India Inc feels fraud 'inevitable': KPMG report
The trend portends complacency that could lead to inadequate efforts to mitigate such risks, according to the report titled “India Fraud Survey 2012” paving the way for regulators to step in, especially in financial services sector.
The report said that 71 per cent of the respondents perceived fraud as “inevitable” including 80 per cent respondents who said that they have experienced in the past two years. Often, the enemy lies within the organisation, a fact that is often ignored by companies and interesting, most of these frauds are unearthed by tips or complaints from sources within the organisation.
Financial services sector, according to 33 per cent of the respondents, was the most vulnerable sector, followed by information and entertainment, and real estate and infrastructure. The report said, “Close to 55 per cent of respondents indicated that their organisations experienced frauds in the last two years, vis-ŕ-vis 45 per cent in the 2010 survey.
“This increase can be attributed to…ongoing economic slowdown that puts pressure on individuals to perform and tempts individuals to commit fraud,” the report said, adding that fraudsters are becoming more tech-savvy. Besides, India Inc is also worried about money laundering (47 per cent), internal reporting-related frauds (44 per cent) and intellectual property frauds (40 per cent), with fraudsters becoming more sophisticated, challenging investigators.
Around 293 companies, including public sector entities, participated in the survey conducted in June this year.