Risks of fraud weighing on India Inc: KPMG report

The wider perception that fraudulent activities within business establishments - both private and public - in the country are on the rise is not altogether unfounded, the `KPMG Fraud Survey Report 2010' confirmed today.

Over the past two years, following the Satyam fiasco, there has been an increasing feeling among the common man as well as the investing public that business establishments and public institutions in the country are practising fraud.

An overwhelming majority of the respondents (75 per cent) indicated that the overall incidence of fraud is rising, thereby indicating that India Inc needs to deal with fraud risks firmly, the report said.

Survey responses specifically from the financial services and consumer markets industry segments feel a higher level of fraudulent activities within their industry.

The survey indicates "procurement" and "sales and distribution" as the most vulnerable areas across industries susceptible to fraud risk.

"The need of the hour is for organisations to realise the importance of putting effective internal control mechanisms in place, so as to manage risks. Accountability is no longer restricted to a company as a whole but also streams down to each and every individual. It has become imperative for companies to be vigilant and aware, and not just act when fraudulent situations arise" Deepankar Sanwalka, Head - Forensic, KPMG in India, said after releasing the report.