ASSEST MISAPPROPRIATION: Inventory and other Assets

Question 1

Inventory Shrinkage

Answer 1

unaccounted for reduction in company’s inventory that results from error or theft

Question 2

How do you conceal Inventory Shrinkage

Answer 2

1. make perpetual inventory = physical inventory (forced reconciliation)
2. write off inventory
3. physical padding

Question 3

Another name for making perpetual inventory = physical inventory

Answer 3

forced reconciliation

Question 4

What is physical padding

Answer 4

making it appear more stuff in warehouse than really is