Problem:
You keep looking over the financials to see where your analysis is wrong- but you can't see any problems-it just looks like inventory is getting larger and larger, but you know that you haven't seen growth in the levels of inventory that the financials seem to be indicating. You start to wonder, as the controller of the company, what could be some of the possible reasons. You just finished a comprehensive audit of all the physical controls of inventory so you doubt inventory is being stolen. Everything else in the financials seems to look fine. In fact, they seem to indicate that the company is improving in profitability.
What might be a valid reason for why inventory appears to increase and how would this be accomplished?