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Abstract
In this paper my objective was to observe the nature and perception of corporate fraud in India and its consequences in the business and economic systems, pinpointing the rising issues so that present legal as well as regulatory obligations can be re-evaluated and structured. This research is based on secondary data. But from where this research has been cited has collected data through an exploratory research, conducted through a combined mode of literature review, case studies, structured questionnaires from 346 companies who were sample for the study and 43 interviews were conducted with the corporate professionals, management, investors, government office and authorities having wide experience. During this process of my research and prior work of others, it was found that the regulatory system is weak, and there is a dire need to redefine the role of auditors. It was found that if proper care has been taken on part of auditor in every case, risk of occurrences of corporate frauds could be mitigated to a huge extent. Coordination among various regulatory authorities is poor, and after every scam, there is a blame game. Reporting of fraud and publication of fraud prevention policy is almost negligible in our country, if published these could help a great deal in prevention of frauds. Banks and financial institutions are unsuccessful in due diligence, and there is often a lack of professionalism on the board and the other executive levels in the company. This study and prior studies conducted by others points to the fact that fraud could be mitigated by realistic and cognizant action by the auditors, and corporate executives if they are willing to avoid perpetrating financial scam despite compulsion from investors, government securities regulators and external market fluctuations. This study points out the fact there should be compulsory publication of fraud prevention policy, special purpose corporate offence wings should be established, recognition of companies for improved corporate governance, fair execution of International Financial Reporting Standards in the companies, Thoughtful and prior attentiveness by banks and financial institutions, compulsory appointment of professionals by shareholders and fixation of responsibility on independent professionals, expertise of audit committee, and more powers to the regulators, especially Securities and Exchange Board of India.