40+ Associate2 Interview Questions and Answers

HPLC is a technique used to separate, identify, and quantify components in a mixture. UV detection is commonly used in HPLC to measure analyte concentration.

• HPLC stands for High-Performance Liquid Chromatography.

• It uses a liquid mobile phase and a solid stationary phase to separate components based on their interactions with the stationary phase.

• UV detection in HPLC involves measuring the absorbance of UV light by the analyte.

• UV detectors are commonly used because many compou...read more

Test of control for audit of trade receivables involves evaluating the effectiveness of internal controls over the accuracy and completeness of trade receivables.

• Understand the client's internal control system related to trade receivables

• Identify key controls and perform walkthroughs to test their effectiveness

• Perform substantive procedures to test the accuracy and completeness of trade receivables

• Evaluate the results of the tests and communicate any issues or deficiencies to...read more

Temperature calibration of a thermometer

• Calibration involves comparing the thermometer readings to a known standard

• Adjustments are made to the thermometer if there are any discrepancies

• Calibration is important to ensure accurate and reliable temperature measurements

• Examples of standards used for calibration include NIST-traceable thermometers and ice-point method

Waterfall distribution is a method of distributing funds or assets to investors in a predetermined sequence.

• Waterfall distribution is commonly used in private equity and real estate investments.

• It involves distributing profits or proceeds to different classes of investors in a specific order.

• The distribution waterfall typically includes hurdles or thresholds that must be met before certain investors receive their share.

• Examples of waterfall distribution include 'cash flow wat...read more

The revenue recognition 5 step model as per Ind AS 115 involves identifying the contract, identifying performance obligations, determining the transaction price, allocating the transaction price to the performance obligations, and recognizing revenue as the performance obligations are satisfied.

• Identify the contract: Determine if there is an agreement between two or more parties that creates enforceable rights and obligations.

• Identify performance obligations: Identify the dis...read more

Financial reporting involves the disclosure of financial information to stakeholders. Mutual funds pool money from investors to invest in securities.

• Financial reporting is the process of presenting financial information to stakeholders, such as investors, creditors, and regulators.

• It includes financial statements like balance sheets, income statements, and cash flow statements.

• Mutual funds are investment vehicles that pool money from multiple investors to invest in a diversif...read more

The major clauses of tax audit report in Form 3CD

• The tax audit report in Form 3CD has 18 major clauses

• These clauses cover various aspects of the audit, such as accounting policies, depreciation, loans and advances, etc.

• Some of the important clauses include Clause 4 (accounting policies), Clause 13 (loans and advances), and Clause 17 (related party transactions)

Corporate action refers to any event initiated by a publicly traded company that impacts its shareholders and can include dividends, stock splits, mergers, acquisitions, and more.

• Corporate actions are events initiated by publicly traded companies

• They can impact shareholders and may involve changes in ownership, capital structure, or financial position

• Examples of corporate actions include dividends, stock splits, mergers, acquisitions, spin-offs, rights issues, and share buyba...read more

PE Fund life cycle involves fundraising, investment, monitoring, and exit strategies.

• Fundraising: PE firms raise capital from investors to form a fund.

• Investment: Funds are used to acquire equity stakes in companies.

• Monitoring: PE firms actively manage and monitor their investments.

• Exit strategies: PE firms aim to exit investments through IPOs, mergers, or acquisitions.

Revenue testing involves applying cut off procedures to ensure accurate reporting of revenue.

• Revenue testing is a process of verifying the accuracy of revenue reported in financial statements.

• Cut off procedures are applied to ensure that revenue is recorded in the correct period.

• Examples of cut off procedures include reviewing sales invoices, shipping documents, and bank statements.

• Revenue testing also involves verifying the completeness and accuracy of revenue recognition po...read more

Titrations are analytical techniques used to determine the concentration of a substance in a solution by reacting it with a known volume and concentration of another substance.

