what is a transposition error 
a transposition error describes an event where a bookkeeper accidentally reverses two adjacent digits when recording transactional data although this error may seem small in scale it often results in substantial financial incongruities that can have a great impact in other areas transpositional errors which tend to occur in accounting firms brokerages and other financial services providers fall under the broader category of transcription errors understanding transpositional errorstransposition errors are generally the result of human error for example in accounting when a bookkeeper manually enters data into a ledger they may by mistake incorrectly transfer information from an invoice into a balance sheet transposition errors may also occur when checks are filled out incorrectly resulting in improper payment amounts that can cause overdrafts and other banking issues furthermore transportation errors can result in incorrectly recorded phone numbers street addresses or zip codes in customer profiles and although the aforementioned mistakes are typically easily remedied in some cases transposition errors relating to medicinal dosing information may lead to tragic consequences examples of transposition errorsif a company fails to catch and correct transposition errors the incorrect value of assets may be perpetuated to outside agencies and individuals such as corporate shareholders and the internal revenue service this could cause a chain effect of inaccuracies for example a business may be saddled with an increased tax liability if the transposition error is large enough to slingshot that company into a higher tax bracket of course this largely depends on the degree of error in question if a bookkeeper mistakenly writes 24 74 instead of 24 47 the resulting 0 27 discrepancy would hardly be consequential on the other hand if 1 823 000 were accidentally recorded as 1 283 000 the resulting 540 000 error is sure to have a profound financial ripple effect transposition errors made in the trading world are sometimes called fat finger trades in one famous example a japanese trader accidentally ordered 1 9 billion shares in toyota luckily that order never went through interestingly transposition errors may be revealed by a rather peculiar mathematical phenomenon pointedly the difference between the incorrectly recorded amount and the correct amount will always be evenly divisible by 9 for example if a bookkeeper errantly writes 72 instead of 27 this would result in an error of 45 which may be evenly divided by 9 to give us 5 likewise if a bookkeeper mistakenly records 63 instead of 36 the difference between those two figures 27 may be evenly divided by 9 to give us 3 bank tellers can use this rule to detect errors transposition errors also describe scenarios where bookkeepers enter spreadsheet data into the wrong cells 