It depends on the typo that was made. Once I saw a case where the transcriptionist had put the wrong diagnosis (seborrheic keratosis, a benign lesion) instead of basal cell carcinoma (a skin cancer). Now, if the patient had not gotten treatment for this carcinoma, with the error being recognized and corrected, then the patient might have gotten worse.
Medical records are used in many way, but primarily are a record of a patient's encounter with a health care facility such as a hospital. Medical records can be abstracted and the data can be sent to government agencies for statistical purposes (collecting all cases of cancer within a geographic area, for example). Once the records have been transcribed, they stay with the facility. The records are usually electronically uploaded to the patient's chart, but most physicians with solo practices still use paper records.