Hold On To Your Goods – Preventing & Detecting Inventory Fraud
Registration Fee – $49
March 4, 2021 – 2:00 – 4:00 pm PST (2.0 CPE)
Advance Preparation: None
Field of Study: Fraud/Accounting and Auditing
The retail industry estimates shoplifting losses at roughly $50 billion per year. Meanwhile, the ACFE estimates that 8% of occupational fraud involves the purchasing or warehousing and custody of inventory. With a total of $4.5 trillion, or 5% of GDP lost to occupational fraud, this is an additional $360 billion for a total of over $400 billion lost to inventory-related fraud each year.
Inventory fraud can occur during the acquisition, storage, manufacture, or sale of inventory. It is the largest asset on the balance sheets of many entities, and it is critical to the generation of revenue. Unanticipated inventory shortages due to theft, overpayment for inventory due to collusion with a supplier, and over-ordering inventory due to a conflict of interest can have a devastating effect on a business and may be the difference between success and failure.
The examples mentioned above are only a few of the many schemes related to inventory fraud. It is incumbent on management to protect inventory and to make certain that goods conforming to the entity’s needs are acquired at reasonable prices and are used as intended to avoid a competitive disadvantage.
This course will explore the ways inventory fraud may be committed and both common controls intended to prevent them as well as unconventional controls that may prove more effective when it comes to fraud prevention. In addition, it will discuss information from which expectations can be derived to develop analytical procedures and management reports useful for detection.
Cases involving inventory losses will be used to highlight various schemes and controls.
Independent and internal auditors and controllers and company accountants of entities with inventories, accountants who are working with situations in holding inventories in making business decisions and establishing internal controls, and accountants and managers in businesses involving inventory with internal control responsibilities.
Objectives: Attendees will be able to:
- Understand the various ways inventory fraud is committed
- Identify the individuals within an entity having the greatest opportunities to commit inventory fraud
- Observe the characteristics and red flags that may indicate the possibility of a fraud scheme being committed
- Learn the types of controls typically used to prevent or detect inventory fraud and the characteristics of those that are most likely to be effective
- Develop reports that will provide indications of whether inventory fraud is occurring in an entity
Topics will include:
- Inventory fraud scheme and the individuals who commit them
- Performing a risk assessment that will identify an entity’s vulnerability to inventory fraud
- Internal controls designed to prevent inventory-related fraud
- Developing internal reports for inventory fraud detection
Mark Dauberman, Bio
Mark provides CPE and technical staff training for CPA firms, private industry, state CPA societies, and government organizations. His topics include accounting, SSARS, ethics, fraud, internal and external auditing, internal control development (COSO), entrepreneurship, and developing a business plan. Mark is in the process of initiating a new entity, The Internal Control Institute, which will be offering CPE and staff training related to internal controls, and in conjunction with professors from Claremont Graduate University, will be providing internal control consulting.
Mark is also an expert witness in the defense of CPAs in cases involving primarily ethics, fraud, and compliance with standards in the performance of professional services.
Mark also provides consulting services to CPA firms with an A & A practice that do not have an expert on GAAP or requirements of Professional Standards within the firm. He addresses such matters as conformity with GAAP, adequacy of disclosures, compliance with professional standards, risk assessment, development and performance of audit and review processes, engagement documentation, compilation and preparation engagements, ethics and independence requirements, assessing and enhancing internal controls for the firm and clients, preparation for peer review, and staff training and CPE. He also provides consulting services related to client management and marketing.
Mark’s public accounting experience includes working with Kenneth Leventhal & Company and more recently, he was a partner at NSBN, a Beverly Hills CPA and business consulting firm. Mark’s industry experience includes serving as assistant controller of a large trucking and warehousing firm along with controller and Vice President of Finance and Administration for major real estate development companies. Mark also spent nearly 30 years as an entrepreneur, operating a company that prepared individuals for the CPA exam nationwide.
Mark has been involved in accounting education at CSU Northridge, CSU San Bernardino, Loyola Marymount University, and UCLA. He obtained his bachelor’s degree in accounting from CSU Northridge. He obtained his Executive MBA at the Peter Drucker and Masatoshi Ito School of Management at Claremont Graduate University, where he previously had been a student of Dr. Drucker’s. He also obtained an Internal Control Certificate from COSO. Until recently, he authored “Knowledge-Based Preparation, Compilation, and Review Engagements” for CCH and updated their checklists for SSARS engagements. He also served as Senior Editor for Roger CPA Review.
Mark Currently provides CPE and technical staff training for CPA firms, private industry employers of accountants, and government organizations on topics that include accounting, compilation, and review, fraud, internal and external auditing, developing internal controls, strategic planning, and practice management. He is also the Senior Editor for Roger CPA Review Course and author’s CCH’s “Knowledge-Based Compilations and Reviews”.
Mark’s public accounting experience includes working with various local firms throughout high school and college, and employment with Kenneth Leventhal & Company. More recently, he was a partner at NSBN, a Beverly Hills CPA and business consulting firm, where he served as director of the audit practice and was responsible for recruiting, training, business development, quality control, and strategic planning for the firm. Mark’s industry experience includes serving as assistant controller of a large trucking and warehousing firm. He has been both a controller and the Vice President of Finance and Administration for major real estate development companies. Mark also spent nearly 30 years as an entrepreneur, operating a business that prepared individuals for the CPA exam.
Mark taught his first university accounting class in 1969 and has been involved in accounting education since most recently as a visiting lecturer at California State University at San Bernardino.
Mark obtained his bachelor’s degree in accounting from California State University at Northridge. He obtained his Executive MBA at the Peter Drucker and Masatoshi Ito School of Management at Claremont Graduate University, where he previously had been a student of Dr. Drucker’s.