What is An Error? An error refers to unintentional mistakes in financial information, such as (a) mathematical or clerical mistakes in the underlying records and accounting data (b) oversight or misinterpretation of facts or (c) misapplication accounting policies. The accounting staff may make mistake without knowing it. The responsibility of errors lies on the head of management. An attempt is made to write up error-free accounts. There are various ways to eliminate errors from the books of accounts. The independent audit is one of these ways, The auditor must use skill and care to locate errors. The books must be rectified. so that financial statements may show true and fair view about business matters.


1. ERRORS OF OMISSION: There is an error of omission when an entry is omitted as a whole. This error cannot affect the trial balance. The debit and credit aspects are altogether neglected. In partial omission, one account may be complete but other accounts may be omitted In this case the trial balance will not agree.
2. ERRORS OF COMMISSION: There is an error of commission when wrong accounts are entered either in the journal or in the ledger or when the totals are wrongly made, or when the posting is done to wrong accounts. There is no effect on trial balance.
3. COMPENSATING ERRORS: There are compensating errors when one account is wrongly debited for a certain amount and another account is wrongly credited for. the same amount. In fact, there are two mistakes Of the same amount. One error is compensating the other error.
4. ORIGINAL ENTRY ERRORS: There is an error of original entry when correct amount is not recorded. The wrong figures are used in recording the transaction. The amount of vouchers does not tally with the amount of journal entries.
5. REVERSAL ERRORS: There is reversal error when a debit account is credited and credit account is debited. There is a wrong analysis of transaction by accounting staff. There is no effect of this entry on trial balance.
6. ERRORS OF DUPLICATION: There is an error of duplication when entry is passed twice. One employee may record one entry and another employee may record another entry for the same voucher. In this way, the accounting clerk commits the error of duplication.

7. ERRORS OF POSTING: There is an error of posting when a transaction has been journalized or recorded in a subsidiary book but has been posted wrongly in the ledger account. Goods sold to R on credit for  Rs.500 have been posted in R account as Rs.50. Goods purchased from Rashid for 20 have been posted to Rasheed account.
8. ERRORS OF CASTING: Casting errors occur due to short casting or excess casting. if any subsidiary book or in any account in the ledger. These errors are reflected in the trial balance unless it is compensated by other errors.
9. TRIAL BALANCE ERRORS: There is trial balance error when a debit balance is placed on credit side or vice versa. There may be an omission of one account from the trial balance. Another account may be written twice in the trial balance.


1. WRONG ALLOCATION: The errors of principle consist of wrong allocation of expenses Between capital and revenue items. The capital items can be treated as revenue and vice versa. The carriage paid on machinery account may be charged to the carriage account. The errors  cannot affect the trial balance,
2. OMITTING OUTSTANDING ASSETS: The error of omission relates to an omission of outstanding assets. These assets include prepaid insurance, prepaid taxes, prepaid rent, prepaid interest; salaries paid in advance,  accrued income, rent receivable, interest receivable and so on.
3. OMITTING OUTSTANDING LIABILITIES: The outstanding liabilities include wages unpaid, carriage outstanding, rent due, tax payable, commission payable, interest payable and unearned income.
4. WRONG VALUATION: There may be the wrong valuation of floating and fixed assets. The current assets may not be valued at cost or market rule. The fixed assets may not be valued at cost less depreciation. Such valuation does not affect the trial balance.
5. RECORDING EXPENSE AS INCOME: There is a recording of expense as income or vice versa. The commission expenses can be recorded as income. The interest expense can be stated as income. The true and fair  view of business matters cannot be stated
6. CONCEALING EXPENDITURE HEADING: There may be concealing title of expenditure account. The repair to machinery may be charged to depreciation account. The advertising expenses may be recorded as assets. The actual head of expense is not disclosed.
7. POSTING TO WRONG ACCOUNT: There may be posting of a transaction to the wrong account. The purchase of machinery may be purchased account. The repair of a building can be posted to It does not affect the trial balance. The truth cannot be stated in accounts.


1. The auditor must recheck the total of trial balance. The debit column total and credit column total may not tally.
2. The auditor can see that all entries appearing in the books of original entry have been posted.
3. The auditor can collect the list of debtors from management. He can compare it with the total stated in the trial balance,
4, He auditor can receive the schedule of creditors from the management. He can tally it with the balance stated in the trial balance.
5.The auditor must check the’ totals of accounts appearing in  the accounting books and records.
6.The trial balance can be examined in order to note that no account is appearing twice in it,
7.The account appears in the ledger may not be transferred to trial balance. The auditor can see that no account is missing.
8.The auditor can check the total of cashbook, He can compare this total with the balance appearing in the trial balance.
9.The auditor should check the total of purchase journal. He can compare such total with the amount appearing in the trial balance. 10.The total of sales books can be examined. The total of sales journal can be matched with the amount appearing in the trial balance.
11. The auditor can check the posting made to the ledger. The difference in posting can be noted.
12.The portal entries can be examined to test the truth in the journal. The wrong entries should be traced to find the true position.
13.The auditor can find the exact difference appearing in the trial balance. The account of the same amount may be traced.
14.The difference may be doubled. The account of such amount may be traced,
15.The auditor can find out the difference. It should be divided by 9. In this case, there may be a transposition of figures.
16.The auditor should note the opening balance appearing the ledger account. The last year account can be checked for tracing correct balance.
17.The auditor can check casting, posting and taking out balances in the books of accounts. Thorough checking can help the auditor.