Learning Materials For Accounting, Management , Finance And Economics.

Thursday, July 1, 2010

Causes Of Accounting Errors

There can be several causes of accounting errors such as carelessness, dishonesty, lack of accounting knowledge etc. The main causes of accounting errors can be pointed out as follows:

Lack Of knowledge

Accounting is based on certain principles and rules. Due to the lack of knowledge of the accounting principles and rules, accounting errors may be occur.

Carelessness

Carelessness may be another reason by which accounting errors may be occur. If the person responsible for keeping books of accounts is not careful in her/his job such errors may crop up.

Ineffective Internal Check

Ineffective internal check system may also cause accounting errors. Ineffective check does not help preventing accounting errors rather it encourages them.

Dishonesty

If the person who is responsible for keeping books of accounts is dishonest, he/she may intentionally commit errors in the books of accounts for the purpose of taking undue advantage.

Computer Flaws

A modern business keeps its accounts in computer. However, defective computer programme and easy access to unauthorized person to the accounting programme may also result in the accounting errors.