The Hindu Business Line : Corporates losing more from within

Bangalore, March 14 Insider knowledge and collusion is one of the biggest reasons for corporate fraud in the country and corporates are losing more because of their employees rather than frauds committed by an external party.

At India’s first conference on ‘Employee Frauds’ in Bangalore today, organised by IndiaForensic Consulting and Pinkerton Consulting and Investigation, delegates from across the country discussed various types of frauds and the remedial measures to be taken to prevent employee frauds.

According to a study by Indian Forensic Consulting, a Pune-based consultancy engaged in fraud examination and forensic accounting in India, 80 per cent of the time, corporates lose more money to ‘shenanigans of their own employees rather than frauds committed by an external party.’

Banking, insurance most hit

It is estimated that the country is losing as much as $40 billion (Rs 1,60,000 crore) to employee frauds every year. Mr Mayur Joshi, Chairman, IndiaForensic Research, said that the banking sector, followed by the insurance companies in the country are the most affected by employee frauds.

Occupational frauds (fake resumes) too are common in the country, with 17-23 per cent of the CVs stating false information.

Mr Barry Wilkins, Vice-President, Homeland Security Pinkerton Consulting and Investigation, US, said that supply-chain security issues are the main cause for concern in the US.

“The country is losing about $30 billion annually to this alone.” According to estimates, employee frauds account for about 5-6 per cent of the total GDP in the US.

The conference and one-day workshop addressed issues related to fraud arising from breach of internal controls, submitting fake resumes, data theft, kickbacks, accounting abuses and misappropriation of assets.

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