Top reasons for fraud include diminishing ethical values, lack of efficient control system, inadequate due diligence
GN Bureau | December 29, 2016
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.
A political war erupted between the centre and Maharashtra over supply of essentials including medicines and oxygen as the state struggles to control the raging Covid-19 amidst scarce health infrastructure. Maharashtra has seen a consistent rise in Covid infections and recorded 67,123 new c
Countering the opposition BJP’s allegations of corruption in the procurement of Remdesivir, a critical anti-viral injection often prescribed for Covid-19 patients, the BrihanMumbai municipal corporation (BMC) has clarified that its decision to procure the drug was aimed at saving lives even if
Criticizing the postponement of the CBSE Class XII exams in the wake of the second Covid -19 wave across the country, Nupur Sharma, BJP national spokesperson, has said the decision will jeopardize the future of students. Despite the pandemic she said no college or university will be ready to give them prov
Atal Innovation Mission, NITI Aayog and All India Council for Technical Education (AICTE), and Ministry of Education’s Innovation Cell has announced their strategic collaboration which aims to empower Atal Tinkering Lab school (ATLs) students for world-class future-ready
Union Ministry of Agriculture and Microsoft India has inked a Memorandum of Understanding (MoU) for a pilot project in 100 villages of six states to develop farmer interface for smart and well-organized agriculture, including post-harvest management and distribution. The pilot
Ajay Prakash Sawhney, Secretary Ministry of Electronics & Information Technology (MeitY) & Chairman NIXI has inaugurated three initiatives of the National Internet Exchange of India (NIXI). With this launch, NIXI has announced to play a supporting role for the IPv6 aw