Prior to being acquired by Maxtor Corporation, MiniScribe manufactured computer disk drives and its stock was quoted on NASDAQ. The company had discovered a material shortfall in its inventory balance. Reporting this shortfall would have increased the cost of goods sold and reduced the company’s net income significantly. So MiniScribe concealed the shortfall from its independent auditors by taking a number of actions to inappropriately overstate its actual inventory balance. First, it recorded a fictitious transfer of nonexistent inventory from its headquarters to an overseas subsidiary. Second, it repackaged scrap items and obsolete inventory as if they were “good” inventory items. Third, in what has got to be one of the most brazen inventory frauds of all time, it packed bricks into computer disk drive boxes and shipped them to its distributors (these shipments were still counted as inventory by MiniScribe until the distributors sold the boxes). One can only imagine the surprised look on its customers’ faces when they opened a box expecting to find a disk drive and found a brick instead.