1

India Business Database.com

PREVENTION IS BETTER THAN CURE

2

FRAUD

“Fraud is simple- concealment methods make it complex”

3

TYPES OF FRAUD

Fraud

Misrepresentation or

concealment of material

facts

Bribery

Conflict of interest

Theft of money or property

Theft of intellectual

property

Breach of fiduciary

duty

Statutory offences

4

COST OF FRAUD RISK

US organizations loose 7% of their annual revenues to fraud.

Fraud schemes continue for years before being detected most likely by tips than by audit

Financial statement fraud are very costly

ACFE fraud risk report

5

FRAUD RISK IS UNIVERSAL

Banking is one of the most

common industry to be

affected by fraud.

Small businesses are very vulnerable to occupational

fraud.

Fraud is mostly committed by

Accounting Department &

Upper Management

6

AUDIT VS FRAUD EXAMINATION

Audit Fraud Examination

Objective Expresses an opinion

Establishes who is responsible

Methodology Examination of financial data

External & Internal financial and non-financial data

Presumption Professional Skepticism

Based on proof

7

•360o

knowledge on the subject

Corporate Intelligence

•Benchmarking competitive environ

Business Credit Analysis

•Forensic analysisInternal Audits

•Review and Implement

Internal Controls &

Systems

FRAUD TOOLS

8

CORPORATE INTELLIGENCE

Analytical process

Related party dealings

Forensic accounting

Monitor business environment

Who can use it?•Regulatory Bodies

•Banks & Hire Purchase companies

•Venture Capital/ Private Equity

•M&A Transaction

•Corporations

9

BUSINESS ANALYSIS

KNOW BEFORE YOU DEAL

Who can use it?

•Extending credit

•Customer relationship management

•Supplier chain management

•Competitive analysis

Operational, financial and

market analysis

Standardized process of

collecting data

10

INTERNAL AUDITS

Who can use it?

• All kind of organizations

Benchmarking

Evaluate processes to determine financial &

non-financial data.

Examine internal

documents

11

DESIGN INTERNAL CONTROLS

Control environment & activities

Risk assessment

Communication & Monitoring

Designing Robust Processes

12

RISK SCORECARDS

Evaluates financial & non-financial data elements

Z testing for population

Industry performance benchmarking

Generic for all types of business units

Proprietary Risk

Scorecard

13

BENEFITS

Managing financial risk

Business loan portfolio & credit lines

Vendor continuity program

SME business analysis

Detecting fraud

Locating misappropriation of assets

Monitoring activities

Achieving objectives

Aligning risk with strategy

Optimize product pricing

Managing multiple risk environment

Enhancing risk response

Reducing operational losses

Identifying and seizing opportunities

Improving capital efficiency

Compliance & Reporting

14

CASE STUDY: SPECIAL AUDIT

Client: Pharmaceutical

Major

Subject: Information

Security

Case Observations

•Gate & Key management

•Email, Fax & Scanner blocking

•Surveillance

Tool: Forensic

Accounting

Recommendation

•Technology recommendations

•SOP manual & Employee training

15

CASE STUDY: MISREPRESENTATION

Client: Banking

Company

Subject: Hosiery

Manufacturer

Case Investigation

•Sham facilities

•Fabricated documents

•Promoter under investigation by Federal Agencies

Fraud Tool: Corporate

Intelligence

Client Benefit

• No facilities were extended

16

CASE STUDY: FICTITIOUS ASSETS

Client: Banking

Company

Subject: PVC

Flooring Company

Case Investigation

•Over statement of receivables & inventory

•Export Benefit certificates not available

Fraud Tool: Internal

Audit

Client Benefit

• Subject business was forced to pre-close account.

17

CASE STUDY: BACKGROUND

Client: Global Trading

Company

Subject: IT Support Service

Provider

Case Investigation

• Promoter involved in another business that was defaulter with banks

Fraud Tool: Business

Credit Analysis

Client Benefit

• Extended safeguards were created

18

CASE STUDY: PAYMENT DELAYS

Client: Global Trading

Company

Subject: Hatcheries Company

Case Investigation

•Delay in payments to the trade

•Earmarked “Sub-Standard” asset with the banks

Fraud Tool: Business

Credit Analysis

Client Benefit

• Further limits were not extended.

19

CASE STUDY: BUSINESS DEVELOPMENT

Client: Machine Tool Manufacturer

Subject: Identificati

on of prospective

clients

Case Methodology

•Database filter

•Feedback form

•Credit Check

Research Tool:

Marketing Solutions

Client Benefit

• Identification of new credible clients

20

PEOPLE

• Merit-holder, Fellow Chartered Accountant

• 22 years in Financial services & Risk management

Vivek Parti, Chief Consultant

• Management graduate

• Twenty yearsexperience in consumer retail, automotive aftermarket, consumerdurable and office automation industries

Arun Lamba, Senior Consultant

• Merit-holder, Fellow Chartered Accountant

• Tax expert with 20 years of experience

Sanjeev Puri, Senior Consultant

• Retail experience

• Project management

Sonia Parti, Practice Leader

21

INFRASTRUCTURE

Scalable data centre in the Indian national capital region

All-India data collection network

Connected to global databases

Established data reporting templates

Proprietary risk management model

Global clients across different industry verticals

Data protection and privacy policies

Value Proposition

Cost Rationalization

Better

Quality

Our

Value

Proposition

22

23

ASSOCIATE

Audit & Assurance

Forensic accounting

IFRS implementation

Compliance & XBRL filing

Tax Advisory

Business research

Partner search

Strategic & Financial

consulting

24

91.120.2569761-63

A-166, 2nd Floor, Defence Colony, New Delhi 110024

B-16, Site-C, Surajpur Indl Area, Greater Noida 201306

• info@indiabusinessdatabase.com

• http://www.indiabusinessdatabase.com

• http://www.indiabusinessdatabase.com/blog

This presentation (slides 1-23) is the property of IBD. It may contain information which is confidential and/or legally

privileged. Unauthorised use, distribution, disclosure or copying without specific permission is strictly prohibited.

THANK YOU