The main reasons identified by respondents for the increase in fraud have been weakening of societal values, the lack of emphasis on fraud prevention and detection, and increasing economic pressures. In India, theft of cash or inventory, or submission of false expense claims is very common amongst employees. In management ranks, expenses and purchasing are much-favoured areas of fraud, with window dressing of financial information and diversion of funds also being relatively frequent. In the 1999 KPMG India Fraud survey report, a comparison of the areas of majority losses was done for the segments of financial services, manufacturing, and consumer products. Secret commissions, expense account frauds and false invoices are more prevalent in the manufacturing and consumer product segments, whereas false financial statements was a higher source of loss in the Financial sector.
Corporate espionage is highest in consumer products.
Fraud in the infotech sector, surprisingly, is quite low in India. However, with increasing computerisation and networking of business environment, the advent of e-commerce and globalisation of business, this scenario is heading for a change. Already there are instances of hacking into sensitive computer networks like that of Bhabha Atomic Research Centre. The CBI is gearing for this scenario by setting up a cyber crime cell, increasing co-operation levels with other international investigating agencies and training its personnel. In the near future, sophistication of crime will involve using IT to its maximum as it does away with the traditional paper trails and can cross political boundaries which hamper government investigating agencies today.