Deloitte Assistant Manager - Audit Interview Questions and Answers

Answering a question on Ind AS 115 and revenue recognition

• Ind AS 115 provides a 5-step model for revenue recognition

• The 5 steps are: identify the contract, identify the performance obligations, determine the transaction price, allocate the transaction price, and recognize revenue

• Revenue can be recognized over time if certain conditions are met, such as the customer simultaneously receiving and consuming the benefits of...read more

Ind AS 116 is a new accounting standard that replaces the old lease accounting standard.

• Ind AS 116 is effective from April 1, 2019.

• Its objective is to provide a single lessee accounting model that requires lessees to recognize assets and liabilities for all leases with a term of more than 12 months.

• Operating leases are treated as off-balance sheet financing, while financial leases are treated as on-balance sheet financ...read more

Audit of Balance Sheet and Profit & Loss A/c involves verifying the accuracy of financial statements.

• Verify the accuracy of account balances and transactions

• Check for proper classification and presentation of financial data

• Ensure compliance with accounting standards and regulations

• Perform analytical procedures to identify unusual transactions or trends

• Confirm balances with third-party sources

• Review supporting documenta...read more

Internal Financial Control over Financial Reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting.

• It involves the establishment and maintenance of policies and procedures

• It ensures that financial information is accurate and complete

• It helps in preventing and detecting fraud

• It involves monitoring and reviewing financial reporting processes

• Examples include segregat...read more

Deferred tax is a liability or asset that arises due to temporary differences between accounting and tax rules.

• Deferred tax liability arises when taxable income is higher than accounting income, and deferred tax asset arises when accounting income is higher than taxable income.

• Examples of temporary differences include depreciation, inventory valuation, and revenue recognition.

• Deferred tax is calculated using the tax ra...read more

CARO 2020 has been amended recently. Can you tell me about the amendments?

• CARO 2020 has been amended to include reporting on the utilization of Corporate Social Responsibility funds.

• The auditor is now required to report on the adequacy and effectiveness of internal financial controls.

• Reporting on the details of proceedings initiated or pending against the company for holding benami property has been added.

• The auditor i...read more

Types of audit opinion include unqualified, qualified, adverse, and disclaimer. Audit risk is the risk of material misstatement.

• Unqualified opinion means the financial statements are fairly presented.

• Qualified opinion means there are some limitations or exceptions in the financial statements.

• Adverse opinion means the financial statements are materially misstated.

• Disclaimer opinion means the auditor is unable to express...read more

To verify a particular ledger, one can perform various procedures such as physical verification, reconciliation, and analytical review.

• For Fixed Assets ledger, perform a physical verification of assets and reconcile with the register.

• For Creditors ledger, reconcile the balance with the supplier statements and review the aging analysis.

• For Inventory ledger, perform a physical count and reconcile with the inventory regis...read more

Audit assertion is a claim made by the management regarding the accuracy of financial statements.

• Audit assertions are used to evaluate the completeness, accuracy, and validity of financial statements.

• There are six types of audit assertions: existence, completeness, accuracy, valuation, rights and obligations, and presentation and disclosure.

• For example, existence assertion ensures that all assets and liabilities in the...read more