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40% of Indian firms lost $50k-$100k to fraud, economic crime during peak Covid, says PwC report

Silver lining is that there’s decline in fraud due to prevention measures taken up by managements, finds survey. As many as 112 Indian companies were part of global survey.

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New Delhi: Forty per cent of Indian companies have lost up to USD 100,000 to various fraud and economic crimes during the peak of the Covid pandemic, a survey by Pricewaterhouse Coopers (PwC) has found. 

Released on 15 November, PwC’s ‘Global Economic Crime and Fraud Survey 2022: India Insights’ shows that 40 per cent of Indian companies have lost between USD 50,000 and USD 100,000 in the last 24 months. 

The report showed that 17 per cent of Indian companies lost between USD 1 million and USD 50 million while 5 per cent of them suffered more than USD 50 million.

The report was based on survey responses from 1,296 organisations around the world. Out of these, 112 were companies from India ranging from technology, financial services, health services to industrial manufacturing, energy.

The survey was based on multiple-choice questions, allowing respondents to select more than one response to the same question.

However, there’s a silver lining — the report shows that there’s been a decline in fraud, thanks to fraud prevention measures. “Fifty-two per cent of Indian organisations experienced fraud or economic crime within the last 24 months, as opposed to 69 per cent in our 2020 survey,” the report says. 

Also Read: Kolkata is India’s newest, biggest scam zone. Police, YouTubers, mice can’t shut it down

Misconduct — the biggest risk 

The report says companies reported new kinds of fraud — such as misconduct risks, legal risks, cybercrime, insider trading, and platform risk — since the pandemic began. “Ninety-five per cent of companies that encountered fraud in India experienced new incidents of fraud as a result of (the) disruption caused by COVID-19,” it mentions.

Examples of misconduct risk include customer fraud, accounting/financial statement fraud, and bribery and corruption. Legal risk includes anti-competitive practices and intellectual property theft.

Platform risk is primarily a financial services term, where a financial system is considered the platform, Puneet Garkhel, a partner at PwC and leader of forensic services, told ThePrint.  

Money laundering is an example of a platform risk because the platform is manipulated to channel money in a fraudulent way that hurts the company, Garkhel said.

The survey shows that at 67 per cent, misconduct was the biggest challenge that companies faced. This was followed by platform risk (38 per cent), cybercrime (31 per cent), insider trading (19 per cent), and legal risk (16 per cent).

Misconduct was the biggest challenge faced by organisations as bad actors began collaborating and taking advantage of pandemic-related uncertainty and volatility,”  the report says. “Amongst organisations that reported fraud, conduct risk (or risks associated with individuals within the firm, or vendors, agents, and customers) was the biggest threat.”

(Edited by Uttara Ramaswamy)

Also Read: India is the sixth most data-breached country in world, says study by cybersecurity firm


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