Comprehensively_Prepared_Document_of_the_Questions_and_Answers_for_the_Interview_of_Senior_Auditor.docx_filename_= UTF-8''Comprehensively Prepared Document of the Questions and Answers for the Interview of Senior Au

$ Audit $
Topic to review.
1. Define Audit-
2. What is the distinction between auditing and accounting?
3. Why is there a need for an audit?
4. Scope of Audit-
5. Internal Control
6. Audit risk
7. Types of Audit Report
i. Unqualified Opinion
ii. Qualified Opinion report
iii. Disclaimer of Opinion report
iv. Adverse Opinion report
8. What are the different types of audit?
9. Internal control,
10. Types of Audit by Organization Structure
11. Functions and Duties of an Auditor-
12. Voucher
13. Vouching
14. Internal Audit
15. External Audit
16. Internal Control
17. Qualities of an Auditor
18. Before and After Audit Measures
19. Audit Report and its type
20. Audit Opinion
21. Appointment of an Auditor
22. Performance Audit
23. Regulatory Audit:
1. Audit- an official inspection of an organization's accounts, typically by an independent body. What

is an Audit? Audit is an independent examination of financial statements of an entity that enables an
auditor to express an opinion whether the financial statements are prepared (in all material respects)
in accordance with an identified and acceptable financial reporting framework.
2. What is the distinction between auditing and accounting? Relationship between auditing and
accounting Auditing and accounting are closely connected but both are separate activities. The
directors of a company are responsible for establishing books of accounts that will accurately record
financial information and that are used for preparing the annual financial statements. It is similarly
the responsibility of the directors to adopt consistent and appropriate accounting policies in order to
prepare and present the financial statements. The financial statements have to comply with national
legislative requirements and International Financial Reporting Standards (IFRSs).
i. Accounting is the process of recording, classifying, summarizing and reporting financial

information in a logical/systematic manner for the purpose of decision making. To provide relevant
SENIOR AUDITOR NOTES………………. Irfan Ali Baloch Page 1 of 42

& reliable information, accountants must have a thorough understanding of the principles and
rules that provide the basis for preparing the financial statements.
ii. In auditing the financial statements, the concern is with determining whether the presented
financial statements properly (true and fair) reflect the financial information that occurred during
the accounting period. Since auditors are primarily concerned with the end result of this work i.e.
do the financial statements show a true and fair view? In order to arrive at their conclusion the
auditors must have a deep knowledge and understanding of accounting (including applicable
accounting standards) and in practice, the directors will consult with the auditors as to appropriate
accounting policies to follow.
3. Why is there a need for an audit? The problem that has always existed at the time when the manager
reports to the owners is that: whether the owners will believe the report or not?
This is because the reports may:
a. Contain errors
b. Not disclose fraud
c. Be inadvertently misleading
d. Be deliberately misleading
e. Fail to disclose relevant information
f. Fail to conform to regulations
4. Scope of Audit- Audit scope, defined as the amount of time and documents which are involved in
an audit, is an important factor in all auditing. The audit scope, ultimately, establishes how deeply
an audit is performed
A determination of the range of the activities and the period (months or years) of records that are to
be subjected to an audit examination.
5. Internal Control Understanding of Internal Control is used by the auditor to identify types of
potential misstatements and to consider factors that affect the risks of material misstatements and
design the nature, timing and extent of further audit procedures.
6. Audit risk (also referred to as residual risk) refers to the risk that an auditor may issue unqualified
report due to the auditor's failure to detect material misstatement either due to error or fraud
7. Types of Audit Reports
i. Unqualified Opinion Report:

An opinion is said to be unqualified when the Auditor concludes that the Financial Statements give
a true and fair view in accordance with the financial reporting framework used for the preparation
and presentation of the Financial Statements. An Auditor gives a Clean opinion or Unqualified
Opinion when he or she does not have any significant reservation in respect of matters contained in
the Financial Statements.
ii. Qualified Opinion report

Qualified report is given by the auditor in either of these two cases:
When the financial statements are materially misstated due to misstatement in one particular account
balance, class of transaction or disclosure that does not have pervasive effect on the financial
statements.

When the auditor is unable to obtain audit evidence regarding particular account balance, class of
transaction or disclosure that does not have pervasive effect on the financial statements.
A Qualified Opinion report is issued when the auditor encountered one of the two types of situations
which do not comply with generally accepted accounting principles, however the rest of the financial
statements are fairly presented. This type of opinion is very similar to an unqualified or "clean
opinion", but the report states that the financial statements are fairly presented with a certain
exception which is otherwise misstated.
iii. Adverse Opinion report

An Adverse Opinion Report is issued on the financial statements of a company when the financial
statements are materially misstated and such misstatements have pervasive effect on the financial
statements. An Adverse Opinion is issued when the auditor determines that the financial statements
of an auditee are materially misstated and, when considered as a whole, do not conform with GAAP.
It is considered the opposite of an unqualified or clean opinion, essentially stating that the
information contained is materially incorrect, unreliable, and inaccurate in order to assess the
auditee's financial position and results of operations.
iv. Disclaimer of Opinion report
A Disclaimer of Opinion is issued in either of the following cases:
When the auditor is not independent or when there is conflict of interest.
When the limitation on scope is imposed by client, as a result the auditor is unable to obtain sufficient
appropriate audit evidence.
When the circumstances indicate substantial problem of going concern in client.
When there are significant uncertainties in the business of client.
A Disclaimer of Opinion, commonly referred to simply as a Disclaimer, is issued when the auditor
could not form and consequently refuses to present an opinion on the financial statements. This type
of report is issued when the auditor tried to audit an entity but could not complete the work due to
various reasons and does not issue an opinion.
8. What are the different types of audit?

Three types of audits are discussed in general, i.e.,
i. Financial statement audits
ii. Operational audits
iii.Compliance audits
(i) Financial Statement Audits An audit of financial statements is conducted to determine whether
the overall financial statements (the quantifiable information being verified) are stated in
accordance with specified criteria.
(ii) Operational Audits An operational audit is a review of any part of an entity’s operating
procedures and methods for the purpose of evaluating efficiency and effectiveness. At the
completion of an operational audit, recommendations to management for improving operation
are normally expected.
(iii) Compliance Audits The purpose of a compliance audit is to determine whether the entity is
following specific procedures, rules, or regulations set down by some higher authority. A
compliance audit for a private business could include determining whether accounting
personnel are following the procedures prescribed by the company controller, reviewing wage
rates for compliance with minimum wage laws, or examining contractual agreements with
bankers and other lenders to be sure the company is complying with legal requirements.

(iv) "Information Systems – Audits of Information Systems look at the overall infrastructure and
network of the University and the controls that relate to the security of the network and the
systems that are maintained in support of the goals of the University. They also include technical
operations, data center operations, project management procedures, and application controls.
(v) Integrated Audits – Integrated audits look at controls that address financial, operational,
compliance and information systems risks. These audits are typically centered on a business cycle
or a specific part of a cycle or process."
9. Internal control, as defined in accounting and auditing, is a process for assuring achievement of an
organization's objectives in operational effectiveness and efficiency, reliable financial reporting, and
compliance with laws, regulations and policies.
10. Qualities of an Auditor- Knowledge of an Accounting & Audit, Business Taxation & Law, Critical
Attitude, Independent, Honest & have patience.
11. Voucher: A voucher is a document which support the business transactions
12. Vouching: Vouching is a technical term, which refers to the inspection of documentary evidence
supporting and substantiating a transaction, by an auditor. It is the essence of Auditing.
13. Internal & External Audit: Internal auditors will examine issues related to company business practices
and risks, while external auditors examine the financial records and issue an opinion regarding the
financial statements of the company. Internal audits are conducted throughout the year, while
external auditors conduct a single annual audit.
14. Before and After Audit Measures:
Explain the procedure which the auditor should adopt before commencing the new audit and also
discuss those instructions which must be given by the auditor
An auditor should pay proper attention to the following points before taking up a new audit :
1. Appointment Letter :-
An auditor should confirm his appointment letter first of all. In this regard he should get and examine
the copy of resolution passed by the shareholders in the general meeting.
2. Nature Of Audit :-
Auditor should know about the nature of audit. If he does not know the nature of audit then he can
not prepare himself for that audit.
3. List Of Books :-
He should obtain a list of all the books of account which are in the use of business.
4. Names Of Officers :-
The auditor should take the list of all the officers with their names duties and powers. He should also
get their specimen signatures.

5. Documents :-
He should also get the copy of memorandum and articles of association. He should study them
carefully and check that company is running the business according to them or not.
6. Prospectus :-
The auditor should examine the prospectus to know the relevant matters affecting the accounts.
7. Accountancy System :-
The system of accounting which is employed by client must be examined by the auditor before taking
the new audit.
8. Minute Book :-
The auditor should get the minute book and read it carefully. He should also take the notes of
important decision made by the directors and shareholders in the various meetings.
9. Internal Control System :-

Internal control system prevailing in the business must be studied by the auditor. He should examine
the record and observe the actual procedure in operation.
10. Personal Visit Of Site :-

The auditor should visit the site of the business personally and he should know maximum about the
technical nature of the business.
11. Study Of Contracts :-

The auditor should study all those contracts which are made by the company with the outsiders and
with employees. He should note down the important mailers.
12. Case Of Joint Auditors :-

If there are more than one auditors and they have decided to audit the company jointly in that
situation they should divide the work among themselves and then start the auditing.
13. Previous Report Inspection In Case Of Old Company :-

If the company not a new but old, in this situation auditor should also inspect the report of previous
auditor.
14. Audit Programme :-

The auditor may chalk out the audit programme keeping in view above points.
15. Timing :-
Auditor should fix the time of audit before starting the new audit. He should also decide the time for
the completion of audit work.
16. Legal Formalities :-

Auditor should also check that legal formalities have been completed by the management or not.
17. Historical Background :-

Auditor must know business history like nature of business, number of products, year of
establishment. He should also keep himself in touch with the operation of the company.
INSTRUCTION GIVEN BY THE AUDITOR TO HIS CLIENT:-

Following instructions must be given to the client by the auditors before commencing the audit :
1. A list of books with the list f employees should be provided to the auditor.
2. A system of book keeping and internal connect should be provided.
3. Final trial balance and draft of final account should be ready for audit examination.
4. All supporting vouchers should be ready.
5. All types of schedules supporting the accounts should be prepared and kept in original form.
15. Audit process

