NEW DELHI, April 7, 2010 (AFP) – Corporate fraud, particularly involving financial statements, is on the rise in India as executives struggle to meet earnings targets, global consultancy KPMG said Wednesday. Forty-five percent of the 1,000 managing directors, chief financial officers and other top executives of leading Indian businesses declared fraud had increased within their organisation, said the study, conducted every two years.
KPMG said 81 percent of respondents reported fraud involving financial statements was “a major issue”.
Some 63 percent blamed a desire to meet or exceed investor expectations as “the most significant reason” for issuing fraudulent financial statements.
“Remuneration linked to financial performance is also a driver for financial statement fraud,” Rohit Mahajan, executive director of KPMG’s forensic services, told AFP.
Corporate fraud has become an increasingly topical issue in India since leading outsourcer Satyam Computer stunned the country’s business world in 2009 with the admission that its profits had been overstated for years.
Satyam founder B. Ramalinga Raju declared he had inflated profits and jacked up the company’s balance sheet by more