Accounting errors range from weekly to monthly

Everyone makes mistakes, and that includes accountants, many of whom apparently make them at least several times per week.

This was one of the findings of a recent survey from professional research firm Gartner, which found that about 18% of accountants admit to making errors at least daily, 33% say they make at least several errors per week, and 59% say they make at least several errors per month. (Presumably those who make several per month include those who make several per week, which presumably includes those who make at least one a day.)

"Financial errors can have tangible business consequences. When accountants make errors — and those errors make their way into the monthly or quarterly close — the enterprise may make business decisions based on incorrect data or, worse, issue inaccurate financial statements," said Mallory Barg Bulman, senior director of research in the Gartner Finance practice.

These errors were closely linked to concerns about low capacity, according to the survey data. In the past three years, 73% of accountants report their workload has increased because of new regulations, and 82% say economic volatility has increased demands for their work. When technology is used to automate routine processes, professionals reported a much lower rate of financial errors: Companies that digitize with high technology acceptance for their technology environments see a 75% reduction in financial errors.

To help develop technology acceptance, Gartner recommended organizations incorporate structured staff feedback into vendor testing and prioritizing technology enhancements; replace old behaviors with new ones and lean on tenured staff to guide the way; and provide transparency into errors and the resolution of errors.

"Given the potential of technology acceptance to reduce error rates in accounting, controllers should make sure they understand the levels of acceptance in their functions and improve it where necessary," said Bulman.

The Gartner survey used a sample of 497 individuals working in the controllership function, and was conducted in July 2023.

The survey results call to mind another recent poll (see previous story), which found the vast majority of companies have admitted to making materially significant mistakes with regard to indirect tax. Tax software company Vertex surveyed 580 professionals worldwide who had at least some influence on direct tax compliance at their companies. The report found that 75% of these professionals say their companies have, at some time or another, made mistakes with regard to indirect tax that were caught and corrected internally. Meanwhile, 62% said their companies have, at some time or another, been made aware of mistakes via government audit.

Breaking these stats down further, of the 75% who reported internal mistakes, 33% said this happens often. Of the 62% whose mistakes were spotted by auditors, 30% said it happens often. When asked whether these mistakes were financially material, 75% said they were.

The data also aligns well with other reports from the PCAOB that found audit quality has been degrading. The regulator observed that 42% of firms inspected by the PCAOB in 2022 had a quality control criticism related to engagement quality reviews, up from 37% in 2020.