Forensic Accounting

Inventory / Stock Losses

J.S. Held’s Inaugural Global Risk Report Examines Potential Business Risks & Opportunities in 2024

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Our team provides financial expertise to assess the precise volume and value of inventory or stock that is lost or damaged as a result of adverse incidents such as fraud, arson, theft, or natural disasters.

Our experts conduct physical examinations; compile and review underlying accounting records; and employ industry data to identify, document, and value inventory. We help clients to quantify their loss and determine total damages in terms of replacement costs; selling price; associated consequential losses and other ancillary costs such as transportation, freight, and taxes. We assist clients in first party insurance claims and provide expert testimony in litigation disputes, especially in large complex cases involving complete destruction or mysterious disappearance of inventory.

Our Services
  • Arson Investigations Support / Analysis of Financial Conditions to Assess Possible Motive
  • Calculation of Losses Using Industry Data
  • Calculation of Sales Value
  • Calculation of Unincurred Costs
  • Expert Witness & Litigation Support
  • Financial Record Analysis Identifying Inventory-on-Hand at Time of Incident
  • Fraud & Misappropriation Identification & Quantification
  • Inventory Loss Evaluations & Quantification
  • Inventory Ownership Confirmation
  • Mysterious Disappearance Investigations
  • Physical Inventory Counts of Damaged Stock & Inventory Reconciliations
Our Experts Are Engaged in Matters Involving
  • Fire – Thermal, Smoke & Extinguishment Water Damage
  • First-Party Claims & Litigation Disputes
  • Fraud / Theft / Looting
  • High-Value Inventory Losses
  • Inventory Being Manufactured, in Storage, or in Transit
  • Loss of Inventory with Uncertain Value
  • Mysterious Disappearance of Inventory
  • Natural Disasters – Flood, Earthquakes, Windstorms & Hurricanes
  • Water Damage – Ingress & Faulty Sprinkler Systems
Review & Quantification of Inventory Losses

We quantify inventory losses, typically involving raw materials, work-in-process, and finished goods, which may be in the course of manufacture, in storage, or in transit. We ensure that lost volumes are accurately measured either through physical counts or via an examination of the underlying accounting records. We value lost volumes in accordance with an agreed Basis of Valuation, current accounting standards, and prevailing market prices.

Investigation of Mysterious Disappearance

We help determine whether a mysterious disappearance of inventory, including cash or other valuables, is likely to be due to accounting errors, physical theft, or fraud. We review the underlying accounting records to establish the extent to which they show, and are susceptible to, error or misappropriation.

Detection of Fraud / Financial Manipulation

Our forensic accountants help clients to identify red flags that indicate potential fraud or financial manipulation and warrant further investigation. Our experts evaluate possible fraudulent behavior, including the insured’s claims history, vendor analysis, tips and employee hotlines, internal websites, inconsistencies with inventory receipts, and slow moving and/or obsolete inventory improperly maintained at full value.

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