30+ Saraswati Institute Engineering Technology Interview Questions and Answers

If bad debt is recovered, the entry should be a reversal of the original bad debt write-off entry.

• Create a journal entry to reverse the original bad debt write-off entry

• Debit the bad debt recovery account for the amount recovered

• Credit the accounts receivable account for the same amount

• If any interest or fees were charged on the bad debt, those should be credited to the income account

• If the bad debt was previously written off as an expense, the reversal entry should be made t...read more

AR stands for Accounts Receivable. Journal entries related to it are transactions that record the amount owed to a company by its customers.

• AR is a type of asset account that represents money owed to a company by its customers

• Journal entries related to AR include recording sales on credit, receiving payments from customers, and writing off bad debts

• Example: Recording a sale on credit would involve debiting AR and crediting sales revenue

• Example: Receiving a payment from a cust...read more

If a company becomes insolvent, the entry should be recorded as a loss in the financial statements.

• Insolvency occurs when a company is unable to pay its debts and liabilities.

• The entry to record insolvency typically involves recognizing a loss on the balance sheet.

• The specific accounts affected will depend on the nature of the insolvency and the company's accounting policies.

• For example, if a company becomes insolvent due to bad debts, the entry may involve debiting the bad d...read more

Internal financial control refers to the policies and procedures implemented by a company to ensure accurate financial reporting and prevent fraud.

• Internal financial control involves the establishment of clear policies and procedures for financial reporting and record-keeping.

• It includes measures to prevent fraud and ensure compliance with relevant laws and regulations.

• Examples of internal financial controls include segregation of duties, regular audits, and the use of accoun...read more

CARO 2020 has additional reporting requirements and emphasis on internal control and risk management compared to CARO 2016.

• CARO 2020 has added reporting requirements such as reporting on fraud, default in repayment of loans, and utilization of Corporate Social Responsibility funds.

• CARO 2020 emphasizes on internal control and risk management, requiring auditors to report on adequacy and effectiveness of internal financial controls.

• Procedure to check sales has been added as a n...read more

Answering questions on BDO, reserves and provisions, outstanding and accrued, and non-profit taxation.

• BDO is a global accounting firm with expertise in tax services.

• Reserves are profits set aside for future use, while provisions are expenses set aside for future payment.

• Outstanding refers to unpaid debts or obligations, while accrued refers to expenses that have been incurred but not yet paid.

• Non-profit organizations may be taxable if they engage in certain activities, such a...read more

I would empathize with the client, explain the situation calmly, offer solutions or alternatives, and ensure their satisfaction.

• Listen to the client's concerns and acknowledge their feelings

• Explain the situation calmly and objectively

• Offer solutions or alternatives to address the issue

• Ensure the client's satisfaction and maintain a positive relationship

I am familiar with various digital tools such as Google Suite, Trello, and Slack. I prefer using Trello for project management and Google Suite for collaboration.

• Google Suite for collaboration and document sharing

• Trello for project management and task tracking

• Slack for team communication and file sharing

Passive Foreign Investment Company (PFIC) is a foreign corporation where at least 75% of its gross income is passive or at least 50% of its assets produce passive income.

• PFIC status can have significant tax implications for U.S. taxpayers.

• Taxpayers must report PFIC investments on Form 8621.

• PFIC rules are complex and may require specialized tax advice.

• Examples of PFICs include certain foreign mutual funds and holding companies.

Learned about financial statement preparation, audit procedures, and client communication.

• Assisted in the preparation of financial statements for clients

• Conducted audit procedures such as testing internal controls and verifying account balances

• Communicated with clients to gather necessary information and provide updates on audit progress

• Learned about the importance of professional skepticism and attention to detail in auditing

Deferred tax is a balance sheet item that represents the tax consequences of temporary differences between accounting income and taxable income.

• Deferred tax arises due to timing differences in recognizing income and expenses for tax and accounting purposes.

• It is recorded on the balance sheet as a liability or asset depending on whether the tax payable is more or less than the tax expense recognized in the income statement.

• Deferred tax assets can arise from items like tax loss...read more

Depreciation is the allocation of the cost of an asset over its useful life, accrual is recognizing revenue and expenses when they are incurred, and prepayment is paying for expenses before they are incurred.

• Depreciation is a non-cash expense that reduces the value of an asset on the balance sheet over time.

• Accrual accounting matches revenue and expenses to the period they are incurred, not when cash is exchanged.

• Prepayment is when expenses are paid in advance before they are...read more

Internal audit process of a manufacturing company involves evaluating the effectiveness of internal controls, risk management, and compliance.

