Tech push for early fraud detection system

The ministry also plans to revamp the EWS by adding more parameters in the existing 10 standards. The EWS starts sending alert signals if discrepancies are found in company books. “XBRL may be called upgrading the early warning system. It is computer-readable and reporting in XBRL will make the job of fraud-detection quicker. More parameters in EWS may be added. It will become easy to compare balance sheets because it will not be manual. Currently,registrar of companies does it manually by comparing balance sheets which are in PDF format,” sources told The Indian Express. With the introduction of XBRL,the RoCs will have a dash board through which they can compare balance sheets of firms whose names have been thrown out by the system immediately.

Currently,parameters like adverse remarks from auditors,changing the auditors for more than once in three years,related-party transactions of more than 5 per cent of domestic sales etc,have been allotted certain weightage and the government follows it for inspecting company books.

The MCA plans to merge this system with XBRL and this will be computer-readable,which will help in selecting,analysing and exchanging data with other computers.

India will adopt the XBRL system from April 2011 while the US Securities and Exchange Commission has already made it mandatory to file statements in this format.