QUESTION: Paraphrase this article into your own words.

Article: Ghost Goods: How to Spot Phantom Inventory by JOSEPH T. WELLS

In this article Ghost Goods: How to Spot Phantom Inventory by JOSEPH T. WELLS examines the inventorys manipulations. The valuation of inventory involves two separate elements: quantity and price. Determining the quantity of inventory on hand is often difficult. Goods are constantly being bought and sold, transferred among locations and added during a manufacturing process. Figuring the unit cost of inventory can be problematic, too; FIFO, LIFO, average cost and other valuation methods can routinely make a material difference in what the final inventory is worth. As a result, the complex inventory account is an attractive target for fraud. The obvious way to increase inventory asset value is to create various records for items that do not exist: unsupported journal entries, inflated inventory count sheets, bogus shipping and receiving reports and fake purchase orders. Since it can be difficult for the auditor to spot such phony documents, he or she normally uses other means to substantiate the existence and value of inventory. Observation of physical inventory. The most reliable way to validate inventory quantity is to count it in its entirety. Analytical procedures. Ghost goods throw a companys books out of kilter. Compared with previous periods, the cost of sales will be too low; inventory and profits will be too.