CARO disclosures

CARO disclosures: Tracing whistleblower trends across India Inc

Photographic portrait of ArunBalaji
ArunBalaji Alagappan

Partner, Forensic & Integrity Services, EY India

4 minute read 31 Mar 2026

A three-year analysis of CARO disclosures reveals a clear shift from minimal reporting to increased detection, escalation and transparency.

In brief

  • CARO disclosures rose five-fold over three years, indicating a sharp increase in fraud reporting.
  • Filings of reports signaled heightened escalation of material fraud and stronger audit assertiveness.
  • Sectoral analysis reflects encouraging reporting trends across financial services and infrastructure, while consumer and technology show more whistleblower activity.

Last year’s analysis of CARO disclosures analysis highlighted a critical concern: the absence of whistleblower complaints from top NSE companies, including raised questions around the effectiveness of employee complaints mechanisms. Extending this analysis across three financial years (FY 22-23 to FY 24-25) provides a deeper lens, shifting the discussion from whether companies leverage vigil mechanisms for corporate governance to how consistently and credibly they do so.

Companies in Top 500 listed in NSE for the last three financial years

Sector

Companies to which CARO was applicable1

Clause xi(a)2

Clause xi(b)3

Clause xi(c)4

FY 22-23

464

7

0

188

FY 23-24

462

21

8

195

FY 24-25

464

37

16

209

EY Trusted Verification - Employee Background Check and Verification

With hybrid working and remote hiring becoming the norm, employment fraud is on the rise. EY is dedicated to harnessing the power of data and technology to help organizations automate their employee background verification process to enable them to hire resources with completely verified profiles.

Know more

Over the three-year period, disclosures under Clause xi(a), i.e., fraud noticed by or on the company, increased five-fold from seven companies in FY 22-23 to 37 in FY 24-25. During the same period, disclosures under Clause xi(c), i.e., whistleblower complaints reporting considered during the audit, rose gradually from 188 to 209 companies. 
 

Clause xi(b) disclosures, i.e., filing of reports with the Central Government under Section 143(12), show a notable shift. From zero cases in FY 22-23, filings increased to eight in FY 23-24 and doubled again to 16 in FY 24-25. This trend indicates a growing willingness or obligation to escalate material fraud as detection increases. It also reflects heightened audit assertiveness, implementation of good governance practices and regulatory sensitivity, reinforcing that fraud identification is increasingly translating into formal compliance reporting.
 

To analyze sector-wise insights, NSE’s industry classifications have been regrouped into four sectors based on similarity in operating and risk characteristics. These include consumer, financial services, infrastructure and technology sectors. tabulated below is the sector-wise breakdown of Nifty 500 companies for which CARO disclosures were applicable during the stated period, and among them, the number of companies that reported instances under three specific clauses of CARO:

EY Document Anomaly & Transaction Analytics - Document verification and fraud detection

EY Document Anomaly & Transaction Analytics offers multi-level checks and advanced statistical algorithms for accurate document verification.

Know more

Financial Services stands out as the most consistent sector across all three years in reporting, particularly under Clause xi(a). Fraud detections in this sector increased steadily from three companies in FY22-23 to 11 in FY23-24 and further to 21 in FY24-25. Correspondingly, Financial Services also accounts for the higher number of regulatory escalations under Clause xi(b) in the latter two years, indicating that identified frauds are increasingly meeting materiality thresholds requiring formal CARO reporting. 
 

Infrastructure shows a gradual increase in fraud detection as Clause xi(a) disclosures in this sector rose from one company in FY 22-23 to six in FY 23-24 and 11 in FY 24-25. Regulatory filings under Clause xi(b) followed a similar trajectory, reflecting that as detection expands, escalation mechanisms are being triggered more frequently. 
 

In contrast, the Consumer sector exhibits relatively low but steady fraud detection over the three-year period, with limited instances reported under Clause xi(a). However, this sector demonstrates consistent and comparatively higher whistleblower management activity under Clause xi(c), with disclosures increasing marginally year-on-year. The technology sector showcases a similar pattern to the consumer sector. Fraud detections under Clause xi(a) remain limited and stable across all three years, while whistleblower disclosures show a gradual upward fraud reporting trend.  
 

Sectors such as healthcare, IT, chemicals and consumer services dominate when it comes to adherence to the whistleblower policy as per activity (clause xi(c)), even when fraud reporting is are low, suggesting early warning signals. Whistleblower culture is strongest in the service sectors, but cases of fraud reporting for compliance are higher in financial sector and manufacturing. 

Key elements for a robust whistleblower hotline include anonymity, awareness, confidentiality and ease of access. Trust in the independent handling of matters by qualified investigators is crucial for encouraging the reporting of concerns without fear of retaliation.

How is your organization strengthening fraud detection and whistleblower frameworks to enhance business ethics and workplace integrity? 


FAQs

Summary

Corporate India’s CARO disclosures figures from the last three years point to stronger fraud‑risk oversight and growing use of whistleblower systems. Reports of fraud have risen steadily, accompanied by a marked increase in cases escalated to regulators—suggesting sharper detection and firmer audit responses. Financial Services shows the deepest maturity, with Infrastructure catching up. Meanwhile, consumer and technology companies surface more whistleblower signals than fraud cases, acting as early warning hubs. These patterns underscore the need for organizations to continually fortify vigilance frameworks.

How EY can help

Related articles

Preparing enterprise crisis management strategy for geopolitical shifts 

Enterprise crisis management is now strategic, guided by geopolitics, ethics and compliance to enhance resilient decision-making and organizational readiness.

Arpinder Singh

Old data governance failures and new costs you cannot ignore

Non-compliance and poor data governance can cost crores. Learn how strong governance frameworks build trust, resilience and regulatory readiness.

Arpinder Singh + 1

How investigation-ready HR teams can build ethical organizations

As workplace misconduct rises, HR must adopt an investigative mindset and structured frameworks to ensure fairness, compliance, and organizational integrity.

Arpinder Singh

    About this article

    Photographic portrait of ArunBalaji
    ArunBalaji Alagappan
    Partner, Forensic & Integrity Services, EY India
    Forensic investigator focused on corporate governance and risk; driving ethical transformation in line with global regulations; advocate for trust, innovation and inclusive leadership.
    Related topics
    Forensics

    EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.