Which statement best describes the Walmart audit outcome?

Which statement best describes the Walmart audit outcome?

• A. Shrinkage doubled year over year
• B. Shrinkage increased by 90 percent
• C. Shrinkage decreased by 90 percent
• D. There was no change in shrinkage

Answer: (C)

Audits focus on how well a company protects its inventory and keeps records accurate. Shrinkage is the loss of inventory from theft, error, or process gaps, measured as the difference between what’s recorded and what’s physically on hand. A dramatic drop in shrinkage shows that controls and procedures have improved—losses are being prevented more effectively and inventory is tracked more accurately. A 90 percent reduction is a substantial improvement, suggesting stronger security, better receiving and counting practices, and possibly real-time inventory monitoring. That’s why this description best fits a positive audit outcome. If shrinkage had doubled or risen, that would indicate worse performance; no change would imply stability but no improvement, which is not as favorable as a substantial decrease.

Audits focus on how well a company protects its inventory and keeps records accurate. Shrinkage is the loss of inventory from theft, error, or process gaps, measured as the difference between what’s recorded and what’s physically on hand. A dramatic drop in shrinkage shows that controls and procedures have improved—losses are being prevented more effectively and inventory is tracked more accurately. A 90 percent reduction is a substantial improvement, suggesting stronger security, better receiving and counting practices, and possibly real-time inventory monitoring. That’s why this description best fits a positive audit outcome. If shrinkage had doubled or risen, that would indicate worse performance; no change would imply stability but no improvement, which is not as favorable as a substantial decrease.