FRAUD AUDIT METHODS: Choosing from the list provided here, what would you classify as the five most useful, and five least useful, methods for detecting warehousing fraud?

a Account for items in transit, compare counts with stock records and reconcile differences.

b Compare classification (WIP, raw materials) to auditor’s test counts.

c Examine receiving area for stock that should be included in the count.

d Follow up all exceptions and exception reports.

e Determine whether costs should be included in the valuation of items (e.g., freight, storage).

f Review physical security.

g Review major adjustments made.

h Examine stock descriptions on tags and compare them to actual stock.

i Draw a flowchart of an internal control system and compare it with policy.

j Agree stock sheet schedule and perpetual ledger with physical counts.

Explain your choices.