An audit is a formal check of financial accounts of an individual, business or organization. An internal
audit is conducted by members of the same organization or business, and an external audit may be
conducted by a regulatory agency or governmental agency. There are six specific steps in the audit
process that should be followed to ensure a successful audit.
I. Requesting Documents
After notifying the organization of the upcoming audit, the auditor typically requests documents
listed on an audit preliminary checklist. These documents may include a copy of the previous audit
report, original bank statements, receipts and ledgers. In addition, the auditor may request
organizational charts, along with copies of board and committee minutes and copies of bylaws and
standing rules.
II. Preparing an Audit Plan

The auditor looks over the information contained in the documents and plans out how the audit will
be conducted. A risk workshop may be conducted to identify possible problems. An audit plan is
then drafted.
III. Scheduling an Open Meeting

Senior management and key administrative staff are then invited to an open meeting during which
the scope of the audit is presented by the auditor. A time frame for the audit is determined, and any
timing issues such as scheduled vacations are discussed and handled. Department heads may be
asked to inform staff of possible interviews with the auditor.
IV. Conducting Fieldwork

The auditor takes information gathered from the open meeting and uses it to finalize the audit plan.
Fieldwork is then conducted by speaking to staff members and reviewing procedures and processes.
The auditor tests for compliance with policies and procedures. Internal controls are evaluated to make

sure they're adequate. The auditor may discuss problems as they arise to give the organization an
opportunity to respond.
V. Drafting a Report
The auditor prepares a report detailing the findings of the audit. Included in the report are
mathematical errors, posting problems, payments authorized but not paid and other discrepancies;
other audit concerns are also listed. The auditor then writes up a commentary describing the findings
of the audit and recommended solutions to any problems.
VI. Setting Up a Closing Meeting

The auditor solicits a response from management that indicates whether it agrees or disagrees with
problems in the report, a description of management's action plan to address the problem and a
projected completion date. At the closing meeting, all parties involved discuss the report and
management responses. If there are any remaining issues, they're resolved at this point.
16. Appointment of an Auditor: For appointment as auditor of: a) a Public Company or b) a Private
Company which is a subsidiary of a Public Company. c) a Private Company having paid up capital of
three million rupees or more. The person must be a Chartered Accountant within the meaning of the
Chartered Accountants Ordinance, 1961. For listed companies an auditor must have a satisfactory QCR
(quality control review) rating issued by ICAP.
17. Performance Audit: Performance audit refers to an independent examination of a program, function,
operation or the management systems and procedures of a governmental or non-profit entity to assess
whether the entity is achieving economy, efficiency and effectiveness in the employment of available
resources.
18. Regulatory Audit: Financial (regulatory) audits are designed to assess whether financial operations
(management, collections and expenditure) of government have been legally executed and are these
accounts a true and fair representation of the financial activities. Generally the annual accounts of
government are reviewed. The review encompasses both financial and non-financial information, for
example policy and financial management.
19. Statutory Audit: A legally required review of the accuracy of a company's or governments financial
records. The purpose of a statutory audit is the same as the purpose of any other audit - to determine
whether an organization is providing a fair and accurate representation of its financial position by
examining information such as bank balances, bookkeeping records and financial transactions.
20. Non-Statutory Audit: A no statutory audit report is any audit that is not legally required. For example,
the Securities and Exchange Commission of Pakistan.

Economics
Topics to review.
1. Economics:
2. Micro Economics:
3. Macro Economics:
4. National Income:
5. GDP
6. Factors of Production
7. Economics Indicator
8. Fiscal Policy
9. Monetary Policy
10. Trade Deficit
11. Budget Deficit
12. Balance of Trade
13. Balance of Payment
14. Direct Taxation
15. Indirect Taxation
16. Progressive Taxation
17. Regressive Taxation
18. Proportional Taxation
19. Budget 2015-16 (4.6 Trillion).
1. Economics: Economics is the social science that describes the factors that determine the production,
distribution and consumption of goods and services.
2. Micro Economics: Microeconomics is a branch of economics that studies the behavior of individuals
and firms in making decisions regarding the allocation of limited resources.
3. Macro Economics: Macroeconomics is a branch of economics dealing with the performance, structure,
behavior, and decision-making of an economy as a whole, rather than individual markets.
4. National Income: National income is the total value a country's final output of all new goods and
services produced in one year.
NNI = C + I + G + NX + NFF - IT - D.
Where: C = Consumption, I = Investments, G = Government spending, NX = Net exports (calculated
by subtracting imports from exports), NFF = Net foreign factor income, IT = Indirect taxes, D =
Depreciation.
5. GDP: GDP is the value of all final goods and services produced in a period of time (quarterly or
yearly). GDP = C + I + G + (X - M), GDP = Consumption + Government Expenditures + Investment +
Exports - Imports
6. Factors of Production: An economic term to describe the inputs that are used in the production of
goods or services in the attempt to make an economic profit. The factors of production include land,
labor, capital and entrepreneurship.

7. Economics Indicator: An economic indicator is a statistic about an economic activity. Economic
indicators allow analysis of economic performance and predictions of future performance. One
application of economic indicators is the study of business cycles.
Income and Wages, Unemployment Rate, Consumer Price Index (Inflation), Currency Strength,
Interest Rates, Corporate Profits, Balance of Trade
"GDP=4.24%, GDP(Prev) = 4.03%,
Unemployment Rate=5.9 %,
Inflation Rate= 3.66 %,
Interest Rate= 5.75 %,
BOT=-309673 PKR Million,
Government Debt to GDP= 64.8 %,
GDP= 271 USD Billion,
GDP per capita= 1143 USD,
Interbank Rate 5.98 %,
Foreign Exchange Reserves 23200 USD Million
External Debt 74126 USD Million
Foreign Direct Investment 2761 USD Million
Corporate Tax Rate 32 %
Personal Income Tax Rate 20 %
Sales Tax Rate 17 %"
8. Fiscal Policy: Fiscal policy is the use of government revenue collection (mainly taxes) and expenditure
(spending) to influence the economy. I also mean a deliberate change in the government expenditures
and taxes to achieve certain national goals.
9. Monetary Policy: Monetary policy is the process by which the monetary authority of a country
controls the supply of money, often targeting an inflation rate or interest rate to ensure price stability
and general trust in the currency
10. Balance of Trade: The difference between a country's imports and its exports. Balance of trade is the
largest component of a country's balance of payments. Debit items include imports, foreign aid,
domestic spending abroad and domestic investments abroad. Credit items include exports, foreign
spending in the domestic economy and foreign investments in the domestic economy. A country has
a trade deficit if it imports more than it exports; the opposite scenario is a trade surplus
11. Balance of Payment: The balance of payments, also known as balance of international payments and
abbreviated BP, of a country is the record of all economic transactions between the residents of the
country and the rest of the world in a particular period (1 year).
12. Trade Deficit: An economic measure of a negative balance of trade in which a country's imports
exceeds its exports. A trade deficit represents an outflow of domestic currency to foreign markets.
13. Trade Surplus: A trade surplus (a surplus in the balance of trade) occurs when the value of a country's
exports exceeds that of its imports.
14. Budget Deficit: A status of financial health in which expenditures exceed revenue

15. Budget Surplus: A situation in which income exceeds expenditures.
16. Direct Taxation: A tax that is paid directly by an individual or organization to the imposing entity. A
taxpayer pays a direct tax to a government for different purposes, including real property tax, personal
property tax, income tax or taxes on assets.
17. Indirect Taxation: An indirect tax (such as sales tax, per unit tax, value added tax (VAT), or goods and
services tax (GST)) is a tax collected by an intermediary (such as a retail store) from the person who
bears the ultimate economic burden of the tax (such as the consumer).
18. Progressive Taxation: A progressive tax is a tax in which the tax rate increases as the taxable amount
increases. Increase in tax as increase in income.
19. Regressive Taxation: A regressive tax is a tax imposed in such a manner that the tax rate decreases as
the amount subject to taxation increases. With increase in income there is a decrease in tax.
20. Proportional Taxation: Proportional tax is the taxing mechanism in which the taxing authority charges
the same rate of tax from each taxpayer, irrespective of income.
21. Budget 2015-16: (Total: 4.6 Trillion), Defense 781B, To pay debt 1150B, Education 71.5, Health 20.88

Taxation
Topics to Review.
1. Tax: Cost of services rendered by the state
2. Withholding Tax: A withholding tax, also called a retention tax, is a government requirement for the
payer of an item of income to withhold or deduct tax from the payment, and pay thattax to the
government.
3. Salary Rates
4. Sales Tax
5. Property Tax
6. Capital Gains
7. Tax of AOP and Individuals
8. Companies Taxation
9. WHT Agent
SECP / Incorporation of Companies
10. What is a company
11. Company Incorporation procedure:
12. Types of Companies
13. Limited Companies (Listed and Unlisted)
14. Private Limited companies
15. Parents Companies
16. Subsidiary company
17. Sister Company
18. Dividend
19. Premium
20. Collateral Security.
1. Tax: Cost of services rendered by the state
2. Withholding Tax: A withholding tax, also called a retention tax, is a government requirement for the
payer of an item of income to withhold or deduct tax from the payment, and pay thattax to the
government.
3. WHT Agent: A withholding agent may be an individual, corporation, partnership, trust, association,
or any other entity, including any foreign intermediary, foreign partnership, branch of certain foreign
banks and insurance companies.
4. Salary Rates: Nill till 400,000/-
5. Sales Tax: 17%
6. Value Added Tax (VAT): a tax on the amount by which the value of an article has been increased at
each stage of its production or distribution
7. 7- Property Tax: Till 150,000 Nil for Individual & AOP 150,000 to 1M (10%) and above 8,5000+15%
(amount exceeding Rs. 1M), For companies 15% of the whole amount
8. Capital Gains: Gains from sale of fixed assets
9. Tax of AOP and Individuals: Small Company 25%, (Registered after 2005)
10. Corporate / Company is 32%, Banking 35%,
SECP / Incorporation of Companies

