Professional Documents
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PAS No. 8
Classification of Errors
1. Intentional or unintentional
2. Material or immaterial
3. May be revealed or not by a trial balance
4. Affects only the balance sheet, income statement or both
5. Counterbalancing or not counter balancing - counterbalancing errors are errors
which, even if not discovered and corrected immediately is automatically
corrected in the succeeding accounting period, in the regular course of
bookkeeping.
6. Prior Period Errors – an error that has significant effect on the financial
statements of one or more prior periods that those financial statements can no
longer be considered to have been reliable at the date of their issue.
Ex: Inclusion in the financial statements of a previous period of material amounts
of receivables in respect of fraudulent contracts which cannot be enforced.
March 2020