Cross-border financial fraud on the rise

New Delhi, May 30 | Updated: May 31 2007, 05:30am hrs
Legal and regulatory environment across the globe and cultural and language differences have been identified as majors challenges in conducting cross-border fraud investigations by senior business executives global research firm KPMG said today.

In an era of Internet and multi-national companies setting up operation bases across continents, the report points out the ill preparedness of most companies to investigate cross-border fraud. The KPMG survey questioned executives in 21 countries.

Multinational corporations (MNCs)have not yet devised effective investigation mechanisms to check inherent risks of fraud in their overseas operations, said the report.

A significant 92% of the respondents expected an increase in international investigations in the coming year, yet more than half had not implemented investigation procedures. Fraudsters operate undeterred by global boundaries. Therefore, companies must be increasingly vigilant about their ability to prevent, detect and respond to fraud,KPMG India Head Forensic Services Deepankar Sanwalka said.

He said companies need an effective fraud detection and investigative capability which is disciplined and fast. MNCs often develop one-size-fits-all investigative policies and procedures across many countries where they operate. But each nation has regulatory procedures that can stymie an investigation, said the report.