Assistant Director Inspection (Financial Matters) Past Papers (2020-2026) PDF
200 Important Questions with One-Line Answers (Basic to Advanced)
PART A – ACCOUNTING FUNDAMENTALS (Q1–40)
Question No.1: What is the basic accounting equation? Ans: Assets = Liabilities + Owner’s Equity.
Question No.2: Who is known as the father of double-entry bookkeeping? Ans: Luca Pacioli (1494).
Question No.3: What is the principle of double entry? Ans: Every debit has an equal and corresponding credit.
Question No.4: What is the normal balance of an asset account? Ans: Debit.
Question No.5: What is the normal balance of liability, capital and revenue accounts? Ans: Credit.
Question No.6: What is the book of original entry? Ans: The journal.
Question No.7: What is a ledger? Ans: The principal book in which all accounts are maintained.
Question No.8: Why is a trial balance prepared? Ans: To check the arithmetical accuracy of ledger postings.
Question No.9: Which errors are not disclosed by a trial balance? Ans: Errors of omission, commission, principle, original entry and compensating errors.
Question No.10: Where is a trial balance difference temporarily placed? Ans: In a suspense account.
Question No.11: What is the difference between capital and revenue expenditure? Ans: Capital expenditure creates long-term benefit or assets; revenue expenditure relates to day-to-day operations of the current period.
Question No.12: What is the accrual basis of accounting? Ans: Recording income and expenses when earned or incurred, not when cash is received or paid.
Question No.13: What is the going concern assumption? Ans: The entity is assumed to continue operating for the foreseeable future.
Question No.14: What are the fundamental qualitative characteristics in the IFRS Conceptual Framework? Ans: Relevance and faithful representation.
Question No.15: What are the enhancing qualitative characteristics? Ans: Comparability, verifiability, timeliness and understandability.
Question No.16: Which body issues IFRS? Ans: The International Accounting Standards Board (IASB).
Question No.17: Which standard deals with presentation of financial statements? Ans: IAS 1.
Question No.18: Which standard deals with inventories? Ans: IAS 2.
Question No.19: How are inventories valued under IAS 2? Ans: At the lower of cost and Net Realizable Value.
Question No.20: Which inventory method is prohibited under IAS 2? Ans: LIFO.
Question No.21: Which standard deals with the statement of cash flows? Ans: IAS 7.
Question No.22: What are the three sections of a cash flow statement? Ans: Operating, investing and financing activities.
Question No.23: Which standard deals with property, plant and equipment? Ans: IAS 16.
Question No.24: Which standard deals with impairment of assets? Ans: IAS 36.
Question No.25: Which standard deals with provisions and contingent liabilities? Ans: IAS 37.
Question No.26: Which standard deals with revenue from contracts with customers? Ans: IFRS 15 (five-step model).
Question No.27: Which standard deals with leases? Ans: IFRS 16.
Question No.28: Which standard deals with financial instruments? Ans: IFRS 9.
Question No.29: What is depreciation? Ans: The systematic allocation of the depreciable amount of an asset over its useful life.
Question No.30: What is the formula for straight-line depreciation? Ans: (Cost − Residual value) ÷ Useful life.
Question No.31: Is depreciation a cash expense? Ans: No, it is a non-cash expense.
Question No.32: What is a bank reconciliation statement? Ans: A statement reconciling the cash book balance with the bank statement balance.
Question No.33: Give examples of reconciling items in bank reconciliation. Ans: Unpresented cheques, deposits in transit, bank charges and direct credits.
Question No.34: What is working capital? Ans: Current Assets − Current Liabilities.
Question No.35: What is the ideal current ratio? Ans: 2:1.
Question No.36: What is the ideal quick (acid-test) ratio? Ans: 1:1 (current assets excluding inventory ÷ current liabilities).
Question No.37: What is Return on Equity (ROE)? Ans: Net Income ÷ Shareholders’ Equity.
Question No.38: What is the interest coverage ratio? Ans: EBIT ÷ Interest expense.
Question No.39: What law governs companies in Pakistan? Ans: The Companies Act 2017, administered by SECP.
