As CEO of your company, youve been going over your financial statements and have noticed something disturbing.

Question:

As CEO of your company, you’ve been going over your and have noticed something disturbing. You perform a horizontal analysis and find that sales have been increasing at a rate of 3 percent per year, while inventory has risen at a rate of 29 percent per year.
1. Could fraud be occurring? Why or why not?
2. Assuming that fraud is being committed, how would you investigate?

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...