One of two PricewaterhouseCoopers employees charged with managing the envelopes containing the names of Oscar winners mistakenly handed off the wrong one for best picture.
"We clearly made a mistake and once the mistake was made we corrected it and owned up to it," Tim Ryan, U.S. chairman and senior partner of PwC, told Variety on Monday.
He attributed the foul-up to "human error."
PwC confirmed to CNN that the account reported by Variety is correct.
Ryan said longtime PwC managing partner Brian Cullinan handed off the envelope to best picture presenters Warren Beatty and Faye Dunaway.
"He feels very, very terrible and horrible. He is very upset about this mistake. And it is also my mistake, our mistake and we all feel very bad," Ryan said.
At 9:05 p.m. on Sunday, Cullinan sent a now-deleted tweet from his personal account that showed fresh-off-the-stage winner Emma Stone smiling with her new Oscar in hand.
"Best Actress Emma Stone backstage! #PWC," Cullinan wrote.
The tweet is viewable in a cached page on Google.
The social media post came just minutes before Dunaway and Beatty were inadvertently given the envelope containing the already announced best actress results -- a move that led to the now infamous gaffe.
"Moonlight" was eventually crowned best picture winner.
Cullinan has not responded to CNN's request for comment.
The firm quickly apologized and said they were "investigating how this could have happened."
PwC has been the Oscars accounting firm for more than 80 years.
In that time, only one similar event has taken place. Back in 1964, Sammy Davis Jr. was handed the wrong envelope when presenting the best musical score (adaptation or treatment) category and accidentally announced the winner for original musical score.
He corrected himself on stage after he was told he announced a winner who was not nominated in the category he was supposed to be presenting.
PwC has several measures in place meant to prevent such occurrences.
A 2016 Los Angeles Times story detailed one such precaution: the envelopes themselves. They names of the categories are printed on the outside to prevent confusion and the text used is "large enough for a presenter and cameras to read easily," the piece noted.
It's worth noting, however, that this year's envelope design was changed from gold paper with white labels to red paper with gold lettering -- considerably harder to read in dim backstage lighting.
To the cameras on stage, the misstep was clear. Photos from Sunday confirmed that Dunaway and Beatty had the wrong envelope on stage.
After looking at the card, Dunaway, who declined to comment on the event, then announced "La La Land" had won best picture.
After the envelopes are stuffed with the winners' names, they are sealed by the only two people who know the results ahead of the ceremony -- in this case, Ruiz and Cullinan. Two sets of winner-containing envelopes are made and Ruiz and Cullinan are tasked with taking them to the ceremony, flanked by guards.
At the ceremony, Ruiz and Cullinan alternate handing envelopes to presenters from opposite sides of the stage.
As an additional safety measure, Ruiz and Cullinan memorize the names of the winners. This is so they can be quick to respond in case the wrong name is read or share the winner with presenters in case something happens to the envelopes.
A 2013 Vanity Fair story recalled a time when Sharon Stone and Quincy Jones were tasked with presenting two awards back-to-back but accidentally gave the second envelope to the first winner. The PwC accountant on hand was able to whisper the winner to Jones off stage.
It has not been said why the team from "La La Land" had so much time to speak on stage before being told the news of their loss. Three "La La Land" producers spoke before the error was fixed.
The mistake puts on thin ice the longstanding relationship between PwC and the Academy.
The Academy has not released a statement. When asked for comment, it referred to the one PwC shared with the press.