The nature, extent and frequency of fraud continues to rise unabated. Organizations are exposed to a range of fraud risks – from employee theft, overbilling schemes, financial statement fraud, bribery & corruption, procurement fraud, cyber-crime and theft of confidential information.
As fraud risks increase and incidence of fraud multiplies, it is critical that organizations understand their fraud risks and take pro-active measures to combat fraud and thus become resilient to such risks and attacks.
Fraudopedia has developed an innovative solution to determine the Fraud Resilience Score of companies in India. The Fraud Resilience Score will indicate the organization’s resilience or strength of its control environment to prevent, detect and/or deter fraudz
The score is an inverse indicator in that:
Higher the Score, lower the risk of fraud.
The entity can rely on the strength of its
control environment and employees to
combat fraud risks.
Lower the score, higher the risk of fraud. The entity cannot rely on its control environment and employees to address fraud risks and consequently, remedial measures are required to enhance the entity’s fraud preparedness.
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Frequently Asked Questions
It is common knowledge that when the Company is faced with adversity and headwinds on corporate malfeasance, Independent Directors are held to account for possible dereliction of fiduciary duty and violation of Companies Act Rules and Regulations. The Fraud Resilience Score will enable Independent Directors to evaluate the entity’s fraud risk profile prior to accepting appointment and monitor the Company’s fraud readiness capability on an ongoing basis.
The nature, extent and volume of Non-performing Assets in India is alarming. Clearly, bankers must safeguard their capital by lending to organizations with a proven track record of leadership, governance and controls.
The Fraud Resilience Score will be an important tool that will assist bankers in making lending decisions prior to lending and thus avoiding delinquencies in their loan portfolio.
Private Equity, Venture Capital and Other Investors must evaluate the integrity of management and the governance framework at an entity prior to investing. The Fraud Resilience Score will provide critical information about the entity’s corporate governance, its leadership, integrity, ethics and preparedness to address fraud risks including risk of fraud by promoters and existing shareholders and the ability of the Board to deter such potential fraudulent acts by promoters.
Similarly, external auditors are answerable to shareholders and regulators when the Companies they audit report fraudulent conduct.
The Fraud Resilience Score will provide external auditors with credible data and insight on fraud risk profile that can be used during their client acceptance process and prior to accepting appointment as statutory auditors of the said entity. Further, the Fraud Resilience Score will provide an ongoing assessment of the entity’s ability to prevent, detect and mitigate fraud risk and assist auditors in tailoring their audit procedures to address fraud risks in their audit of the entity’s financial statements.
For additional information and queries on Fraud Resilience Score, please email us at score@fraudopedia.co.in