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PwC survey says India Inc abounds fraud
By agencies
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Tuesday, 06 December 2005, 20:30 IST
NEW DELHI: Indian companies are now reporting newer types of economic crimes even as economic crimes are on the rise in the country, according to the PricewaterhouseCoopers (PwC) Economic Crime Survey 2005.
The findings suggest that more than half the organizations in India have faced at least one form of fraud like money laundering and financial misappropriation during the last couple of years, with the number of companies reporting fraudulent incidents increasing from 24 percent in the 2003 Survey to 54 percent now.
The survey also said that the most prevalent economic crime experienced in the country was counterfeiting, corruption, and bribery.
It also said that the companies reporting financial misrepresentation has risen by seven times, while eight percent of the respondents reported cases of money laundering in the current survey, as against no such cases in the previous survey.
Companies in India regardless of size or it being regulated or unregulated, was immune from fraud, the findings suggested.
In most cases, the survey said, the usual perpetrator of crime is a graduate or post-graduate male aged between 31 and 50. Also, insiders were involved in one-third of the frauds in the country, with 37 percent of the respondents reporting that the internal perpetrator was a member of the senior management; in 32 percent of the cases, the culprit was from the middle management.
About 99 percent of the respondents had instituted one or more measures, including internal or external audits, internal controls, compliance programs and code of ethics to counter economic crime.
While almost all respondents have one or more measures of detection and prevention of economic crime, the most common means of detecting fraud, interestingly, was by accident or chance (about 37 percent), the survey said.
Also, in 42 percent of the cases in India, it was possible to make recoveries from the perpetrator, as against 33 percent of the cases in Asia-Pacific and just 28 cases globally, the survey said.