Final answer:
The statement is false because an error in ending inventory does not self-correct in the following years without an intentional adjustment. The error will perpetuate through the financial statements until it is identified and corrected.
Step-by-step explanation:
The statement is false. If an error is made to the ending inventory in 2015, it will indeed affect the financial statements of 2015 and consequently carry over to 2016 as the ending inventory of one period becomes the beginning inventory of the next.
However, the error will not self-correct in 2017 unless an adjusting entry is made. This is because the ending inventory error affects the cost of goods sold and, therefore, the net income. An overstatement in ending inventory will cause an understatement in cost of goods sold, leading to an overstatement of net income (and vice versa for an understatement of ending inventory).
Error correction in financial accounting typically requires an intentional adjustment once the error has been identified. Without such an adjustment, the financial statements will continue to reflect the incorrect amounts. Proper accounting practices dictate that once an error is discovered, it should be corrected as soon as possible to maintain the integrity of the financial statements.