In inventory controls, what should be done when discrepancies are discovered?

• A. Ignore until annual audit
• B. Deliberately alter records
• C. Report discrepancies
• D. Hide the issue

Answer: (C)

Maintaining accurate inventory records hinges on acting when a discrepancy is found. When counts don’t match, report the difference to the supervisor or inventory control team, document the variance with details, and begin an investigation to identify root causes such as counting errors, data entry mistakes, receiving/shipping issues, or potential theft. This keeps the audit trail intact, enables corrective actions, and protects the organization from bigger losses. Ignoring the issue, altering records, or hiding it undermines controls and can lead to fraud or penalties. Therefore, reporting discrepancies is the right course of action.