Wipro starts probe into $4 million fraud

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Source: Economic Times of India

26 Feb 2010, 0427 hrs IST, TNN


BANGALORE: Embezzlement by employees is seen to be a common phenomenon among Indian companies. And some say even the $4 million that a Wipro employee is said to have embezzled is a relatively ordinary figure.

Wipro is now instituting a high-level internal probe, and is said to have even mandated Ernst & Young to verify the audited accounts. Experts say the reason for such frauds typically is lax controls.

Kashi Memani, former chairman and managing partner of Ernst and Young India, said such frauds happen when a company does not conduct regular internal audits, do not have in place a tight set of internal controls and most importantly, when they decentralize the power of checks and balances to people down in the hierarchy.

"It is very important for companies to change the set of people who have access to accounts on a regular basis. But, one must be careful not to change people either too soon or wait for too long. Many a time people who have for long earned the company's trust of handling accounts, tend to misuse this trust," Memani said.



Read more: http://economictimes.indiatimes.com/articleshow/5617785.cms