Question

"Accounting Methods and Inventories" Please respond to the following:

• Using the Internet or Strayer databases, research an example of fraud by inventory misstatement for a public company in the last five (5) years. Next, explain this incident, including the particulars of how the fraud was achieved and how it was detected.
• Research clearly shows that whistleblowers are the best detection method. Explain the role whistleblowers played in the fraud example you selected previously, or how a whistleblower would have enhanced the detection of that fraud example. Provide support for your response.

Answer 1

There is highlighted case of fraud in walmart when there was shrinkage leading to deterioation in value of goods.the company lost $3 billion in 2013 sales due to out of stock merchandise while its inventory grew at a faster rate than its sale .whistleblowers play a pivot role in detection of fraud.the whole purpose of a whistleblower is to remove unethical practices in a work environment. they help in detecting misuse of public funds,waste and other frauds to safeguard and maintain accountability,when people are accountable they know they are responsible to report and hence alert about their works.there was also a case wherein it was established that whistle blower helped in reporting major money laundring fraud in a Danske bank.whistleblowers often have inside knowledge about activities taking place but they are at vulnerable position as well.