SESSION ON FORENSIC ACCOUNTING AND FRAUD MANAGEMENT

Mr. Nikhil Parulkar, Head of Risk Containment Unit at Kotak Mahindra Bank, Mumbai provided us with the basic insights into the world of risk management with respect to monetary transactions on 30^th August, 2011. He is a certified forensic expert, a proven hand in examining fraud cases, and adept at recognizing the loopholes which can give room to fraud, in the banking industry. He has dealt with many fraud investigations . He has worked with Indian banking big wigs, such as ICICI and HDFC , prior to joining Kotak Mahindra apart from devoting his invaluable expertise with consulting big wig Ernst & Young. 


Mr. Nikhil started by explaining the definition of fraud. He notified the lack of proper meaning attached to the hazard known as “FRAUD” as no such peculiar definition of “FRAUD” has been underlined as per the Institute of Chartered Accountants of India better known as the ICAI. The only law that recognizes it as a wrongdoing is the IPC-420 which is for cheating. He then went on to define “FRAUD” as per the Common Wealth which involves ethics and intent as the parameters along with other factors. He explained the terminology focusing on “the guilty mind” and citing the example of Satyam.

 Mr. Nikhil then pointed out the various characteristics of “FRAUDS” apart from explaining every aspect of it. He brought to light the several consequences of the problem and the reasons affecting the susceptibility of major organizations to “FRAUD”. Here he came up with the significance of forensic accounting. Nikhil questioned whether a company falters or does not falter due to the DNA of the company or the DNA of the people who make it. He then went on to discuss the fraud triangle, fraud diamond (which is an addition of a new dimension to fraud triangle), the capability dimension, which has been the most notorious dimension, having debilitating effects as seen in the recent past. He enumerated the dimensions of fraud triangle, perceived pressure facing the individual, opportunity to commit fraud, person’s rationalization and integrity.

“Inside Job” an informative movie was screened post completion of the session, which is based on the chronicle of events and decisions which led to 2008 financial meltdown/crisis, the root cause of the financial crisis and the role of persons vested with power, how they can influence the systems was insightful and a discussion followed over the good and bad of the decisions sensitized the students towards the importance of ethics and role of corporate governance. And a pledge was taken by all the students that they will follow highest corporate governance standards where ever they work and see that their subordinates and superiors follow the ethics by being an example.

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