Easy2Siksha Sample Papers
GNDU Most Repeated (Important) Quesons
B.Com 5th Semester
AUDITING
(Based on 4-Year GNDU Queson Paper Trend Analysis: 2021–2024)
Must-Prepare Quesons (80–100% Probability)
SECTION–A (Introducon, Auditor & Errors)
1. Qualies of an Auditor / Essenal Qualies Required of an Auditor (4 mes)
2021 (Q1), 2022 (Q1ii), 2023 (Q2i), 2024 (Q2)
Always appears in Secon–A; direct theory queson about auditor’s personal and
professional traits.
Tip: Prepare in points – honesty, independence, integrity, objecvity, technical
skill, condenality.
2. Errors & Frauds – Meaning, Types, Detecon (4 mes)
2021 (Q2), 2022 (Q1i – linked to scope), 2023 (Q1), 2024 (Q6 – Vouching vs
Vericaon includes fraud checks)
Error detecon and fraud prevenon form the foundaon of audit understanding.
Tip: Write dierences between errors of omission, commission, principle & fraud;
add steps auditor uses for detecon.
2025 Smart Predicon Table
(Based on 4-Year GNDU Paper Trend: 2021–2024)
Secon
Queson Topic
Years
Appeared
Priority
A
Qualies of an Auditor
2021–24
Very High
(100%)
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Secon
Queson Topic
Years
Appeared
Priority
A
Errors & Frauds – Detecon and
Prevenon
2021–24
Very High
(100%)
B
Internal Control – Meaning, Elements,
Need
2021–24
Very High
(100%)
2025 GUARANTEED QUESTIONS (100% Appearance Trend)
Top 5 Must-Prepare Quesons (Appeared All 4 Years)
1. Describe the essenal qualies and professional ethics of an Auditor.
2. Dierenate between Internal Control, Internal Check, and Internal Audit.
BONUS HIGH-PRIORITY QUESTIONS (80–90%)
6. Dene and explain Internal Control – its objecves, importance, and elements.
7. Write a detailed note on Management Audit and its benets to business
management.
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GNDU Most Repeated (Important) Answers
B.Com 5th Semester
AUDITING
(Based on 4-Year GNDU Queson Paper Trend Analysis: 2021–2024)
Must-Prepare Quesons (80–100% Probability)
SECTION–A (Introducon, Auditor & Errors)
Qualies of an Auditor / Essenal Qualies Required of an Auditor (4 mes)
2021 (Q1), 2022 (Q1ii), 2023 (Q2i), 2024 (Q2)
Always appears in Secon–A; direct theory queson about auditor’s personal and
professional traits.
Tip: Prepare in points – honesty, independence, integrity, objecvity, technical skill,
condenality.
Ans: A Different Beginning: The Story of the Financial Guardian
Imagine a huge company — full of busy employees, hundreds of transactions happening
every day, invoices being printed, and accounts being updated. Everyone is doing their
job, but somewhere deep inside the office, there’s a quiet, observant figure flipping
through balance sheets, tracing numbers, and looking beyond the surface.
That person is not there to sell, not to buy, not even to manage — he is there to check,
verify, and protect the truth.
He is the Auditor — the financial guardian of the organization.
Just like a doctor examines a patient to ensure health, an auditor examines the accounts
of a business to ensure honesty, accuracy, and financial health.
But to do this sacred duty, an auditor must possess certain special qualities — not just
knowledge, but also integrity, patience, courage, and wisdom.
Let’s explore this story of what makes a great auditor — not just by theory, but through
human understanding.
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Meaning of an Auditor
Before we dive into his qualities, let’s first understand who an auditor is.
An auditor is a person appointed to examine the books of accounts of a business and to
express an opinion on whether they give a true and fair view of its financial position.
In simple words, he checks whether the accounts are correct, honest, and in accordance
with the law.
The auditor acts as the eyes and ears of the shareholders — because owners cannot
always be present to check everything themselves.
Why Qualities Matter for an Auditor
You might wonder — why emphasize qualities so much?
Because an auditor’s job is not only technical but also moral.
He deals with sensitive financial data, company secrets, and people’s trust.
If he lacks honesty or carefulness, a single error can destroy the company’s reputation —
or even the auditor’s career.
Hence, an auditor’s personality must be a perfect blend of knowledge, ethics,
intelligence, and courage.
Essential Qualities of an Auditor
Let’s now explore these qualities one by one — like pieces of a puzzle that form the
complete image of a true auditor.
1. Professional Knowledge and Competence
The first and foremost quality of an auditor is knowledge — and not just ordinary
knowledge, but deep and updated professional understanding.
He must know:
• Principles of accounting and auditing
• Financial laws, taxation rules, and company regulations
• Business procedures and financial management
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• Modern tools like computerized accounting systems and auditing software
For example, if an auditor doesn’t understand GST or digital transactions, he may miss
important errors or frauds.
