An accounting error is a mistake in the accounting records. An error can fall into a number of areas, such as:
- Entering a transaction in the wrong account
- Entering the wrong amount in an account
- Incorrectly setting the auto reversal flag on an account
- Incorrectly applying a policy or accounting standard
- Not entering a transaction at all
Accounting errors do not involve fraud; there is no intent to deceive.
Accounting errors can be reduced by training employees properly and installing detective controls.