Frauds set to increase over the next two years, but corporate India's preparedness to tackle them found lagging: Deloitte India Fraud Survey

Around 56 percent of survey respondents believed that incidents of fraud would continue to rise over the next two years, and highlighted diversion/theft of fundsor goods, bribery and corruption, and regulatory noncompliance as the top three frauds they had experienced in the past two years.

The associated losses due to fraud appear to be conservative, as 44 percent of survey respondents said they lost less than INR 10 million over the last two years. Further, the majority of survey respondents indicated that emerging fraud risks such as social media fraud (69 percent), ecommerce fraud (60%), cloud computing fraud (96 percent), and virtual/ crypto-currency fraud (50 percent) did not pose a challenge to their organizations, and adequate steps were not being taken to mitigate these frauds.

“One of the key reasons for the continued dominance of well-known frauds among corporate India is the reliance on inadequate/ dated mechanisms to manage fraud risks. We have observed that companies make limited investments in the area of fraud risk management and tend to rely on a generic set of controls to mitigate all frauds. Over the years these mechanisms can lose their effectiveness, thereby exposing companies to the risk of fraud. This is also a likely reason why companies are unable to gauge the extent of fraud risks from new areas such as social media and ecommerce,” said Rohit Mahajan, Senior Director & Head, Deloitte Forensic.