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ACFE CFE-Fraud-Schemes-and-Financial-Crimes Exam - Topic 2 Question 2 Discussion

Forced reconciliation of the account says:
C) To conceal shrinkage is to change the perpetual inventory record so that it matches the physical inventory count.
A) To conceal shrinkage is to alter inventory record so that it matches the physical inventory count.
B) To conceal inventory is to alter shrinkage record so that it matches the physical inventory count.
D) To conceal write-offs is to change the perpetual inventory record so that it matches the physical inventory count.

ACFE CFE-Fraud-Schemes-and-Financial-Crimes Exam - Topic 2 Question 2 Discussion

Actual exam question for ACFE's CFE-Fraud-Schemes-and-Financial-Crimes exam
Question #: 2
Topic #: 2
[All CFE-Fraud-Schemes-and-Financial-Crimes Questions]

Forced reconciliation of the account says:

Show Suggested Answer Hide Answer
Suggested Answer: C

Rationale for Correct Answer:

Forced reconciliation occurs when fraudsters alter the perpetual inventory records to conceal shrinkage. By adjusting the records, they make the books appear consistent with the physical count, hiding theft or loss.

Analysis of Incorrect Options:

A -- Too vague; does not specify perpetual records.

B -- Incorrect; inventory is concealed, not shrinkage records.

D -- Write-offs are a different concealment method.

Key Concept:

Forced reconciliations as a concealment method in inventory fraud.


ACFE Fraud Examiners Manual (2020 International Edition), Inventory and Other Assets --- Concealment of Shrinkage.

by Mabelle at Jun 29, 2026, 01:51 AM

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Hyman
10 hours ago
Totally agree with A, makes the most sense!
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Julianna
6 days ago
A) is correct, it’s all about matching records.
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Regenia
11 days ago
I’m leaning towards D because it mentions write-offs, but I’m not confident since I don’t remember much about that topic.
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Kate
16 days ago
I’m a bit confused between A and C. They both mention altering records, but I can’t recall which one specifically refers to shrinkage.
upvoted 0 times
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Iesha
21 days ago
I remember practicing a question similar to this, and I feel like it was about altering records to match physical counts, so maybe C is correct?
upvoted 0 times
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Annmarie
26 days ago
I think option A sounds familiar, but I'm not entirely sure if it’s the right definition of forced reconciliation.
upvoted 0 times
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