JOIN USThe Satyam scam had been a big eye opener as far as corporates are concerned. However, the learnings from all the corporate frauds in the country have not been significant.
According to the Deloitte India Fraud Survey, corporate frauds are set to increase over the next two years but corporate India is lagging behind in terms of its preparedness to tackle them.
“The fraud detection mechanisms across most of the corporates are dated or inadequate as they make very limited investment in this area. These dated mechanisms lose their effectiveness due to which the corporates are vulnerable to more and more frauds,” Rohit Mahajan, Senior Director & Head, Deloitte Forensic, said.
New fraud risks including social media, e-commerce, cloud computing and virtual currencies have to be dealt with in an ideal manner as well going forward, Mahajan said.
The associated losses due to fraud appear to be conservative as 44 per cent of survey respondents said they lost less than Rs 1 crore over the last 2 years. A majority of the respondents felt that a stringent regulatory environment could help reduce instances of fraud in the future.
Companies need to invest more in technology in order to curb frauds.
“Corporate India has traditionally taken a reactive approach to mitigating fraud and complying with regulatory requirements. Companies, however, need to make investments towards putting in place systems and processes aimed at curbing frauds in the long-term,” Mahajan said.
The Deloitte India Fraud Survey Report was developed on the basis of responses from around 400 CXOs all major sectors working in the area of fraud risk management.
Besides deliberating on the current state of fraud in corporate India, the survey also focuses on prevention and detection of fraud including profiling the fraudster, role of technology in fraud risk management, and managing new fraud risks.