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2 pages/≈550 words
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APA
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Accounting, Finance, SPSS
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Essay
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English (U.S.)
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Topic:

Personal Experience with Inventory (Essay Sample)

Instructions:

First page: Write about: If appropriate, include personal experience in your response.
Inventory accounting is a good place for fraudulent behavior. Think about the accounting principles and practices related to inventory and list one way that fraudulent behavior might take place. Be very specific.
Create one way to reduce the risk of this fraudulent behavior in the business.
Second page, 2 other students replied to above topic, respond to both students essays. Please keep separate. Include persona experiences if you have any. 
1. If appropriate, include personal experience in your response.
Inventory accounting is a good place for fraudulent behavior. Think about the accounting principles and practices related to inventory and list one way that fraudulent behavior might take place. Be very specific.
Create one way to reduce the risk of this fraudulent behavior in the business.
- Personal experience where I had once worked: the bar manager who did the inventory for the bar would under inventory, blame her co-bartenders, and take bottles of liquor. Horrible? Yes. It is unethical, and illegal. She always got away with it. It happens not only in the bar but the kitchen too. There is staff who will do anything to put food on the table for their families. They create havoc for the inventory accounting aspect of the business. 
2. "Fraudulently inflating the value of accounts receivable. Companies set up “allowance” accounts to cover those receivables that ultimately become uncollectable and must be written off. When the company writes off these receivables at their actual value, it results in a decrease of receivables, current short-term assets, and net income." (http://www.lindenwoodassociates.com/crisis-management/working-capital-fraud-distressed-company/) 
To me, that is just as bad as paying someone under the table; you know that it is wrong and should not be done, which is why it is being kept a secret. In fraudulent inventory, you are lying not only about the supply for merchandise in which to make more money for your business, you are also pretty much lying about sales as well as the demand of the product(s) in question that are supposedly "on-hand" to be purchased.
One way to keep this from occurring is to keep an accurate, up-to-date record of the merchandise daily, therefore, making it difficult to have an fradulation. 

source..
Content:

Discussion 6
Name
Institutional Affiliation
Personal Experience with Inventory
Inventory fraud is the stealing of physical inventory items and altering the inventory records on a company’s financial statement. Inventory fraud may either be on the side of the employer or the employee. In the case of the employer, fraud is committed with an intention of falsifying records to portray a picture of a prospering business. In the case of the employee, fraud is most frequently committed once the intention of ‘ripping off’ a company for personal gain has been established. Therefore, fraudulent behaviour among the employees might as well as be an employer’s worst nightmare due to the potential losses that he or she might incur due to falsified inventory records. Without proper inspection and management of inventory records, employees with fraudulent behaviour will have an easy time ‘ripping off’ the business. The end result is the looming possibility that the business files for bankruptcy.
A very common case of inventory fraud occurs when there is inventory theft. This is when an employee tampers with the inventory records with personal gain as the main motive. It frequently occurs through theft of physical inventory items. This follows an alteration in the inventory so as to cover any tracks leading to the employee who stole the items. This kind of inventory fraud is most common in small business where the inventory is handled by one or two people and there is physical counting of the inventory items.
A possible solution to this problem is a change from one person handling the inventory to involving more people in handling the inventory. This will aid in reducing the possibility of inventory fraud since more people will be involved in recording transactions, and hence it becomes more difficult for them to co-ordinate and ‘rip off’ the business. This will involve separation of inventory-related duties which may include making bank deposits, placing orders, entering cash receipts into the accounts among other activities. The duties should be divided such that at every step of transaction, there is no one person handling all the activities, as in the case of making bank deposits and at the same time entering cash receipts into the accounts.
Response 1
In the first case of the bar manager who frequently took home bottles of liquor and blamed the co-bartenders, a perfect example of inventory theft is portra...
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