Inventory fraud usually involves the theft of goods or materials from a company.  The perpetrator may try to cover up the theft by falsifying computer records for quantities on-hand, or may just allow the losses to occur, knowing that the losses will be accepted during the physical inventory which the employee knows is always inaccurate.  Fraud can be concealed by the taking of a small amount of goods or materials from a number of boxes, possibly even blaming the supplier for shortages.

Regular cycle-counting, an organized warehouse, and good inventory record keeping, along with good picking, packing, receiving, and stocking procedures accompanied by helpful technologies can assist in the reduction of inventory fraud.