Public Section Preview
Predicted Questions with Model Answers
Q1 (5-mark, 50 words): What are the objectives of auditing? Explain with reference to SA-200.
(2023 Q42 was 2-mark — expect 5-mark elaboration in 2026)
Model Answer (50 words):
As per SA-200 (ICAI), the primary objective of auditing is to enable the auditor to express an opinion on whether financial statements give a true and fair view. Secondary objectives: (i) detect and prevent errors (unintentional mistakes — omission, commission, principle); (ii) detect and prevent fraud (defalcation, falsification); (iii) verify compliance with Companies Act 2013, accounting standards, and applicable regulations.
Q2 (5-mark, 50 words): What is Social Audit? How is it conducted under MGNREGS?
(Never asked as 5-mark — high probability for 2026)
Model Answer (50 words):
Social Audit is a community-driven accountability process that examines whether government programmes reached intended beneficiaries and achieved social objectives. Under MGNREGS Section 17, Gram Sabha conducts social audit of all works every six months. Process: documents made public → community verifies worksites → Jan Sunwai (public hearing) in Gram Sabha → action taken report submitted within 30 days.
Q3 (5-mark, 50 words): Explain Performance Audit with reference to the three 'E's.
(2021 Q48 asked usefulness — 2026 may ask three E's directly)
Model Answer (50 words):
Performance Audit (Value for Money Audit) evaluates public resource use on three dimensions: (i) Economy — were inputs acquired at minimum cost consistent with required quality?; (ii) Efficiency — was maximum output achieved from given inputs (minimum waste)?; (iii) Effectiveness — did the programme achieve its intended outcomes and benefit target groups? CAG of India conducts performance audits on government programmes.
Q4 (5-mark, 50 words): Explain the constitutional position and key duties of the CAG.
(2021 Q45 and 2023 Q43 both asked — likely repeat in 2026)
Model Answer (50 words):
The Comptroller and Auditor General (CAG) is a constitutional authority under Article 148 — appointed by the President, serves 6 years or until age 65. Salary from Consolidated Fund ensures independence. Key duties: (i) audit Union and State government accounts; (ii) audit PSUs; (iii) conduct performance audits; (iv) certify Finance Accounts; (v) submit reports to Parliament/State Legislatures.
Q5 (5-mark, 50 words): What is Zero Based Budgeting (ZBB)? State four key features.
(2021 Q46 and 2023 Q45 both asked — ensure mastery)
Model Answer (50 words):
Zero Based Budgeting (ZBB), introduced by Peter Pyhrr (USA, 1969), requires every department to justify expenditure from zero each cycle — no automatic carryover. Rajasthan adopted ZBB in 1987. Key features: (i) zero as base; (ii) every item justified on merit; (iii) activities ranked as decision packages; (iv) lower-priority packages cut; (v) eliminates inefficient schemes.
Q6 (5-mark, 50 words): What is an Audit Programme? Explain its contents and advantages.
(Never asked directly — high probability for 2026)
Model Answer (50 words):
An Audit Programme is a detailed written plan specifying what to audit, how, by whom, and by when. Contents include: risk assessment, tests of internal controls, substantive procedures (vouching, physical verification), sampling plan, and time budget. Advantages: (i) ensures systematic, complete audit; (ii) divides work efficiently; (iii) provides legal evidence of due diligence; (iv) facilitates supervision and review by audit manager.