More corporate frauds

In the broadest sense, a fraud is a deception made for personal gain. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and is also a civil law violation. Many hoaxes are fraudulent, although those not made for personal gain are not technically frauds.

WERE YOU about to faint when the police came knocking for your co-worker? You never thought the soft-spoken 40year-old gentleman who taught you ledger entries could ever be a fraudster More than anywhere, appearance may be deceptive in the world of corporate fraud.

Why are people often caught unaware when somebody is accused of fraud? Because the accused is one known to be helpful, polite and inconspicuous. And most importantly, it is that person who enjoys the absolute trust of both superiors and colleagues, according to a study.

A KPMG study of 360 cases across India, Europe, South Africa and the Middle East shows that 36 per cent of fraudsters belong to the finance department. Most fraudsters are middleaged. The survey states that 70 per cent of fraudsters belong to 36-55 year age group.

"Over 60 per cent of the perpetrators are members of top management. Senior managers have access to confidential information, and due to their position it is easier for them to bypass internal controls and inflict greater damage to the company overall," says Deepankar Sanwalka, executive director and head of KPMG Forensic in India.

Though the count of women fraudsters formed a minority at 15 per cent of the total sample size, it was found that one in every four conspired fraud had the hand of a woman.

The survey said sta- tistics of fraudulent females could be affected by their under-representation in management and relatively lower access to sensitive information.

The survey also challenges the common notion relating loyalty with the tenure of employment and responsibility with position held.

It shows that people who are threefive years old in the organisation formed 36 per cent of the fraudsters, while more than half had spent six years or more in the company Seniority makes a big difference. Those in senior management had a hand in 49 per cent of the reported cases.

Further, a majority of fraudsters belong to the finance department. While finance personnel topped the number of cases reported at 36 per cent, those in operations or sales came second at 32 per cent, followed by CEOs at 11 per cent.

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