What might be a valid reason for the increase in Green Company’s inventory cost

You keep looking over the Green Company’s financial statements to see where your analysis is going wrong. You are certain that the company is not experiencing revenue growth that would support the consistent increase in the inventories that are being reflected on the balance sheet. You just finished a comprehensive audit of all the physical controls of inventory, so you doubt that inventory is being stolen. Everything else in the financials seems to look fine. In fact, they seem to indicate that the company is improving in profitability.
Using both the required text and external resources, address each of the questions below. Your responses should range between 2-4 strong paragraphs for each question, with references appropriately cited. Visuals (tables, charts, graphs) are encouraged as a tool in summarizing major points.

1. What might be a valid reason for the increase in Green Company’s inventory cost?
2. Assuming that fraud is being committed, how could a fraud perpetrator commit this type of fraud?
3. What could be done to prevent this type of fraud?

 

 

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