Instructor for this course

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.


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: October 22, 2018

Included In Certifications

This course is included in the following Certification Programs:

11 CoursesBusiness Fraud Identification and Prevention Certification

  1. Intro to Forensic Accounting and Investigation
  2. Dissecting the Fraud Triangle
  3. Fraud: Focus on Corruption
  4. Fraud: Focus on Fraudulent Disbursements
  5. Fraud: Focus on Cash Component of Asset Misappropriation
  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

9 Reviews (35 ratings)Reviews

Member's Profile
Great job on a relevant topic. Good course for retail related teams.
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!
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.
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.
Member's Profile
Good discussion on inventory fraud especially for manufacturing and retail. Also some extra coverage about non-inventory assets.
Member's Profile
After viewing all of Lynn's courses i have a good understanding of fraud schemes and controls to mitigate the risk.
Member's Profile
Nice refresher on the importance of managing fraud risks in the inventory account.
Member's Profile
Interesting course, particularly if you like the Balance Sheet.
Member's Profile
Good discussion on inventory fraud and what to look out for.


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

Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
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
  7:23Introduction 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
  15:00Red Flags
  13:38Misstating Inventory Balances
  6:38Other Assets
  1:28:18Fraud Tree: Focus on Inventory
  PDFSlides: Fraud Tree: Focus on Inventory
  PDFFraud Tree: Focus on Inventory Glossary/Index