Inventory shrinkage is the reduction in inventory due to theft or waste. Investigating inventory shrinkage can detect fraud schemes and inefficiencies.
Losses due to inventory fraud or theft are usually concealed in a type of inventory shrinkage account on the income statement. Some perpetrators may not have the ability to write off or do not write off inventory and as a result the inventory balance is overstated on the balance sheet.
Abnormal shrinkage or a pattern of shrinkage are red flags of fraud. Our use of sophisticated data analytics software can analyze vast amounts of data looking for red flags of fraud such as detectable patterns, trends of inventory shrinkage or concealment of shrinkage.
Timely detection and prevention of inventory fraud can save you money and time.
