Which of the following is not an indicator of fraud in the acquisition and payment cycle?
A)Theft of inventory by employees.
B)Inventory shrinkage.
C)Large manual adjustments to inventory accounts.
D)Excess inventory because of a production slowdown.

Question

Quizplus · Accepted Answer

Excess inventory because of a production slowdown is not necessarily an indicator of fraud in the acquisition and payment cycle. It may simply be a result of a temporary decrease in demand or an unforeseen disruption in the supply chain. However, the other three options (theft of inventory by employees, inventory shrinkage, and large manual adjustments to inventory accounts) could all potentially be indicators of fraud in the acquisition and payment cycle.

Which of the Following Is Not an Indicator of Fraud