A fraud expert at work

Updated: Mar 26 2006, 05:30am hrs
You could call Deepankar Sanwalka a fraud expert. He's been dealing in them for over two decades now. Frauds in any form internal, environmental and social audits, due diligence, cost reduction studies, validation of award schemes, corruption investigations, business ethics and litigation support are his cup of tea, or more literally what earn him his daily bread.

As executive director of forensic services, KPMG India, responsible for an almost annual Fraud Survey Report (the latest released last week), he sees far more than an average person's share of fraud. Or does he, for India is still rated in the bottom quarter by Transparency International in terms of corruption. And the loss is estimated at about 3-5% of the GDP, enormous by any standards.

Fraud detection is increasing in India, he says. Unfortunately, frauds are almost always detected after they have occurred. So it is necessary for companies to improve their risk management. Even when companies comply with Sebis Clause 49, there is little information with the employees on how they can report frauds. He cites the example of hotlines in US, where employees can call up anonymously to report what they see or suspect. Talking about India he says, Perhaps an e-mail account would work better as many fear they would be recognised over the phone.

He says, The financial sector in India is most at risk and needs far more checks. According to his estimates, nearly 90% of all frauds committed today have an element of computers involved in them. All the recent investigations have had elements of IT in them.

Sanwalka is a member of the Institute of Chartered Accountants of India and president on the board of the India chapter of the Association of Certified Fraud Examiners. And he established the forensic accounting practice for KPMG in India in 1996, starting single-handedly then.

And he is hopeful of change. I see a definite climate for more ethical practices, he says, explaining it will only benefit the companies in the long run. Tea money or speed money can only go so far.

He also stresses the need for zero tolerance for companies in dealing with their employees. So beware, for when you have been presenting a bill for Rs 200 instead of the actual Rs 100 you spent on the cab ride, there just might be someone tracking you!