What should accountants do to address discovered errors on financial statements?

When accountants discover errors on financial statements, the appropriate action is to record correcting entries. This is essential as it ensures the financial records reflect accurate information, which is fundamental for reliability in financial reporting. Correcting entries allow the affected accounts to be adjusted to their correct balances without needing to overhaul the entire financial document or create confusion about the financial health of the organization.

By implementing correcting entries, accountants maintain the integrity of the financial data while also adhering to the principles of transparency and accountability. It's important for the updates to properly reflect the corrections in the relevant accounting periods to preserve consistency and accuracy in financial reporting.

While footnotes can provide additional context or details about an error, they do not rectify the underlying inaccuracies in the financial statements themselves. Ignoring errors or reissuing entire statements could lead to confusion and potentially undermine trust in the organization's financial reporting. Thus, recording correcting entries is the most effective and professional approach in addressing discovered inaccuracies.