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ICE sector has maximum risk of corporate espionage

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CIOL Bureau
New Update

NEW DELHI: The survey carried out by KPMG across a cross section of senior executives in 800 organizations in different vertical segments, respondents in the ICE sector felt most vulnerable to corporate espionage. While 84 percent of respondents in the ICE sector apprehended corporate espionage attacks in their organizations, the financial sector came second with 81 percent respondents apprehending attacks in their organization..



Numerous security leaks and modern day hack attacks have made corporate espionage one of the most serious concerns for the corporate world. Ranging from simple unethical transgressions to fierce competitive intelligence, corporate espionage is a real fear today with as many as 75 percent of those surveyed saying that corporate espionage could affect their business in future.



As a result, 51 percent of respondents have framed some policies or procedures to counter corporate espionage. The most common measures were allowing access to sensitive information on a need to know basis (82 percent) and restricted physical access to sensitive areas (79 percent). Improved IT systems as a way to prevent corporate espionage was at 55 percent. Other preventive measures mentioned by respondents included: review by top management of sensitive information, display of identification tags for all personnel and visitors, shredding of paper before disposal, continuos efforts to build loyalty towards the organization.



The largest number of frauds were experienced in the retail sector (83 percent) followed by IT (67 percent). The financial services sector lost the maximum due to false information (50 percent) and the ICE sector suffered on account of misappropriation of funds (22 percent).



In several cases, the fraud was discovered by more than one method. Internal methods of detection like internal controls (41 percent) and internal auditor review (33 percent) continue to be more effective than external methods with the latter method discovering only 2 percent of the frauds.



Respondents believe that their organization was defrauded due to poor internal controls (51 percent), followed by collusion between supplier and vendor particularly in the manufacturing sector, employee and management (40 percent) and background checks of employees and vendors not being comprehensive (29 percent).



Respondents have undertaken improved internal controls (57 percent) and extensive background checks (58 percent) as measures to prevent fraud. In many cases organizations have enhanced budget requirements for internal audits and provided more powers to the audit committee (52 percent).



Organizations who have not conducted fraud diagnostic reviews seem to be susceptible to the risk of fraud. This appears to be justified by the finding that 44 percent of the respondents who have not undertaken a fraud diagnostic review were victimized by fraud.

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