This document discusses various types of accounting errors and frauds. It defines errors of omission as when a transaction is totally omitted from the books. Errors of principle occur when accounting principles are violated. Errors of recording to a wrong account happen when the correct journal entry is made but posted to the wrong account. Compensatory errors exist when more than one error nullifies each other's effects. Frauds discussed include cash, goods, assets, labor, and account manipulation frauds. The presentation concludes with a hope that the errors and frauds content was understandable.

1. JAIPUR NATIONAL UNIVERSITY
AUDITING
PRESENTED BY PRESENTED TO
AAKASH PANDEY MR.PRADEEP SHARMA
B.COM 3 SEM
2

2. IntroductIon
When the business transactions are recorded in the books of
accounts there remains a possibility of accounting errors. It may be
because of hastiness in writing, negligence, oversight or incomplete
knowledge of the principles of accountancy. Some times in order to
manipulate the books of accounts, errors are committed
intentionally.
 Irrespective of whether the accounting errors are committed
innocently or intentionally they cannot be rectified by erasing with
the help of an eraser. Necessary accounting effects are to be given in
accounts in order to rectify these errors. Sometimes in an error
affects two accounts, in order to rectify the same, a journal entry is
passed which is known as a rectification entry and it is recorded in
journal proper.
 Generally two principles should be taken into consideration to
rectify the accounting errors.
Undo what is wrong
Do what is correct.
 Let us understand this point with the help of an illustration.

3. Errors
 Errors of Omission
 Errors of Principle
 Errors of recording to a wrong
account
 Errors committed at the time of
recording in primary books (Error of
commission)
 Compensatory errors

4. (1) Errors of
omission• When a transaction is totally
omitted to be recorded in the
journal or the subsidiary books
or the ledger, such an error is
known as an error of omission.
• E.g. Rs.4,000 received from
Bhavana is left unrecorded. By
writing correct journal entry for
this transaction the above error
will be rectified.

5. When an error arises because
of non-compliance of
accounting principles or
violation of accounting
principles it is known as an
error of principle.

6. In such type of an error, journal
entry is written correctly but while
posting, instead of giving the effect
to the correct account by mistake
the effect is given to some other
account. Thus by debiting or
crediting a wrong account with
correct amount, on the correct
side, the trial balance remains

7. (4) Errors of Commission
Transaction Recorded in
Correct Book with Less
Amount
Transaction Recorded in
Correct Book with More
Amount
Transaction Recorded in
Wrong Subsidiary Books
Transaction Recorded in
Wrong Subsidiary Book with
Wrong Amount

8. (5) CompEnsatory
Errors
In the books of accounts when
more than one error exists but
because of their nullifying effects
on debit and credit sides, the trial
balance tallies, such errors are
known as compensatory errors. E.g.
Total of purchase book is overcast
by Rs.500 and receipt of Rs.500
from Vanita is posted to her
account by Rs.1,000.

9. fraUDs

10. TYPES OF FRAUD
FRAUD IN CASH
FRAUD OF GOODS
FRAUD OF ASSETS
MIAPPROPIATION OF AMENITIES
FRAUD OF LABOUR
MANIPULATION OF ACCOUNTS

11. CONCLUSION
HERE I COCLUDE MY PRESENTATION ON
“ ERRORS AND FRAUDS IN
ACCOUNTING”
WISH THAT THIS PRESENTATION IS
HELPFUL AND UNDERSTANDABLE TO
YOU.
THANK YOU