Can You Explain Errors In Term Of Auditing? What Are Clerical Mistakes?

An error refers to unintentional mistakes in financial information, such as mathematical or clerical mistakes in the underlying records and accounting data, oversight or misinterpretation of facts or misapplication of accounting policies. The accounting staff may make mistake without knowing it. The responsibility of errors lies on the head of management. An attempt is made to write up error free accounts. There are various ways to eliminate errors from the books of accounts. The independent audit is one of these ways. The auditor must use skill and care to locate errors. The books must be rectified so that financial statements may show true and fair view about business matters.

             The error of omission is a mathematical or clerical mistake. When and entry is omitted as a whole it cannot affect the trial balance. The debit and credit aspects are altogether neglected. In partial omission one account may be complete but other account may be omitted. In this case the trial balance will not agree. The error of commission is a mathematical or clerical mistake. The wrong accounts or wrong amounts are recorded in the books of accounts. The amount recorded may be less or excess in the account. The use of wrong account is possible. There is no effect on trial balance.