Fraud: Ultro and Enormo

Topics: Smuggling, Finance, Debt Pages: 1 (346 words) Published: May 23, 2014
Joseph Cicio

A.) The implication of this illegal act committed by Ultro’s management is committing fraud, so they are ultimately responsible for what happened. They sold automobiles that were fully depreciated on Ultro’s books to employees to generate an additional $50,000 in foreign currency which is illegal all with in itself. They also knew the Caribbean country in which they were operating out of has strict laws governing the transfer of funds to other countries, but an employee still went out of his/her way to smuggle $50,000 of foreign currency out of the Caribbean country so it could be deposited in one of Enormo’s bank accounts. Management did nothing to stop this employee from smuggling the money out of the country and most likely sanction the action. Enormo and Ultro’s management does not seem to care about these illegal actions and does not want to take any measures to resolve these issues in the future, even though they are fully responsible.

B.) If the CPA firm suspects that Enormo’s management is involved in noncompliance (which they are), they should communicate the matter to the next level of authority in the organization. If Enormo’s next level authority is not cooperating, the firm should obtain their own legal advice from outside of Enormo’s legal team. Since they have already committed fraud once with this illegal action, the CPA firm should take a deeper look into Enormo’s financial records to see if these types of illegal transactions have happened in years past.

C.) I personally would report the illegal act because it would be unethical not to even though it is a small amount of money. Not only is my reputation at stake, but so is the reputation of my entire CPA firm. If I were to lie about one companies financial records, I would be jeopardizing any future business with other clients if I were to get caught. It is always better to report everything you find in an audit so nothing comes back to negatively impact you and...
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