CFO frauds reveal failures of auditors and audit committees, expose risks of corporate collapse, say experts

Recent incidents in India, including the alleged diversion of ₹1.18 crore at Marcellus Investment Managers and ₹250 crore in unauthorized trades at Gameskraft Technologies, have exposed critical weaknesses in corporate governance. These cases highlight gaps in internal controls, audit functions, and board supervision, showing how overreliance on CFOs without proper oversight can lead to significant financial and reputational risks.

Our Founder & MD, Mr. Shriram Subramanian, noted that CFO frauds highlight the importance of systems over trust. He highlighted that concentration of authority, weak internal audits, and insufficiently independent oversight can create vulnerabilities and added that even trusted relationships should be governed by strong processes, segregation of duties, and active audit committee involvement to prevent misuse of financial authority.

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