Authors : Himanshu

Volume/Issue : Volume 10 - 2025, Issue 12 - December

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DOI : https://doi.org/10.38124/ijisrt/25dec091

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Abstract : The rise of digital fraud and cyber incidents poses significant threats to the existence of contemporary corporations. In response, boards of directors, traditionally tasked with strategic decision-making, risk management, and stakeholder accountability, are now compelled to include cyber risk in their corporate governance frameworks. This study delves into the pivotal role of boards in preventing digital fraud by implementing governance structures, disclosure and compliance frameworks, risk management strategies, and drawing insights from prominent breach cases. It amalgamates insights from regulatory advancements, notably U.S. disclosure regulations, industry best practices (COSO, NIST, ISACA/industry manuals), and enforcement patterns to offer practical guidance for boards, audit and risk committees, as well as management teams. The digital revolution in global commerce has inadvertently led to a substantial increase in the vulnerability of businesses to cyber fraud, transforming it from a mere IT concern to a pervasive challenge at the board level. Modern corporate cyber fraud is characterized by its industrialized nature, utilization of advanced AI-driven deception techniques, and a strategic emphasis on exploiting human vulnerabilities. This synopsis explores the multifaceted progression of cyber fraud, encompassing intricate technical exploits, the weaponization of social engineering, and the significant economic and reputational repercussions for modern enterprises. The contemporary landscape is dominated by well-organized criminal syndicates driven by financial motives, leveraging cutting-edge technology to achieve mass-scale operations and hyper-personalized attacks. Attack methods have evolved beyond conventional phishing tactics to encompass vishing (voice phishing using sophisticated voice replicas of senior executives) and deepfake assaults that convincingly mimic faces, voices, and writing styles. This paradigm shift has redefined social engineering, positioning human trust as the primary security perimeter. Strategies like Business Email Compromise (BEC) and Payment Diversion fraud, where attackers manipulate payment instructions to redirect substantial corporate funds, now heavily rely on these AI-enhanced deceptive capabilities, resulting in substantial financial losses and severe erosion of stakeholder trust. Moreover, the fusion of cyber threats with traditional financial crimes, including ransomware and assaults targeting critical financial infrastructure, underscores a comprehensive threat landscape where data breaches, operational disruptions, and financial theft are interlinked. Mitigating these risks necessitates a fundamental shift in corporate defense tactics. Traditional security measures focused on network perimeters alone are inadequate against these adaptive, context-aware threats. The imperative lies in implementing a multi-layered, comprehensive security framework that integrates advanced technological defenses (e.g., behavioral analytics, threat intelligence) with robust human training and procedural safeguards. This includes enforcing active verification protocols reliant on confidential, non-public knowledge to counter the efficacy of deepfake attacks. In essence, combating corporate cyber fraud transcends a mere technological battle; it is an essential organizational mandate demanding cultural resilience, ongoing employee education, and the strategic fusion of cybersecurity, fraud prevention, and financial crime functions to safeguard the enduring integrity and stability of digital enterprises.

Keywords : Cyber Risk Oversight, Digital Fraud, Corporate Governance, Board Responsibility, Cyber Disclosure, Incident Response, SEC Rule, COSO, NIST.

References :

1. SEC — Final Rule: Cybersecurity Risk Management, Strategy, Governance, and Incident Disclosure (2023).
2. COSO — Managing Cyber Risk using the COSO ERM Framework.
3. ISACA / Cyber-Risk Oversight handbooks (Board guidance, 2023).
4. NIST — Govern function and cyber risk governance materials.
5. Reuters / KPMG / industry analyses on SEC enforcement and rules.
6. IBM / CISA summaries and case analyses on major incidents (Equifax, Colonial Pipeline, SolarWinds).