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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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Daniela
4 days ago
A is clear. Concealing shrinkage is about inventory accuracy.
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Aracelis
9 days ago
D doesn't fit. Write-offs aren't the same as shrinkage.
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Christiane
15 days ago
C sounds right. Perpetual records need to align with counts.
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Jerry
20 days ago
I feel B is misleading. Shrinkage is different from inventory.
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Wenona
25 days ago
I think it's A. It makes sense to match records.
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Stephaine
1 month ago
C) sounds right, but I’m not sure about the wording.
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Zena
1 month ago
B) is misleading, it’s really about shrinkage, not inventory.
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Paulene
1 month ago
Wait, how can you just change records like that? Seems shady.
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Hyman
2 months ago
Totally agree with A, makes the most sense!
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Julianna
2 months ago
A) is correct, it’s all about matching records.
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Regenia
2 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.
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Kate
2 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.
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Iesha
2 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?
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Annmarie
2 months ago
I think option A sounds familiar, but I'm not entirely sure if it’s the right definition of forced reconciliation.
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