India like US unprepared to investigate fraud: KPMG study

Kolkata, May 31 (UNI) India, like America, South America, Europe, Asia, Australia and Africa, is often unprepared to investigate fraud promptly, according to a research by KPMG International.

"In an age when criminals can digitally flash stolen money and intellectual property across the globe in an instant, corporations are often unprepared," the report said.

"Fraudsters operate undeterred by global boundaries," said KPMG Head Forensic Services Deepankar Sanwalka adding "therefore, companies must be increasingly vigilant about their ability to prevent, detect and respond to fraud.'' "Companies need an effective fraud detection and investigative capability that is painstakingly disciplined and lightning fast-a virtual police SWAT team," Mr Sanwalka continued.

"In addition to financial loss, an ineffective investigative process can adversely reflect on an organisation's reputation, its risk management abilities, and its commitment to good corporate governance," he said.

The KPMG surveyed senior business executives in 21 countries, 92 per cent of respondents said they did not expect any abatement and many expect an increase in the number of international investigations in the coming year.

Around 56 per cent said they have not implemented comprehensive investigation procedures. By contrast, 60 per cent of the executives acknowledge that planning an investigation remains key to its success.

"Multinational organisations often develop one-size-fits-all investigative policies and procedures across many countries in which they operate, but each nation has its own, ever-changing regulatory and policing procedures that can stymie an investigation," said Deepankar Sanwalka.

"Companies should establish broad investigative procedures, knowing that they should be tailored to each respective country, ideally with a well-trained local team that knows the language, culture, and legal and regulatory environments." In addition, just 48 per cent of the survey respondents said their investigative staff had received training during the last six months, while 27 per cent had not been trained within the last year.

Mr Sanwalka said that there were steps that executives can take to improve international investigations of fraud, like assessing and benchmark their organization's investigation competence against industry-recognized "better practice" capabilities, assess their investigation protocols and ensure that the board and audit committee were informed of all issues and ensure a single, global point of accountability for reporting incidents of fraud and misconduct.

The KPMG, a global network of consultancy firms, conducted survey during late 2006 and early 2007 brought responses from 103 senior business executives throughout North America, South America, Europe, Asia, Australia, and Africa who are responsible for cross-border investigations within multinational businesses.

UNI