Engaged by a technology-based manufacturer of specialty engineered materials and services, we assisted the chief financial officer and general counsel with an internal investigation of the company’s inventory reporting. This data-intensive forensic investigation included the review and analysis of almost two years of shipping, invoicing, and inventory transactions and related reports. The findings included: overstatements of quarterly net earnings for more than 18 months; improper accounting entries resulting in the overstatement of inventory and the understatement of accounts payable; and, various internal accounting controls deficiencies. Dismissal from the company and further injunctive actions were taken against the plant controller as a result of fabricated work-in-process and general ledger entries that artificially inflated inventory book value and understated cost of sales.

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