1. Define a company: Companies registered under companies’ ordinance, 1984
2. Company Incorporation procedure: Name your company and Get it approved, Pay the fees for
incorporation and Register your company, Get Digital Signature and Make a Company Seal
3. Memorandum of Association: Memorandum of Association explains your business sector of the

company e.g. Institution, Travel agency, Trading or manufacturing, Supply or chain of stores. To put
simply, MOA tells about the relationship of your company with the outside world.
4. Article of Association: Articles of Association lets know about the day-to-day proceedings within the
company i.e. what role CEO and directors would play, business concerned meetings and the
appointments of employees, in short- how the company will run.
5. Types of Companies:
(1) Public Limited
(2) Private Limited
6. Limited Companies (Listed: Listed company is the company which has its shares listed on any stock
exchange and Unlisted whose shares are not listed on any stock exchange of the country and these type
of companies are not allowed to trade their shares through stock exchange.)
7. Private Limited companies: A private limited company is the company which restricts the right to the
transfer the shares if any Private Limited company restricts the maximum number of members to be
fifty. Private Limited Company prohibits any kind of invitation to general public to subscribe for its
any shares and pay any amount to the company in that respect.
8. Parent Company: A parent company is a company that owns enough voting stock in another firm to
control management and operation by doing and influencing or electing its board of directors; the
second company being deemed as a subsidiary of the parent company.
9. Subsidiary company: A subsidiary, subsidiary company or daughter company is a company that is

owned or controlled by another company, which is called the parent company, parent, or holding
company. The subsidiary can be a company, corporation, or limited liability company. In some cases it
is a government or state-owned enterprise.
10. Sister Company: A sister company is a company with close affiliations to another company with a
separate name and personnel. Both companies are owned by the same parent and are considered
subsidiaries of the larger company.
11. Joint Venture: A joint venture (JV) is a business agreement in which the parties agree to develop, for a
finite time, a new entity and new assets by contributing equity. They exercise control over the enterprise
and consequently share revenues, expenses and assets.
12. Dividend: A sum of money paid regularly (typically annually) by a company to its shareholders out of
its profits (or reserves).
13. Types of Dividend:

A cash dividend is the most common form of dividend, and it is one that the test focuses on. A
corporation will send out a cash payment in the form of a check directly to the stockholders.
Stock dividend A corporation that wants to reward its shareholders, but also wants to conserve cash for
other business purposes, may elect to pay a stock dividend to their shareholders. With a stock dividend,
each investor will receive an additional number of shares based on the number of shares that they own.
Rights dividend: A right is issued to existing shareholders by a corporation that wants to sell additional
common shares to raise new capital. All common stockholders have a preemptive right to maintain the
proportional ownership in the company.
14. Premium: An amount to be paid for a contract of insurance.
15. Collateral Security: Collateral' Property or other assets that a borrower offers a lender to secure a loan.
If the borrower stops making the promised loan payments, the lender can seize the collateral to recoup
its losses.

Accounting
Topics to review yourself.
1. Accounting
2. Types of Accounting
3. Financial Accounting
4. Cost Accounting
5. Difference b/w Accounting, Finance & Economics
6. Deferred Taxation
7. Depreciation
8. Types of Depreciation
9. Accumulated Depreciation
10. Ratios
11. Accounting Cycle
12. Accruals
13. Deferrals
14. Balance Sheet Items
15. Charts of Accounts
16. Appropriation Accounts
17. Lease (Operation and Finance Lease):
18. Budget Types (Deficit / Surplus) Zero Budget , Sales Budget, Production Budget
19. Adjusting Entries
20. Closing Entries
21. Financial Statements
1. Accounting: Accounting is the process of recording, classifying, summarizing and reporting financial
information in a logical/systematic manner for the purpose of decision making.
2. Types of Accounting: Financial Accounting, Management Accounting, Governmental Accounting,

Forensic Accounting, Cost Accounting, Project Accounting
3. Financial Accounting: financial reporting is the process of producing information for external use
usually in the form of financial statements. Financial Statements reflect an entity's past performance
and current position based on a set of standards and guidelines known as GAAP (Generally Accepted
Accounting Principles)
4. Cost Accounting: the recording of all the costs incurred in a business in a way that can be used to
improve its management or the recording of all the costs incurred in a business with the view to
determine and control the cost
5. Difference b/w Accounting, Finance (management of large amounts of money, especially by

governments or large companies. & Economics.
6. Deferred Taxation (IAS 12): A deferred tax asset is an asset on a company's balance sheet that may be
used to reduce any subsequent period's income tax expense.
Deferred tax liabilities, the amounts of income taxes payable in future periods in respect of taxable
temporary differences

7. Preliminary Expenses: Preliminary expenses are the expenses that spent by the promoters before the
incorporation of company. Expenses paid for company registration, logo and other fee.
8. Depreciation (IAS-16) : It is reduction in the value of an asset due to wear and tear.Formula TC-SV /
Useful life
9. Types of Depreciation:
Straight Line, Reducing Balance
10. Accumulated Depreciation: Accumulated depreciation is the sum total of the depreciation recorded for
certain assets.
11. Ratios: A Ratio is a relationship between two numbers indicating how many times the first number
contains the second.
12. Accounting Cycle: The term accounting cycle refers to the specific steps that are involved in completing
the accounting process
13. Accruals: The expenses which are incurred but yet not paid (rent, rates, tax, salaries payables etc.)
14. Deferrals: The amount received in advance but in consideration good not delivered or services yet not
rendered.
15. Balance Sheet Items: Current & Fixed assets, Current & Long term liabilities, Capital
16. Charts of Accounts: The chart of accounts is a listing of all accounts used in the general ledger of an
organization each account accompanied by a reference number.
17. Appropriation Accounts: The appropriation account is the account of any governmental agency that
receives a credit. An appropriation account is reduced by the costs incurred by the agency to perform
the task or complete the project for which the credit was given.
18. Lease (Operation and Finance Lease): (IAS-17) It is the relationship between lesser and lessee. An
operating lease is commonly used to acquire equipment on a relatively short-term basis. It also defines
“to use of an asset for a particular period which is shorter than the economic life of the asset without
any transfer of ownership rights.
Finance lease is one in which risk and rewards incidental to the ownership of the leased asset are
transferred to lessee but not the actual ownership. A finance lease is a lease that transfers substantially
all the risks and rewards incidental to ownership of an asset to the lessee.
19. Budget Types (Deficit / Surplus) Zero Budget , Sales Budget, Production Budget
A budget is a quantitative expression of a plan for a defined period of time. An estimation of the
revenue and expenses over a specified future period of time. ... A surplus budget means profits are
anticipated, while a balanced budget means that revenues are expected to equal expenses. A deficit
budget means expenses will exceed revenues.

20. Zero-based budgeting is an approach to planning and decision-making that reverses the working
process of traditional budgeting. In traditional incremental budgeting, departmental managers justify
only variances versus past years based on the assumption that the "baseline" is automatically approved.
Zero Based Budgeting: A method of budgeting in which all expenses must be justified for each new
period. Zero-based budgeting starts from a "zero base" and every function within an organization is
analyzed for its needs and costs.
21. An incremental budget is a budget prepared using a previous period's budget or actual performance as
a basis with incremental amounts added for the new budget period. • The allocation of resources is
based upon allocations from the previous period.
22. Adjusting Entries: Adjusting entries, also called adjusting journal entries, are journal entries made at
the end of a period to correct accounts before the financial statements are prepared. This is the fourth
step in the accounting cycle.
Adjusting entries are accounting journal entries that convert a company's accounting records to the
accrual basis of accounting. An adjusting journal entry is typically made just prior to issuing a
company's financial statements. For example salaries & rent payable
23. Closing Entries: Closing entries are journal entries made at the end of an accounting period which
transfer the balances of temporary accounts to permanent accounts. Closing entries are based on the
account balances in an adjusted trial balance
24. Financial Statements (IAS-1): A financial statement (or financial report) is a formal record of the
financial activities and position of a business, person, or other entity. Relevant financial information is
presented in a structured manner and in a form easy to understand. Financial statements are a collection
of reports about an organization's financial results, financial condition, and cash flows. It contains
Balance Sheet, Income Statement, Owner’s Equity and Cash Flow
25. Factor: A factor is a financial intermediary that purchases receivables from a company. A factor is
essentially a funding source that agrees to pay the company the value of the invoice less a discount for
commission and fees.
26. Capital Employed: “Capital Employed” as shown in the denominator is the sum of shareholders' equity
and debt liabilities; it can be simplified as (Total Assets – Current Liabilities).

Miscellaneous
1. Self-Introduction: This is Irfan Ali from Hyderabad. I Company Info
have done MBA (Finance) from University of Sindh About: The Auditor General’s organization is the prime
institution in the country for ensuring public
Jamshoro. I have three years of teaching in Business
accountability and fiscal transparency in governmental
Subjects. operations. The organization is expected to bring about
2. Self-Experience: I have three years of teaching in improvements in the financial discipline and internal
Business Subjects. control environment in the executive departments for
minimizing the possibility of waste and fraud.
3. Why do you want to work with our company?
As the AGP’s mission statement says Serving the nation The Auditor General of Pakistan is appointed under the
by promoting accountability, transparency, and good Constitution of the country. Rana Assad Amin is the
governance in the management and use of public current Auditor General of Pakistan.
resources, my long-term goal is aligned with it’s mission
Vision: A model supreme audit institution adding value
because I have always vowed to work in the financial to national resources.
organization where transparency and good governance
are the core values of the firm. Mission: Serving the nation by promoting
4. Why should we hire you? accountability, transparency and good governance in the
management and use of public resources.
Sir I have a nice teaching background and I have worked
with commitment and dedication wherever I have
worked. AGP is the organization where my knowledge,
skills and experience match to the position for which I have appeared for interview today.
5. Why are you looking for a job change?
I am thankful to the previous organization where I have learnt a lot related to my qualification. I
believe change is necessary to enhance my skills, knowledge, and my personal and financial growth,
and Your organization is the right platform where I can learn more.
6. Strength & Weaknesses;
Strengths: I am adaptable and flexible, Optimistic, hardworking, with positive attitude towards my
career Weakness: I am straightforward and I can’t say no when someone asks for help. I am a little bit
impatient.
7. Family background
8. What are your short-term and long-term goals?
I want to get a good job that related to my academic qualification, skills and experience in the short
run. In the long run, I want to get a respectable position in a reputed organization.
9. Difference b/w Accounting & Finance

Accounting is the process of creating and managing financial statements which record the day to day
transactions of the business. Finance has a broader scope and is responsible for initiating transactions
to aid in cash, investment and other working capital management.
10. Difference b/w Accounting & Audit (Differences Between Auditing and Accounting. Accounting is
the act of collecting, recording, analyzing and interpretation of financial transactions but auditing is
the act of examination of books of accounts and evidential documents, so as to prove the true and fair
view of profitability and financial position.)
11. Difference b/w Economics & Finance:

Economics is a social science that studies the management of goods and services, including the
production and consumption and the factors affecting them. Finance is the science of managing funds

keeping in mind the time, cash at hand and the risk involved. Branches of economics include macro
and micro economics.
12. Difference b/w Accounting & Book keeping
13. Appropriation & Re-appropriation of Accounts

