Why is it important for a company to correct inventory errors in the second year?

• A. Correcting inventory errors in the second year decreases the company's tax liability.
• B. Correcting inventory errors in the second year ensures accurate financial reporting and prevents long-term discrepancies.
• C. Correcting inventory errors in the second year increases the company's tax liability.
• D. Correcting inventory errors in the second year is unnecessary as they do not affect financial reporting.

Answer: (B)