Reference no: EM132642642

Question - Internal Control & Governance

Stuart Dabbs of Global Solutions Pty Ltd of Melbourne Victoria, was sentenced to 18 months in prison, ordered to pay a $6,000 fine for participating in an illegal kickback scheme, and pay $440,000 in restitution to Nordyne, Inc., a manufacturer of heating and cooling systems based in Geelong, Victoria. Background. Dabbs was a principal of Global Solutions, an independent retailer of computer equipment and services. His co-defendant Kenneth Kantola was the manager of information technology for Nordyne, Inc. Kantola was responsible for purchasing computer equipment used by Nordyne. Between January 2014 and December 2018, Nordyne paid Global Solutions $5.9 million for computer equipment. Dabbs and Kantola agreed that Nordyne would order computer equipment that was invoiced by Dabbs and Global at fraudulently inflated prices or prices that intentionally omitted appropriate discounts. Kantola then approved the fraudulent invoices for payment by Nordyne. In exchange for the approval of these invoices, Dabbs paid Kantola a cash kickback. Since Dabbs was the sales representative for the Nordyne account, he was also paid commission for these sales.

Required - How this fraud could have been prevented? List six (6) internal control measures that should have been taken to prevent this fraud.