What would you do first that if you found a discrepancy in physical inventory?

You would firstly need to move the item to a systemic location so it is not available for inventory.
Check if the item has been damaged out of the location, or picked in error.
The item would show as an additional item in the picking process, or part of the damaged inventory.
Secondly, check previous movement and identify a picking error, run a full location report for the item, and check each location, which would identify discrepancies in the stock holding of the item and also identify any discrepancies in the stowing process.
Lastly, cycle counting should pick up the item in the count, identifying a stowing error.
If the item is not found it should be wrote off.
Note: Items usually turn up in an adjacent location.

In my openion to accurate the Inventory that you have to generate the Cycle Count and Counts the physical stock after completing the physical counts you have compile physical sheets with System if you found varuances, so first you have view the system transactions second check physical documents and third check your Inbound and Outbound status iam sure you will find the variaces and resolve the issues these kind of variances has occurs in Big operations so don't panic and worries about the issue :)

We need to study the type of business operations (sales or manfacturing).
A.
Total Receipts vs Total Issues (Any pending documents) B.
Rejection or OSD pending C Wrong entry of Material receipts D Wrong dispatch or issue of materials

First reconcile your inward goods log with your issuance log details then do a physical count to confirm if it tally with your closing balance