Abstract
The aim of this paper is to offer an overview of the research literature on corporate fraud and financial crime, in addition to the various prevention methods employed in diverse settings. It also seeks to discover effective methods that have been used to prevent fraud. Moreover, it aims to identify the causes of frauds along with their effects on the company’s stakeholders.
It also delineates numerous Indian legislations that have been instituted to help reduce corruption and enhance transparency and accountability in both government and businesses.
Other objective of the paper is to identify such appropriate strategies, which have been used till now successfully, in order to stop this fraud. We will try to delineate the effects of fraud at several organizational or societal levels. The detection and prevention of corporate fraud comes first in the list of top priorities for the organization.
It causes high devastation to the economy and the stakeholders. Corporate fraud today has turned part and parcel of the life of the common man; it has made its place in common man’s day-to-day life, and as such, it poses a severe threat to the entire economy.
Keywords: Financial Crime, Economy, Indian legislations, CorporateFraud, Prevention.
- INTRODUCTION
Any organization which has to prosper and be long lasting needs to ensure an environment of trust and integrity in the workplace. Regrettably, fraud could undermine this trust and impact the company as a whole. Corporate fraud can result in lasting harm to a company’s reputation and financial goals.
Corporation fraud[1] is a dangerous risk to India’s business environment and can cause chaos to companies, investors, and the economy. With growth in the corporate sector of India, it also faces fraudulent behaviour that chromatograph to financial loss, damaged reputations, and broken trust. This detailed research tries to bring to the fore the dark side of corporate fraud in India, its types, impacts, and strategies to deal with this serious problem.
It not only severely affects the interests of all stakeholders, mainly the investors, but also portrays a very bad image of the country’s economy. Any corporate fraud taking place within a state not only affects the capital market but also hits the company’s creditors, investors, and employees
Further, such negative implications have also been seen to affect the current and potential foreign investors, who are an important factor in the growth of a developing country like India. This resulted in our MPs enacting stringent laws to deal statutorily with the growing menace of corporate frauds and to protect the interests of innocent investors.
Corporate fraud in India is as old as time, with financial manipulation and insider trading among many other activities being carried out pretty openly across traditional businesses and startups in this fast-changing corporate world. The perpetrator may be an entrepreneur or a government official, hitting businesses and markets.
[1]V, S. (n.d.). Fraud-Definitions.