Using the Internet or Strayer databases, research an example of fraud by invento

Question

Using the Internet or Strayer databases, research an example of fraud by inventory misstatement for a public company in the last five (5) years. Next, explain this incident, including the particulars of how the fraud was achieved and how it was detected.

Research clearly shows that whistleblowers are the best detection method. Explain the role whistleblowers played in the fraud example you selected previously, or how a whistleblower would have enhanced the detection of that fraud example. Provide support for your response.

Explanation / Answer

the study is about a public sector firm in India, namely APHMEL, located in the state of Andhra Pradesh. The firm works on production of heavy machinery on orders for both public sector firms as well as orders from private firms too. in the last few years it made many false statements, and the internal people (at top level) drawn the money and taken it.

as the producer of machinery, it always needs to buy materials like steel and iron from various sellers. they were managed to receive bills from the sellers even though there are no transfer of material from the seller to the place of APHMEL. Later they mentioned in their records that the material was destroed due to water and bad wether, the material is not suit for production, and considering it as scrap and selling as wastage. by doing this, they were able to receives lakhs and crores of money and at last one team of people from Audit find this and made the legal allegations.

this fraud is not idenfied by the management or employees, but the external audit team. hence whistle blowing concept is not works to this.

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