Accounting Errors for financial statements results

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• Counterbalancing errors, correcting errors

  There are a variety of ways that errors are handled for both types: 1. The accounting staff may discover it before the books are closed, 2. The auditors may discover it before the financial statements are issued, 3.

• Financial Statement Restatement

  Discuss (a) The restatement of the company (b) The accounting principals involved (c) The effect of errors and changes on financial statements (d) The affect to the stockholders Include at least three different sources including the source of

• Auditing: Restatement of financial statements. Define the deficiency.

  identification by the auditor of a material misstatement in the financial statements for the period under audit that was not initially identified by the entity; ?

• How do accounting errors occur? What are examples of errors

  - If errors such as the one above are not corrected, the financial statements will be inaccurate.

• Discuss how the provision for income taxes is computed and reflected in interim financial statement.

  Market declines that have been recognized in prior interim financial statements can be recovered in subsequent interim financial statements of the same year.

• Two major constraints in the presentation of accounting data

  For example, if cost were not an issue, the accounting records of a company could be completely redone for the period in question in order to insure that there were no errors or omission in the records.

• Accounting Procedures

  For example: Phillips Morris Cos., Inc. reports the financial position and results of operations not only its parent's tobacco company but also for its subsidiaries which include Kraft Foods and Miller Brewing Company.

• The Importance and Usefulness of the Accounting Cycle

  A separate type of accounting process has been developed for account for these types of activities. It is called cost accounting. The results of the details of costs accounting flow into the cycle in the earlier steps.

• Completion of Accounting Cycle

  The financial statements must be prepared in a very specific order. Again, errors in the posting of adjusting errors will lead to errors in the revenue and expense figures; and errors in assets and liabilities.