How do you handle a shortage discovered during an annual inventory?

How do you handle a shortage discovered during an annual inventory?

• A. Do nothing and wait for the next inventory.
• B. Immediately declare a loss and write off the item.
• C. Investigate the cause, adjust records, requisition missing items, and document actions.
• D. Hide the discrepancy from records.

Answer: (C)

Accountability discrepancies found in an annual inventory require a systematic follow-up: investigate the cause, reconcile the records with the physical count, and take corrective actions. You determine what happened—whether it was a clerical error, misplacement, or actual missing items—then adjust the property records to reflect the true quantity. If items are missing, initiate a requisition to replace them and bring the stock back to authorized levels. All steps, findings, and actions should be documented for auditability. This approach keeps accountability intact and prevents concealing losses or bypassing controls, which would be inappropriate.

Accountability discrepancies found in an annual inventory require a systematic follow-up: investigate the cause, reconcile the records with the physical count, and take corrective actions. You determine what happened—whether it was a clerical error, misplacement, or actual missing items—then adjust the property records to reflect the true quantity. If items are missing, initiate a requisition to replace them and bring the stock back to authorized levels. All steps, findings, and actions should be documented for auditability. This approach keeps accountability intact and prevents concealing losses or bypassing controls, which would be inappropriate.