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Inventory Fraud

Inventory accounting is a good place for fraudulent behavior. Think about the accounting principles and practices related to inventory and list one way that fraudulent behavior might take place. Be very specific. Create one way to reduce the risk of this fraudulent behavior in the business.

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Step 1
One inventory accounting fraud is to record less inventory than what actually is in stock. The excess stock is sold off. When the inventory count is done the count matches the inventory balance. When inventory comes in, fraud is committed by not recording ...

Solution Summary

This solution explains inventory accounting fraud and the method of controlling it. The sources used are also included in the solution.