FRAUD RISK ASSESSMENT FOR INTERNAL AUDITORS.

Some common fraud risk indicators in inventory management systems

• Unauthorized and unusual Inventory adjustments
• .Unusual inventory costs
• Inventory turnover inconsistent with the approved lead time and order levels
• Slow moving inventory items
• Inventory unit cost inconsistent with sales price
• Inventory items with negative costs
• Inventory with negative quantity or negative balances
• Uncounted inventory items
• Missed physical inventory counts
• Improper inventory valuation
• Prolonged goods in transit accounts and unreconciled and uncleaned suspense accounts

Samples of  common fraud risk indicators  in Fixed Asset Management process

• Capitalized Expenses
• Large asset additions or disposals
• Incorrect or improper asset valuation
• Asset procured but not recorded
• Assets with unusual depreciations
• Assets with no depreciation
• Asset purchases not capitalized
• Assets capitalized long after usage
• Assets with differences between salvage value and asset value
• Assets depreciated beyond  cost of the assets