Question No.40: Which professional body regulates chartered accountants in Pakistan? Ans: The Institute of Chartered Accountants of Pakistan (ICAP).
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ڈیلی فری ٹیسٹ سیریز اور آن لائن باقاعدہ تیاری سیشن کا حصہ بننے کے لیے ابھی ہمارا واٹس ایپ چینل جوائن کریں اور گھر بیٹھے امتحانات میں کامیابی حاصل کریں!
PART B – FINANCIAL MANAGEMENT, COSTING & ECONOMICS (Q41–75)
Question No.41: What is the future value formula? Ans: FV = PV(1 + r)ⁿ.
Question No.42: What is Net Present Value (NPV)? Ans: The present value of cash inflows minus the present value of outflows; accept the project if NPV > 0.
Question No.43: What is the Internal Rate of Return (IRR)? Ans: The discount rate at which NPV equals zero.
Question No.44: What is the main drawback of the payback period method? Ans: It ignores the time value of money and cash flows after the payback period.
Question No.45: What is the Profitability Index? Ans: PV of inflows ÷ initial investment; accept if greater than 1.
Question No.46: What is WACC? Ans: Weighted Average Cost of Capital, the blended cost of debt and equity.
Question No.47: What is the CAPM formula? Ans: Re = Rf + β(Rm − Rf).
Question No.48: What does beta measure? Ans: Systematic (market) risk of a security.
Question No.49: What is the Gordon growth model? Ans: P₀ = D₁ ÷ (r − g).
Question No.50: What is the Economic Order Quantity formula? Ans: EOQ = √(2DS ÷ H).
Question No.51: What is the break-even point in units? Ans: Fixed Costs ÷ (Selling price − Variable cost per unit).
Question No.52: What is contribution margin? Ans: Sales − Variable costs.
Question No.53: What is the margin of safety? Ans: Actual sales − Break-even sales.
Question No.54: What is marginal costing? Ans: A technique in which only variable costs are charged to products and fixed costs are treated as period costs.
Question No.55: What is Activity-Based Costing? Ans: Allocating overheads to products based on the activities that drive costs.
Question No.56: What is standard costing? Ans: Setting predetermined costs and comparing them with actual costs to analyse variances.
Question No.57: What is an adverse variance? Ans: One where actual cost exceeds standard cost (or actual revenue is below budget).
Question No.58: What is zero-based budgeting? Ans: Budgeting in which every expenditure is justified afresh from zero each period (Peter Pyhrr).
Question No.59: What is incremental budgeting? Ans: Preparing a budget by adjusting the previous year’s figures.
Question No.60: What is a flexible budget? Ans: A budget that adjusts to different levels of activity.
Question No.61: What is performance budgeting? Ans: A budget linking allocations to measurable outputs and results.
Question No.62: What is responsibility accounting? Ans: Assigning costs and revenues to the managers responsible for controlling them.
Question No.63: What is operating leverage? Ans: The sensitivity of operating profit to changes in sales due to fixed operating costs.
Question No.64: What is the Modigliani–Miller theorem (without taxes)? Ans: A firm’s value is independent of its capital structure.
Question No.65: What is the fiscal deficit? Ans: Total government expenditure − Total revenue (excluding borrowings).
Question No.66: What is the primary deficit? Ans: Fiscal deficit − Interest payments.
Question No.67: What is GDP? Ans: The market value of all final goods and services produced within a country in a year.
Question No.68: Which index commonly measures inflation in Pakistan? Ans: The Consumer Price Index (CPI), compiled by PBS.
Question No.69: Who conducts monetary policy in Pakistan? Ans: The State Bank of Pakistan.
Question No.70: Which body collects federal taxes in Pakistan? Ans: The Federal Board of Revenue (FBR).
Question No.71: Which body collects sales tax on services in Punjab? Ans: The Punjab Revenue Authority (PRA).
Question No.72: Which NFC Award is currently operative? Ans: The 7th NFC Award (2009).
Question No.73: What is the provinces’ share in the divisible pool under the 7th NFC? Ans: 57.5%.
