The finance community and directors have to take measures to prevent fraud and failure of internal financial controls such as by developing case study of the Register of Frauds, National Financial Reporting Authority (NFRA) chairman Ajay Bhushan Prasad Pandey said on Friday.
Perhaps it is time to go back to the basics of internal financial controls as not all the corporate frauds were committed by very sophisticated designs but by age-old methods of fictitious sales and loans and advances, over-invoicing of purchases, related party transactions and due to failure of basic internal controls, Pandey said a CII event in Mumbai.
Speaking at the conference on “Financial Reporting and Corporate Governance in the Corporate Sector”, Pandey said that investors reward well-governed corporates.
About building trust and meeting stakeholder’s expectations, Pandey mooted the idea of crowdsourcing of risk-related matters and matters of emphasis for auditor consideration. He also suggested consideration of the UK Brydon report recommendation of publication of Directors Risk Report before the audit scope is decided by The Audit Committee which can evaluate stakeholder’s inputs on that Risk Report.
On the sustainability reporting standards, he said it is better to align with those of the International Sustainability Standards Board of IFRS Foundation.