A transposition error is a data entry error that is caused by inadvertently switching two adjacent numbers. A clue to the presence of such an error is that the amount of the error is always evenly divisible by 9. For example, the number 63 is entered as 36, which is a difference of 27. The number 27 is evenly divisible by 9. Similarly, the number 72 is entered as 27, which is a difference of 45, which is also evenly divisible by 9.
Transposition errors must be corrected, since they will otherwise result in incorrect numbers in the financial statements that may be material. For example, when $12,000,000 is incorrectly entered as $21,000,000 for a revenue figure, the $9,000,000 difference could have a substantial impact on the income statement.
Since this type of error is caused by manual data entry, a possible solution is to use automated systems or bar code scanning to minimize the amount of manual data entry.