Corporate fraud still not a major concern: KPMG

However, while 40 per cent of the respondents are satisfied that their organisation has a well-developed understanding of the fraud risks it faces, 50 per cent are only somewhat satisfied while 9 per cent are not.

While only half the companies surveyed have a conflict of interest policy, 72 per cent do not require their employees to sign a declaration to this effect.

According to KPMG India executive director Deepankar Sanwalka this is an area where India has some way to go. He added that another problem was the country having a history of people not coming up and talking about environment problems like bullying, harassment and discrimination. Half the respondents feel channels of communication for reporting suspicion of fraud need improvement.

According to KPMG International global managing partner (forensic) Norman D. Inkster the focus of this year’s survey has been on prevention and the respondents’ perceptions of how they currently manage fraud risk in their organisations.

Nearly half the respondents also feel that an improvement is needed in the documentation and communication of fraud and ethics policies and principles in their organisations. Such a policy is non-existent in 16 per cent of the companies, while 38 per cent feel they have a very clear one.

Twenty per cent of the respondents said that they were not satisfied with recruitment screening procedures, which could indicate a systematic weakness for Indian corporations according to Sanwalka.

But only 48 per cent believe that recruitment procedures will stop a fraudster from joining their organization. An extremely low 13 per cent of companies claim to be ‘extremely knowledgeable’ about ways in which fraud can occur in their organisation.

Sanwalka also added that as more companies implement systems to safeguard their interests, they are in a better position to know if frauds have occurred or not. The survey covered chief executive officers or other senior management of 196 organisations.