Luhova Olha, Candidate of Economic Sciences, Senior lecturer of the Department of Accounting and Taxation, Mykolayiv National Agrarian University, Mykolayiv, Ukraine

ORCID ID: 0000-0003-4432-0295
e-mail: lugova@mnau.edu.ua

Voroshylova Olena, Applicant of higher education of Accounting and Finance Faculty, Mykolayiv National Agrarian University, Mykolayiv, Ukraine

Lata Yuliia, Applicant of higher education of Accounting and Finance Faculty, Mykolayiv National Agrarian University, Mykolayiv, Ukraine

Errors in Accounting: Detection and Corrections

Introduction. Errors can arise in the process of recognition, measurement, presentation and disclosure information in accounting and reporting. Accepted errors lead to distortion of information about the actual financial condition of the enterprise, thus misleading interested users of financial statements. It is important not only to detect errors in a timely manner, but also to classify them correctly, to distinguish between errors from fraud facts, and also from changes in accounting estimates, to determine the significance of the error.

Purpose. The purpose of the article is to identify the nature of accounting errors and their types, which will facilitate the analysis of each error in order to eliminate their causes and apply a rational way of correction.

Results. Possible reasons for the occurrence of errors are revealed: ignorance and non-use of legislative and regulatory documents regulating accounting; formality of a composite accounting policies; inaccuracies in calculations; incorrect approach to the assessment of the facts of economic life; incomplete use of information available at the date of signing financial statements; unlawful actions of officials, etc. The classification of errors made in the financial statements in accordance with IAS 8 is presented. The difference between error correction, accounting estimates and accounting policies is discussed. The order of determination of significance is indicated. The methods for correcting errors of the current period (correctional method, reversal, additional records) and previous periods are determined. The procedure for correcting errors in the financial statements is summarized.

Conclusions. Accounting is the basis of the control of the activities of any entity. The financial condition of the enterprise depends on the correctness of its drawing up. However errors in accounting due to various reasons are inevitable, they must be identified in a timely manner, clearly identified and properly corrected. The significant reduction of accounting mistakes contributes to the proper observance of the requirements of current NAS or IFRS.

Keywords: errors; materiality; prior period errors; correctional method; reversal; additional record; error correction.

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