20+ Audit Analyst Interview Questions and Answers

Profit and loss account, financial statement, and cash flow statement are all important financial documents used to track a company's financial performance.

• Profit and loss account shows a company's revenues, expenses, and net income or loss over a specific period of time.

• Financial statements provide a comprehensive overview of a company's financial health, including its assets, liabilities, and equity.

• Cash flow statement shows the inflow and outflow of cash in a company over ...read more

The cash flow statement has three main elements: operating activities, investing activities, and financing activities.

• Operating activities: cash inflows and outflows from the company's core business operations, such as sales and expenses.

• Investing activities: cash inflows and outflows from investments, such as buying or selling property, plant, and equipment.

• Financing activities: cash inflows and outflows from financing, such as issuing or repaying debt, or paying dividends t...read more

Bank Reconciliation Statement is a document that compares the bank statement with the company's records.

• It helps to identify any discrepancies between the two records.

• It ensures that all transactions are recorded accurately.

• It helps to detect any fraudulent activities.

• It is prepared at regular intervals, usually monthly.

• Example: If a company issues a check but it has not yet cleared the bank, it will be reflected in the company's records but not in the bank statement.

• Example:...read more

Current assets/liabilities are expected to be used/settled within a year, while non-current assets/liabilities have a longer life span.

• Current assets include cash, accounts receivable, inventory, and prepaid expenses.

• Current liabilities include accounts payable, short-term loans, and accrued expenses.

• Non-current assets include property, plant, and equipment, long-term investments, and intangible assets.

• Non-current liabilities include long-term loans, deferred tax liabilities,...read more

Auditing is the process of examining financial records to ensure accuracy and compliance with laws and regulations.

• Auditing involves reviewing financial statements, records, and transactions.

• It is done to ensure that financial information is accurate and reliable.

• Auditors also check for compliance with laws and regulations.

• There are different types of audits, such as internal, external, and forensic audits.

• Auditing is important for maintaining transparency and accountability ...read more

Amortization is for intangible assets while depreciation is for tangible assets.

• Amortization is the process of spreading the cost of an intangible asset over its useful life.

• Depreciation is the process of spreading the cost of a tangible asset over its useful life.

• Amortization is used for assets like patents, copyrights, and trademarks.

• Depreciation is used for assets like buildings, machinery, and vehicles.

Working capital is calculated by subtracting current liabilities from current assets.

• Current assets include cash, accounts receivable, inventory, and short-term investments.

• Current liabilities include accounts payable, short-term loans, and accrued expenses.

• The formula for working capital is: Current Assets - Current Liabilities.

• A positive working capital indicates that a company has enough short-term assets to cover its short-term liabilities.

• A negative working capital indic...read more

Amalgamation refers to the process of combining two or more entities into one.

• Amalgamation is a common business strategy used to achieve growth and expansion.

• It involves the merging of two or more companies or organizations into a single entity.

• The new entity formed through amalgamation may have a new name, management structure, and ownership.

• Amalgamation can be either voluntary or forced, depending on the circumstances.

• Examples of amalgamation include the merger of Disney an...read more

Rectification entry is made to correct a wrong posted entry in accounting records.

• Identify the incorrect entry and the correct entry to be made

• Prepare a rectification entry to reverse the incorrect entry and record the correct entry

• Ensure that the rectification entry is properly documented and approved

• Post the rectification entry to the accounting records

To swap two numbers without a third variable and built-in function in Python, use arithmetic operations.

• Use addition and subtraction to swap the numbers

• Example: a = 5, b = 10. a = a + b, b = a - b, a = a - b will swap the values

Accounting is the process of recording, classifying, and summarizing financial transactions to provide information that is useful in making business decisions.

• Accounting involves keeping track of financial transactions such as sales, purchases, and payments

• It includes classifying these transactions into categories such as assets, liabilities, and equity

• The information is then summarized in financial statements such as balance sheets and income statements

• Examples of accounting...read more

Yes, GST stands for Goods and Services Tax.

• GST is a tax system implemented in India in 2017.

• It replaced multiple indirect taxes like VAT, excise duty, etc.

• It is a destination-based tax system, meaning the tax is collected where the goods or services are consumed.

• There are four tax slabs under GST - 5%, 12%, 18%, and 28%.

• GST has simplified the tax system and made it easier for businesses to comply with tax regulations.

An audit analyst is responsible for examining financial records and ensuring compliance with regulations.

• An audit analyst reviews financial statements, invoices, and other financial documents.

• They analyze financial data to identify errors, discrepancies, or potential fraud.

• They assess internal controls and make recommendations for improvement.

• They may conduct interviews with employees and gather evidence to support their findings.

• Examples of audit analyst tasks include reconc...read more

Provision is an estimated liability while reserve is a part of profit set aside for future use.

• Provision is an estimated liability that a company sets aside to cover a known or potential future obligation.

• Reserve is a part of profit that a company sets aside for future use, such as for expansion or to cover unexpected expenses.

• Provisions are usually based on estimates and can be adjusted as more information becomes available.

• Reserves are not based on estimates and are set asi...read more

The golden rules of accounting are basic principles that guide the process of recording financial transactions.

• Debit what comes in, credit what goes out

• Debit the receiver, credit the giver

• Debit expenses and losses, credit income and gains

Standard costing types are predetermined, normal, and basic.

• Predetermined standard costing involves setting standard costs in advance based on estimates.

• Normal standard costing uses historical data to determine standard costs.

• Basic standard costing uses the simplest form of standard costs without considering any variations.

• Examples: Predetermined - setting standard labor cost per hour for a specific task, Normal - using average material cost per unit based on past purchases, ...read more

Reconstruction refers to the process of rebuilding or recreating something that has been damaged or destroyed.

• Reconstruction can refer to physical structures such as buildings or roads that have been damaged due to natural disasters or accidents.

• It can also refer to the process of restoring historical artifacts or documents.

• In finance, reconstruction can refer to the process of reorganizing a company's assets and liabilities to improve its financial position.

• In medical terms,...read more

The golden accounting rule is the fundamental principle of double-entry bookkeeping. There are five types of accounts: assets, liabilities, equity, income, and expenses.

• The golden accounting rule states that for every debit entry, there must be a corresponding credit entry of equal value.

• Assets are resources owned by a company, such as cash, inventory, or property.

• Liabilities are obligations or debts owed by a company, such as loans or accounts payable.

• Equity represents the o...read more

5 shortcuts to MS Excel

• Ctrl + C: Copy selected cells

• Ctrl + V: Paste copied cells

• Ctrl + Z: Undo last action

• Ctrl + S: Save current workbook

• Ctrl + F: Find and replace data

Cash flows refer to the movement of money in and out of a business or investment.

• Cash flows can be categorized into operating, investing, and financing activities.

• Operating cash flows include revenue and expenses from the core business operations.

• Investing cash flows involve buying or selling assets like property, equipment, or investments.

• Financing cash flows include activities related to raising capital or repaying debt.

• Positive cash flows indicate that a company is generat...read more