Changes in accounting are very important, considering that the right changes will have a positive impact in several areas in a company. Also, errors corrections are important, since mistakes or errors not fix on time can create more miscalculations. There is a variety of situations where the correction of an error is needed. Also, where a need for a change in reporting entity, a change in accounting principle, or a change in accounting estimate. In addition, when accounting for these changes and/ or errors, one must follow the accounting principle rules. Although, there are different interpretations of these accounting rules and principles, which come from either the FASB or the International Accounting Standards Board, they work together to In other words, management has the say when they want to make the call to adopt a new accounting standard. Additionally, management has the dominance of deciding on several accounting choices. For example, management can choose between using accelerated or straight-line depreciation (Spiceland, Sepe & Nelson, 2018). In addition, it can also choose the most appropriate way to measure inventories in the company, whether it may be using the average cost, FIFO or LIFO. Also, according to Wiley (2006), if the change is made voluntarily, then the financial statements of that period of change are to include the disclosure of nature and the reason for the change and also an explanation of why management believes that the newly adopted accounting principle is A few of accounting tasks that require estimates are: “anticipating uncollectible accounts receivable, predicting warranty expenses, amortizing intangible assets, and making actuarial assumptions for pension benefits” (Spiceland, Sepe & Nelson, 2018, p. 1168). Although, estimates are essential in accounting, they usually tend to turn out to be wrong. That is to say, since it is approximated calculations (like educated guesses), the chances of being right are very low and the changes of having a wrong outcome are very high. Moreover, according to Spiceland, Sepe and Nelson (2018), the changes in accounting estimates are accounted for prospectively. Something in the future or something that is expected to happen in the future defines the word prospectively. Hence, the changes in accounting are accounted in for the current and future periods, as discussed before. In addition, this will affect some aspects of both the balance sheet and the income statement in the current period and future periods (Spiceland, Sepe & Nelson,
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