• Types of titrations include acid-base titrations, redox titrations, and complexometric titrations.

• Procedures involve adding a titrant (solution of known concentration) to the analyte (solution of unknown concentration) until the reaction is complete.

• Methods include using indicators to determine the endp...read more

Ending prepaid expenses can be calculated by subtracting the prepaid expenses at the beginning of the period from the total prepaid expenses incurred during the period.

• Determine the prepaid expenses at the beginning of the period

• Determine the total prepaid expenses incurred during the period

• Subtract the prepaid expenses at the beginning of the period from the total prepaid expenses incurred during the period

• The resulting amount is the ending prepaid expenses

PwC is a leading professional services firm. A bearer cheque is a type of cheque that can be cashed by anyone who possesses it.

• PwC is known for its expertise in audit, tax, and advisory services

• It has a global presence with offices in over 150 countries

• Bearer cheques are risky as they can be easily stolen and cashed by anyone

• They are not commonly used anymore due to the rise of electronic banking

• An example of a bearer cheque is a traveler's cheque

The number of umbrellas sold in July in Ernakulam varies depending on factors like weather, tourist influx, and local demand.

• Sales may increase during monsoon season due to heavy rainfall

• Tourist influx may also impact umbrella sales as visitors may purchase them as souvenirs or for practical use

• Local demand for umbrellas may be higher in areas with frequent rain showers

• Promotions or discounts on umbrellas can also influence sales numbers

A derivative is a financial contract whose value is derived from the performance of an underlying asset, index, or rate.

• Types of derivatives include options, futures, forwards, and swaps.

• Options give the holder the right, but not the obligation, to buy or sell an asset at a specified price before or on a specified date.

• Futures are contracts to buy or sell an asset at a future date for a price agreed upon today.

• Forwards are similar to futures but are customized contracts betwe...read more

Ind AS 115 requires auditors to perform audit procedures on listed entities.

• Auditors must assess the entity's revenue recognition policies and procedures.

• They should also evaluate the effectiveness of internal controls related to revenue recognition.

• Auditors must obtain sufficient and appropriate audit evidence to support the entity's revenue recognition.

• They should also assess the impact of any changes in revenue recognition policies or procedures.

• Auditors must communicate a...read more

NAV stands for Net Asset Value, it is the value of a fund's assets minus its liabilities.

• NAV is calculated by subtracting the total value of a fund's liabilities from the total value of its assets.

• The formula for calculating NAV is: NAV = (Total Assets - Total Liabilities) / Total Number of Outstanding Shares

• NAV is typically calculated at the end of each trading day to determine the price at which shares of the fund are bought and sold.

• For example, if a mutual fund has total ...read more

Capital market refers to the market for buying and selling long-term debt or equity securities, while money market refers to the market for short-term debt securities.

• Capital market involves long-term investments in stocks, bonds, and other financial instruments.

• Money market deals with short-term borrowing and lending, typically with maturities of one year or less.

• Examples of capital market instruments include stocks, corporate bonds, and government securities.

• Examples of mon...read more

Sales and purchase can be tested by analyzing transaction records, comparing with inventory levels, and conducting reconciliation.

• Reviewing sales invoices and purchase orders for accuracy

• Comparing sales data with inventory levels to ensure consistency

• Conducting regular reconciliation of sales and purchase records

• Analyzing trends in sales and purchase data to identify any anomalies or discrepancies

The OSI model is a conceptual framework that standardizes the functions of a telecommunication or computing system into seven layers.

• Layer 1 - Physical layer: Deals with physical connections and transmission of raw data. Example: Ethernet cables

• Layer 2 - Data link layer: Manages data transfer between devices on the same network. Example: MAC addresses

• Layer 3 - Network layer: Handles routing and forwarding of data packets. Example: IP addresses

• Layer 4 - Transport layer: Ensure...read more

Taxation is the process of imposing a financial charge or other levy upon a taxpayer by a state or the functional equivalent of a state.

