Final answer:
Unexplained increases in inventory shrinkage are most directly related to inventory larceny, a theft that occurs post-recording in inventory books, unlike fictitious refunds or sales skimming which typically affect financial records.
Step-by-step explanation:
Unexplained increases in inventory shrinkage can often be a red flag signaling different types of fraud schemes. Among the options listed, b. Inventory larceny is the most directly related to unexplained inventory shrinkage. Inventory larceny refers to the theft of goods from the inventory after they have been recorded in the company's books, which directly affects shrinkage figures.
While fictitious refunds and sales skimming are also forms of fraud, they do not typically result in inventory shrinkage discrepancies. Fictitious refunds involve refunding money for goods that were never returned, and sales skimming involves underreporting sales and pocketing the difference, both of which primarily affect financial records rather than physical inventory counts.