1. Chapter 9
Non-Cash Assets

2. Inventory and All Other Assets Misuse Larceny Asset Req. & Transfers
False Sales
& Shipping
Purchasing &
Receiving
Unconcealed
Larceny

3. Non-Cash Misappropriations
Misuse
Unconcealed larceny
Asset requisitions and transfers
Purchasing and receiving schemes
Fraudulent shipments

4. Misuse of Non-Cash Assets
Typical misuse
Doing personal work on company time
Running side businesses

5. The Costs of Inventory Misuse
productivity
additional employees
Lost business
wear and tear

6. Unconcealed Larceny Schemes
not complex
Some employees know their co-workers are stealing
highly trusted
Assets misappropriated after-hours or mail to themselves

7. The Fake Sale accomplice
Sale is not rung up but the accomplice takes the merchandise
return merchandise for cash

8. Preventing and Detecting Larceny of Non-Cash Assets
Segregate the duties
Maintain physical security
access logs
Install security cameras

9. Preventing and Detecting Larceny of Non-Cash Assets
inventory counts
Investigate significant discrepancies
customer complaints

10. Asset Requisitions and Transfers
non-cash assets to be moved from one location to another
Internal documents are used
requisition materials to complete a work-related project but steals the materials
multiple locations

11. Purchasing and Receiving Schemes
Assets were intentionally purchased by the company but misappropriated
Falsifying incoming shipments

12. False Shipments of Inventory and Other Assets
False shipping documents and false sales documents
False packing slips
false sale is created
Receivable is aged and written off
Legitimate sale is understated

13. Other Schemes Assets are written off Assets are declared as scrap
New equipment is ordered for the company to replace old

14. Concealing Inventory Shrinkage
What is Inventory Shrinkage?
What detects Inventory Shrinkage?

15. Concealing Inventory Shrinkage
Altered inventory records
Fictitious sales and accounts receivable

16. Concealing Inventory Shrinkage
Write off inventory and other assets
Physical padding

17. Preventing and Detecting Non-Cash Thefts Concealed by Fraudulent Support
Segregation of Duties
Match the invoices to receiving reports before payments are issued
Match the packing slip to an approved purchase order

18. Preventing and Detecting Non-Cash Thefts Concealed by Fraudulent Support
Match outgoing shipments to the sales order before the merchandise goes out
Periodically match inventory shipments to sales records
Investigate shipments that cannot be traced to a sale
Check out unexplained increases in bad debt expense

19. Preventing and Detecting Non-Cash Thefts Concealed by Fraudulent Support
Compare shipping addresses to employee addresses
Review unexplained entries in perpetual inventory records
Reconcile materials ordered for specific projects with actual work done
Perform trend analysis on scrap inventory
Check to make sure that inventory removed from inventory is properly approved