• Taxation is the means by which governments finance their spending by imposing charges on citizens and corporate entities.

• It involves the collection of taxes from individuals and businesses based on their income, profits, or property.

• Taxation can take various forms such as income tax, sales tax, property tax, and corporate tax.

• The revenue gene...read more

The count of rows after inner, left, and right join can vary based on the data and join conditions.

• The count after an inner join will be the same as the smallest table being joined.

• The count after a left join will be the same as the left table being joined.

• The count after a right join will be the same as the right table being joined.

A swap is a financial derivative contract in which two parties agree to exchange one stream of cash flows for another.

• Swaps are commonly used to hedge against interest rate risk or to speculate on future market movements.

• The two most common types of swaps are interest rate swaps and currency swaps.

• In an interest rate swap, two parties agree to exchange fixed and floating interest rate payments based on a notional principal amount.

• In a currency swap, two parties agree to excha...read more

Reactions are chemical processes that involve the transformation of one or more substances into new substances.

• Combustion: a reaction between a fuel and an oxidant that produces heat and light (e.g. burning of wood)

• Acid-base: a reaction between an acid and a base that produces water and a salt (e.g. reaction between hydrochloric acid and sodium hydroxide)

• Redox: a reaction in which there is a transfer of electrons between reactants (e.g. rusting of iron)

• Polymerization: a react...read more

Bank balances can be tested by reconciling the bank statement with the company's records.

• Compare the ending balance on the bank statement with the ending balance in the company's general ledger.

• Check for any outstanding checks or deposits that have not cleared the bank yet.

• Verify any bank fees or interest charges that may have been deducted from the account.

• Ensure that all transactions are accurately recorded in both the bank statement and the company's records.

• Perform regula...read more

Cash expenses can be tested by reconciling physical cash on hand with recorded expenses in the accounting system.

• Reconcile physical cash on hand with cash expenses recorded in the accounting system

• Verify receipts and invoices for cash expenses

• Check for any discrepancies or missing documentation

• Perform surprise cash counts to ensure accuracy

Types of swaps include interest rate swaps, currency swaps, and commodity swaps. Accrual calculation is the process of determining the amount of interest earned or owed on a swap.

• Interest rate swaps involve exchanging fixed and floating interest rate payments based on a notional amount.

• Currency swaps involve exchanging principal and interest payments in different currencies.

• Commodity swaps involve exchanging cash flows based on the price of a commodity.

• Accrual calculation inv...read more

Capital market is a financial market where long-term debt or equity-backed securities are bought and sold.

• Capital market facilitates the buying and selling of long-term financial instruments such as stocks and bonds.

• It helps companies raise capital by issuing stocks or bonds to investors.

• Investors can buy and sell securities on stock exchanges like NYSE or NASDAQ.

• Capital market plays a crucial role in the economy by channeling funds from savers to borrowers.

• It includes primar...read more

Audit process involves systematic examination of financial records, statements, and transactions to ensure accuracy and compliance.

• Planning and preparation

• Fieldwork and data collection

• Analysis and evaluation of findings

• Reporting and communication of results

• Follow-up and monitoring of corrective actions

• Examples: financial audit, operational audit, compliance audit

Accrual income is recorded when it is earned, regardless of when cash is received.

• Accrual income is recognized when it is earned, not when cash is received.

• It involves recording revenue or expenses in the period they are incurred, even if cash transactions have not occurred.

• Accrual income is recorded through adjusting journal entries at the end of an accounting period.

• Examples include recognizing revenue from services provided but not yet invoiced, or recording interest incom...read more

Cut off procedures are steps taken to stop a process or transaction at a specific point in time.

• Cut off procedures are used in accounting to ensure that transactions are recorded in the correct accounting period.

• Examples include cut off procedures for inventory counts at the end of a fiscal year.