Question No.74: What is Punjab’s share among provinces under the 7th NFC? Ans: 51.74%.
Question No.75: What is a Treasury Single Account (TSA)? Ans: A unified government bank account structure that consolidates public cash balances.
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ڈیلی فری ٹیسٹ سیریز اور آن لائن باقاعدہ تیاری سیشن کا حصہ بننے کے لیے ابھی ہمارا واٹس ایپ چینل جوائن کریں اور گھر بیٹھے امتحانات میں کامیابی حاصل کریں!
PART C – GOVERNMENT ACCOUNTING & BUDGETING (PAKISTAN/PUNJAB) (Q76–120)
Question No.76: What is the financial year of the Government of Pakistan and Punjab? Ans: 1st July to 30th June.
Question No.77: Which Article of the Constitution creates the Provincial Consolidated Fund? Ans: Article 118.
Question No.78: Which Article creates the Federal Consolidated Fund? Ans: Article 78.
Question No.79: What is the Public Account? Ans: All public money other than the Consolidated Fund, such as GP Fund and deposits, where the government acts as a banker or trustee.
Question No.80: Which Article deals with the Provincial Annual Budget Statement? Ans: Article 120.
Question No.81: Which Article deals with the Federal Annual Budget Statement? Ans: Article 80.
Question No.82: What is charged expenditure? Ans: Expenditure charged on the Consolidated Fund that is not subject to a vote of the Assembly (Article 121 for provinces).
Question No.83: Give examples of charged expenditure in a province. Ans: The Governor’s emoluments, High Court judges’ salaries and debt charges.
Question No.84: Which Article provides for supplementary and excess grants in a province? Ans: Article 124.
Question No.85: Which Article provides for a vote on account in a province? Ans: Article 126 (for a period not exceeding four months).
Question No.86: Which Article requires authentication of the schedule of expenditure by the Chief Minister? Ans: Article 123.
Question No.87: Which Article provides for the Auditor-General of Pakistan? Ans: Article 168.
Question No.88: What is the term of office of the Auditor-General? Ans: Four years.
Question No.89: Under which Article are provincial audit reports submitted to the Governor? Ans: Article 171.
Question No.90: Which law defines the AGP’s functions and powers? Ans: The Auditor-General’s (Functions, Powers and Terms and Conditions of Service) Ordinance 2001.
Question No.91: When were accounting functions separated from audit in Pakistan? Ans: In 2001, through the Controller General of Accounts Ordinance.
Question No.92: Who compiles the accounts of the Punjab Government? Ans: The Accountant General Punjab.
Question No.93: What is the New Accounting Model (NAM)? Ans: Pakistan’s government accounting model based on double entry and a modified cash basis.
Question No.94: Under which project was NAM introduced? Ans: PIFRA (Project to Improve Financial Reporting and Auditing).
Question No.95: Which government accounting standards has Pakistan adopted? Ans: Cash Basis IPSAS, issued by IPSASB under IFAC.
Question No.96: What does object code A01 represent in the NAM Chart of Accounts? Ans: Employees Related Expenses.
Question No.97: What does object code A03 represent? Ans: Operating Expenses.
Question No.98: What do object codes A09, A12 and A13 represent? Ans: Physical Assets, Civil Works, and Repairs & Maintenance respectively.
Question No.99: What is re-appropriation? Ans: Transfer of savings from one unit of appropriation to another within the same grant.
Question No.100: Between which items is re-appropriation not permissible? Ans: Between charged and voted expenditure, or from one grant to another.
Question No.101: What happens to unspent funds at the end of the financial year? Ans: They lapse on 30th June.
Question No.102: What is surrender of savings? Ans: Returning anticipated unspent funds to the Finance Department before the close of the financial year.
Question No.103: How is expenditure in excess of a grant regularized? Ans: Through an Excess Budget Statement approved by the Assembly (Article 124).
Question No.104: Which rules govern financial matters in Punjab? Ans: The Punjab Financial Rules (Volumes I & II).
Question No.105: Which rules govern delegation of financial powers in Punjab? Ans: The Punjab Delegation of Financial Powers Rules 2016.
