Fictitious inventory schemes typically involve fake documents such as:

Fictitious inventory schemes typically involve fake documents such as:

• A. Payroll registers
• B. Inventory count sheets and receiving reports
• C. Bank reconciliation statements
• D. Purchase orders for real vendors

Answer: (B)

Fictitious inventory schemes hinge on creating a paper trail that makes non-existent stock appear real. The documents that directly support inventory records are those that show what has been counted and what was received, such as inventory count sheets and receiving reports. Fabricating these provides a believable basis for overstated or fake inventory balances, helping conceal theft or misstatement. Payroll registers would pave the way for ghost employees, bank reconciliation statements relate to cash controls, and purchase orders for real vendors would not by themselves create fake inventory records.

Fictitious inventory schemes hinge on creating a paper trail that makes non-existent stock appear real. The documents that directly support inventory records are those that show what has been counted and what was received, such as inventory count sheets and receiving reports. Fabricating these provides a believable basis for overstated or fake inventory balances, helping conceal theft or misstatement. Payroll registers would pave the way for ghost employees, bank reconciliation statements relate to cash controls, and purchase orders for real vendors would not by themselves create fake inventory records.