Indian firms may have to abide by strict global standards: EY

rule book:Companies will be introduced to new standards of compliance requirements.— FILE PHOTO  

Indian companies will have to comply with stricter international norms following a rise in foreign investments in the country, according to a report.

The organisations would have to meet the requirements of foreign laws like U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act, according to the report by EY.

“Active measures are being progressively included to identify and seal any gaps within organisations’ compliance frameworks,” according to the report titled ‘Forensic Outlook 2016.’

“These include, but are not limited to, introducing or re-evaluating the company’s code of conduct and anti-bribery and corruption compliance framework, setting up whistleblowing frameworks to enhance transparency, conducting awareness trainings and implementing thorough fraud, bribery and corruption monitoring systems.”

Retail sector

“The Retail and Consumer Products (RCP) sector has seen a significant uptick in India with increasing consumer purchasing power as well as varied choices… with cost reduction high on the agenda, many companies have resorted to cost reduction initiatives to maintain profitability.

“This has given rise to several risk scenarios,” according to the report.

The risk scenarios for the retail sector include bribery and corruption, supply chain leakage such as thefts or any dubious movement of inventory and counterfeiting, which will not only results in a loss of revenue but also expose companies to increased reputation and litigation risks.

Auto sector

Similarly, the report points out to a number of risks facing the auto sector, including violation of emission norms through the manipulation of prototype test norms and test results, bribery and corruption, and dealer frauds.

These include monetary and non-monetary benefits extended to government officials for managing emission test results, negotiating fleet sale contracts, obtaining bulk sale orders, managing non-compliance to various government licenses and regulatory requirements.

It highlights the benefit of Bankruptcy, Black Money and Benami Transactions Bills in enabling transparent business dynamics