Fraud Examination 4th Edition by Steve Albrecht,Chad Albrecht,Conan Albrecht ,Mark Zimbelman

Exercise 46

As CEO of your company, you've been going over your financial statements and have noticed something disturbing. You perform a horizontal analysis and find that sales have been increasing at a rate of 3 percent per year, while inventory has risen at a rate of 29 percent per year.
1. Could fraud be occurring Why or why not
2. Assuming that fraud is being committed, how would you investigate