The pandemic -led financial stress could lead to an increase in fraud and corporate misconduct—the hallmark of similar crisis periods in the past, experts have warned. Struggling companies often face pressure to dress up earnings to understate threats to their viability or to secure financing during a downturn. “Lessons from the 2008 financial crisis have shown us that major disruptive events such as the pandemic, always increase the propensity for fraud and allied criminal misconduct. “One circumstance where employee-driven fraud takes place is when incentives are linked to targets and financial performance. Experts said about 70% of the frauds are exposed by whistle-blowers, key stakeholders in the corporate ecosystem who need protection.

Source: Mint February 11, 2021 18:11 UTC