Report: E&Y survey on white collar crime

Excerpts from Power Breakfast on CNBC-TV18 Watch the full show » Nifty BSE | NSE 10/02/12 Are Mutual Funds betting on Nifty?

With corporate crime on the rise, here's an emerging trend that India Inc is not particularly keen to talk about; white collar crime. The Ernst and Young global fraud survey finds that the threat from within is worrying corporates to death, reports CNBC-TV18.

 

There is a sudden spurt of cases of employees accused of fudging account books or cheating customers. The Ernst and Young fraud survey finds that corporate India is experiencing a wave of white-collar crime like never before.

 

Close to half the respondents have said that corporate crime is up substantially and 24% felt it was at an alarming level. And the threat is mostly from within.

 

36% of the respondents said that internal fraud in collusion with a third party was the greatest risk to their companies. Only 14% said accounting fraud was a red flag area. E&Y believes that this is an area that is grossly underestimated.

 

20% said they would not initiate criminal proceedings to a negative publicity. Also, clean audit reports don't necessarily mean a clean slate. 12% of the respondents said that allegations of fraud would not be reported to the audit committee or the board.

 

If these findings sound alarming, it is only the tip of the iceberg. The survey also finds that only one fifth of the frauds are reported in the public domain.