Key Controls to Prevent Inventory Fraud

By:  |  Category: Blog Saturday, October 6th, 2018  |  No Comments
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If controls are not in place to prevent the theft of inventory, companies can experience significant fraud losses. Key controls to prevent theft of inventories are listed below:

• Segregation of duties between custody of goods and record keeping for the related inventory

• High-dollar inventory stored in locked or secured rooms or cages

• Storekeepers who are responsible and accountable for quantities on hand

• Inventories stored in an orderly manner, properly labeled or tagged (where accurate counts can be made during periodic physical inventory counts)

• Unannounced inventory counts by persons other than the storekeeper

• Inventories recorded on the general ledger; large inventory write downs investigated

• Use of spotters or surveillance cameras

• Application of the “cost/benefit” principle to each inventory location.

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