CFE – Financial Transactions and Fraud Schemes — Question 32

Which of the following is a method that a fraudster might use to conceal inventory shrinkage?

Answer options

• A. Placing empty boxes on warehouse shelves
• B. Selling merchandise without recording the sale
• C. Falsely increasing the perpetual inventory figure
• D. All of the above

Correct answer: A

Explanation

The correct answer is A, as placing empty boxes on warehouse shelves can give the appearance of full inventory while actual products are missing. Options B and C also represent methods for concealing inventory shrinkage, but they do not specifically involve the physical manipulation of inventory display like option A does. Therefore, while D may seem plausible, A is the most direct method to conceal shrinkage.