Question No.106: What is a DDO? Ans: The Drawing and Disbursing Officer, who draws and disburses funds for an office.
Question No.107: Who is the Principal Accounting Officer of a department? Ans: The Administrative Secretary, who is accountable to the Public Accounts Committee.
Question No.108: What is an Abstract Contingent (AC) bill? Ans: A bill for drawing an advance without detailed vouchers, adjusted later through a DC bill.
Question No.109: What is a Detailed Contingent (DC) bill? Ans: A bill submitted with supporting vouchers to adjust an AC bill.
Question No.110: How often must the cash book be closed? Ans: Daily; the DDO verifies the cash balance at least monthly.
Question No.111: What is a permanent advance (imprest)? Ans: A fixed cash advance for petty expenditure, replenished on submission of vouchers.
Question No.112: What is a Personal Ledger Account (PLA)? Ans: An account in the treasury allowing a designated officer to deposit and withdraw funds for specified purposes.
Question No.113: What is the Budget Call Circular? Ans: Finance Department instructions to departments to prepare budget estimates.
Question No.114: What is the MTBF? Ans: Medium-Term Budgetary Framework, a three-year rolling, output-based budgeting approach.
Question No.115: What is the difference between current and development budgets? Ans: The current budget covers recurring expenditure; the development budget (ADP) covers projects and capital investment.
Question No.116: What is a PC-I? Ans: The planning document for approval of a development project.
Question No.117: What are PC-II, PC-III, PC-IV and PC-V? Ans: Feasibility study, progress report, completion report and annual operational report after completion, respectively.
Question No.118: Which forum approves development projects at the provincial level in Punjab? Ans: The Provincial Development Working Party (PDWP).
Question No.119: What is the highest forum for approving large federal projects? Ans: ECNEC (Executive Committee of the National Economic Council).
Question No.120: Which federal law governs public financial management? Ans: The Public Finance Management Act 2019.
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ڈیلی فری ٹیسٹ سیریز اور آن لائن باقاعدہ تیاری سیشن کا حصہ بننے کے لیے ابھی ہمارا واٹس ایپ چینل جوائن کریں اور گھر بیٹھے امتحانات میں کامیابی حاصل کریں!
Question No.121: What is an audit? Ans: An independent examination of financial information to express an opinion on whether it is fairly presented.
Question No.122: What are the main types of public sector audit? Ans: Financial attest audit, compliance audit and performance audit.
Question No.123: What does performance audit assess? Ans: The 3Es: Economy, Efficiency and Effectiveness.
Question No.124: Which standards govern public sector auditing internationally? Ans: The ISSAIs issued by INTOSAI.
Question No.125: Which body issues International Standards on Auditing (ISAs)? Ans: The IAASB under IFAC.
Question No.126: Which ISA deals with the auditor’s responsibilities relating to fraud? Ans: ISA 240.
Question No.127: Which ISA deals with materiality? Ans: ISA 320.
Question No.128: Which ISA deals with identifying and assessing risks of material misstatement? Ans: ISA 315.
Question No.129: Which ISA deals with audit evidence? Ans: ISA 500.
Question No.130: Which ISA deals with audit sampling? Ans: ISA 530.
Question No.131: Which ISA deals with going concern? Ans: ISA 570.
Question No.132: Which ISA deals with forming an opinion on financial statements? Ans: ISA 700.
Question No.133: Which ISA deals with modified opinions? Ans: ISA 705.
Question No.134: Which ISA deals with audit documentation? Ans: ISA 230.
Question No.135: What is the audit risk model? Ans: Audit Risk = Inherent Risk × Control Risk × Detection Risk.
Question No.136: Which component of audit risk can the auditor control? Ans: Detection risk.
Question No.137: What is materiality? Ans: The magnitude of a misstatement that could influence users’ economic decisions.
Question No.138: What are the four types of audit opinion? Ans: Unmodified, qualified, adverse and disclaimer.
Question No.139: When is a disclaimer of opinion issued? Ans: When the auditor cannot obtain sufficient appropriate evidence and the possible effects are material and pervasive.