An appropriation account is a governmental accounting term. The appropriation account is the
account of any governmental agency that receives a credit. An appropriation account is reduced by
the costs incurred by the agency to perform the task or complete the project for which the credit was
given.
14. Good Governance:

Good governance is an indeterminate term used in the international development literature to
describe how public institutions conduct public affairs and manage public resources. Governance is
"the process of decision-making and the process by which decisions are implemented (or not
implemented)".
15. Reasons for Corruption

Greed, the desire for power and the wish to advance oneself in society are primary reasons for
corruption. Corruption typically flourishes in societies in which there is a high value placed on
money, power and station in life. Its effects might include instability, distrust and unjustness.
Causes:
1: Political Causes
a. Corruption in Political System
b. Corruption in Political Leaders
c. Due to Corruption bad governance
d. Hinders in the way of accountability
2: Social Causes
a. Lack of Understanding about Corruption, it's forms and types
b. Illiteracy
c. Urbanization
3: Economic causes
a. Poverty
b. Unemployment
c. Inconsistence economic growth and uncontrollable inflation
Solutions:
No1: Equitable Accountability
2: Proper Research on Social Hierarchy to fathom the corruption triggers
3: Once the factors are known then later comes the education
4: Implementation of Possible solutions
5: Reward process
16. ERP:

Enterprise resource planning (ERP) is business process management software that allows an
organization to use a system of integrated applications to manage the business and automate many
back-office functions related to technology, services and human resources.
17. PANAMA Papers:

The Panama Papers are an unprecedented leak of 11.5m files from the database of the world’s fourth
biggest offshore law firm, Mossack Fonseca. The records were obtained from an anonymous source
by the German newspaper Süddeutsche Zeitung, which shared them with the International
Consortium of Investigative Journalists (ICIJ). The ICIJ then shared them with a large network of
international partners, including the Guardian and the BBC.
What do they reveal?

The documents show the myriad ways in which the rich can exploit secretive offshore tax regimes.
Twelve national leaders are among 143 politicians, their families and close associates from around the
world known to have been using offshore tax havens.
Interview Experiences
Usually interviews are divided into following sections:
1. Introduction: Brief but catching. Mention specialty / distinction,
2. Domicile district profile: famous personalities, historical places, history and etymology of name
of your district,
3. Qualification related questions, largely regarding subjects in graduation and masters, particularly
about the major subject in final: Usually shallow questions, but one has to be prepared to face
every sort of question
4. Job nature and department related questions (This is the most crucial section of interview which,
if answered properly, there are abundant chances for your selection) : in/for which you have
applied, nature and information of job, challenges faced by department,
5. Opinion and information on contemporary issues: opinion means your opinion on the issue,
contemporary issues, always answer compulsorily on the opinion based questions
6. GK based (Mostly from PAK Study and Islamic studies)
The Interview of Senior Auditor is usually divided into three sections:

1. Personal Questions: Self, family, strengths and weaknesses, district profile, qualification,
experience
2. Subject related: accounting, auditing, taxation, economics, budgeting,
3. Current affairs/ GK: political, social, and geographic national contemporary issues
Tahir Hussain Tahir

1. You did MS Management Science? Is management science or art?
Management is both science and art. As science, it is a systematic process of planning, organizing,
leading and controlling. As art, it is the skill of getting things done though and with people.
2. What was Multus Contribution in management science?
Theory X and Theory Y are theories of human motivation and management developed by Douglas
McGregor who explained how managers' beliefs about what motivates their people can affect their
management style.

If you believe that your team members dislike their work and have little motivation, then, according
to McGregor, you'll likely use an authoritarian style of management. This approach is very "hands-
on" and usually involves micromanaging people's work to ensure that it gets done properly.
McGregor called this Theory X.
On the other hand, if you believe that your people take pride in their work and see it as a challenge
Add to My Personal Learning Plan, then you'll more likely adopt a participative management style.
Managers who use this approach trust their people to take ownership of their work and do it
effectively by themselves. McGregor called this Theory Y.
3. What are the techniques of FSA?

Comparative Financial Statements, statement of changes in working capital,
Common size balance sheets and income statements: is a technique that expresses each financial
statement item as a percent of a base amount.
Horizontal or trend analysis: is a technique for evaluating a series of financial statement data over a
period of time.
Ratio analysis: A single ratio is not meaningful; hence it is compared intracompany, intercompany
and industry averages figures.
A. Liquidity Ratios: Measures short-term ability of the company to pay its maturing obligations and
to meet unexpected needs for cash.
B. Profitability ratios: Measures the income or operating success of a company for a given period of
time.
C. Solvency ratios: Measures the ability of the company to survive over a long period of time.
4. What is meant by prudence concept?

The prudence concept, also known as the conservatism principle, is an accounting principle that
requires an accountant to record liabilities and expenses as soon as they occur, but revenues only
when they are assured or realized.
5. What is statutory audit?

A legally required review of the accuracy of a company's or governments financial records.
6. What are the techniques of management accounting analysis?
7. Substantive test
8. What is Public Account committee?

There are some forms of controls over the administration of a country. One of those controls is
budgetary control. Power of passing the budget is vested into parliament. However, within the
executive there are three main agencies which are responsible for proper allocation and spending of
funds. Those three agencies are Central Board of Revenue, Finance Ministry and Auditor General.
CBR collects funds, FM gives the ascent, AG prepares the audit report. From this step onwards, PAC
comes into action. At the end of a fiscal year, it scrutinises all the funds allocated to administration
along with ensuring the proper spending and completion of various projects including economic
ventures. Ultimately, it provides the feedback to the parliament. With these points in view, it may be
concluded that PAC keeps the vigilant eye over public funds.
National Assembly, through its Public Accounts Committee, scrutinizes public spending and
exercises control of expenditure incurred by the government.

Public Accounts Committee to probe into the financial affairs of the government and semi-
government departments and organisations, detect unauthorised use of public money, misuse of
official position, pin point the culprits and recommend penal action against them.
To have a Public Accounts Committee (PAC) is a constitutional requirement and it has been always
in existence but never before it had been allowed to act so independently.
Read this article: Public Accounts Committee in action

9. Who can be the members of public account committee?
10. Who conducts the audit of AGP?

Director legal of AGP Office
11. What will you do if some government ministry is refusing to allow you for the audit of its ministry?
To whom will you report?
Public Accounts Committee
12. Is audit mandatory for all organizations?
SECP's recent brief to the news media is mind boggling. It wants all private companies, even
companies with a petty paid up capital of Rs7.50 million, to engage the services of the panel of SECP's
chosen or selected auditors to audit these companies. Is SECP living in isolation? As it is obvious to
all and the SECP, the paltry paid up capital of Rs7.50 million worth of companies obviously does not
require any audit, as at present, even a small apartment or shop in any urban area now costs more
than Rs15-25 million.
13. Why firms conduct audit as there is no statutory need of audit?
Ehtesham Fazal Paul

1. Accounting principles
Accounting follows a certain framework of core principles which makes the information generated
through an accounting system valuable. Without these core principles accounting would be irrelevant
and unreliable.
These principals include:
a. Accrual Concept
Accrual concept is the most fundamental principle of accounting which requires recording
revenues when they are earned and not when they are received in cash, and recording expenses
when they are incurred and not when they are paid.
b. Going Concern Concept
Going concern concept is a simple but very important financial accounting principle which
stipulates the basis on which financial statements are prepared depending on the likelihood of
the company continuing its normal course of business.
c. Business Entity Concept
In accounting, we treat a business or an organization and its owners as two separately identifiable
parties. This concept is called business entity concept. It means that personal transactions of
owners are treated separately from those of the business.
d. Monetary Unit Assumption

In accounting, we can communicate only those business transactions and other events which can
be expressed in monetary units. This is called monetary unit assumption.
e. Time Period Principle
Although businesses intend to continue in long-term, it is always helpful to account for their
performance and position based on certain time periods because it provides timely feedback and
helps in making timely decisions.
Under time period assumption, we prepare financial statements quarterly, half-yearly or annually.
The income statement provides us an insight into the performance of the company for a period of
time.
f. Revenue Recognition Principle
Revenue recognition principle tells that revenue is to be recognized only when the rewards and
benefits associated with the items sold or service provided is transferred, where the amount can
be estimated reliability and when the amount is recoverable.
g. Full Disclosure Principle
Full disclosure principle is relevant to materiality concept. It requires that all material information
has to be disclosed in the financial statements either on the face of the financial statements or in
the notes to the financial statements. E.g.
 Accounting policies need to be disclosed because they help understand the basis of
accounting.
 Details of contingent liabilities, contingent assets, legal proceedings, etc. are also relevant to
the decision making of users and hence need to be disclosed.
h. Historical Cost Concept
Accounting is concerned with past events and it requires consistency and comparability that is
why it requires the accounting transactions to be recorded at their historical costs. This is called
historical cost concept.
Historical cost is the value of a resource given up or a liability incurred to acquire an asset/service
at the time when the resource was given up or the liability incurred.
i. Matching Principle
Matching principle is one of the most fundamental principles in accounting. It requires that a
company must record expenses in the period in which the related revenues are earned. Matching
concept is at the heart of accrual basis of accounting.
It is important to match expenses with revenues because net income, i.e. the net amount earned in
a period, is calculated by subtracting expenses from revenues. If expenses are not properly
recorded in the correct period, the net income for a particular period may be either understated or
overstated and so are the related balance sheet balances.
Matching principle is what differentiates the accrual basis of accounting from cash basis of
accounting. It requires recognition of revenues and expenses regardless of the actual receipt of
cash from revenues and actual payment of cash for expenses.
j. Relevance and Reliability:
Relevance and reliability are two of the four key qualitative characteristics of financial accounting
information. The others being understandability and comparability.
Relevance requires that the financial accounting information should be such that the users need
it and it is expected to affect their decisions.
Reliability requires that the information should be accurate and true and fair.

k. Materiality Concept
Financial statements are prepared to help its users in making economic decisions. All such
information which can be reasonably expected to affect decisions of the users of financial
statements is material and this property of information is called materiality. Materiality is a key
concept in accounting because it helps accountants and auditors in deciding which figures need
separate reporting and what is the maximum amount above which errors or omissions should be
avoided at all costs.
Deciding whether a piece of information is material or not requires considerable judgment.

