5 steps to prevent complex inventory frauds
Fraudsters are becoming increasingly creative. Here's how SMEs in the manufacturing sector can guard against losses.
By Cecilia Locati, FCMA, CGMA
When we think about inventory theft, we often think of a sales assistant stealing a product from a shop stockroom or an employee carrying away items from a warehouse. Although these are common forms of theft, more complex cases of inventory fraud affect manufacturers, too.
Noncash fraud schemes, a category that includes inventory theft, are among the most common types of frauds, accounting for 19% of all asset misappropriation schemes, according to the 2016 Report to the Nations on Occupational Fraud and Abuse by the Association of Certified Fraud Examiners (ACFE). They are second only to billing schemes, which account for 22% of all asset misappropriations.
The following real-life case study shows how creative fraudsters can be when it comes to inventory theft. The names of the company and individuals have been changed.