So, continuous learning and professional training are the backbone of his career.
Knowledge is to an auditor what a compass is to a sailor — it guides him through the
ocean of numbers.
2. Integrity and Honesty
Integrity means being truthful even when no one is watching.
An auditor must never be influenced by money, pressure, or personal interest.
Imagine a situation — a company’s manager offers a gift or a favor to overlook a small
mistake. A true auditor will politely refuse and report what is right.
That’s what honesty in auditing means — to stand for truth, not for convenience.
If an auditor loses honesty, he loses everything — his name, his profession, and his trust.
3. Independence
An auditor must be independent in thought and action.
He should not be under the control of company directors, managers, or anyone else.
His opinion must be his own, unbiased and fearless.
For instance, if a company is owned by his close relatives or friends, he should avoid
auditing it to maintain independence.
Independence is the soul of auditing.
Without it, even the most intelligent auditor becomes just a rubber stamp.
4. Objectivity and Impartiality
Closely linked to independence is objectivity — the ability to make decisions based on
facts, not feelings.
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An auditor must always rely on evidence, documents, and data — not on personal
judgment, assumptions, or emotions.
He should treat everyone equally, whether the company is big or small, rich or poor.
A good auditor’s report is like a mirror — it reflects the truth as it is, not as someone
wants it to be.
5. Patience and Perseverance
Auditing is not glamorous — it’s detailed, time-consuming, and requires great patience.
An auditor often has to go through thousands of vouchers, ledgers, receipts, and bank
statements. He might have to question employees politely or recheck data multiple
times.
Without patience, he can miss errors or feel frustrated.
Hence, a calm and composed mind helps him notice what others overlook.
A hurried auditor is like a careless doctor — both can harm instead of healing.
6. Tactfulness and Diplomacy
While auditing, the auditor must interact with various people — accountants, clerks, and
managers. Sometimes, he may find mistakes or even frauds committed by them.
In such cases, he must be tactful — meaning polite, respectful, and diplomatic in
handling sensitive matters.
Instead of blaming or embarrassing anyone, a good auditor uses careful language and
maintains harmony while still performing his duty.
Tact builds cooperation, not conflict.
7. Secrecy and Confidentiality
An auditor gets access to all confidential records — profit figures, salary details, and
even business secrets.
He must never disclose such information to outsiders, competitors, or even friends.
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Maintaining professional secrecy is not only an ethical duty but also a legal one.
Only in cases required by law — like reporting a fraud — can he share information.
Trust is the bridge between the client and the auditor — secrecy keeps that bridge
strong.
8. Skeptical Mind and Critical Thinking
A great auditor never accepts things blindly.
He always asks questions like:
• “Is this entry genuine?”
• “Is there any hidden motive?”
• “Does the evidence support the claim?”
This attitude of professional skepticism helps in detecting errors, manipulation, and
fraud.
He must think critically and verify every doubtful item until he’s satisfied with the truth.
9. Sense of Responsibility
Auditing is a responsible job. The auditor’s report influences shareholders’ decisions,
government actions, and public trust.
A single careless statement can lead to huge losses.
Hence, the auditor must feel a deep sense of duty towards society, his profession, and
the organization.
He should complete his work with sincerity, diligence, and accountability.
10. Sound Judgment
Every auditor faces situations where rules don’t give clear answers.
In such times, he must rely on his sound judgment — a mix of logic, experience, and
fairness.
For example, deciding whether an expense is capital or revenue in nature often requires
judgment.
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This quality develops over time through experience, reflection, and learning.
11. Communication Skills
An auditor’s work doesn’t end with checking accounts — he must report his findings
clearly and effectively.
Good communication — both written and verbal — helps him prepare audit reports,
discuss observations, and explain complex issues in simple terms.
A clear, well-structured report increases the credibility of his work.
12. Awareness of Laws and Regulations
Since businesses operate under various laws (like the Companies Act, Income Tax Act,
GST laws, etc.), an auditor must be aware of all legal requirements.
He must ensure that the company complies with them and report any violations.
Without legal knowledge, even a skilled accountant can fail as an auditor.
13. Moral Courage
Auditors sometimes face pressure from powerful businessmen or political influences.
They may be threatened, bribed, or criticized.
But a real auditor must have the courage to speak the truth — to stand by his principles
even if it costs him personally.
History remembers such auditors as heroes of honesty, not as silent followers.
14. Leadership and Teamwork
Large audits require teamwork — assistants, junior auditors, and staff.
A senior auditor must guide, instruct, and motivate his team, ensuring that everyone
works efficiently.
Good leadership ensures that the audit is completed within time and with high quality.
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Conclusion: The Auditor – A Silent Hero
If businessmen are the players in the financial game, the auditor is the referee —
ensuring that everyone follows the rules.
