Writing off inventory and other assets is a direct accounting method used to conceal theft. After an asset is misappropriated, a fraudster can create a fraudulent journal entry to remove it from the accounting records, claiming it is obsolete, damaged, or scrap. This entry credits the asset account (e.g., Inventory) and debits an expense account (e.g., Scrap Expense), effectively eliminating the book-to-physical discrepancy caused by the theft. This is a common and straightforward concealment technique for non-cash asset misappropriation schemes.

A. Altered: This term is too general. While fraudsters alter records to conceal theft, "write-offs" describes the specific accounting procedure for removing the asset from the books.
B. Perpetual: A perpetual inventory system is an accounting method for tracking inventory in real-time. It is a control mechanism, not a fraud scheme.
C. False shipping slip: A false shipping slip is a document used to create a fictitious sale to conceal stolen inventory. While a valid scheme, the write-off is a more direct accounting action to "remove assets from the books."

1. Association of Certified Fraud Examiners (ACFE). (2023). Fraud Examiners Manual, International Edition.

Section 2: The Fraud Tree, Asset Misappropriation, Non-Cash, Inventory, Concealment. In the subsection "Writing Off Inventory and Other Assets," the manual states: "In addition to creating fictitious sales, a fraudster who has stolen inventory or other assets can conceal the theft by writing the assets off his books... For instance, he can declare the inventory obsolete or damaged... The result is the same as if the inventory had been sold: The asset is removed from the books." (p. 2.522). This directly supports that write-offs are a method to remove stolen assets from the books.

2. Singleton, T. W., & Singleton, A. J. (2010). Fraud Auditing and Forensic Accounting (4th ed.). John Wiley & Sons.

Chapter 7: Asset Misappropriation. The text discusses inventory fraud concealment, stating, "The theft is concealed by a fraudulent entry to the inventory account... Common schemes include writing off inventory as obsolete or scrap, or creating a fictitious sale." (p. 158). This reference identifies writing off inventory as a primary and common scheme for concealment.

3. Albrecht, W. S., Albrecht, C. O., Albrecht, C. C., & Zimbelman, M. F. (2016). Fraud Examination (5th ed.). Cengage Learning.

Chapter 8: Theft of Inventory and Other Assets. This chapter details methods for concealing inventory theft, explaining that "Stolen inventory can be concealed by writing it off as 'scrap,' 'lost,' 'damaged,' 'bad,' or 'obsolete.'" (p. 245). This explicitly confirms that fraudulent write-offs are a key concealment method.