There are various methods by which professionals can monitor the primary accounting documents.However, from time to time in the reflection of certain data there are all sorts of inaccuracies.Consider further how the correction of errors in accounting and reporting.
General
Accounting errors are wrong or reflect nonreflection of certain facts of economic activity of the enterprise.Fully prevent the probability of their occurrence is not possible.However, it may be timely to take measures to detect errors in the accounting (financial) reporting and eliminate their consequences.It must be remembered that all the detected errors to be corrected.
Legislation
primary accounting documents are drawn up in accordance with the Guidelines and Regulations (FDR).Since 2010, it operates PBU 22/2010.They set the procedure for correction of accounting errors and terms of disclosure of information about the inaccuracies in the documents of the organization, legal entities other than credit card companies, municipalities and government agencies.
Causes of incorrect information
According PBU 22/2010 Typical errors can be driven:
- inaccurate calculations;
- fraud officials leading enterprise accounting;
- improper classification or analysis of the facts of economic activity of the organization;
- incorrect implementation of accounting policies of the company;
- misuse of the information available at the time of signing the papers;
- incorrect application of legal norms that regulate accounting.
Classification
The following types of accounting errors:
- Counting defects.It bugs that are associated with incorrect calculations or incorrect deposit / transfer of information in the registers.
- defects caused by late fixation of primary documentation.Such shortcomings appear, as a rule, because of unharmonized work units.The signed documents are often simply not time to get into accounting.Paper may be delayed and contractors.In this case, their nonreflection not be considered erroneous.
- omissions, occurring due to incorrect application of the law.These errors are the result of violations of the rules of the securities and the disclosure of their information.
addition to the above, defects can be the result of inaccurate, false, incomplete data.These errors can be both unintentionally and intentionally committed.In the latter case, therefore, some companies are trying to hide evidence of misconduct.It may be, for example:
- overstatement of material written off in accordance with one or other bases (theft of raw materials);
- failure to credit and cash orders, followed by the responsible employee unrecorded receipts in cash to the organization (the fact of financial fraud).
Exceptions
not considered errors omissions or inaccuracies in the reflection of the facts of economic activity in the financial statements or accounting records, identified as a result of new data that were not available to the company at the time of application (failure to pay) information on relevant operations.There will be no change in the recognized shortcomings and performance indicators.In particular, we are talking about reserves:
- for impairment of financial investments;
- for doubtful accounts;
- for impairment of inventories.
All of the estimates are not entered in the line balance.They only corrected some of his figures.
Methods for detection of defects
for early detection of errors in the financial reporting and accounting is recommended:
- conduct regular inventory of existing assets and the liabilities of the company, including a reconciliation of payments to contractors.
- analyze all the data contained in the accounting registers.Including in the framework of these activities are checked comparability of the periods (estimated matching of revenue and expenditure levels).
- Check wiring and unusual large transactions.
- Correlate performance reporting - to perform arithmetic and logical control.
Ways to fix accounting errors
Conduct adjustments can be carried out by the following methods:
- part.Correction of errors in accounting and reporting in this case, the additional wiring, complementary or reversal, conducted before the operation only on the value of the positive or negative difference.
- complete.In this case, the method of the reversal of all operations carried out before, with actuation subsequently correct data.
When using any of the above options should be prepared comments with links to the papers, which are carried out adjustments.To identify shortcomings accounting reference is made to correct errors.
criteria influencing the adjustment
Correction of errors in accounting and reporting is carried out by various methods depending on the importance of deficiencies.According to this indicator identified two categories of defects.Errors can be significant or insignificant.The criteria by which the shortcomings of the first category must be specified in the relevant securities.A significant error in accounting - is a defect which, individually or in combination with other defects in one period can influence the economic decisions of interested users, which was adopted on the basis of the financial data presented in this period.Directly criteria indicating the degree of importance determined by the enterprise independently.The organization, in this case comes from both the magnitude and the nature of the relevant article (s).The situation in the financial policy of the enterprise may be formulated thus:
"mistake should be recognized as essential if it provokes distortions in reporting greater than 10% or the value of the currency adopted indicator."
Period identifying gaps
This criterion also has an impact on the rules in accordance with which the correction of errors in accounting and reporting.In particular, the defects can be:
1. Current year identified:
- until its completion;
- after its completion, but before the signing by reporting.
2. previous year, detected:
- after signing the papers, but until the moment of their stakeholders;
- after giving users up to the approval of reporting;
- after the approval of the securities.
Stakeholders
These include:
- LLC members.
- bodies of state authority, local government or other authority competent to implement the rights of the owner.
- Shareholders of.
Special cases
Regardless of the degree of importance:
- Correction of errors in the accounting and reporting of identified before the end of the year, carried the marks respectively accounts in the month in which they are found.
- Correcting deficiencies, established at the end of the year before signing the papers, it carried out the month of December of the year in which they are made.
These provisions mean that whatever material errors that were made in the preparation of quarterly interim financial statements, they are not revised.If in the II quarter.the company found a significant drawback, which appeared in the I quarter., the changes that will be caused by its adjustment will be reflected in the papers for 6 months (9 months) and will not affect the results for the I quarter.
Features eliminate minor defects
If, after the signing of the reporting accountant detects an error, which is not considered significant, according to the current accounting policies, and has been admitted in the previous period, then n. 14 AR adjustment it made marks in the relevant accounts in the monthwhen it was discovered.Losses and gains brought about by the elimination of defects, included in other income or expense for the current period.For example:
"In January 2011, the company purchased and immediately used the stationery does not reflect in the accounting of these operations. This defect was identified in November 2012. In this case, the responsible people are the financial help of the error. The adjustment is reflected in the papers for Novemberas follows:
Debit cq. 10.9 "Household supplies and accessories".
