Cooking the books
At the time of declaring results, many corporates resort to financial manipulation, or creative accounting, to present an impressive picture of their performance. This has been corroborated by the recent KPMG Fraud Survey 2010*.
75 per cent of the respondents in the KPMG survey believe that fraud incidences in India Inc have increased in the past two years.
Top 5 factors contributing to rise in fraud
63 per cent: Inadequate internal controls or compliance programmes.
48 per cent: Diminishing ethical values.
40 per cent: Failure by dept heads to act against deviation from established procedures.
28 per cent: Lack of framework for enforcing compliance of company's code of conduct.
27 per cent: Inadequate background checks on employees and vendors.
* India's Fraud Survey 2010 was conducted by KPMG among heads and senior management personnel in 1,000 leading companies across industry segments.
