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What should be look for within inventory or in the accounts

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What should be look for within inventory or in the accounts receivable area in order to detect irregularities?

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The solution discusses what should be looked for within inventory or in the accounts receivable area in order to detect irregularities.

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Inventory:

The most important thing that we want to check are the physical inventory count logs. We need to determine if the inventory has been physically counted on a regular basis (usually once per year). If not, we can automatically determine that irregularities have a greater chance of being present because physical inventory counts have not been completed. Another area to check are the inventory logs. A substantive test should be performed to determine actual inventory against inventory logs. Inventory logs can also be checked against accounts payable, because ...

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