Most warehouse audit findings fall into a small number of familiar patterns. Knowing them helps you read an audit report calmly, focus on what matters and, ideally, fix the issues before an auditor finds them. The examples below reflect typical situations in warehouses run on 1C or ERP systems in Uzbekistan.
Unexplained stock adjustments
This is probably the most common finding. Count differences are posted as adjustments, but nobody can show why the difference arose or who approved the correction. Sometimes adjustments are netted, so a large shortage in one item is hidden by a surplus in another.
What it means: the system balance is kept close to the physical stock, but the cause of the differences is never addressed, and real losses can be concealed. Auditors usually respond by testing adjustments in detail and widening their samples. The usual fix is a simple rule: no adjustment without an investigation note and approval from someone outside the warehouse, plus a periodic review of adjustments by finance.
Write-offs without evidence
Damaged or expired goods are written off, but the file contains only a signed form, with no photos, no list of batches and no record of how the goods were disposed of. In some cases write-offs cluster at the end of the period in round numbers.
What it means: write-offs may be correct, but nobody can prove it, and the same channel can be used to remove stock improperly. Fixes include a standard write-off pack with photos and batch details, a witness for disposal, and approval limits that send larger write-offs to finance or head office. Confirm any local documentation requirements with your accountant.
Weak segregation of duties and shared logins
In small subsidiaries the storekeeper often receives goods, issues them and also posts the entries in the system. Shared logins make it impossible to see who did what. Former employees sometimes keep active accounts.
What it means: one person can move stock and change its record without anyone noticing. Full segregation may not be practical, but compensating controls are: individual logins, regular review of user rights, and an independent monthly look at adjustments and unusual transactions.
Poor cut-off and late entries
Goods arrive or leave on one day and are recorded days later. Around the period end this means stock is counted in the warehouse but missing from the system, or the other way round.
What it means: both stock figures and revenue or cost can sit in the wrong period. The fix is a same-day recording rule for receipts and shipments, and a documented cut-off procedure for the last and first days of each period.
Mixed and unlabelled stock
Damaged goods sit next to saleable ones, customer stock is not separated from company stock, and locations are unlabelled or ignored. Counts become slow and errors common.
- Typical symptoms: items found in unrecorded locations, repeated recounts, surplus and shortage of the same item
- Typical cause: no location discipline, or a WMS layout that does not match the floor
- Typical fix: label all locations, create clear zones for blocked and third-party stock, and enforce put-away to the recorded location
Slow-moving and obsolete stock not reviewed
Stock that has not moved for a long time stays in the books at full cost because nobody is responsible for reviewing it. Auditors often find dusty pallets of discontinued products during the walk-round.
What it means: the stock value may be overstated, and space and money are tied up. The fix is a periodic ageing report, a documented review with sales and finance, and a clear decision for each item: sell, return, rework or write off. The accounting treatment should be confirmed with your local accountant or auditor.
How to read a findings list
A long list is not necessarily a bad result, and a short one is not necessarily good. Look at the ratings, the root causes and whether findings repeat across areas. Three findings with the same root cause, for example one person controlling everything, are really one problem to solve. Start with high-rated issues that share a cause, and treat the rest as a planned improvement programme.
It is also worth comparing the findings with previous audits and with other sites in your group. A finding that appears in every warehouse may point to a group-wide gap, such as a missing policy or a system setting, which head office should fix centrally. A finding unique to one site is more likely to reflect local practice or local management, and is best solved together with the site team.
Key takeaways
- Unexplained adjustments and undocumented write-offs are the most frequent findings.
- Shared logins and missing segregation of duties need at least compensating controls.
- Cut-off problems affect both stock and the period in which results are reported.
- Location discipline makes counts faster and differences easier to trace.
- Group findings by root cause and fix the shared causes first.