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The Association of Certified Fraud Examiners (ACFE) has developed a fraud tree which categorizes types of fraud schemes into the following three primary areas:

  • Corruption
  • Asset Misappropriation
  • Financial Statement (FS) Fraud

Previous courses have addressed corruption and asset misappropriation related to fraudulent disbursements and financial statement fraud.   This course addresses asset misappropriation – specifically related to inventory and other assets.

To identify how fraud can be mitigated, individuals must understand the types of fraud most prevalent to their business.  Asset misappropriation is a scheme in which an employee steals or misuses the employing organization’s resources. Considering inventory and other assets, there are multiple methods in which fraud can occur.  These extend through the raw materials, work in process, and final goods stages.  It can relate to employee theft, vendor fraud or accounting irregularities.  This session will focus on the many methods involved in inventory fraud.

Note: Information within this course comes from readily available public domain documents and is utilized by the trainer as a supplement for relaying the course content.

Learning Objectives

  • Explore the penalties for asset misappropriation.
  • Recognize the definitions of inventory and other assets.
  • Identify types of inventory fraud and relevant red flags within the raw materials and Work in Process (WIP) categories.
  • Explore the concept and relevant red flags for misstating inventory value.
  • Explore the concepts and red flags of accounting inventory type frauds.
  • Identify prevention methods for inventory fraud.
  • Explore the concept and relevant red flags for “other assets” fraud.
Last updated/reviewed: June 14, 2021

Included In Certifications

This course is included in the following Certification Programs:

11 CoursesBusiness Fraud Identification and Prevention Certification

  1. Introduction to Forensic Accounting
  2. The Fraud Triangle
  3. Fraud: Focus on Corruption
  4. Fraud: Focus on Fraudulent Disbursements
  5. Fraud: Focus on Cash And Assets
  6. Fraud: Focus on Inventory
  7. Fraud: Focus on Financial Statement Fraud – Part One
  8. Fraud: Focus on Financial Statement Fraud – Part Two
  9. Fraud and COSO 2013
  10. Top Fraud Schemes
  11. Fraud Risk Assessments

25 Reviews (97 ratings)Reviews

4
Member's Profile
The course did a great job of highlighting the potential areas of fraud in the inventory area. This course is a great jumping off point to delve deeper into fraud and internal controls around inventory.
5
Member's Profile
This course provides valuable information and tools in understanding how fraud could occur with inventory and other assets, in addition to ways to help prevent or minimize losses. Great course!
5
Anonymous Author
Working at a company with inventory means this is always a risk that needs to be understood. As it stands right now, we are looking into multiple frauds within our different subsidiaries.
5
Anonymous Author
the inventory is main and important account on all the balance sheet in all the business and the course provide a lot of good information to detect and prevent fraud of the inventory.
5
Anonymous Author
Good review on types of inventory fraud, misstating inventory balances and fraud prevention. The instructor does a good job in explaining and providing examples.
5
Anonymous Author
The course is very informative and structured. It provides detailed situational samples such as red flags and methkds on how to prevent and manage fraud.
5
Anonymous Author
Another great course from Lynn, who is in my opinion, one of the best instructors here. Multiple real life examples make this course of a high value.
5
Anonymous Author
A very important topic for internal auditors and top management. Should be advertised and preventive measures implemented implemented as presented.
5
Anonymous Author
The course presents very useful information on fraud related to inventory and other assets in a very interesting and easy to understand manner.
4
Anonymous Author
I like this course so much I just wish there were more fraud courses delivered in this modular video formats for my CFE requirement of CPE.
5
Member's Profile
this was a good review and reminder to pay close attention to inventories of clients and employers. The material was clear and concise.
5
Member's Profile
Good discussion on inventory fraud especially for manufacturing and retail. Also some extra coverage about non-inventory assets.
4
Member's Profile
After viewing all of Lynn's courses i have a good understanding of fraud schemes and controls to mitigate the risk.
4
Anonymous Author
Another great course from Lynn Fountain. Full of examples and real. Life scenarios. Thanks for the course!
4
Anonymous Author
The course is very informative and structured. It provided a good overview of frauds related to inventory. .
5
Anonymous Author
Good principles for fraud awareness. Useful information on red flags that should be investigated.
5
Member's Profile
Good basic introduction to inventory fraud with a lot of possibilities and scenarios provided.
4
Anonymous Author
The speaker provides great examples on different inventory fraud and how to prevent it.
5
Member's Profile
Nice refresher on the importance of managing fraud risks in the inventory account.
5
Anonymous Author
This course provides a good understanding of the methodology of inventory fraud.
5
Member's Profile
Great job on a relevant topic. Good course for retail related teams.
5
Member's Profile
Interesting course, particularly if you like the Balance Sheet.
5
Member's Profile
Good discussion on inventory fraud and what to look out for.
4
Member's Profile
you should show people what they got wrong in the exam.
5
Anonymous Author
very informative.good aspects explained on inventory

Prerequisites

Course Complexity: Intermediate

No Advanced Preparation or Prerequisites are needed for this course. However, it is recommended to take the other courses in the series prior to completing this one.

Education Provider Information

Company:
Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
Contact:
For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 or send an e-mail to .
Course Syllabus
INTRODUCTION AND OVERVIEW
  7:24Introduction to Fraud Tree: Focus on Inventory and Other Assests
Focus on Inventory
  17:51Inventory and Other Assests
  14:12Types of Inventory Fraud: Raw and Materials/WIP
  15:01Red Flags
  13:38Misstating Inventory Balances
  13:36Prevention
CONCLUSION
  6:39Other Assets
CONTINUOUS PLAY
  1:28:22Fraud Tree: Focus on Inventory
SUPPORTING MATERIALS
  PDFSlides: Fraud Tree: Focus on Inventory
  PDFFraud Tree: Focus on Inventory Glossary/Index
REVIEW AND TEST
  quizREVIEW QUESTIONS
 examFINAL EXAM