Other mistake: If the scene in which Jack Aubrey gives the order "hard a larboard" [meaning the opposite of starboard] was indeed a rudder order (ie. turn the rudder in the direction commanded, which turns the ship the other way, in this case to starboard) the face of the compass wouldn't have rotated clockwise. The compass shows a southerly course, rotates clockwise, and eases to show an easterly course, which is a 90 degree turn to port.
Master and Commander: The Far Side of the World (2003)
1 other mistake - chronological order
Directed by: Peter Weir
Starring: Russell Crowe, Paul Bettany, James D'Arcy
Continuity mistake: The position of the needle and thread lying on Peter's body differ in the wide shot and following close-up. (01:59:10)
Capt. Jack Aubrey: To wives and sweethearts - may they never meet.
Trivia: Paul Bettany describes the scenes in which he collects insects: "I don't like insects. They tend to scamper and scuttle, so it was difficult." He also practiced for his self-operating scene by sitting "at home and [trying] it with a butter knife in front of the mirror."
More questions & answers from Master and Commander: The Far Side of the World
Chosen answer: The flag is a signal flag, and is probably meant to signal that the ship is a whaler or engaged in fishing operations. Such flags were part of an international code, which, with some modification, is still in use today. (The flag is similar to the modern-day "Foxtrot".)