'MNCs ill-prepared to tackle cross border frauds'

NEW DELHI, MAY 30: Multinational corporations have not yet devised effective investigation mechanisms to check inherent risks of fraud in their overseas operations, global research firm KPMG said.
In its recent report the research firm found MNCs to be often unarmed to investigate cases of fraud promptly and effectively in a country other than where they are headquartered.

A significant majority of the business executives surveyed across 21 countries by KPMG expected an increase in the number of fraud related international investigations in the coming years, the report said.

Despite expectations of increased fraud risks in the overseas market, as many as 56 per cent said they have not implemented comprehensive investigation procedures. Although 60 per cent of these executives acknowledged that planning an investigation remains key to its success.

"Fraudsters operate undeterred by global boundaries. Therefore, companies must be increasingly vigilant about their ability to prevent, detect and respond to fraud," KPMG India Head Forensic Services Deepankar Sanwalka said.

He said companies need an effective fraud detection and investigative capability which is disciplined and fast.

"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 added.


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