Information can be material either due to size of the amounts involved or due to the nature of the
event.
Example: Materiality due to size
Maldives Plc’s total sales for the financial year 2012 amounts to $100 million and its total assets
are $50 million. The company’s external auditors have found out that $3 million worth of sales
shouldn’t be recognized in financial year 2012 because the risks and rewards inherent in the sales
have not been transferred.
This amount of $3 million is material in the context of total assets of $50 million. The company
should adjust its financial statements.
l. Substance Over Form

Substance over form is an accounting principle which recognizes that business transactions
should be accounted in accordance with their (economic) substance instead of their (legal) form.
Economic substance refers to the underlying economic or commercial purpose of a business
transaction apart from its legal or tax considerations. Legal form refers to interpretation of a
business transaction in accordance with the applicable business laws.
m. Prudence Concept
Accounting transactions and other events are sometimes uncertain but in order to be relevant we
have to report them in time. We have to make estimates requiring judgment to counter the
uncertainty. While making judgment, we need to be cautious and prudent. Prudence is a key
accounting principle which makes sure that assets and income are not overstated and liabilities
and expenses are not understated.
Bad debts are probable in many businesses, so they create a special contra-account to accounts
receivable called allowance for bad debts which brings the accounts receivable balance to the
amount which is expected to be realized and hence prevents overstatement of assets. An expense
called bad debts expense is also booked to stop net income from being overstated.
n. Understandability Concept
Understandability is one of the four qualitative characteristics of financial accounting
information. The other being relevance, reliability, timeliness, faithful representation,
comparability and materiality. Understandability refers to the quality of financial information
which makes it understandable by people with reasonable background knowledge of business
and economic activities.

Understandability requires the information presented in financial reports to be concise, complete
and clear in presentation. The information should be presented so as to facilitate the user of the
information.
o. Comparability Principle
Comparability is one of the key qualities which accounting information must possess. Accounting
information is comparable when accounting standards and policies are applied consistently from
one period to another and from one region to another. The characteristic of comparability of
financial statements is important because it allows us to compare a set of financial statements with
those of prior periods and those of other companies.
p. Consistency Concept
The concept of consistency means that accounting methods once adopted must be applied
consistently in future. Also same methods and techniques must be used for similar situations.
It implies that a business must refrain from changing its accounting policy unless on reasonable
grounds. If for any valid reasons the accounting policy is changed, a business must disclose the
nature of change, the reasons for the change and its effects on the items of financial statements.
Consistency concept is important because of the need for comparability, that is, it enables
investors and other users of financial statements to easily and correctly compare the financial
statements of a company.
These principles are the building blocks that form the basis of more complex and specialized
principles called GAAP or generally accepted accounting principles such as the International
Financial Reporting Standards, US GAAP, etc. They deal with matters like accounting for revenue,
accounting for income taxes, accounting for business combinations, etc.
2. Accounting ratios:

3. Difference between liquidity and solvency ratio

Liquidity Measures short-term ability of the company to pay its maturing obligations and to meet
unexpected needs for cash while Measures the ability of the company to survive over a long period
of time.
4. Cost accounting?
5. Cost centre?
What is a 'Cost Center'
A cost center is a department within an organization that does not directly add to profit but still costs
the organization money to operate. Cost centers only contribute to a company's profitability
indirectly, unlike a profit center, which contributes to profitability directly through its actions.
Managers of cost centers including human resources and research and development (R&D) are
responsible for keeping their costs in line or below budget.
BREAKING DOWN 'Cost Center'

A cost center indirectly contributes to a company’s profit through operational efficiency, customer
service or increasing product value. Cost centers help management utilize resources in smarter ways
by having a greater understanding of how resources are being used. Although cost centers contribute
to revenues, it is impossible to discern the actual revenue generated. Any associated benefits or
revenue-producing activities of these departments are disregarded for internal management
purposes.
6. Audit report of AGP?
7. Audit report of private entity?
8. Chairman FBR: Dr. Muhammad Irshad
9. Banking and finance

A bank is a financial institution that accepts deposits from the public and creates credit. Lending
activities can be performed either directly or indirectly through capital markets. Due to their
importance in the financial stability of a country, banks are highly regulated in most countries.
10. Purpose of Census and advantages of census
In addition to collecting population data for the purposes of accurately apportioning congressional
districts, the federal government uses census data, among other reasons, to determine: The allocation
of federal funding for education programs in states and communities.
11. Last NFC Award
7th in 2009
12. Advantages and disadvantages of CPEC
Main stakeholders of CPEC: Pakistan, China
Note: both above regional players have government and private sector included stakeholders in
CPEC.
SWOT Analysis
Strength of CPEC
Gawadar port and international air port.
Crude oil depot and oil refinery at Gawadar.
Highway Structure (3000 km).

Railway structure (1100 km, Kashgar to Islamabad and rehabilitation of existing rail structure in
Pakistan).
Pakistan-China strategic relationship (china daily, 2013).
Petroleum transportation.
Energy infrastructure 21,690 MW (Pakistan today, 2014).
Telecommunication (optical fiber cable from china border to Rawalpindi).
Research activities (joint research cotton biotechnology research center).
Opening doors for Pakistani market to European, Middle east, Gulf countries, Russia and Africa
Weaknesses of CPEC
1) Political viewpoints on rout of roads.
2) Lack of fund usage transparency.
3) Lack of seriousness on project implementation.
4) Lack of long term and non interupting internal (local) and external (foriegn) policies.
Opportunities of CPEC
Infrastructure buildup including roads and railway track up gradation.
Job opportunities for all Pakistan.
Very huge international investment
III. Economic empowerment to poor and backward areas like Baluchistan, FATA and north Sind,
Gilgitbaltistan, North-West China regions including Xinjiang.
Joint research activities in various areas of life and technology
Great opportunities for local and foreign investors in region like Iran and Gulf countries
Increase demand of education, security and health will provide better lifestyle accurse the corridor.
VII. Building up several industrial zones along with highway and rail structure.
VIII. Iran-Pakistan and China gas pipeline.
Threats of CPEC
Security threats from Xinjiang separating militant groups
Tehreek-e-Taliban and other terrorist groups like BLA.
Insurgent activities of traitors in supported by RAW, CIA and MOSSAD in region.
U.S, Afghanistan and Indian foreign policies towards Pakistan.
Conclusion
The China-Pakistan economic corridor will be the game changer for the Pakistan. It is our duty to
support this corridor and encourage those who have low in power and facilities like Baluchistan,
FATA and Sind. Planners should improve the map by delivering and connecting more to needy and
also encourage most populated and existing industrial zone. Government should stretch its planning
and increase the number of stakeholders for CPEC to get maximum juice of this joint step of Pakistan
and China governments. Long live Pak-China friendship.

My Self-Prepared Questions
1. What is the meaning of your Name ?
Knowledge of ALLAH
2. From where do you belong actually?

Dadu District "Area 300 km²
Main Places: Dadu Canal arises from Sukkur barrage."
3. Which language Do u speak in Home ? ( Its Dhatki )

Balochi
Balochi (Balochi: ‫ )بلؤچی‬is a Northwestern Iranian language. It is the principal language of the Baloch
people. There are 47 letters in the Balochi language the orthography of the Balochi script was introduced
by Taimur Mengal in his Balochi pamphlet "Balochi Nama Qasim" published in 1987.The first
collection of poetry in Balochi, Gulbang by Mir Gul Khan Nasir was published in 1951 and
incorporated the Urdu Arabic Script.
4. Name of nearest water canal to ur hometown ?

Dadu Canal
5. In there any Natural resources in your hometown or nearest ?
Lake Manchar is the largest freshwater lake in Pakistan and one of Asia's largest. It is located west of
the Indus River, in Dadu District, Sindh. The area of the lake fluctuates with the seasons from as little
as 350 km² to as much as 520 km².
6. Length of River Indus?
3180 km
7. Did U here about Silk Road?
The southern route or Karakoram route was mainly a single route running from China through the
Karakoram mountains, where it persists in modern times as the international paved road connecting
Pakistan and China as the Karakoram Highway
8. Do u know about NFC ? detail ma bata sagty hn?
"NFC – National Finance Commission is a constitutional body set up for the distribution of financial
resources among the provinces by federal government on annual basis, called National Finance
Commission Award. Certain types of taxes collected in each province are pooled, and then redistributed
according to the NFC formula.
1974 - First NFC Award given by the elected government of late Z.A.Bhutto "
(Pakistan is a federal country. Distribution of resources has a profound impact on income, development,
backwardness, and poverty. The paper briefly discusses the federation, its needs and importance in
general. The National Finance Commission (NFC) award is considered as a step towards federalism.)
9. Province wise difference in NFC ? 7th is the last NFC Award

10. What is amortization? "Also tried to confuse me wid depreciation ?
It is important to note that the term amortization refers to intangible assets; the term depreciation refers
to tangible assets, and the term depletion refers to natural resources."
"Amortization is an accounting term that refers to the process of allocating the cost of an intangible
asset over a period of time. It also refers to the repayment of loan principal over time.
The length of time over which various intangible assets are amortized vary widely, from a few years
to as many as 40 years. As a general rule, an asset should be amortized over its estimated useful life,
or the maturity or loan period in the case of a bond or a loan. If an intangible asset has an indefinite
life, such as goodwill, it cannot be amortized.
"Let's assume Company XYZ owns the patent on a piece of technology, and that patent lasts 15 years.
If the company spent $15 million to develop the technology, then it would record $1 million each year
for 15 years as amortization expense on its income statement.
Alternatively, let's assume Company XYZ has a $10 million loan outstanding. If Company XYZ repays
$500,000 of that principal every year, we would say that $500,000 of the loan has amortized each year."
11. Example of Intangible Assets?

Goodwill, patents, copyrights,
12. Why we prepare cashflow Statement ?

In financial accounting, a cash flow statement, also known as statement of cash flows, is a financial
statement that shows how changes in balance sheet accounts and income affect cash and cash
equivalents, and breaks the analysis down to operating, investing and financing activities.
13. Tel us About COCI? "again asked: What is Council of Common Interest?
I rplied: I didn’t here about this.
he said Ok leave it"
Council of Common Interests or CCI is a constitutional body in Pakistan. The CCI resolves the
disputes of power sharing between the federation and provinces.
"CCI was formed under 1973 constitution. Until 2010 the body worked under Cabinet Division. After
18th amendment the body was transferred under Ministry of Inter Provincial Coordination in march
2010.
Membership of CCI consists of following:[3]
The Prime Minister of Pakistan
All four Provincial Chief Ministers
Three members to be nominated by Prime Minister (Usually Cabinet members)
After passage of the Eighteenth Constitutional Amendment, it is mandatory for the Council to meet
once in ninety days."
14. Scope of Audit A determination of the range of the activities and the period (months or years) of
records that are to be subjected to an audit examination. The term “scope of an audit” refers to the
audit procedures that, in the auditor’s judgment and based on the ISAs, are deemed appropriate in the
circumstances to achieve the objective of the audit.

