What Can We Learn from the 2010 Indian Fraud Survey by KPMG and PWC?

Dear All,

I am sharing with you all the Indian Fraud Survey 2010 conducted by KPMG and PWC. I hope this provides us with the necessary insights into the corporate world.

Regards,
Octavious

Thank you, Octavious, for sharing information compiled by KPMG and Price Waterhouse Coopers. From a learning perspective, these reports can be considered useful. However, what about the instances of fraud in which these companies were also implicated as auditors? Links to some documents regarding their potential involvement are attached for the general awareness of the readers. Does this imply that a person, auditor, or corporate entity can preach better than they practice?

[KPMG's tax shelter and kickback scam - Deputy Chairman Jeffrey Stein and 7 execs indicted - Newsday - 30Aug2005](http://newsgroups.derkeiler.com/Archive/Soc/soc.culture.ukrainian/2005-09/msg00018.html)

[New Century Bankruptcy Examiner Says KPMG Aided Fraud (Update4) - Bloomberg.com](http://bloomberg.com) (*link updated to site home*) ([Search On Cite](https://www.citehr.com/results.php?q=New Century Bankruptcy Examiner Says KPMG Aided Fraud Update4 Bloomberg com) | [Search On Google](https://www.google.com/search?q=New Century Bankruptcy Examiner Says KPMG Aided Fraud Update4 Bloomberg com))

[Asia Times Online :: South Asia news, business and economy from India and Pakistan](http://www.atimes.com/atimes/South_Asia/KA10Df02.html)

[PwC Settles Tyco Investors' Suit Over Fraud - washingtonpost.com](http://www.washingtonpost.com/wp-dyn/content/article/2007/07/06/AR2007070601857.html)

Dear Psdhingra,

Over the years, I have understood one thing: that companies and governments equally thrive on black money, and at some point in time, they are all involved in money laundering in significant ways. According to a write-up, black money fuels about 20 percent of the Indian GDP.

Now, think about why there is so much corruption.

Regards,
Octavious

No one can stop intellectual property sharing in this massive networking age. That we will do at any cost to help others. Property right 'Kalli valli'.

Nice analysis. The PwC one is much crisper. The concept of the fraud triangle in that report is very true. The fraud triangle with Pressure/incentive; Opportunity, and Rationalization is quite factual. Most of the frauds are committed under pressure from the family with their active abetting. If the wife is not greedy, the husband won't be corrupt.

Dear Octavious,

I fully agree with your views. However, my intention in pointing out was whether these audit companies, which themselves have a track record of involvement in frauds, can provide any real and valuable advice in the name of preventing fraud. I hope you will agree with me that any survey by such companies, which also have a track record of their own involvement in fraud, cannot be devoid of bias in their findings. I consider such actions as mere eyewash, meant to cover up their own positions or to dilute their own sins in the realm of corporate governance. If they can pay billions of dollars in fines through court judgments, one can imagine the extent and means by which they have stripped the corporates of money.

You may perhaps further agree that frauds and money laundering in companies cannot occur to such a degree without clear connivance of the auditors.

PS Dhingra

Nice analysis! But regarding your statement "If the wife is not greedy, the husband won't be corrupt," I can say it can go both ways. The husband can be corrupt by instinct, while the wife may not be demanding or greedy. It all depends on the nature of the person resorting to corruption. If the husband is not corrupt by nature, no matter how greedy the wife is, he won't indulge or would be afraid of being involved in making corruption.

Nice analysis. The PwC one is much crisper. The concept of the fraud triangle in that report is very true. The fraud triangle with Pressure/Incentive; Opportunity, and Rationalization is quite factual. Most of the frauds are committed under pressure from the family with their active abetting. If the wife is not greedy, the husband won't be corrupt.

Greetings all,

Well, the issues are much greater now. There is a growing concern with respect to document fraud in the immigration process, and unfortunately, the perception of Indian talent is greatly affected.

I wish to share a document by the Economic Intelligence Unit, published in the year 2007, titled - 'Paper Chase - Document fraud in the immigration process'.

Alarmingly, document fraud is directly linked to crime at a higher level, including human trafficking, especially in the cross-border movement of people.

I have also included our organization's Strategic Initiative to curb document fraud, and have been actively seeking to generate awareness of the need to curb document fraud and the related brokerage of intellectual capital.

Our group on CiteHR: Open Registry of Verified Knowledge Workers: Free Employee Verification

I'd invite your thoughts.

Reference:

Frauds to increase, feels India Inc - Times Of India

Want a job overseas? Beware of fraud - Rediff.com Get Ahead

Dear Mr. Octavious,

Thank you for sharing a valuable article with our members.

At the corporate level, the top-level management is always concerned about the performance and achievements of its employees. That's the reason the management is not willing to take severe action against erring employees involved in corruption and fraud. The best-performing employees are using their brains to generate wealth (unduly), which is being tolerated by the management to some extent. However, when the performance levels exceed and the company or a specific project starts incurring losses, the management takes stringent action against the defaulting employees, even to the extent of dismissing them from the organization.

The above explanation will help Mr. Dhingra understand why organizations are still not taking stringent action against erring personnel in their organization.

I really appreciate Mr. Octavious for initiating such a mind-blowing and knowledge-enhancing discussion on frauds in India.

Dear Mr. Bhaskar,

I differ with your views that "the best performing employees are using the brain and making wealth (unduly) which is being tolerated by the management up to some extent." The fact is totally on the reverse side. The best performing employees never think about their involvement in frauds or corruption, as they don't find any time even to remotely think about that due to their full concentration on their performance only. Rather, you will find that the best performing employees are neither compensated adequately for their performance, nor are they made so close by their bosses to know about their secrets. It is only the wicked brain employees who just think about making wealth by hook or crook and don't bother about their performance except to please or grease their bosses, or merely the touting employees who are never the best performers but think only about making wealth either due to their being very close to the top management, which closes eyes even on reporting against those employees, or some of the top bosses even use them to make corruption on their behalf also keeping themselves in disguise.

The reason behind organizations not taking any stringent action against the erring personnel in their organization is not the best performing employees, BUT, the involvement of a few of the top bosses themselves in the corruption. No honest management spares even the best performing employee when the question comes to corruption and fraud on his part. I can bet that in the black money cases, you won't be able to find even a single account of any best performing employees in any Swiss bank or any other foreign country account. On the contrary, you would find the accounts of politicians, top bureaucrats, or business tycoons who believe in giving and taking bribery. IT IS MERELY THE MISCONCEPTION OF YOUR MIND.

I wonder, what made you think about the best performing employees using their brains to make wealth (unduly)?

Dear Mr. Octavious,

Thank you for sharing a valuable article with our members.

In corporate level, the Top-level management is always concerned about the performance and achievement of its employees. That's the reason the management is not willing to take severe action against erring employees involved in corruption and frauds. The best performing employees are using their brains to make wealth (unduly) which is being tolerated by the management up to some extent. Whenever the level exceeds and the company or the specific project starts incurring loss, the management takes stringent action against the defaulting employees even up to the extent of throwing them out of the organization.

The above explanation will help Mr. Dhingra understand why organizations are still not taking any stringent action against the erring personnel in their organization.

I really appreciate Mr. Octavious for initiating such a mind-blowing and knowledge-enhancing discussion on Frauds in India.