Any Answers Answered: error correction

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Over recent weeks, there have been a few threads in Any Answers asking for advice on correcting errors, explains Steve Collings.

The typical scenarios entail firms taking on new clients and discovering errors that have been made in the client’s accounts. Advice normally entails liaising with the previous firm to ascertain the reasons why certain accounting treatments have taken place through to re-creating the prior year’s financial statements and prior-period adjustments.

This article will take a look at the various ways in which errors might occur within a set of financial statements, together with advice on the best ways in which to correct such errors.


The term ‘error’ is taken to mean an unintentional mistake. FRS 3 Reporting Financial Performance also has the concept of ‘fundamental error’. Fundamental errors are defined at paragraph 63 to FRS 3 and are ‘those that are of such significance as to destroy the true and fair view and hence the validity of financial statements.’

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About Steven Collings


Steve Collings, FMAAT FCCA is the audit and technical partner at Leavitt Walmsley Associates Ltd where Steve trained and qualified.


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02nd Mar 2012 15:40

What about very small companies or charities?

I have a client whose balances were understated by £140* because the previous accountant didn't include cash in hand.  The client wanted me to do the accounts "perfectly" as they had encountered problems with the previous accountant and didn't want to risk upsetting the charities people.  I therefore restated and noted in the Independent Examiner's report that I was restating the opening cash balance.  

The question is: did I go over the top, or did I simply reassure a client?  I think I did the latter, but would be interested in what others think of what I did


* against income of between £30 - £40k per annum


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02nd Mar 2012 22:46


The layouts seem to have gone a bit out of sync from the original file.  The £260k and £1.345m figures in the STRGL should be underneath the 2011 current year, whereas the only figure that should be in the 2010 comparative year should, of course, just be the £1.540m figure.





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05th Mar 2012 10:06

It always amazes me.......

The number of accountants that act for "New Client Limited".

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05th Mar 2012 12:00

Re. Layouts

Hi Steve,

I had a few issues with the formatting when uploading your article, but think it's all fixed now.

Do let me know if it's as it should be now.

Thanks, Rob


Thanks (2)
09th Mar 2012 11:27

Corporation tax return

Do we have to resubmit the corporation tax return for 2010 once error has been corrected?


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