20+ Associate L2 Interview Questions and Answers

Answering questions on revenue recognition, AR checking, and audit opinion.

• For returnable policy goods, revenue is recognized only when the customer confirms acceptance of the goods.

• AR checking involves verifying the accuracy of the accounts receivable balance by reviewing invoices, payments, and credit memos.

• At year end, AR checking involves confirming outstanding balances with customers and assessing the collectability of any doubtful accounts.

• Audit opinion is the conclusio...read more

I will cross-check the information with reliable sources and verify the data for accuracy and completeness.

• Verify the information with multiple sources

• Check for consistency in the data provided

• Ensure that all necessary information is present

• Compare the data with industry standards and regulations

• Ask for clarification or additional information if needed

P2P process involves risks such as fraud, errors, and non-compliance. Controls like segregation of duties, approvals, and audits can mitigate them.

• P2P process involves procurement, receiving, and payment

• Risks include fraud, errors, and non-compliance with policies and regulations

• Controls include segregation of duties, approvals, and audits

• Segregation of duties ensures that no single person has complete control over the process

• Approvals ensure that all transactions are authori...read more

COSO is a framework for internal control while COBIT is a framework for IT governance.

• COSO focuses on internal control over financial reporting while COBIT focuses on IT governance and management

• COSO has five components: control environment, risk assessment, control activities, information and communication, and monitoring activities

• COBIT has five focus areas: strategic alignment, value delivery, risk management, resource management, and performance measurement

• COSO is widely ...read more

Audit assertions are the claims made by management regarding the accuracy and completeness of financial statements.

• Audit assertions are used by auditors to assess the risk of material misstatement in financial statements.

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

• For example, existence assertion refers to whether the assets and liabilities actually exist, while completeness ass...read more

Cash balance can be verified by reconciling the bank statement with the company's cash account.

• Compare the ending balance on the bank statement with the ending balance on the company's cash account

• Check for any outstanding checks or deposits in transit

• Verify that all transactions have been recorded accurately

• Perform regular audits to ensure accuracy

Materiality concept in audit refers to the significance of an item or an error in financial statements.

• Materiality is a key concept in audit as it helps auditors determine the importance of an item or an error in financial statements.

• It is used to determine the scope of the audit and the level of detail required in the audit procedures.

• Materiality is based on both quantitative and qualitative factors, such as the size of the item, its nature, and the impact it may have on the...read more

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

• Materiality is a key concept in auditing and is used to determine the level of detail required in an audit.

• It involves assessing the significance of an item or event in relation to the financial statements as a whole.

• Materiality is a matter of professional judgment and is influenced by factors such as the size and nature of the item or event, the c...read more

Futures and forwards are both types of derivative contracts, but they differ in terms of their standardization, trading platform, and settlement.

• Futures contracts are standardized and traded on exchanges, while forwards are customized and traded over-the-counter.

• Futures contracts have daily settlement and are marked-to-market, while forwards settle at the end of the contract period.

• Futures contracts have lower counterparty risk due to the involvement of a clearinghouse, while...read more

Stat audit is mandatory and conducted by external auditors while internal audit is voluntary and conducted by internal auditors.

• Stat audit is conducted to ensure compliance with legal and regulatory requirements.

• Internal audit is conducted to evaluate and improve the effectiveness of risk management, control, and governance processes.

• Stat audit is mandatory and conducted by external auditors while internal audit is voluntary and conducted by internal auditors.

• Stat audit is fo...read more

Derivatives are financial instruments whose value is derived from an underlying asset. Auditing is the process of examining financial records to ensure accuracy and compliance. Internal control refers to the policies and procedures implemented by a company to safeguard assets and ensure accurate financial reporting. Materiality refers to the significance of a financial transaction or event.

• Derivatives are contracts between two parties that derive their value from an underlyin...read more

Inherent risk and control risk are two types of risks in service organization audit.

• Inherent risk is the risk of material misstatement in the absence of any internal controls.

• Control risk is the risk that a material misstatement will not be prevented or detected by the internal controls.

• Service organization audit involves assessing these risks to determine the level of assurance needed.

• Examples of inherent risks include complex transactions, significant estimates, and related...read more

Coding question to find next greatest number

• Iterate from right to left and find the first digit that is smaller than the digit next to it

• Swap this digit with the smallest digit on its right side that is greater than it

• Sort the digits to the right of the swapped digit in ascending order

• If no such digit exists, return the input number as it is

A deferred tax asset is an accounting concept that represents a future tax benefit that a company can claim.

• It arises when a company has overpaid taxes or has carried forward tax losses from previous years.

• It can be used to offset future tax liabilities and reduce the company's tax bill.

• Deferred tax assets are recorded on the balance sheet as an asset.

• Examples include tax credits, tax loss carryforwards, and accelerated depreciation.

GAAP and IFRS are two different accounting standards used globally.

• GAAP is used primarily in the United States, while IFRS is used in most other countries.

• GAAP is rules-based, while IFRS is principles-based.

• IFRS allows for more judgment and interpretation in financial reporting.

• IFRS requires more extensive disclosures in financial statements.

• IFRS is considered more flexible and adaptable to changing business environments.

• Some differences include the treatment of inventory, in...read more

Bonds are debt securities issued by companies or governments to raise capital.

• Bonds are essentially loans that investors make to the issuer

• They have a fixed interest rate and a maturity date

• The issuer pays interest to the bondholder until the bond matures

• At maturity, the issuer repays the principal amount to the bondholder

• Bonds are generally considered less risky than stocks

• Examples of bonds include government bonds, corporate bonds, and municipal bonds

Derivatives are financial instruments whose value is derived from an underlying asset or benchmark.

• Derivatives are contracts between two parties that specify the conditions for buying or selling an asset at a future date and price.

• They are used for hedging, speculation, and arbitrage in financial markets.

• Examples of derivatives include futures contracts, options, swaps, and forward contracts.

SQL DML queries are used to manipulate data in a database.

• DML stands for Data Manipulation Language

• Used to insert, update, delete data in a database

• Examples: INSERT INTO, UPDATE, DELETE FROM

Cloud computing is the delivery of computing services over the internet.

• Cloud computing allows users to access data and applications from anywhere with an internet connection

• It eliminates the need for physical hardware and infrastructure

• Examples include Amazon Web Services, Microsoft Azure, and Google Cloud Platform

A relational database is a type of database that stores and organizes data in tables with relationships between them.

• Data is organized into tables with columns and rows

• Tables can have relationships with each other through keys

• SQL is used to manipulate and query data in relational databases

• Examples include MySQL, Oracle, and Microsoft SQL Server

Revenue recognition concept refers to the accounting principle that outlines when and how revenue should be recognized in financial statements.

• Revenue recognition concept determines the timing and amount of revenue that should be recognized in financial statements.

• It is important for companies to follow this concept to ensure accurate financial reporting.

• Revenue can be recognized at different points in time depending on the type of transaction and the terms of the agreement.

• F...read more

Hash map is a data structure that stores key-value pairs and uses hashing to quickly retrieve values.

• Hash map uses a hash function to map keys to indices in an array.

• Collisions can occur when multiple keys map to the same index, which can be resolved using techniques like chaining or open addressing.

• Retrieving a value from a hash map involves computing the hash of the key and accessing the corresponding index in the array.

• Examples of hash map implementations include Java's Ha...read more