Accounting Error


DEFINITION of 'Accounting Error'

An error in an accounting item that was not caused intentionally. An accounting error can include discrepancies in dollar figures, or might be an error in using accounting policy incorrectly (i.e., a compliance error).

Accounting error should not be confused with fraud, which is an intentional error in an accounting item, usually to hide or alter data for personal gain.

BREAKING DOWN 'Accounting Error'

By doing what ever it can to follow accounting standards such as the Generally Accepted Accounting Principles (GAAP), and maintaining internal controls, a company can easily minimize accounting errors. Corrections of the errors are shown later, in a restatement of comparative financial statements.

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  3. Forensic Accounting

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  4. Restatement

    The revision and publication of one or more of a company's previous ...
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    The systematic and comprehensive recording of financial transactions ...
  6. Generally Accepted Accounting Principles ...

    The common set of accounting principles, standards and procedures ...
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  1. Can working capital be depreciated?

    Working capital as current assets cannot be depreciated the way long-term, fixed assets are. In accounting, depreciation ... Read Full Answer >>
  2. Do working capital funds expire?

    While working capital funds do not expire, the working capital figure does change over time. This is because it is calculated ... Read Full Answer >>
  3. How much working capital does a small business need?

    The amount of working capital a small business needs to run smoothly depends largely on the type of business, its operating ... Read Full Answer >>
  4. What does high working capital say about a company's financial prospects?

    If a company has high working capital, it has more than enough liquid funds to meet its short-term obligations. Working capital, ... Read Full Answer >>
  5. How can working capital affect a company's finances?

    Working capital, or total current assets minus total current liabilities, can affect a company's longer-term investment effectiveness ... Read Full Answer >>
  6. What can working capital be used for?

    Working capital is used to cover all of a company's short-term expenses, including inventory, payments on short-term debt ... Read Full Answer >>

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