• Assessing the adequacy of inventory controls

• Reviewing production processes for efficiency and effectiveness

• Evaluating compliance with environmental regulations

• Assessing the effectiveness of quality control measures

• Reviewing financial controls and transactions

• Evaluating the effectiveness of health and safety policies

• Assessing the adequac...read more

Revenue recognition for goods involves recognizing revenue when goods are delivered or services are rendered.

• Revenue is recognized when the risks and rewards of ownership have been transferred to the buyer.

• Revenue is recognized at the fair value of the consideration received or receivable.

• Revenue recognition criteria include the amount of revenue can be measured reliably, it is probable that economic benefits will flow to the entity, and the costs incurred or to be incurred c...read more

Test of details focuses on specific transactions or account balances, while controls test the effectiveness of internal controls.

• Test of details involves examining individual transactions or account balances to ensure accuracy and completeness.

• Controls testing evaluates the effectiveness of internal controls in preventing or detecting errors or fraud.

• Test of details may involve confirming account balances with third parties or examining supporting documentation.

• Controls testi...read more

Audit procedures for purchase cycle and payroll involve verifying transactions, reconciling accounts, and testing internal controls.

• Verify purchase orders, invoices, and payments match

• Reconcile accounts payable ledger to vendor statements

• Test segregation of duties in payroll processing

• Review payroll register for accuracy and completeness

• Confirm payroll taxes are properly withheld and remitted

I chose statutory audit because of its importance in ensuring financial transparency and compliance with regulations.

• Statutory audit helps in verifying the accuracy of financial statements and ensuring compliance with laws and regulations.

• It provides assurance to stakeholders and investors about the financial health and integrity of the organization.

• Statutory audit also helps in detecting and preventing fraud and errors in financial reporting.

• I find the analytical and investi...read more

FAS stands for Fire Alarm System.

• FAS is an acronym for Fire Alarm System.

• It refers to a network of devices that detect and alert people about the presence of fire or smoke.

• FAS typically includes smoke detectors, heat detectors, fire alarms, and control panels.

• These systems are crucial for early fire detection and ensuring the safety of occupants in buildings.

• Examples of FAS brands include Honeywell, Siemens, and Notifier.

SOC audit focuses on controls and processes, while ISO 27001 focuses on information security management system.

• SOC audit assesses the effectiveness of controls and processes in place to protect data and systems.

• ISO 27001 is a standard that specifies requirements for establishing, implementing, maintaining, and continually improving an information security management system.

• SOC audit is more focused on the operational effectiveness of controls, while ISO 27001 is focused on th...read more

Best practices for handling complex accounting situations involve thorough research, clear communication, and attention to detail.

• Thoroughly research accounting standards and regulations related to the situation

• Communicate with relevant stakeholders to gather necessary information and ensure understanding

• Document all steps taken and decisions made to maintain a clear audit trail

• Seek guidance from experts or consultants if needed

• Regularly review and reassess the situation to i...read more

The procedure for appointment of auditor involves various steps and RBI compliances.

• Appointment of auditor is done by the Board of Directors.

• The auditor must be a Chartered Accountant.

• The auditor must be independent and not have any conflict of interest.

• The auditor must be appointed for a term of one year and can be reappointed for a maximum of five years.

• The auditor must comply with RBI regulations and guidelines.

• The auditor must submit audit reports to the RBI as per the pr...read more

Revenue recognition under IFRS involves recognizing revenue when it is earned and realizable, regardless of when cash is received.

• Revenue is recognized when it is probable that economic benefits will flow to the entity and the revenue can be reliably measured.

• Revenue is measured at the fair value of the consideration received or receivable.

• Revenue recognition criteria include transfer of risks and rewards, no continuing managerial involvement, and the amount of revenue can be...read more

Form 5471 is a tax form used by certain U.S. persons who are shareholders in certain foreign corporations.

• Required to be filed by U.S. persons who are officers, directors, or shareholders in certain foreign corporations

• Provides information on the foreign corporation's financial activities and ownership structure

• Helps the IRS prevent tax evasion through controlled foreign corporations

• Different filing requirements based on the type of foreign corporation and the shareholder's o...read more

Ind AS 2 outlines the principles for the valuation and measurement of inventory.

• Ind AS 2 requires inventory to be measured at the lower of cost and net realizable value.

• Cost includes all costs incurred to bring the inventory to its present location and condition.

• Net realizable value is the estimated selling price less estimated costs to complete and sell.

• Ind AS 2 provides guidance on the cost formulas that can be used to determine the cost of inventory, such as FIFO, weighted...read more

ITGC controls are essential for ensuring the integrity of financial information and safeguarding assets.

