Audit rounding

Correspondence to Professor Ruth Harris; ruth

The general rule of thumb is to perform the rounding at a transactional level, and as late in the process as possible in order to minimize the potential cumulative impact the rounding might have

When calculations are being performed, rounding should only be applied to the final answer

The primary rationale of rounding in accounting is to provide a more accurate assessment of a company’s financial state

However, if the rounding is done incorrectly it can result in an inaccurate assessment and presentation of a company’s financial state