Branch could not ignore this. On August 16th, one month after that initial suspicious phone call and fax from MST, Branch asked Robertson, Samlal’s supervisor, to talk to her privately. They went into a conference room and Branch told Robertson about her suspicions that Samlalwas using his authority to override the system of internal controls and conducting shady transactions. She mentioned that Samlal directed MST’s off-lease computer equipment to his friend Tim Johnson at Maverick Fitness, and that he gave the Bishop High School account to his friend Albert. Further, he had Enterprise pay to ship the equipment from the University of North Carolina to Maverick, even though this was against company policy. Robertson decided to conduct an internal audit. During the two-week audit, Enterprise discovered that Samlal had diverted part or all of the proceeds from several shipments of computers from April 4, 2018–August 2019. Also, several companies, including Maverick Fitness and Trystone, never remitted payment to Enterprise for this equipment. They also discovered invoices for the shipment of equipment to Maverick that Samlal had signed off on and turned in to Accounts Payable for payment, even though it was not Enterprise’s policy to cover shipping costs. Finally, there was evidence that, although computers that were placed with unauthorized remarketers were entered into the LeaseInfosystem, they were being sold for below-market prices to those remarketers. There was no doubt in anyone’s mind that fraud was occurring at Enterprise. Meantime, Samlal continued to divert company assets. At one point during those two weeks, he handed Branch a copy of an $82,125 check from Asset Recovery Specialists and told her to close out a University of North Carolina contract for 565 laptops. But Samlal did not know that Branch had already spoken to the Asset Recovery Specialists representative and found out that the check was for the purchase of only 365 laptops. Samlalhad diverted the other 200 laptops to Maverick. Meantime, Samlal continued to divert company assets. At one point during those two weeks, he handed Branch a copy of an $82,125 check from Asset Recovery Specialists and told her to close out a University of North Carolina contract for 565 laptops. But Samlal did not know that Branch had already spoken to the Asset Recovery Specialists representative and found out that the check was for the purchase of only 365 laptops. Samlalhad diverted the other 200 laptops to Maverick. 1.As discussed in units 1 to 4, all frauds involve key elements. Identify and describe using examples from the case, the elements of the Enterprise’s fraud? 2. What were the red flags that signalled fraud was occurring at Enterprise? What should auditors, fraud examiners, and colleagues pay attention to that could be indicative of fraud? 3. Describe Enterprise’s fraud prevention programme and identify any improvements that might be necessary to prevent this type of fraud or at least discover it sooner.
Branch could not ignore this. On August 16th, one month after that initial suspicious phone
call and fax from MST, Branch asked Robertson, Samlal’s supervisor, to talk to her privately.
They went into a conference room and Branch told Robertson about her suspicions that Samlal
was using his authority to override the system of internal controls and conducting shady
transactions. She mentioned that Samlal directed MST’s off-lease computer equipment to his
friend Tim Johnson at Maverick Fitness, and that he gave the Bishop High School account to
his friend Albert. Further, he had Enterprise pay to ship the equipment from the University of
North Carolina to Maverick, even though this was against company policy. Robertson decided
to conduct an internal audit.
During the two-week audit, Enterprise discovered that Samlal had diverted part or all of the
proceeds from several shipments of computers from April 4, 2018–August 2019. Also, several
companies, including Maverick Fitness and Trystone, never remitted payment to Enterprise for
this equipment. They also discovered invoices for the shipment of equipment to Maverick that
Samlal had signed off on and turned in to Accounts Payable for payment, even though it was
not Enterprise’s policy to cover shipping costs. Finally, there was evidence that, although
computers that were placed with unauthorized remarketers were entered into the LeaseInfo
system, they were being sold for below-market prices to those remarketers. There was no doubt
in anyone’s mind that fraud was occurring at Enterprise.
Meantime, Samlal continued to divert company assets. At one point during those two weeks,
he handed Branch a copy of an $82,125 check from Asset Recovery Specialists and told her to
close out a University of North Carolina contract for 565 laptops.
But Samlal did not know that Branch had already spoken to the Asset Recovery Specialists
representative and found out that the check was for the purchase of only 365 laptops. Samlal
had diverted the other 200 laptops to Maverick.
Meantime, Samlal continued to divert company assets. At one point during those two weeks,
he handed Branch a copy of an $82,125 check from Asset Recovery Specialists and told her to
close out a University of North Carolina contract for 565 laptops.
But Samlal did not know that Branch had already spoken to the Asset Recovery Specialists
representative and found out that the check was for the purchase of only 365 laptops. Samlal
had diverted the other 200 laptops to Maverick.
1.As discussed in units 1 to 4, all frauds involve key elements. Identify and describe using
examples from the case, the elements of the Enterprise’s fraud?
2. What were the red flags that signalled fraud was occurring at Enterprise? What should
auditors, fraud examiners, and colleagues pay attention to that could be indicative of fraud?
3. Describe Enterprise’s fraud prevention programme and identify any improvements that
might be necessary to prevent this type of fraud or at least discover it sooner.
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