15. Qualities of an auditor
Knowledge of an Accounting & Audit, Business Taxation & Law, Critical Attitude, Independent,
Honest & have patience
16. So tell me everything U know about Audit ? I rplied all about following respectively.
Audit is an objective examination and evaluation of the financial statements of an organization to make
sure that the records are a fair and accurate representation of the transactions they claim to represent.
Definition + Types + Differences +Benefits.
17. After my rpl he asked & also tried to confused me about Social Audit ? I rplied: Sorry Sir.
A social audit is a way of measuring, understanding, reporting and ultimately improving an
organization's social and ethical performance. A social audit helps to narrow gaps between vision/goal
and reality, between efficiency and effectiveness.
18. Why Audit is necessary for a listed company. "He said is k 12 se 13 Reason hn
But I Highlighted about only 6 in my reply."
"Companies have audits because the companies are not necessarily managed by their owners. The
owners hire the professionals to manage the firm and it is the management’s responsibility to
maximize the owner’s wealth in the company. In order to keep the track of such wealth maximization,
the management prepares financial statements for the owners. However, owners need someone to vet
the financial statements and therefore they appoint external auditors to express an opinion on such
financial statements as to the true and fair presentation.
"The auditors are auditing for the shareholders of the company i.e. the investors of your company.
Whether it is mandatory or optional depends on the type of the entity. A sole proprietor or a
partnership firm may not have its account audited in some jurisdictions while it is mandatory for
public companies.
The final outcome is an audit report where the auditor expresses his opinion on the financial
statements. The opinions are based on whether the financial statements represent the true and fair
representation of the financial condition of the company."
19. What is Corporate Social Responsibility?

I didn’t explain properly.
Corporate social responsibility (CSR) refers to business practices involving initiatives that benefit
society. A business's CSR can encompass a wide variety of tactics, from giving away a portion of a
company's proceeds to charity, to implementing "greener" business operations.
20. As an Auditor U are very much familiar with Bank Statement and its Reconciliation ? Bank
Reconciliation statement
"A bank reconciliation or bank rec is a report used to check and explain the differences between the
cash balance in a company's accounting ledger and the bank statement balance. A bank reconciliation
is also one of the main ways to prevent fraud and embezzlement of company funds. Here is how it
works.

Let's take Fender Guitar Company for example. Throughout the course of business, Fender writes
checks to vendors for goods and services. These checks are recorded as expenses (cash out) in Fender's
accounting system as soon as the checks are written. Fender also receives checks from customers and
dealers who are buying their guitars. These checks are recorded as income (cash in) as soon as the checks
are received. Notice how none of the checks have made it to the bank account yet? The checks Fender
wrote to vendors won't actually be withdrawn from Fender's bank account until the vendors actually
receive and cash them. The checks Fender received from customers won't actually appear in Fender's
bank account until they are cashed and the bank clears them.
This disconnect between Fender's accounting records and what is actually in the Fender bank account
is called the bank statement difference or ledger different. The two balances won't be the same until all
the outstanding checks that Fender wrote vendors are cashed and the checks Fender received from
customers or deposits in transit are cleared. In an ideal world, the bank statement balance the
accounting ledger balance would always be the same, but they rarely are.
A bank reconciliation checks the accuracy of both records: the bank statement and the accounting
records. Basically, a bank reconciliation has two column: one for all the bank statement transactions
and one for all the accounting record transactions. Each transaction is matched and checked off to see
what checks are outstanding and what deposits are in transit. Once the bank statement balance is
adjusted for deposits in transit and outstanding checks and the book balance is adjusted for bank
account activity not recorded in the accounting system, the two adjusted balances should be equal. Here
is what an example bank reconciliation looks like."
Fender Guitar Company
Bank Reconciliation
December 31, 2015
Bank Statement Balance at 12/31/15 Book Balance at 12/31/15
Add: Add: Income Not Recorded on Books
Deposits in Transit Bank Interest Income
Less: Less: Expenses Not Reocorded on Books

Outstanding Checks Bank Account Charges
Adjusted Bank Balance Adjusted Book Balance
Author: Author:
Checks that Fender checks that Vendor
received from customers received from Fendor
have not been cleared. have not been cleared
into the bank
22. Why this difference occurs.

The difference occurs because the checks received by the companies from customers and checks given
to suppliers for receiving cash have not been submitted for clearance.

23. What are the components of cash flow statements?
"Cash flow from operating activities are generally calculated according to the following formula:
Cash Flows from Operations = Net income + Noncash Expenses + Changes in Working Capital"
"Cash flow from investing activities primarily reflect the company's purchases or sales of capital
assets (that is, assets with a useful life of more than one year that appear on the balance sheet).
Cash flow from financing activities typically reflect the company's purchase or sale of stock and any
proceeds from or payments on debt financing. The measure varies with the different capital
structures, dividend policies, or debt terms companies may have.
24. Direct taxes and indirect taxes

A direct tax is one that the taxpayer pays directly to the government. These taxes cannot be shifted to
others. ... A family pays its own federal income taxes. An indirect tax can be passed on to another
person or group.
25. Economic Growth and Development?

Economic growth means an increase in real national income / national output. Economic development
means an improvement in quality of life and living standards, e.g. measures of literacy, life-
expectancy and health care. ... Higher real GDP, enables more to be spent on health care and education.
26. What are the legal requirements for opening an LC?

27. How do exports affect economy?
If exports are less than imports, the net exports figure would be negative, and the nation has a trade
deficit. Positive net exports contribute to economic growth, something that is intuitively easy to
understand. ... Conversely, imports are considered to be a drag on the economy, as can be gauged from
the GDP equation.
28. Why Pakistan economy is not taking the effects of decreasing oil prices?
A fall in the oil price will reduce the import bills of Pakistan, thereby improving the balance of
payments, foreign reserves and, of course, the value of the rupee
29. How many types of taxes in Pakistan? Which taxes are collected by Provincial taxes?

30. Taxes are 11.9% of GDP Direct taxes and Indirect Taxes
31. World Bank vs IMF
The primary difference between the International Monetary Fund, or IMF, and the World Bank lies
in their respective purposes and functions. The IMF exists primarily to stabilize exchange rates, while
the World Bank's goal is to reduce poverty. ... The loans offered by the IMF, however, are loaded with
conditions.
32. WTO? Salient features of WTO?

The establishment of the World Trade Organization (WTO) as the successor to ,the GATT on 1 January
1995 under the Marrakesh Agreement places the global trading system on a firm constitutional footing
with the evolution of international economic legislation resulted through the Uruguay Round of
GATT negotiations.
"Objectives of WTO
1. To ensure the reduction of tariffs and other barriers to trade.
2. To eliminate discriminatory treatment in international trade relations.
3. To facilitate higher standards of living, full employment, a growing volume of real income and
effective demand, and an increase in production and trade in goods and services of the member
nations.
4. To make positive effect, which ensures developing countries, especially the least developed secure
a level of share in the growth of international trade that reflects the needs of their economic
development.
5. To facilitate the optimal use of the world’s resources for sustainable development.
6. To promote an integrated, more viable and durable trading system incorporating all the resolutions
of the Uruguay Round’s multilateral trade negotiations.
Above all, to ensure that linkages trade policies, environmental policies with sustainable growth and
development are taken care of by the member countries in evolving a new economic order."
"Salient features of WTO

I. Unlike the GATT, it is a legal entity.
ii. Unlike the International Monetary Fund (IMF) and the World Bank (WB) it is not an agent of the
United Nations.
iii. Unlike the IMF and the World Bank, there is no weighted voting, but all the WTO members have
equal rights.
iv. Unlike the GATT, the agreements under the WTO are permanent and binding to the member
countries.
v. Unlike the GATT, the WTO dispute settlement system is based not on dilatory but automatic
mechanism. It is also quicker and binding on the members. As such, the WTO is a powerful body.
Unlike the GATT, the WTOs approach is rule- based and time-bound.
vii. Unlike the GATT, the WTOs have a wider coverage. It covers trade in goods as well as services.
viii. Unlike the GATT, the WTOs have a focus on trade-related aspects of intellectual property rights
and several other issues of agreements.
ix. Above all, the WTO is a huge organisational body with a large secretariat."
33. Which type of taxes is the main source of revenue in UK? After Income second source?

"UK tax revenues come from a variety of sources. The main sources of tax revenue include:
Income tax (main tax rate is 20%)
National Insurance
VAT (20% on most goods and services)
Corporation tax
Council Tax (local government)
Business rates
Excise duties (alcohol, cigarettes)
Other taxes include (stamp duty, carbon tax, airport tax, inheritance tax, capital gains)"
34. Dumping In economics, "dumping" is a kind of predatory pricing, especially in the context of
international trade. It occurs when manufacturers export a product to another country at a price either
below the price charged in its home market or below its cost of production. "What is 'Dumping'
Dumping, in reference to international trade, is the export by a country or company of a product at a

price that is lower in the foreign market than the price charged in the domestic market. As dumping
usually involves substantial export volumes of the product, it often has the effect of endangering the
financial viability of manufacturers or producers of the product in the importing nation."
"Considered a form of price discrimination, dumping occurs when a manufacturer lowers the price of
a good entering a foreign market than it charges domestic customers. The identification of trade
dumping can be performed simply by comparing the sales price of a good in its market of origin and
the price listed in an importing market. Trade dumping is considered intentional in nature in that the
primary purpose is to gain an advantage within the market that imports the goods."
35. Foreign reserves?

Foreign Exchange Reserves 23200 USD Million
Foreign-exchange reserves (also called forex reserves or FX reserves) is money or other assets held by
a central bank or other monetary authority so that it can pay if need be its liabilities, such as the
currency issued by the central bank, as well as the various bank reserves deposited with the central
bank by the ...
36. China Currency? In PKR? UK Pound in PKR?

"1 Chinese Yuan equals 15.22 Pakistani Rupee"
"1 British Pound equals 131.62 Pakistani Rupee"
37. Fiscal Policy? Who makes fiscal policy?

