INVENTORY FRAUD IN MANUFACTURING COMPANIES IN BENIN CITY

ABSTRACT

This study evaluated inventory fraud in fourteen (14) manufacturing companies in Benin City for the period 2023.

The study was carried out with the use of primary data generated from questionnaires distributed to respondents for the period on which the descriptive statistics test and the analysis of variance (ANOVA) test were used to analyse the data. The variables employed in this study to evaluate inventory fraud were the nature of inventory fraud, magnitude of inventory fraud, causes of inventory fraud, effects of inventory fraud, and the solutions to inventory fraud and five research hypotheses were formulated from each of the variables.

The result of the findings revealed that the frequency of inventory fraud is influenced by the type of inventory being targeted within manufacturing companies in Benin City, there is a significant difference in the prevalence of inventory fraud among these companies, a significant relationship exists between inventory fraud and internal control weaknesses in the manufacturing companies, and inventory fraud has a considerable negative effect on the operations of manufacturing companies in Benin City. This study recommends that manufacturing companies in Benin City conduct comprehensive risk assessments to identify vulnerable inventory types and processes, strengthen internal control systems through measures like segregation of duties and regular audits, implement employee training programs to raise awareness and promote ethical culture, adopt advanced inventory management technologies for improved tracking and transparency, and encourage regular communication and collaboration with law enforcement and industry associations to share best practices and strategies for combating inventory fraud.