Error Analysis
Error Analysis
- Should not be a major problem with good internal control. More common in small firms.
- Only material errors are corrected
- Difficult to do. You must decide what is the nature of the error and how to correct it; impact on the financial statements?
- B/S errors (real accounts only, misclassifications)
- I/S errors (nominal accounts only, misclassifications)
- Above are corrected using reclassification entries.