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Please Explain the impact of the missing journal entry on the financial statements of the company?

Auditing Budgeting Financial Reporting Journal Entries Finance
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Question added by Rehan Qureshi , Financial Consultant , Self Employeed
Date Posted: 2014/01/21
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Rehan Qureshi
by Rehan Qureshi , Financial Consultant , Self Employeed

The problems created by missing a journal entry on the financial statements of a company really depends on what sort of journal entry was missed. In the event of a journal entry being more of a reclassification of a particular expense that has been transferred from a single account, the repercussions of missing this entry would not be all that severe. This could very well be information that already exists in the journal, and simply forgetting to reinstate this in a later journal entry is quite careless but not particularly dangerous or harmful in the slightest. However, in the event of a large financial action taking place, missing the journal entry could be potentially quite harmful. For example, if the statements do not display a correctly stated balance, this misleading information could create great confusion within the company. It could lead to a particular action being taken or a certain decision being made that did not have to happen. Likewise, if an amount of money that has been paid into the account is not displayed in the journal entry on the financial statements, this could equally cause problems. If the company has not got records in the journal of this particular income, then they are going to question the establishment that has already paid them. This confusion could cause to unnecessary friction between companies that could easily have been avoided if the journals had been kept up to date, accurate and complete.

 

The repercussions around missing a journal entry on financial statements depend mostly on what is at stake as a result of the missed entry. However, in the event of a missed entry being discovered, it is important that the financial statements are retracted and republished once the error has been amended.

Dasarathi Rath
by Dasarathi Rath , Sr. Accountant , Al Luban Special Investment LLC

After finalization of financial statement of the company it should be audited and finalised. There is no missing in journal entry because all entries before passed after that finalized . ,if you had missing the journal entry the impact variation in profit .

Mohammed Hussain Shah
by Mohammed Hussain Shah , Finance Manager , Al-Naba Contracting Co. Ltd

Since the financial statements should reflect a true and fair view of the state of affairs of a company at a particular date , it is therefore imperative that all the transactions should get reflected in the books of accounts. Anything missed out can cause an understatement or overstatement of expenses, income, assets or liabilities and may therefore affect the truthfulness of the financials. Unless the item is immaterial in nature the financials must be restated.

imdhiyas kaja
by imdhiyas kaja , Accounts officer , Grupo Antolin Pune Pvt Ltd

When a missing Journal entry in financial statement,the Management can n't get proper and orginal Financial reports.Either Profit or loss in given statement its must be wrong it affected Management view and investorview and creditabity of the Company

Waseem Ahmed Syed
by Waseem Ahmed Syed , Senior Accountant , Al Hazeem Trading Company

It will effect the statement of accounts if you miss for posting the jounral entry. It will effect the balance on the Trail balance and it will trouble you to get the proper amount missing and u have to make reconsilation of the amount missing and who have to feed or adjust the entry with the proper amount to get the balance of account correct.

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