Accounting Errors are the diverse list of unintentional or intentional errors that may occur in the process of updating an organization's accounting system. Such errors may further propagate into Financial Reporting
List of Error Types
- Error of Omission. A Business Transaction is completely omitted from the accounting records.
- Error of Original Entry. Both sides of a Transaction include the wrong amount.
- Rounding Error. While usually immaterial the modification of numerical accuracy may under some circumstances create cumulative effects.
- Transposition Error. (Reversal of digits)
- Duplication Error. Transaction is entered twice (or more).
- Error of Reversal. Entries are made to the correct amount, but with debits instead of credits, and vice versa.
- Error of Commission. Entries are made at the correct amount, and the appropriate side (debit or credit), but one or more entries are made to the wrong account of the correct type.
- Error of Principle. Entries are made to the correct amount, and the appropriate side (debit or credit), as with an error of commission, but the wrong type of account is used. Does not meet accounting principles.
Compensating errors are multiple unrelated errors that would individually lead to an imbalance, but together cancel each other out