He doesn’t create profit or loss but ensures that whatever is reported is true, fair, and
honest.
A perfect auditor is not made overnight. He is built with time, experience, discipline, and
character.
His pen may look simple, but its stroke can protect investors, save reputations, and
uphold the nation’s economic trust.
So, the qualities of an auditor are not just professional requirements — they are moral
values in action.
In Summary:
“An auditor must be intelligent like a scholar, honest like a saint, patient like a monk,
and brave like a soldier.”
These are the essential qualities that make an auditor not only a professional but a
protector of financial truth.
2. Errors & Frauds – Meaning, Types, Detecon (4 mes)
2021 (Q2), 2022 (Q1i – linked to scope), 2023 (Q1), 2024 (Q6 – Vouching vs
Vericaon includes fraud checks)
Error detecon and fraud prevenon form the foundaon of audit understanding.
Tip: Write dierences between errors of omission, commission, principle & fraud;
add steps auditor uses for detecon.
Ans: A young accountant named Arjun has just joined a trading firm. On his very first
day, his senior tells him: “Remember, Arjun, accounts are like a mirror. If the mirror is
clean, it shows the true face of the business. But if there are smudges—errors or frauds—
the reflection becomes distorted. Your job is to keep the mirror spotless.”
That simple advice captures the essence of our topic: Errors and Frauds in Accounting—
Meaning, Types, and Detection. Errors are like accidental smudges on the mirror, while
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frauds are deliberate scratches made to deceive. Both must be identified and corrected
to ensure the accounts show a true and fair view.
Let’s walk through this story step by step, in a way that feels alive, simple, and
examiner-friendly.
Meaning
Errors
• Errors are unintentional mistakes in recording, classifying, or summarizing
transactions.
• They arise due to negligence, lack of knowledge, or oversight.
• Example: Writing ₹5,000 instead of ₹50,000.
Frauds
• Frauds are intentional misstatements or manipulations of accounts to deceive
stakeholders.
• They involve dishonesty, concealment, or misrepresentation.
• Example: A cashier deliberately not recording cash sales and pocketing the
money.
Story Analogy: If accounts are like a cricket scoreboard, an error is when the scorer
mistakenly writes 45 instead of 54. A fraud is when the scorer deliberately changes the
score to favor his friend’s team.
Types of Errors
Errors can be classified into several categories:
1. Errors of Omission
• When a transaction is completely or partially left out.
• Example: Forgetting to record a credit sale.
2. Errors of Commission
• Wrongly recording a transaction.
• Example: Posting ₹5,000 to the wrong customer’s account.
3. Errors of Principle
• Violating accounting principles.
• Example: Treating purchase of machinery as an expense instead of an asset.
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4. Compensating Errors
• Two or more errors cancel each other out.
• Example: Overstating purchases by ₹1,000 and understating sales by ₹1,000.
5. Clerical Errors
• Mistakes in posting, casting, or carrying forward balances.
Types of Frauds
Frauds are more serious because they are deliberate.
1. Misappropriation of Assets (Employee Fraud)
• Theft of cash, goods, or assets.
• Example: Cashier pocketing daily sales.
2. Manipulation of Accounts (Management Fraud)
• Falsifying accounts to show higher profits or lower liabilities.
• Example: Inflating sales to impress investors.
3. Window Dressing
• Presenting accounts in a way that misleads stakeholders.
• Example: Showing obsolete stock at full value.
4. Forgery and Falsification
• Creating fake invoices, altering vouchers, or forging signatures.
Story Note: If errors are like accidental slips on a wet floor, frauds are like someone
deliberately placing a banana peel to make others fall.
Detection of Errors and Frauds
How do auditors and accountants detect these issues?
1. Trial Balance
• Errors often show up when the trial balance does not tally.
• However, some errors (like compensating errors) may not affect the trial balance.
2. Vouching
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• Checking supporting documents (invoices, receipts, vouchers) to verify
transactions.
3. Verification
• Physically checking assets like cash, stock, and machinery.
4. Internal Control Systems
• Segregation of duties, authorization of transactions, and regular reconciliations.
5. Audit Techniques
• Surprise checks, analytical review, ratio analysis, and scrutiny of unusual entries.
Story Analogy: Detecting errors is like proofreading an essay for spelling mistakes.
Detecting fraud is like investigating whether someone deliberately changed the essay to
cheat.
Real-Life Examples
• Error Example: A clerk mistakenly records ₹1,200 as ₹12,000. The trial balance
shows a mismatch, and the error is caught.
• Fraud Example: In the Satyam scandal (2009), management inflated profits by
showing fake cash balances—this was deliberate fraud, not error.
Importance of Detecting Errors and Frauds
1. Ensures accounts show a true and fair view.
2. Protects investors, creditors, and employees.
3. Maintains trust in financial reporting.
4. Prevents financial losses and legal consequences.
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