Adjustments to financial statements – known as out-of-period adjustments – fell to a low of just 114 during 2021. This fall represents a 17% decline from 2020 and is part of a broader fall seen since 2016. Out-of-period adjustments are a method of correcting immaterial errors in financial statements. Instead of reissuing previous financial statements or revising previous financial period information, a company will correct the error in the current period.
In this article, Audit Analytics examines the major decrease in financial adjustments over a 10-year period.