The number of domestic companies witnessing incidences of frauds has increased in the current year, with as many as 71 per cent of surveyed companies saying their exposure to such instances rose, says a report.

“This year, 71 per cent of those surveyed in India said their exposure to fraud has increased, up from 67 per cent of respondents who reported such an increase last year,” global risk mitigation and response solution provider Kroll said in a global fraud report.

The report said 69 per cent of domestic companies continued to be hit by fraud, experiencing an above-average incidence of different types of fraud which includes theft of physical assets, corruption and bribery, internal financial fraud and information theft.

Kroll said while companies have always operated against the backdrop of a high-corruption environment, 37 per cent of respondents acknowledge that their firms have become even more vulnerable to corruption and bribery-related fraud, up from 32 per cent last year and well above the global average of 20 per cent.

“Fraud and corruption continue to stay top of mind for companies looking to do business here. A number of domestic and international companies we have been in discussions with are delaying investments here because of corruption and bribery related risks and vendor and procurement related fraud,” Reshmi Khurana, head of Kroll India said.

“Fraud combined with a tough business environment, means that companies must continue to create strong and well-organised internal control systems to prevent fraud and develop best practices to respond to fraud when it arises,” Khurana said.

According to the report, insider fraud is particularly rife in the country compared to other BRIC countries. Of those domestic companies who suffered from fraud in the last year and where the perpetrator was known, 89 per cent indicated that the perpetrator was an insider of some sort, the report said.

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