ERROR CORRECTION

CORRECTION PROCEDURES

1. Analysis: Correcting document level balances requires careful analysis and evaluation of the status of file balances. The correction procedures provide for reversal of any or all balances carried in the file and require that the following steps be completed:

1. Analysis and evaluation of the balances in the document record that may be in error by reviewing source documents and the financial reports;
   
   
2. Determination of the exact balances and amounts that are in error for each document record;
   
   
3. Preparation of the necessary accounting transactions to correct the balances in error;
   
   
4. Processing the correction transaction and verifying the results against the financial reports.

2. Reversals: Document level reversals are normally accomplished by entering transactions identical to those that create the balances but with the reverse code to post opposite to the normal posting. The following exceptions exist:
   
   
   1. If the document has been closed but is still on the active file, the correction transaction must
      contain a modifier of 'A'.
      
      
   2. To reverse any final transaction that resulted in a netting action, a separate transaction will be
      required to adjust the net amount.
      
      
   3. If several accruals or payments against a single document are to be reversed, a single reverse transaction may be used for the total amount.

Throughout the above discussion, it has been assumed that the original transactions in question have been overstated in amount. If they have been understated, corrections may be made by entering transaction with reverse code " " (blank).

If possible, it is preferable to reverse all incorrect transactions in such cases, and re-enter them with correct amounts in order to clarify the audit trail. However, this procedure can be undertaken only when the number of corrections to be made is reasonably low.

TO: Error Correction Index