Question No.140: When is an adverse opinion issued? Ans: When misstatements are both material and pervasive.
Question No.141: What is an Emphasis of Matter paragraph? Ans: A paragraph drawing attention to a matter already properly disclosed, without modifying the opinion (ISA 706).
Question No.142: What are the main audit evidence procedures? Ans: Inspection, observation, inquiry, external confirmation, recalculation, reperformance and analytical procedures.
Question No.143: Which evidence is generally most reliable? Ans: Evidence obtained directly by the auditor or from independent external sources in documentary form.
Question No.144: What is vouching? Ans: Examining documentary evidence supporting recorded transactions.
Question No.145: What is verification? Ans: Confirming the existence, ownership and valuation of assets and liabilities.
Question No.146: What is teeming and lading? Ans: A fraud in which cash received from one customer is misappropriated and concealed by crediting it with a later receipt from another customer.
Question No.147: What is the fraud triangle? Ans: Pressure (incentive), opportunity and rationalization (Donald Cressey).
Question No.148: What is internal control? Ans: A process designed to provide reasonable assurance on operations, reporting and compliance objectives.
Question No.149: What are the five components of the COSO internal control framework? Ans: Control environment, risk assessment, control activities, information & communication, and monitoring activities.
Question No.150: What is the most fundamental internal control principle? Ans: Segregation of duties (authorization, custody and recording handled by different persons).
Question No.151: What is the difference between preventive and detective controls? Ans: Preventive controls stop errors or fraud before they occur; detective controls identify them after they occur.
Question No.152: Give an example of a preventive control. Ans: Authorization limits and approvals before payment.
Question No.153: Give an example of a detective control. Ans: Bank reconciliation or physical stock verification.
Question No.154: What is the IIA’s Three Lines Model? Ans: Management (first line), risk and compliance functions (second line) and internal audit (third line).
Question No.155: What is internal audit (IIA)? Ans: An independent, objective assurance and consulting activity designed to add value and improve operations.
Question No.156: To whom should internal audit functionally report for independence? Ans: The Audit Committee or Board.
Question No.157: What is an audit trail? Ans: A documented chronological record that allows a transaction to be traced from source to final report.
Question No.158: What is Money Unit Sampling (MUS)? Ans: Statistical sampling in which each rupee is a sampling unit, so larger items are more likely to be selected.
Question No.159: What is Benford’s Law used for in audit? Ans: Detecting anomalies or fraud from the frequency of leading digits in data.
Question No.160: What is a forensic audit? Ans: An examination of financial records to gather evidence of fraud for legal proceedings.
Question No.161: What is an audit para? Ans: An audit observation highlighting an irregularity or non-compliance in government accounts.
Question No.162: What is the DAC? Ans: The Departmental Accounts Committee, which discusses audit paras before they go to the PAC.
Question No.163: What is the role of the Public Accounts Committee? Ans: To examine audit reports and appropriation accounts and ensure accountability of executive spending.
Question No.164: What is a physical verification of stores? Ans: Periodic counting of stock and assets to compare with stock registers.
Question No.165: What is a dead stock register? Ans: A register of non-consumable assets such as furniture and equipment.
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ڈیلی فری ٹیسٹ سیریز اور آن لائن باقاعدہ تیاری سیشن کا حصہ بننے کے لیے ابھی ہمارا واٹس ایپ چینل جوائن کریں اور گھر بیٹھے امتحانات میں کامیابی حاصل کریں!
PART E – PUNJAB PROCUREMENT RULES (PPRA) (Q166–200)
Question No.166: Under which law was the Punjab Procurement Regulatory Authority established? Ans: The Punjab Procurement Regulatory Authority Act 2009.
Question No.167: Which rules currently govern public procurement in Punjab? Ans: The Punjab Procurement Rules 2014.
Question No.168: What are the guiding principles of public procurement? Ans: Fairness, transparency, value for money, efficiency, economy and accountability.
Question No.169: What is value for money? Ans: Achieving the best combination of cost, quality and timeliness over the life of the procurement.
