Corporate Frauds: India Inc.'s Response
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Code : GOV0032
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Region : India |
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Introduction: These were some of the headlines that rocked India Inc’s image recently. A staggering 42% of the companies across all sectors in India have been victims of corporate frauds. In spite of incurring losses amounting to more than the value of several companies put together, companies have been ignorant, complacent, lenient, and careless about it. Nearly 70% of the Indian companies fear that corporate frauds would increase in the near future. With corporate frauds spreading at an alarming rate, can companies afford to remain calm about it? Surprisingly, companies have enough research to adopt the right measures and act against fraud. Apart from the major kinds of frauds and the reasons why fraud continues to be a threat, investigations into a series of frauds have revealed some common patterns on the profile of the general fraudsters and the reasons that motivate fraud. Yet, neither do companies report fraud nor have they employed measures like whistle blowing that have been proved effective in the west. With corporate frauds bringing down great companies in no time, companies would have no choice but to be proactive, aware and alert in order to contain this menace. |
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Irrespective of the size and nature of business, corporate frauds has been a common problem.As long as commercial enterprises have been in existence, corporate frauds have also existed. However, since the 1990s, due to increased competition, decentralisation of organisational structure, increased global expansion and weak internal controls, the incidence of corporate frauds has been on the rise. Between 2003 and 2007, the number of companies reporting fraud has increased from 37% to 43% globally...