• Access controls to restrict unauthorized access to systems and data

• Change management controls to ensure proper authorization and documentation of changes

• Backup and recovery controls to protect data from loss or corruption

• Segregation of duties controls to prevent fraud and errors

• Physical security controls to protect IT assets from theft or damage

I analyze financial statements by reviewing income statements, balance sheets, and cash flow statements to assess the financial health of a company.

• Review income statements to analyze revenue, expenses, and profitability

• Examine balance sheets to assess assets, liabilities, and equity

• Analyze cash flow statements to understand the sources and uses of cash

• Compare financial ratios to industry benchmarks for performance evaluation

Standards on auditing are guidelines for auditors to follow while conducting audits.

• Standards on auditing ensure that audits are conducted in a consistent and reliable manner.

• There are three types of standards on auditing: general standards, fieldwork standards, and reporting standards.

• Examples of general standards include independence, due care, and professional skepticism.

• Examples of fieldwork standards include planning and supervision, internal control evaluation, and audi...read more

RLS in Power BI stands for Row-Level Security.

• RLS allows you to restrict access to certain rows of data based on the user's role or permissions.

• It helps in ensuring that users only see the data that they are authorized to view.

• RLS can be implemented by creating roles and defining filters based on user attributes or roles.

• For example, you can use RLS to restrict a sales manager to only see data related to their region.

The union budget has both positive and negative aspects.

• The budget has increased allocation for healthcare and infrastructure.

• However, there is a lack of focus on job creation and agriculture.

• The increase in fuel prices may lead to inflation.

• Overall, the budget seems to be a mixed bag.

Different types of audit opinions include unqualified, qualified, adverse, and disclaimer.

• Unqualified opinion: clean opinion, no material misstatements found

• Qualified opinion: some limitations or scope restrictions, but overall financial statements are fairly presented

• Adverse opinion: significant material misstatements found, financial statements are not fairly presented

• Disclaimer opinion: auditor unable to form an opinion due to lack of sufficient evidence or restrictions

Assertion is a claim or statement made by management regarding the financial statements.

• Assertions are made by management to ensure the accuracy and completeness of financial statements.

• There are different types of assertions such as existence, completeness, valuation, rights and obligations, etc.

• For example, the assertion of existence would state that all reported assets and liabilities actually exist.

• Auditors test these assertions during the audit process to provide assuran...read more

Materiality is the concept of determining the significance or importance of an item or event in relation to financial statements.

• Materiality helps auditors decide what information to focus on during an audit

• It is based on the size, nature, and circumstances of an item or event

• Materiality is subjective and can vary depending on the context

• For example, a small error in a company's financial statements may not be considered material if it does not impact the overall financial pi...read more

BDO is a reputable firm known for its quality audit services, providing a great learning opportunity for aspiring audit professionals.

• BDO is a well-established firm with a strong reputation in the audit industry

• Working at BDO will provide valuable experience and exposure to a variety of clients and industries

• Opportunity to work with experienced professionals and learn best practices in auditing

• Enhance skills in financial analysis, risk assessment, and compliance

• Potential for ...read more

The mode of transport refers to the method or means by which people or goods are transported from one place to another.

• Modes of transport include air, land, and water transportation.

• Examples of air transport include airplanes and helicopters.

• Examples of land transport include cars, buses, trains, and bicycles.

• Examples of water transport include ships, boats, and submarines.

The Clauses of Caro 2020 are legal provisions related to auditing and accounting standards in India.

• The Clauses of Caro 2020 are mandatory for companies falling under specified criteria.

• They cover aspects such as maintenance of books of accounts, internal control systems, and compliance with laws.

• Examples of clauses include reporting on fixed assets, loans and advances, and related party transactions.

Use regex to find dates in Python strings.

• Import the re module in Python for regex operations.

• Use the re.findall() function to find all matches of a regex pattern in a string.

• Create a regex pattern to match dates in various formats, such as 'MM/DD/YYYY' or 'YYYY-MM-DD'.

• Example: regex_pattern = r'\d{2}/\d{2}/\d{4}' will match dates in 'MM/DD/YYYY' format.

Amendments on Caro refer to changes made to the Companies (Auditor's Report) Order, which outlines the format and content of auditor's reports for companies.

• Amendments on Caro are made by the Ministry of Corporate Affairs to ensure compliance with changing regulations and standards.

• These amendments may include updates to reporting requirements, disclosure of key audit matters, or changes in the format of the auditor's report.

• For example, recent amendments to Caro may require ...read more

I have used various financial analysis tools such as Excel, Bloomberg Terminal, and Tableau in my previous roles.

• Excel for financial modeling and data analysis

• Bloomberg Terminal for market research and analysis

• Tableau for data visualization and reporting