Whenever any company is able to sniff out that something fishy is happening with regard to financial dealings but not able to find out the source of fraud, it seeks the immediate help of forensic accountants.
Most of the experts in this field are of the opinion that white collar criminals are actually decent people who don't intend to harm anybody. Most of these crooks really feel guilty for having committed such frauds for quite some time in the beginning stages, unlike hardened criminals, and this really makes the job of the forensic accountant very complex and challenging.
Fraud may manifest in multiple forms. The Canadian Institute of Chartered Accountants defines fraud as a deliberate act of deceit resorted to by senior members of the management or by the employees who are in charge of governance or third parties in order to secure an illegal advantage. The activities can range from forging important documents, cooking up financial information, misappropriation of cash/stock and money-laundering.
The stock frauds in India can be categorized into various types:
The flying companies: In the last 10 years of the 19th century, the investors were caught in the IPO web as they were attracted by huge returns from the listed shares and the regulatory norms were not very stringent in those days, as they are now.
Brokerage misguidance: The brokerage firms in India are known for advising the investors in such an uncanny manner, that none can guess that the investors are being misled by them, by their wrong advice. In the US, such incidents have taken place and the brokerage firms that are involved in the above said controversies are JP Morgan Chase, Morgan Stanley or Credit Suisse (All names of brokerage firms).
High-tech frauds: Technology has entwined in all our lives and the stock market trading transactions are now carried online. Stock markets have become highly vulnerable to frauds, by way of manipulating the technology.
Market manipulations: Ketan Parikh and Harshad Mehta have been noted for making abnormal profits by manipulating the market price of the shares, deliberately.
The telemarketing project of an US-based credit-card company was just about to be completed.
When an internal audit conducted at the Wipro call center in Mumbai, India, brought to light the collective scam of the call agents, as many as 60 call-center agents got joined together and had been badgering American consumers for two months by making fraudulent claims about membership fees and gifts. (www.India Forensic.com) |
