 "Survey shows Media & Entertainment industry witnessed sharp rise in fraud cases")
New Delhi: The Indian Media & Entertainment industry has witnessed a sharp rise in fraud-related cases over the last two years and they have led to significant loss of profits and inflated costs, says a survey.
According to the EY’s Media & Entertainment (M&E) Fraud Survey 2014 released today, one out of six respondents reported increased cases of fraud in their organisations.
[caption id=“attachment_74236” align=“alignleft” width=“380”]  Distributors sort through newspapers. Reuters[/caption]
Around 98 per cent say unethical practices led to significant loss of profits and inflated costs, while 70 per cent say false invoicing and overbilling by third parties is a serious issue.
“Being on an upward trajectory, the Indian M&E sector is increasingly victimised by the growing challenges around governance breakdowns and unethical practices. This has led to extensive losses (monetary and reputational), sub-par performance and arrested development,” EY Partner, Fraud
Investigation & Dispute Services, Mukul Shrivastava said.
In light of the changing industry dynamics, organisations will have to improve vigilance, boost internal controls and raise compliance benchmarks for sustainable growth, Shrivastava added.
Interestingly, only 24 per cent have regular reviews conducted by external law firms or specialist consultants.
Moreover, around 57 per cent are yet to set up a whistleblowing mechanism to protect the company’s interests and 41 per cent have minimal knowledge about anti-corruption laws such as Foreign Corrupt Practices Act, UK Bribery Act and local regulations.
Regular training, awareness programmes, interactive sessions with case studies and scenarios are expected to be strategic enablers in institutionalising a robust fraud risk management programme, the report said.
“As companies in the M&E sector increase in size and move from unorganised to organised operations, the need for proactive fraud prevention has increased,” Farokh Balsara, India Media & Entertainment Sector Leader India said.
The adoption of an ethical business conduct and sound governance policies will play a crucial role in determining its true success, Balsara added.
PTI
PTI
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