Enforcement of Corporate Governance Against Financial Statement Fraud: A SEBI and Companies Act 2013 Perspective

Abstract

Corporate governance plays a crucial role in ensuring financial transparency, accountability, and ethical business practices. However, financial statement fraud remains a persistent challenge, undermining investor confidence and corporate integrity. This research examines the enforcement of corporate governance mechanisms under the Companies Act 2013 and SEBI's Listing Obligations and Disclosure Requirements (LODR) Regulations, 2015 in preventing fraudulent financial reporting. Despite robust legal frameworks, gaps in enforcement, regulatory inefficiencies, and auditor collusion continue to facilitate financial misconduct. Through an analysis of governance challenges and enforcement mechanisms, this study highlights key areas for reform, including strengthening regulatory oversight, enhancing auditor independence, and leveraging technology for fraud detection. The findings underscore the need for stricter compliance measures, improved board accountability, and proactive policy interventions to mitigate financial fraud and enhance corporate governance effectiveness in India.