Chennai, June 15 (IANS) Frauds in the Indian corporate sector are largely in the manager and staff member levels unlike the global trend where they are committed by senior executives, states a report by professional services firm KPMG.
The report also states that fraudsters in India are young and start their fraudulent activities at a younger age.
The report, one of the latest by KPMG International, titled “Global profiles of the fraudster” also said 62 per cent of the frauds in India are committed in collusion, similar to global trends.
In a statement issued on Wednesday, KPMG said: “Fraudsters who collude tend to be senior employees who have worked at the company for longer when compared to individual fraudsters. Globally, 35 per cent of fraudsters are executives or non-executive directors, compared with 23 per cent in India.”
“In addition, 63 per cent of the fraudsters surveyed in India constituted managers and staff members. This is consistent with the trend of perpetrators in India being younger,” the statement said.
According to the report, women are less likely to collude with only 45 per cent of them colluding, compared to 66 per cent of males. Collusion involving more than five people increased from 9 per cent in 2010 to 20 per cent in 2015.
It also said that 34 per cent of collusive fraudsters cost the company $1 million or more, compared with 16 per cent for soloists.
“Colluders inflict much more damage than individuals. Larger the group, bigger the damage. Increasingly, these groups include outside parties and companies need to watch out for how they mitigate the rise of third parties colluding with employees,” Mohit Bahl, Partner and Head, Forensic Services, KPMG in India was quoted as saying in the statement.
“A strong third party risk management programme which ensures comprehensive due diligence is carried out on vendors, channel partners and suppliers, is a sound way of combating fraud and assessing risks regularly,” he added.
This year’s survey is a follow-up to the 2013 report and is based on an analysis of 750 fraudsters across 81 countries, examined between March 2013 and August 2015.
“Globally, 79 per cent of the fraudsters are men; and the proportion of women has risen to 17 per cent from 13 per cent in 2010. Findings in India indicate that Indian fraudsters are younger in age, compared to their global counterparts. 32 per cent of the perpetrators were in the 26-35 age group, compared with 14 per cent globally,” KPMG said.
“An interesting observation in this year’s survey in India finds an increasing number of fraudsters in the one to four years of service bracket (27 per cent) compared to 19 per cent globally, indicating that not only is the Indian fraudster younger, but also starts early,” Jagvinder Brar, Partner, Forensic Services, KPMG in India was quoted as saying in the statement.
The increasing incidence of technology in enabling these frauds is consistent with the trend of perpetrators being younger in our country (33 per cent of frauds in India were tech-enabled as opposed to 19 per cent globally.
In India, greed is the predominant motivation for 77 per cent of fraudsters compared with 60 per cent globally.
“This manifests itself into personal financial gain and the desire to show better performance than what it is in reality. 64 per cent of fraudsters in India are high performers compared with 38 per cent globally. Their sense of superiority is stronger than their sense of fear or anger,” Mritunjay Kapur, Partner and Head, Risk Consulting, KPMG in India was quoted as saying in the statement.