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Fraud Inventory Case

 
 

The business world has always been concerned with theft. In fact major retailers report millions of dollars in stolen merchandise each and every year.

One mayor retailer said, 'I was always a problem, and although efforts to minimize the risk are in place it was accepted as a cost of doing businesses.

However in the early 90s businesses began looking at the employees and realized that they were as much at fault for stolen merchandise as was the general public.

Upon this realization can investigations by auditors and accountants to ensure facts, figures and inventories existed and were correct as reported. They were in for a shock.

Fraud inventory case or as it is better known inventory fraud has become a paramount concern.

There are a few ways to commit fraud inventory case.

The most popular is to have management increase inventory values and conceal shortages.

Some managers and retailers have even gone so far as to mix hundreds of empty boxes with boxes of real merchandise in order to exaggerate their inventory stock.

The question remains, how do you spot inventory fraud? There are a few things to look for:

•  a company committing inventory fraud will often not have sales increase as fast as its inventory

•  even as inventory increases shipping costs are falling or remaining the same

•  the goods sold are not inline with a companies filed tax returns

Only a small percentage of retail companies create this fraud inventory. However with the recent up surge in accounting scandals and business scams, companies are bound to be watched much more closely.

 

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