Methods of Detecting Errors

The term error in accounting refers to an unintentional mistakes committed in the statement of financial statement. Errors and mistakes are of various kind such as errors of principle, errors of omission, errors of commission and compensative errors. Generally an auditor should perform the following functions to detect errors:

1. Auditor should check the total of trial balance.
2. Auditor should compare the balance of last year with the opening balance of this year.
3. Auditor should check the balance of accounts.
4. Auditor should compare the data of books and account with the amount of trial balance.
5. Auditor should check the primary books of account.
6. Auditor should prepare the list of debtors and creditor and should compare with the amount of trial balance.
7. Auditor should check carefully check in those areas where there are more chances of frauds and errors.