Question No.170: Why is annual procurement planning required? Ans: To consolidate needs, avoid splitting and ensure timely procurement within budget.
Question No.171: Is splitting of procurement allowed? Ans: No, splitting to avoid a higher procurement method or threshold is prohibited.
Question No.172: What is the principal method of procurement? Ans: Open competitive bidding.
Question No.173: When is the single stage one envelope procedure used? Ans: For simple, standard items where a single envelope contains both technical and financial proposals.
Question No.174: How does the single stage two envelope procedure work? Ans: Technical and financial proposals are submitted separately; financial bids are opened only for technically responsive bidders.
Question No.175: When is two stage bidding used? Ans: When specifications cannot be finalized in advance; technical proposals without price come first, then revised technical and financial bids.
Question No.176: What is the maximum bid security? Ans: Up to 5% of the estimated cost or bid price.
Question No.177: What is the normal limit of performance security? Ans: Up to 10% of the contract amount.
Question No.178: What is the minimum bid response time for national and international bidding? Ans: At least 15 days for national and 30 days for international competitive bidding.
Question No.179: How should bids be opened? Ans: Publicly, at the specified time and place, in the presence of bidders or their representatives.
Question No.180: What happens to bids received after the deadline? Ans: They are rejected and returned unopened.
Question No.181: Can new evaluation criteria be introduced after bids are opened? Ans: No, evaluation must follow only the criteria stated in the bidding documents.
Question No.182: To whom is the contract awarded? Ans: The bidder with the most advantageous (lowest evaluated responsive) bid.
Question No.183: Is negotiation with the lowest bidder allowed in open bidding? Ans: No, negotiations on price are generally not allowed.
Question No.184: Can a procurement agency reject all bids? Ans: Yes, before acceptance, and it must communicate the grounds to bidders on request.
Question No.185: What are alternative methods of procurement? Ans: Petty purchases, request for quotations, direct contracting and negotiated procurement, under conditions specified in the rules.
Question No.186: When is direct contracting permitted? Ans: For proprietary or sole-source items, repeat orders, emergencies and other specified conditions.
Question No.187: What is an emergency for procurement purposes? Ans: A natural calamity, disaster or other unforeseen situation that threatens life or property and requires immediate procurement.
Question No.188: How many quotations are normally required under the request for quotations method? Ans: At least three.
Question No.189: What is required before awarding the contract? Ans: Publication of the bid evaluation report on the PPRA website.
Question No.190: What is the Grievance Redressal Committee? Ans: A committee constituted by the procurement agency to address complaints of aggrieved bidders.
Question No.191: On what grounds can a bidder be blacklisted? Ans: Corrupt or fraudulent practices, or persistent failure to perform contractual obligations.
Question No.192: What is a corrupt practice in procurement? Ans: Offering, giving, receiving or soliciting anything of value to improperly influence a public official.
Question No.193: What is a fraudulent practice in procurement? Ans: Misrepresenting facts to obtain a financial benefit or avoid an obligation.
Question No.194: What is mis-procurement? Ans: Public procurement made in contravention of the procurement rules.
Question No.195: How long should procurement records be retained? Ans: At least five years.
Question No.196: What is the name of Punjab’s e-procurement system? Ans: PEPS (Punjab e-Procurement System).
Question No.197: What is QCBS? Ans: Quality and Cost Based Selection, a method for hiring consultants that weighs both technical quality and price.
Question No.198: What are other consultant selection methods? Ans: Quality Based Selection, Least Cost Selection, Fixed Budget Selection and Single Source Selection.
Question No.199: What is a framework contract? Ans: A long-term agreement with suppliers for recurring needs, with orders placed as required.
Question No.200: What is an integrity pact? Ans: A declaration by the bidder or supplier that it has not paid and will not pay any bribe or commission to obtain the contract.
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ڈیلی فری ٹیسٹ سیریز اور آن لائن باقاعدہ تیاری سیشن کا حصہ بننے کے لیے ابھی ہمارا واٹس ایپ چینل جوائن کریں اور گھر بیٹھے امتحانات میں کامیابی حاصل کریں!
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