Both execution and observation of erroneous actions have been shown to increase the activity of the anterior cingulate cortex (ACC) as reflected in characteristic event-related potential (ERP) components labelled error-related negativity (ERN) and observer error-related negativity (oERN), respectively. Whereas these labels implicate a modulation of both components by response accuracy, recent findings suggest a more general involvement of the ACC in the detection of unexpected events. In previous studies, a lower frequency of erroneous as compared with correct observed actions resulted in lower expectation of erroneous actions. The present study investigates whether ERPs following observed actions are modulated by response accuracy or violation of expectation. Sixteen human subjects observed a virtual person whose actions in a game were expected or unexpected. Action expectation was independent of accuracy. In both conditions, subjects observed correct and incorrect actions equally often. Whereas ERPs were not modulated by accuracy, we found an enhanced amplitude of a negative frontocentral ERP component in the time window of the oERN for unexpected as compared with expected observed actions, which we suggest reflects an action prediction error. These results propose that the function of the ACC in performance monitoring depends less on accuracy of actions but rather on predictions and their violations. Future research will have to clarify whether the present ERP modulations revealed a feature of the oERN or whether they represent a distinct component.