Forensic Outlook 2014
The need of the hour is for organizations to evaluate their business strategies, and assess and put in place stringent measures to de-risk themselves by institutionalizing holistic frameworks that foster transparency, promote an ethical culture and sustain their long-term profitability. Our report talks about some key trends that corporate India will need to focus on to mitigate fraud risks.
The Companies Act 2013 – building a strong case for good governance: The Act has been developed in the aftermath of a number of corporate scandals. While its true impact can only be gauged over time, and much remains to be implemented, its initiation has led to companies shifting from being complacent to playing a compliant role. They are proactively promoting good governance and transparency, and advocating ethical corporate practices. In the report, Yogen Vaidya, Director, Fraud Investigation and Dispute Services at EY, elaborates on how he expects the Act to be a game changer for India Inc. and stimulate antifraud and anti-corruption practices.
Streamlining company-vendor partnerships: Business partnerships have increasingly come under the scanners of various local and global regulatory agencies. Therefore, it is imperative that companies keep a watchful eye on all their associates and partners to avoid financial or reputational losses. Implementation of a strong third party due diligence framework will be a key step in this direction. Dinesh Moudgil, Executive Director, Fraud Investigation & Dispute Services at EY, elucidates the importance of third party due diligence programs.
Evolving role of human resources (HR): The responsibilities of the HR function in organizations is expected to become all-encompassing and extend from redefining ethics at the workplace to promoting a holistic code of conduct, and ensuring increased compliance with laws and leading corporate governance practices. Jagdeep Singh, Director, Fraud Investigation & Dispute Services at EY, explains HR’s contribution in encouraging employees to closely conform with organizations’ codes of conduct and their compliance with relevant laws.
Technology redefining the way business is conducted: To manage the complexities of digitization and prepare for the risks of tomorrow, organizations will need to adopt diverse and innovative technology. This will also ensure the creation of a robust and secure foundation in enterprises, which can help them combat fraud and corruption. Anil Kona, Partner, Fraud Investigation & Dispute Services at EY, elaborates on the latest technology trends that can be leveraged against global cybercrime and digital fraud. With the next decade expected to be dominated by “transformative mega trends” such as Big Data, cloud, social media and mobility, organizations will need to ride the technology wave, adopt sophisticated methods to mitigate cyber risks and protect the confidentiality of their data and other critical assets.
Whistleblowing for greater awareness: Compulsory implementation of vigil mechanisms comes at an opportune time when there is a rapid increase in fraud- and corruption-related risks. Such vigil mechanisms enable organizations to safeguard their assets, and mitigate losses relating to their reputation, productivity and monetary damage. At the same time, they clearly reflect organizations’ commitment to sound governance, including in their ethical values and transparency. They are also help companies achieve long-term sustainability and drive their overall profitability. In another article, Jagdeep Singh provides an overview of the intrinsic need for an organization to frame a robust whistleblowing mechanism.