Indian companies operate in a high corruption environment adopting different methods to dupe investors and government agencies, a study has revealed. According to Kroll’s Global Fraud Report for 2013-14, 69 percent of Indian companies reported seven different types of frauds with insider fraud being the most common.

The other common types of fraud include— theft of physical assets (33 percent Indian companies as against 28 percent global average), corruption and bribery (24 percent Indian companies as compared to 14 percent global average), internal financial fraud (22 percent Indian companies as compared to 16 percent global average) and information theft (24 percent Indian companies vis-à-vis 22 percent global average), the study conducted on over 900 senior executives worldwide pointed.

The study recorded a jump in the number of respondents admitting to frauds in Indian companies from 67 percent last year to 71 percent this year.

Around 69 percent of those surveyed suspected junior employees to be involved in internal thefts which are rampant across most Indian companies. “This is far higher than experienced in Brazil, Russia and China,” says the report. The other reasons for high rate of internal thefts included high staff turnover cited by 29 percent respondents while around 40 percent said that fraud was committed by vendors/suppliers.

Exceeding the global average of 35.8 percent, 49 percent of those surveyed said that fraud was detected through internal audit.  Another 33.5 percent reported fraud discovery by management, 27.5 percent through whistleblowers and 5.9 percent through external audit.

The financial services companies were the worst hit by frauds with almost 76 percent of them being affected by internal financial frauds, regulatory or compliance breach and money laundering. The manufacturing sector has also been affected due to two reasons— from IT complexity (at 47 percent) and greater complexity of products (at 28 percent).