Modern accounting software makes it relatively easy to correct a transaction error. Minor errors discovered after the annual financial report is prepared are not corrected. Why not?
A) Bookkeepers do not know how to fix the errors.
B) Retracting an annual report is not appropriate for minor errors.
C) Current year budgets would have to be changed.
D) Accounting errors should be corrected only after a forensic audit.

Question

Quizplus · Accepted Answer

Minor errors discovered after the annual financial report is prepared are typically not corrected because retracting an annual report for minor errors is not considered appropriate or necessary. The cost and effort to retract and correct the report often outweigh the benefits, especially if the errors do not materially affect the financial statements.

Modern Accounting Software Makes It Relatively Easy to Correct a Transaction