Fiscal policy is the means by which a government adjusts its spending levels and tax rates to monitor
and influence a nation's economy. It is the sister strategy to monetary policy through which a central
bank influences a nation's money supply.
There are two main types of fiscal policy: expansionary and contractionary. Expansionary fiscal
policy, designed to stimulate the economy, is most often used during a recession, times of high
unemployment or other low periods of the business cycle. It entails the government spending more
money, lowering taxes, or both.
38. Rent Theory?

39. What is hedging and type?
A hedge can be constructed from many types of financial instruments, including stocks, exchange-
traded funds, insurance, forward contracts, swaps, options, gambles, many types of over-the-counter
and derivative products, and futures contracts. "In finance, a hedge is a strategy intended to
protect an investment or portfolio against loss. It usually involves buying securities that move in the
opposite direction than the asset being protected."
"HOW IT WORKS (EXAMPLE):

Let's assume part of your investment portfolio includes 100 shares of Company XYZ, which
manufactures autos. Because the auto industry is cyclical (meaning Company XYZ usually sells more
cars and is more profitable during economic booms and sells fewer cars and is less profitable during
economic slumps), Company XYZ shares will probably be worth less if the economy starts to
deteriorate. How do you protect your investment?
One way is to buy defensive stocks. These stocks might be from the food, utility, or other industries
that sell products
The definition of hedge on InvestingAnswers that consumers consider basic necessities. During
economic slumps, these stocks tend to gain or at least hold their value. Thus, these stocks may gain
when your XYZ shares lose."
40. Economics definitions?

"1. General Definition of Economics
2. Adam Smith’s Wealth Definition
3. Marshall’s Welfare Definition
4. Robbins’ Scarcity Definition.
1. the management of a family or a household."
"General economic rules [change | change source]

All people have to decide between their options.
The cost of goods is what a person gives up for the goods.
When a person gives up something (like money) to get a good, they also give up other things that they
could have gotten instead. This means that the true cost of something is what you give up to get it.
This includes money, and the economic benefits (""utility"") that you didn't get because you can no
longer buy something else. This is called opportunity cost.
People react to encouragements (""incentives""). Making an option more attractive will make more
people choose it.
Trade can make everyone better off.
Markets are usually good for the organisation of economic life. In the free market, goods will be
shared by people and companies making small decisions. The “invisible hand” of the market (Adam
Smith) states that if everyone tries to get what they want, everyone will be as well-off as they could
possibly be.
Sometimes prices do not fully show the cost or benefit to society. For example, air pollution is bad for
society, and education is good for society. The government can put a tax (or do something to reduce
sales) on items that are bad for society. It can also support (like giving money for) items that are good
for society.
The living standard of a country depends on the skills to produce services and goods. Productivity is
the amount of the produced goods divided by total working hours.

When there is an increase in the total money supply, or when the cost to produce things rises, prices
go up. This is called inflation." "Famous economists in history include:
Adam Smith (considered to be the father of economics; he supported free markets).

Thomas Malthus (he wrote about how a high population can affect the economy badly).
Karl Marx (he wrote a book called The Communist Manifesto; he supported communism).
John Maynard Keynes (he created a popular economic theory called Keynesian economics).
Milton Friedman (he wrote a lot about monetarism and the money supply).
Famous economists of the 19th and 20th century include Friedrich August von Hayek, Wassily
Leontief, N. Gregory Mankiw, Carl Menger, and Léon Walras."
41. What is finance? Types?

Finance is the science of managing money
"Business Finance
Personal Finance
Public Finance
Behavioral Finance
Investment Finance"
42. financial risk management?
Financial risk management is the field of finance which encompasses all techniques, skills and
procedures to invest in the portfolio that minimizes risk
43. Objectives of State Bank of Pakistan

The State Bank of Pakistan frames and operators the monetary policy. Monetary policy is conducted
by the State Bank of Pakistan to regulate and control the volume of money and credit supply in the
country in order to achieve specific economic objectives such as price stability, reducing
unemployment, etc. The main instruments of monetary policy are (i) Open market operations (ii)
Changing the reserve requirement and (iii) Changing the discount rate.
44. Sales Tax rate The Sales Tax Rate in Pakistan stands at 17 percent.
45. Difference b/w public finance and development finance

Public finance is the study of the role of the government in the economy. It is the branch of economics
which assesses the government revenue and government expenditure of the public authorities and
the adjustment of one or the other to achieve desirable effects and avoid undesirable ones. A
development finance institution (DFI) is an alternative financial institution which includes
microfinance institutions, community development financial institution and revolving loan funds. ...
DFIs are backed by states with developed economies.
46. Major Economic problems in Pak

"Low FDI And Huge Debt Trap
iv) Poorly Managed Tax System
v) Low Export And High Import
vi) Inflation

vii) Influx Of Local People Fom War Ridden Areas And Their Rehabilitation
viii) Lack Of Tourism"
47. Which section of company ordinance deals on audit of company ?

"The Companies Ordinance, 1984
Section 252. Appointment and remuneration of auditors.-
(1) Every company shall at each annual general meeting appoint an auditor or auditors to hold office
from the conclusion of that meeting until the conclusion of the next annual general meeting:
Provided that an auditor or auditors appointed in a general meeting may be removed before
conclusion of the next annual general meeting through a special resolution."
(2) Appointment of a partnership by the firm name to be the auditors of a company shall be deemed
to be the appointment of all the persons who are partners in the firm at the time of appointment.
(3) The first auditor or auditors of a company shall be appointed by the directors within sixty days
of the date of incorporation of the company; and the auditor or auditors so appointed shall hold office
until the conclusion of the first annual general meeting:"
48. Who and when is auditor appointed?

"Auditor's appointment:
First auditor is appointed by directors of the company within 60 days of incorporation. I they fail to
do so, shareholders shall appoint the auditor within 120 day of incorporation. If the SH failed to do
so, SECP shall appoint the auditor within 180 days of incorporation." Subsequent appointments
in every AGM by S/Hs "Y shareholders p h k WO same hi auditors appoint krem ya phr koi aur
Mgr practically wohi appoint hoty hn subsequently"
49. Whats the authority which registers the companies?

Companies' registrar in SECP
50. Bretton woods agreement

What is the 'Bretton Woods Agreement'
The Bretton Woods Agreement is the landmark system for monetary and exchange rate management
established in 1944. It was developed at the United Nations Monetary and Financial Conference held
in Bretton Woods, New Hampshire, from July 1 to July 22, 1944. Under the agreement, currencies were
pegged to the price of gold, and the U.S. dollar was seen as a reserve currency linked to the price of
gold.
BREAKING DOWN 'Bretton Woods Agreement'

The Bretton Woods Agreement remains an important part of world financial history. The creation of
the International Monetary Fund (IMF) and valuation of gold and foreign exchange rates remain
important to this day. The agreement also made currencies convertible for trade and other current
account transactions. The strong value of the U.S. dollar eventually led to the collapse of this system
after more than 20 years.
The Bretton Woods Agreement
Delegates from 44 countries met to create a new international monetary system. The main goals of the
meeting of the 730 delegates were to ensure a foreign exchange rate system, prevent competitive
devaluations and promote economic growth.

Preparation for this event took two years. The primary designers of the system were John Maynard
Keynes, of the United Kingdom, and Harry Dexter White, the chief international economist of the
Treasury Department. Keynes’ plan was to establish a global central bank called the Clearing Union.
White’s plan limited the powers and resources of each country. In the end, the adopted plan took
ideals from both, leaning more toward White’s plan.
Creation of Two New Institutions

One of the major items that came about from the Bretton Woods Agreement was the creation of the
International Monetary Fund. The IMF was created to monitor exchange rates and lend reserve
currencies to nations. It was formally introduced in December 1945 when 29 members signed the
Articles of Agreement. The Bretton Woods Agreement also created the World Bank Group, which was
set up to provide financial assistance for countries during the reconstruction post World War I phase.
End of Bretton Woods Agreement

The Bretton Woods Agreement was dissolved between 1968 and 1973. An overvaluation of the U.S.
dollar led to concerns over the exchange rates and tie to the price of gold. President Richard Nixon
called for a temporary suspension of the dollar’s convertibility. Countries were then free to choose
any exchange agreement, except the price of gold. In 1973, foreign governments let currencies float,
which put an end to the Bretton Woods system.
51. 4 P’s of marketing

Marketing Mix Definition of the 4P's and 7P's - People, Product, Price, Promotion, Place, Process and
Physical Evidence all make up the Marketing Mix.
52. Sampling
Sampling is a process used in statistical analysis in which a predetermined number of observations
are taken from a larger population. The methodology used to sample from a larger population
depends on the type of analysis being performed, but may include simple random sampling or
systematic sampling.
53. Circular debt
It refers to the debt prevailing among different departments of the government over the power usage
charges. for example PEPCO supplies power to all the governments departments nd also to KESC but
all these do not pay for the power they use. PEPCO in turn has to pay to various IPPs from where it
purchases power but as it dun gets it money so it cant pay to IPPs. IPPs in turn have to pay to oil
companies to purchase fuel which they cant pay. so this is a circle of debt due to which power
production of IPPs suffer
Just informed by a friend that GOP has printed Rs. 81.6 billion for making payments to IPPs to break
the circle of circular debt. Get ready for the new wave of inflation in the country.
54. NEC
As per constitution
Article 156: National Economic Council
1. The President shall constitute a National Economic Council which shall consist of -
a. the Prime Minister, who shall be the Chairman of the Council;
b. the Chief Ministers and one member from each Province to be nominated by the Chief Minister;
and
c. four other members as the Prime Minister may nominate from time to time.