Credit Account for fixing calculations (76, 73, 71, 70, 62, 60).
Recognised adoption of stationery in accordance with theinvoice for the number 101 on January 20, 2011.
Debit account for fixed costs (44, 26).
Credit cq. 10.9 " Household fixtures and fittings".
shown the use of goods for the office needsin January 2011.
Debit cq. 91.2 "Other expenses".
Credit Account on account of expenditures (44, 26).
reflected losses in 2011, which are linked to the late indication of transactions for the acquisition and subsequent use of office supplies (January 2011, invoice from 20.01.2011 year №101) ".
important point
Subjects in smallbusiness, except ordinary shares in public securities have the right to carry out the correction of errors in accounting and reporting, recognized in accordance with the financial policy of the enterprise significant made in the previous annual cycle and identified after the approval of the securities in the current year, according to the above scheme without retrospective restatement. This provision is fixed in AR 22 (Nos. 2, p. 9). In the financial policy of the organization should be to fix the point of whether the company will make use of this opportunity.
Features corrections of significant deficiencies
procedure for correction of these errors will depend on the period ofin which they were found.Thus, a significant shortcoming of the previous year, detected after signing the papers for the current period, but prior to the submission of the interested parties, adjusted in accordance with para. 6 AR 22. In particular, the financial help of the correction of the error indicates the removal of her marks in the relevant accounts for Decemberthis period.If the papers have been provided in some other users (put into the IRS, statistical offices, etc.), they should be replaced by those in which a significant defect is corrected.Such statements are called the revised.Lack recognized as a significant, admitted last year and identified before providing securities for the current year to stakeholders, as adjusted in accordance with para. 6 PBU.Responsible Officer will need to check your balance.The revised forms revealed the following information:
- that these securities replace the previous full;
- of the grounds on which it was necessary to check the balance and create a new one.
revised paper is sent to all addresses which were sent earlier.Significant prior period error, discovered after the approval of the annual accounts, corrected marks in the relevant accounts in the current period.Thus offsetting entry appears cq.84 "Accumulated deficit (retained earnings)."
restating the comparative figures
It is carried out by correcting reporting elements as if prior period error had never occurred.This method is called a retrospective restatement.He performed with respect to comparative figures from the previous period, when he was admitted to defect.In other words, if the inaccuracy occurred in 2011, as revealed in November of 2012, the reports for 2012 recalculated figures is carried out on 31.12.2011.The elements on 31.12.2012 will contain the corrected information.As an exception to advocate cases where it is not possible:
- to link this to a specific period of malfunctioning;
- assess the impact of defects cumulatively to all previous periods.
Special provisions
necessary to pay attention to the fact that the correction of significant errors of previous period, found after having been approved by the line balance, they are not subject to replacement, revision and re-submission to interested users.If the defect has been admitted before started the earliest period of the submitted papers for the current year, the adjustment of the opening balance are subject to the relevant articles of the commitments of capital assets.Currently, the financial statements reflect the indicators adopted at the end of the previous two years.Thus, if the inaccuracy admitted in 2009, and discovered in 2012, the restated opening balance at the beginning of 2010, 2011 and 2012.The findings will be reflected in the explanatory note accompanying the accounts for the last year, said.If the determination of the impact of significant errors is impossible for one or more prior periods that are presented in the financial statements, the enterprise needs to adjust the opening balance for certain items.These include assets, liabilities and assets at the beginning of the earliest period for which the conversion can be done.The inability to establish the effect of a material error in the previous reporting period there if need multiple or complex calculations, the performance of which it is impossible to extract information about the circumstances that existed at the time of occurrence of defects, or need to use the information received after the approval of accounts.
Disclosure
According to the requirements of para. 15 AR, the explanatory note to the financial statements for the annual activities of the enterprise must contain certain information relating to significant prior period errors that have been corrected in the current cycle.In particular, the papers stated:
- amount of adjustment with respect to each article - for each prior period as far as is practically feasible.
- nature of the error.
- amount of adjustment in relation to basic and diluted earnings (loss) per share.The index is specified in the event that the company is obliged to disclose information about the profit that is attributable to one share.
- amount of the change in opening balance for the earliest of the reporting periods.
If you can not determine the impact of significant discrepancies for one or more previous cycles, which are reflected in the papers, the explanatory note should disclose the reasons that led to this circumstance.However, it should also specify the method of making a significant error correction, as well as the period from which the recorded changes.
example
In September 2012 it was revealed that in 2010 had not been revalued amounts of the principal debt on long-term loans and credits in the currency of the acquired company.In the process of calculating the exchange rate difference to the amount of these obligations at the exchange rate in 2012 was negative difference accountant.This flaw is considered significant, the organization does not act as a small enterprise.This error entailed:
1. Distortion figures on the size of the amount of negative exchange rate differences for the following items:
- understated the value of borrowed funds (line 1410);
- overestimated the size of retained earnings (line 1370).
2. Distortion of the amount of the value of indicators too calculated the income tax with the size of the exchange rate difference:
- understated retained earnings (line 1370);
- overpriced short-term debt in the amount of income tax (line 1520).
must perform a retrospective recalculation of 31.12.2010 and 31.12.2011.
