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

Forced reconciliation of the account says:

ATo conceal shrinkage is to alter inventory record so that it matches the physical inventory count.

BTo conceal inventory is to alter shrinkage record so that it matches the physical inventory count.

CTo conceal shrinkage is to change the perpetual inventory record so that it matches the physical inventory count.

DTo conceal write-offs is to change the perpetual inventory record so that it matches the physical inventory count.

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.

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22 comments · newest first

Wendell 8 days ago

A and C both have merit. But I lean towards C.

Myrtie 13 days ago

I agree with C. It’s about accuracy in records.

Andra 18 days ago

D is misleading. Write-offs aren't the same as shrinkage.

Sommer 24 days ago

B is confusing. Shrinkage and inventory are different.

Cherri 29 days ago

A seems too simple. What about B?

Desmond 1 month ago

I feel like C is the right choice. Perpetual records are key.

Josephine 1 month ago

I think A is correct. It makes sense to match records.

Stefanie 1 month ago

I agree with C. Perpetual records are crucial for tracking.

Daniela 2 months ago

A is clear. Concealing shrinkage is about inventory accuracy.

Aracelis 2 months ago

D doesn't fit. Write-offs aren't the same as shrinkage.

Christiane 2 months ago

C sounds right. Perpetual records need to align with counts.

Jerry 2 months ago

I feel B is misleading. Shrinkage is different from inventory.

Wenona 2 months ago

I think it's A. It makes sense to match records.

Stephaine 3 months ago

C) sounds right, but I’m not sure about the wording.

Zena 3 months ago

B) is misleading, it’s really about shrinkage, not inventory.

Paulene 3 months ago

Wait, how can you just change records like that? Seems shady.

Hyman 3 months ago

Totally agree with A, makes the most sense!

Julianna 3 months ago

A) is correct, it’s all about matching records.

Regenia 3 months 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.

Kate 4 months 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.

Iesha 4 months 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?

Annmarie 4 months ago

I think option A sounds familiar, but I'm not entirely sure if it’s the right definition of forced reconciliation.

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