Heightened fraud risk impacts businesses significantly: Kroll
Premium- About 85% of surveyed firms had held internal probes with help of external agencies
MUMBAI :
Organizations from across the world, including India, are dealing with increasing costs of investigating allegations of serious misconduct, which is severely impacting many businesses, Kroll said in its recent report on data and technology risks and governance.
“In today’s complex business environment, corporate investigations are becoming more frequent and publicized as businesses become increasingly regulated and companies expand operations and supply chains across global markets and jurisdictions," Kroll said in the report, Global Fraud Risk.
India Inc. has also faced serious allegations of money laundering, fraud , corruption and other wrongdoings in recent times, which often resulted in damaging the reputation of an organization and its financials.
According to Kroll, almost 85% of Indian firms that were part of the survey said they had conducted internal investigations with the help of external experts, such as accountancy firms (72%), computer forensics and eDiscovery firms (71%) and investigative firms 66%).
Despite the advancements in technology and data analytics, 82% respondents in India said the cost of investigations has increased in the past three years. “For those organizations that are not well-prepared or equipped, the time and cost involved in an internal investigation is an additional source of pain," the report said.
“Even though several organizations implemented due diligence procedures internally to monitor fraudulent activities, occurrence of fraud has not stopped. Almost 50% of them have said that illicit activity, corruption and similar activities of misconduct had a significant impact on businesses. A large proportion of respondents in India have conducted investigations involving fraud, corruption or related misconduct in the past three years and we expect it to continue. With geopolitical turbulence and challenging economic conditions companies must become more wary of fraud risks, and will need to take proactive and corrective measures," Tarun Bhatia, managing director and head, forensic investigations, intelligence practice, South Asia, Kroll, said.
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