• Cut off procedures may also be used in manufacturing to stop production at a certain point in order to make changes or adjustments.

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

• Audit assertions include existence, completeness, valuation, rights and obligations, and presentation and disclosure.

• They help auditors assess the risk of material misstatement in financial statements.

• For example, existence assertion ensures that assets and liabilities actually exist.

• Completeness assertion ensures that all transactions and balances are recorded.

• Valuation assertion en...read more

NAV is calculated by subtracting liabilities from assets and dividing by the number of outstanding shares.

• Calculate the total value of assets

• Subtract the total value of liabilities

• Divide the result by the number of outstanding shares

• NAV = (Total Assets - Total Liabilities) / Outstanding Shares

• NAV is used to determine the value of a mutual fund or ETF

Margin calculation for futures

• Margin is the amount of money required to open a futures position

• It is calculated based on the contract size, price, and leverage

• Initial margin is required to open a position, maintenance margin to keep it open

• Margin calls occur when the account falls below the maintenance margin

• Example: Buying one E-mini S&P 500 futures contract with a contract size of $50 x S&P 500 index value and a price of 3,000 would require an initial margin of $6,000

Materiality refers to the significance or importance of an item, event, or information in relation to a specific context or decision.

• Materiality is a concept used in auditing to determine the impact of errors or omissions on financial statements.

• It helps in deciding what information should be disclosed to stakeholders based on its relevance and significance.

• Materiality is subjective and can vary depending on the circumstances and the users of the information.

• For example, a sm...read more

Implement a code to reverse an array of strings.

• Create a function that takes an array of strings as input

• Use a loop to iterate through the array and swap the elements from start to end

• Return the reversed array

Derivatives are financial instruments whose value is derived from an underlying asset or group of assets.

• Derivatives can be used for hedging, speculation, or arbitrage.

• Common types of derivatives include options, futures, forwards, and swaps.

• Derivatives allow investors to take on leverage and potentially increase returns.

• Example: A call option on a stock gives the holder the right to buy the stock at a specified price within a certain time frame.

Controls in audit refer to policies and procedures implemented to ensure accuracy and reliability of financial statements.

• Preventive controls: designed to prevent errors or fraud before they occur (e.g. segregation of duties)

• Detective controls: designed to detect errors or fraud after they have occurred (e.g. reconciliations)

• Corrective controls: designed to correct errors or fraud that have been detected (e.g. adjusting journal entries)

• Directive controls: designed to guide em...read more

I have 3 years of experience in my previous company working as a software engineer.

• Worked on various projects involving web development and database management

• Collaborated with cross-functional teams to deliver high-quality software solutions

• Received positive feedback from supervisors for my problem-solving skills and attention to detail

Derivatives are financial instruments that derive their value from an underlying asset or security.

• Types of derivatives include futures, options, swaps, and forwards.

• Futures are contracts to buy or sell an asset at a predetermined price and date.

• Options give the holder the right, but not the obligation, to buy or sell an asset at a predetermined price and date.

• Swaps involve exchanging cash flows based on different financial instruments.

• Forwards are similar to futures, but are...read more

Audit process steps involve planning, fieldwork, reporting, and follow-up.

• Planning: Establish objectives, scope, and criteria for the audit.

• Fieldwork: Gather evidence, perform tests, and analyze findings.

• Reporting: Document audit results, conclusions, and recommendations.

• Follow-up: Monitor implementation of recommendations and track progress.

• Example: Planning may involve reviewing previous audits and identifying key risks.

Types of markets refer to the different categories in which goods and services are bought and sold.

• Perfect competition market - many buyers and sellers with identical products (e.g. agricultural products)

• Monopoly market - single seller with unique product and high barriers to entry (e.g. utilities)

• Oligopoly market - few large firms dominating the market (e.g. automobile industry)

• Monopolistic competition market - many sellers offering differentiated products (e.g. fast food ch...read more