KPMG India
Prime Property Ventures Interview Questions and Answers
Q1. What is Auditing
Auditing is the process of examining and verifying financial records to ensure accuracy and compliance with laws and regulations.
Auditing involves reviewing financial statements, records, and transactions.
The goal of auditing is to provide assurance that financial information is accurate and reliable.
Auditors may also identify areas for improvement in financial reporting and internal controls.
Examples of audits include financial statement audits, internal audits, and complian...read more
Q2. Is Land ever depreciated?
No, land is not depreciated as it is considered to have an indefinite useful life.
Land is not subject to depreciation because it is considered to have an indefinite useful life.
Depreciation is only applicable to assets that have a limited useful life, such as buildings or machinery.
The cost of land is typically not allocated over time like other assets, but rather recorded at its original cost on the balance sheet.
Land may appreciate in value over time, rather than depreciate...read more
Q3. what is materiality and PM?
Materiality and PM refer to the concept of significance in auditing, with materiality being the threshold for financial information to be considered important and PM being the performance materiality set below materiality.
Materiality is the threshold at which financial information becomes significant enough to influence the decisions of users of the financial statements.
Performance materiality (PM) is set below materiality and is used to determine the extent of misstatements ...read more
Q4. Golden rules of Accounting
The golden rules of accounting are basic principles that guide the process of recording financial transactions.
The golden rules include: Debit what comes in, Credit what goes out; Debit the receiver, Credit the giver; Debit expenses and losses, Credit income and gains.
These rules help ensure that financial transactions are accurately recorded and classified in the accounting system.
For example, when a company receives cash from a customer, the cash account is debited (increas...read more
Q5. entry for bad debts
Entry for bad debts is made to reflect the amount of accounts receivable that are unlikely to be collected.
Bad debts are recorded as an expense on the income statement.
The entry typically involves debiting the bad debt expense account and crediting the accounts receivable account.
It is important to regularly review and adjust the bad debt allowance to reflect the most accurate estimate of uncollectible accounts.
Example: If a customer declares bankruptcy and is unable to pay t...read more
Q6. types of audit risks
Audit risks include inherent risk, control risk, and detection risk.
Inherent risk: risk of material misstatement without considering internal controls
Control risk: risk that internal controls will not prevent or detect material misstatements
Detection risk: risk that audit procedures will not detect material misstatements
Examples: Inherent risk - complexity of transactions, Control risk - ineffective segregation of duties, Detection risk - reliance on sampling
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