2. The National Economic Council shall review the overall economic condition of the country and
shall, for advising the Federal Government and the Provincial Governments, formulate plans in
respect of financial, commercial, social and economic policies; and in formulating such plans it shall,
amongst other factors, ensure balanced development and regional equity and shall also be guided by
the Principles of Policy set out in
Chapter 2 of Part-II.
55. Routes of CPEC

THE deep-sea port of Gwadar is supposed to be connected to the Chinese border through two routes
— eastern route and western route.
The eastern route will pass through Makran coastal highway, Karachi, Hyderabad, Sukkur, Multan,
Lahore, Islamabad, Mansehra, Thakot, Raikot to Khunjarab while the western route will pass through
Gwadar, Turbat, Bismah, Surab, Qalat, Quetta, Zhob, Dera Ismail Khan, Bannu, Kohat, Peshawar and
Islamabad onward.
56. What is Trial Balance? And what does it represent?
Nadeem
1. Functions of regulatory authorities
Government body formed or mandated under the terms of a legislative act (statute) to ensure
compliance with the provisions of the act, and in carrying out its purpose. Also called regulatory
authority or regulatory body
2. CAPM
In finance, the capital asset pricing model (CAPM) is a model used to determine a theoretically
appropriate required rate of return of an asset, to make decisions about adding assets to a well-
diversified portfolio.
The model takes into account the asset's sensitivity to non-diversifiable risk (also known as
systematic risk or market risk), often represented by the quantity beta (β) in the financial industry, as
well as the expected return of the market and the expected return of a theoretical risk-free asset. CAPM
assumes a particular form of utility functions (in which only first and second moments matter, that is
risk is measured by variance, for example a quadratic utility) or alternatively asset returns whose
probability distributions are completely described by the first two moments (for example, the normal
distribution) and zero transaction costs (necessary for diversification to get rid of all idiosyncratic
risk). Under these conditions, CAPM shows that the cost of equity capital is determined only by
beta.[1][2] Despite it failing numerous empirical tests, [3] and the existence of more modern
approaches to asset pricing and portfolio selection (such as arbitrage pricing theory and Merton's
portfolio problem), the CAPM still remains popular due to its simplicity and utility in a variety of
situations.
3. Challenges to Pak Economy

First and foremost the mounting ‘Debt’ issue.
Declining national exports
Finally, the third critical problem relates to the mistake being committed by this government of
indulging in excessive taxation and regulation. Much has been made of the 60% increase in tax
collected over the last three years, however, it would be interesting to see how much of this came from
actually broadening the tax base – Practically nil. Coercive collection drives and squeezing the
existing taxpayers will only strengthen the case and charm of the ever-present un-documented sector
in the Pak economy. In addition, the present aggressive oversight/regulatory drives by provincial
governments and the complete disharmony between the revenue-collection authorities of the center
and the provinces is resulting in added costs and double taxation for businesses.
4. APR
An annual percentage rate (APR) is the annual rate charged for borrowing or earned through an
investment, and is expressed as a percentage that represents the actual yearly cost of funds over the
term of a loan.
5. IRR
6. NPV
7. Units under AGP
8. PAK Monetary program
9. SWOT Analysis
10. PESTAL Analysis
11. Business analysis models
12. Capital accumulation
13. Qualities of accounts
14. Name of M.Com equivalent degree in UK?
15. Structure of Ministry of Finance? Bodies

MoF is subdivided into three divisions:
1. Finance: The Finance Division (FD) is the most elite bureaucratic division under the Finance
Ministry's purview. The FD comes under the supervision of the Secretary of Finance, an office
held by Dr Waqar Masood Khan as of 2014.
The division's bureaucracy is divided into several wings and units as listed below:
A. HRM Wing
B. Corporate finance Wing
C. Economic advisor’s wing
D. Expenditure wing
The FD also delegates its functions to specialised sub-departments within the division, which
include the following:
a. Auditor General of Pakistan
The Auditor General's organization is the prime institution in the country for ensuring public
accountability and fiscal transparency in governmental operations. The organization is
expected to bring about improvements in the financial discipline and internal control
environment in the executive departments for minimizing the possibility of waste and fraud.
b. Accountant General Pakistan Revenues (AGPR) is responsible for the centralised accounting
and reporting of federal transactions. Additionally the AGPR is responsible for the
consolidation of summarised financial information prepared by federal self-accounting
entities. The AGPR receives accounts and reports from the DAOs, PAOs, Federal Treasuries

and SBP/NBP, and provide Annual Accounts (to the AGP) and Consolidated Monthly
Accounts (to the Federal Finance Division).
There are AGPR sub-offices in each of the Provinces who also act as the DAO in respect of
Federal Government transactions relevant to the Provincial Headquarters. The Controller
General of Accounts is the administrative head of the AGPR.
c. Controller General of Accounts
The Controller General of Accounts (CGA) is the premier accounting office of the Government
of Pakistan. The Office is entrusted with the task of producing accurate and timely financial
statements for the federation. It was formed under an ordinance issued in 2001. The Office
achieves task through dedicated human resources, immense investment in infrastructure and
strict quality control checks by the Senior Officers. It is also responsible for disbursing
government money in form of payments of salaries and allowances to government servants
and payments to contractors. All these transactions and any other transactions by Government
of Pakistan, are captured in the SAP ERP and then the information is used to generate monthly,
quarterly and yearly financials. The Controller General of Accounts is appointed by the
President from amongst the officers of the Accounts Group and shall hold a civil service rank
of BPS 22.
d. Securities and Exchange Commission of Pakistan
e. Competition Commission of Pakistan
f. Central Directorate of National Savings (CDNS)
g. Debt Policy Coordination Office (DPCO)
h. Pakistan Mint
i. Federal Treasury Offices
2. Revenue: This division is headed by Secretary, Revenue Division; who usually is an ex officio
Chairman of the Federal Board of Revenue (the supreme tax agency). This division (Federal Board
of Revenue) is responsible for: (i) formulation and administration of fiscal policies, (ii) levy and
collection of federal taxes and (iii) quasi-judicial function of hearing of appeals.
3. Economic affairs: The Economic Affairs Division (EAD) is responsible for requirement
assessment, programming and negotiations of external economic assistance concerning the
Government of Pakistan and its constituent units from foreign governments and multilateral
agencies.[11] Amongst its various functions are the management of external debt, provision of
technical assistance to foreign countries, lending and re-lending of foreign loans, and monitoring
of aid utilization. The EAD has thirteen wings and comes under the supervision of the Secretary
of Economic Affairs, an office held by Muhammad Saleem Sethi as of 2014.
4. Statistics: The Statistics Division includes these departments:
Federal Bureau of Statistics, headquartered in Islamabad
Population Census Organization, headquartered in Islamabad
Agricultural Census Organization, headquartered in Lahore
The above three have been merged now in to a single department since 2015 called Pakistan
Bureau of Statistics, headquartered in Islamabad
16. Phases of audit process

An audit can be an unpleasant surprise, or it can be a welcome opportunity to get your organization's
affairs in order. While some audits -- such as those performed by the IRS -- come as a surprise, some
companies hire independent outside auditors to conduct a planned audit. Regardless of the kind of

audit in which a company is involved, the auditor will likely use the same four phases to perform the
audit.
Planning
In the planning phase, the auditor makes an effort to understand what kinds of documentation are
needed, collects documents from previous audits and gathers preliminary statements from involved
parties. During the planning phase, the auditor also begins to plan the scope of the audit and to
determine what the objective of the audit is. In some non-sensitive cases, a letter is sent to the internal
organization's auditing committee to let the group know that an audit is forthcoming.
Preliminary Review
The auditor begins to evaluate the way that a company operates and takes into account the
organization's internal processes. If any of these processes do not allow the auditor to perform the
audit as well as he had planned, he may adapt to accommodate for the differences between his
assumptions and the way the organization actually operates. For example, if an auditor comes in with
the assumption that only a select few employees have access to the organization's bookkeeping
software, when in actuality many employees have access, he may need to reevaluate how he plans to
perform the audit. The auditor holds an entrance conference with the organization being audited and
will incorporate any recommendations made by the organization, if appropriate. Some of the
processes that might be discussed include how an internal accountant approves purchases with petty
cash, how an employee receives access to a company credit card and how mileage is reimbursed.
Fieldwork
The auditor will begin to interview employees in different areas of the organization to understand its
general practices and processes. The auditor often performs this work on site. The auditor begins to
be able to determine, during this phase, if the organization's operations and processes are working as
effectively as they should. The auditor also clearly identifies the areas that are not in compliance, or
that are less effective than they need to be. For example, he may notice that an organization is not
keeping records or filing documents as federal or local law mandates.
Audit Report
All of the work done during the first three phases culminates in the production and delivery of the
audit report. In addition to identifying areas in need of improvement, the audit report also includes
recommendations that list the processes the organization can follow to improve the way it operates.
For example, an auditor may recommend that an organization add an extra layer of approvals before
a supervisor is able to okay purchases. An exit conference is held between the auditor and upper-level
management to discuss the results of the audit.

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$ Audit $

1. Audit- an official inspection of an organization's accounts, typically by an independent body. What

i. Accounting is the process of recording, classifying, summarizing and reporting financial

SENIOR AUDITOR NOTES………………. Irfan Ali Baloch Page 1 of 42

7. Types of Audit Reports

i. Unqualified Opinion Report:

ii. Qualified Opinion report

SENIOR AUDITOR NOTES………………. Irfan Ali Baloch Page 2 of 42

iii. Adverse Opinion report

8. What are the different types of audit?

SENIOR AUDITOR NOTES………………. Irfan Ali Baloch Page 3 of 42

11. Voucher: A voucher is a document which support the business transactions

14. Before and After Audit Measures:

SENIOR AUDITOR NOTES………………. Irfan Ali Baloch Page 4 of 42

9. Internal Control System :-

10. Personal Visit Of Site :-

11. Study Of Contracts :-

12. Case Of Joint Auditors :-

13. Previous Report Inspection In Case Of Old Company :-

14. Audit Programme :-

16. Legal Formalities :-

17. Historical Background :-

SENIOR AUDITOR NOTES………………. Irfan Ali Baloch Page 5 of 42

INSTRUCTION GIVEN BY THE AUDITOR TO HIS CLIENT:-

2. A system of book keeping and internal connect should be provided.

4. All supporting vouchers should be ready.

15. Audit process

II. Preparing an Audit Plan

III. Scheduling an Open Meeting

IV. Conducting Fieldwork

SENIOR AUDITOR NOTES………………. Irfan Ali Baloch Page 6 of 42

VI. Setting Up a Closing Meeting

SENIOR AUDITOR NOTES………………. Irfan Ali Baloch Page 7 of 42

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1. Tax: Cost of services rendered by the state

SECP / Incorporation of Companies

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3. Memorandum of Association: Memorandum of Association explains your business sector of the

9. Subsidiary company: A subsidiary, subsidiary company or daughter company is a company that is

13. Types of Dividend:

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14. Premium: An amount to be paid for a contract of insurance.

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2. Types of Accounting: Financial Accounting, Management Accounting, Governmental Accounting,

5. Difference b/w Accounting, Finance (management of large amounts of money, especially by

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9. Difference b/w Accounting & Finance

11. Difference b/w Economics & Finance:

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12. Difference b/w Accounting & Book keeping

13. Appropriation & Re-appropriation of Accounts

14. Good Governance:

15. Reasons for Corruption

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17. PANAMA Papers:

What do they reveal?

The Interview of Senior Auditor is usually divided into three sections:

Tahir Hussain Tahir

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3. What are the techniques of FSA?

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