Frauds will increase over the next two years: Deloitte survey

Top reasons for fraud include diminishing ethical values, lack of efficient control system, inadequate due diligence

GN Bureau | December 29, 2016


#Fraud   #Deloitte Survey   #Survey  

A large number of respondents in a survey carried out by Deloitte expect fraud to go up over the next two years.

According to Deloitte’s India Fraud Survey Edition II, in perspectives from companies with over Rs 200 crore turn over and/or over 200 employees, 70 percent of respondents felt incidents of fraud will increase in the next two years.

Top reasons that contribute to fraud include – diminishing ethical values (38%), lack of efficient control system (37%), inadequate due diligence (37%) and unrealistic goals linked to monetary compensation (37%).

Vendor favoritism (42%), diversion/ theft of funds (33%) and bribery and corruption (30%) were the top fraud incidents experienced by organizations.

Junior and middle management employees were considered the most likely to commit fraud. The top three measures undertaken to prevent fraud include – Internal Audit/ Risk assessment (89%), Tone at the top and implementation of anti-fraud policies (79%), and fraud awareness workshops and trainings (66%). Fraud is mostly detected through whistleblower hotlines.

Response to fraud is complex and determined on a case to case basis – 43% said investigations were commenced based on the severity of fraud; 36% said the fraudster was allowed to resign in lieu of  pressing legal charges; and 33% said fraud was communicated to employees, the Board and regulatory agencies.

Read: Sin in SIM: Dial F for fraud


In small and medium enterprises survey, 54% of respondents felt incidents of fraud will increase in the next two years. The top three reasons that contribute to fraud include the following – diminishing ethical values (68%), limited/ lack of segregation of duties (68%) and limited employee education on fraud (60%).

Top three frauds experienced by organizations include – Diversion/ theft of funds (32%), bribery and corruption (28%) and conflict of interest (26%).

The most common forms of corruption experienced include – collusive bribery (69%) and facilitation payments (69%). Procurement (44%) and sales and distribution (29%) were considered the functions most vulnerable to fraud risks.

In the survey of working professionals’, 65% of respondents felt incidents of fraud will increase in the next two years. Top three reasons that contribute to fraud include – weak/ ineffective controls (65%), technological advancements (43%), and general decline in ethical values (42%). The top three frauds experienced by organizations include – bribery and corruption (43%), financial statement fraud (40%), and embezzlement of funds (39%).

Frauds personally experienced by working professionals include bribery and corruption at government offices (59%), identity theft (37%) and sector specific frauds (31%).

In response to fraud, 55% of respondents claimed they did nothing as there was no way to recover losses.

Comments

 

Other News

Look who’s talking ethics in Karnataka?

 Just after the UP assembly election in 1996, I was among the scores of reporters waiting at Kalyan Singh’s residence, waiting to get the first inkling of the future course of the BJP. The party had secured the maximum seats – 174 out of 425 seats – but was short of the majority mark

Company secretaries are gatekeepers of corporate governance: SEBI Chairman

“Company Secretaries, once known as secretaries to the board and management, have transformed themselves into key managerial and governance professionals. Today they are recognised for their importance on corporate landscape and have become gatekeepers of corporate governance,” said Ajay Tyagi,

Will there be light at the end of the tunnel?

Any good news which promises to bring about qualitative improvement in the lives of people, especially in rural India, is always welcome. It was heartening indeed to learn that every single village in the country now has access to electricity, as announced by the prime minister on April 29. This is most ce

A dry run in Bundelkhand

The paved road, the few concrete houses and men on motorcycles – these are deceptive signs of development in Madralalpur village. Only a couple of weeks ago, Babu, a 47-year-old distressed farmer, had hanged himself from a babool tree. Villagers were gathered at his house as his wife, mother, sister-

Our jobs, their jobs

Statistics has come a long way from the time when British prime minister Benjamin Disraeli observed: “There are three kinds of lies: lies, damned lies, and statistics.” Statistics is now an accredited branch of applied mathematics; statistical methods are routinely used to prove or disprove the

Why hasty ordinance on rape of minors needs gender balance

Of all offences, it’s the crime of rape that fires public sentiment the most, eliciting an outrage that exceeds the seemingly worst felony of all – murder too. It has probably more to do with the offence and associated gory details staying, even being replayed ruthlessly, in memory with continu

Current Issue

Current Issue

Video

CM Nitish’s convoy attacked in Buxar

Opinion

Facebook    Twitter    Google Plus    Linkedin    Subscribe Newsletter

Twitter