Do you agree or disagree with the following post? Please eplain. Thank you in advance!

Inventory errors are an issue that effects a company's accounting records for two accounting periods which is the closing inventory for one period and the opening inventory for the following period (Harrison,W.T., Horngreen, C.T., & Thomas, C., 2013). When there is an inventory error it results in an inaccurate cost of goods sold and ultimately the profits of a company (Accounting Tools, 2017).

There are many types of inventory errors that a company could have, but the most common is an inaccurate count of inventory either high or low. These errors can be inadvertent; however, if there is a fraudulent person who is doing the inventory then this is where the accounting books could be misrepresented by overstating inventory quantities. The misrepresentation could be used to artificially inflate the value of the company to attract stock holders or for obtaining credit. This is again a very good reason to not have the same person doing the inventory as the person who is performing the accounting for the company.

References:

Harrison, W.T., Horngreen, C.T., Thomas, C.W. (2013). Financial Accounting (9th Ed.) Upper Saddle River, New Jersey: Pearson/Prentice Hall.

Accounting Tools (2017) Types of Inventory Errors. Retrieved from http://www.accountingtools.com/types-of-inventory-errors