DR. RADHANATH PYNE
UGC MINOR PROJECT – NO. PHW-100/14-15(ERO)
TITLE OF THE PROJECT: FINANCIAL FRAUD AND ROLE OF ACCOUNTANTS IN INDIA
PRINCIPAL INVESTIGATOR: DR. RADHANATH PYNE
DEPARTMENT OF COMMERCE
10 RAJA NABAKRISHNA STREET
KOLKATA – 700 005
Summary of Findings:
- Theoretically various methods are explored through which frauds are committed.
- Apart from the process of fraud, the society and psychology of the fraudsters are also highlighted which shows the fraud is committed mainly from the upper level of the management. Lack of proper corporate governance is also predicted as a major drawback of financial fraud.
- The scenario of the national and international failures is compared and it is found that the large companies from western countries are more vulnerable in terms of fraud. India as a conservative player in this issue can insulate a bit. But the significant concern is the number and volume of the fraud is increasing gradually.
- While discussing the theoretical issues it was also a major concern that the punishment of not compliance of the legal standard is minimal. So the compensation to the investors in case of loss due to fraud is negligible.
- Findings of the analysis of primary survey are interesting. Total thirty questions are placed for response. After getting the responses the validity is tested and seen the figures as valid. The responses are segregated in to four blocks C,P,D and R (Concepts, Process, Disclosure and Regulation). An average response of the particular respondent about the block is calculated. Then all the groups are studied internally by covariance matrix to find the variability among the responses. Next, a correlation matrix is drawn through SPSS to find the relationship among the groups. It shows that though the respondents have a better understanding of the theoretical background of fraud, they are not that much sound about the disclosure and regulation of fraud. The correlation shows a weak result when the disclosure and regulation is compared with other groups like concepts and process.
- Thus the probable recommendation and further research area is also mentioned in the concluding chapter. The ethical issues, governance issues, audit committee issues along with the independence of the auditors and the legal provisions relating to monitoring the fraud is also highlighted.
- Overall the project clarifies the standing of Indian accountants in fraud issues and unveils the reluctant attitudes to fight against it. There is enough scope of extending the research by taking much bigger sample and analyzing the same in a more scientific and objective way to throw a light about the future trend of ethical accounting in India and thus providing a safer financial paradigm to the investors.