Employee Theft Essays

1056 Words Apr 28th, 2012 5 Pages
Essay 5
Are you a victim of employee theft? Did you know that employee theft has cost from small businesses to major Fortune 500 companies over $37.14 billion in 2010 alone? Fraud against business includes the theft of physical assets such as cash or inventory. Essentially there are two types of inventory fraud: physical loss and financial statement fraud.
Inventory shrinkage is the term use in accounting to describe the loss of inventory. Loss of inventory might be due to shoplifting, employee theft, damage, etc. Inventory fraud can occur in any company. Nearly 50% of retail inventory shrinkage comes from employee theft. Dr. Hollinger, who conducts the National Retail Security Survey, reported that shrinkage (as mentioned before) has
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The executive director recreated one of our vendor’s invoices and charges thousands of dollars throughout the years. When it comes to the accountant, she used the business credit card to purchase personal things, she also change the numbers on the bank reconciliation, which was done by hand.
In addition, one of the maintenance guys was stealing from the warehouse. Since we manage shopping centers, houses and apartment buildings we have to have in stock different kind of supplies for quick response to any problem we may encounter. This guy was also going to our vendor and requesting supplies for his personal project, he was even offering his services to different people using our company’s supplies.
Hendry, the clerk in the warehouse, could have talked to Sunny and Paulie about the scheme and how easy it could be with Paulie’s help to commit inventory fraud. Once, Hendry located the item he wanted to remove from the warehouse, transferred to Sunny who then putted in his car. Paulie came in play when it was time for the record inventory; she either reported the item as damage or return. So, if there was no record of the fur coats being in the warehouse there are no coats to be accounted for.
Warning signs that inventory fraud is occurring in your business are: low inventory valuation even though the warehouse is full of inventory, high inventory valuation even when the warehouse is empty, shipping invoices that cannot be trace

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