Audit and Assurance Executive Interview Questions and Answers

Accounts payable and receivable are audited by examining invoices, payments, reconciliations, and internal controls.

• Reviewing invoices and matching them to purchase orders and receiving reports

• Confirming balances with vendors and customers

• Analyzing aging reports to identify overdue payments

• Testing internal controls related to authorization, recording, and reconciliation of transactions

• Performing cutoff tests to ensure transactions are recorded in the correct period

Audit methodology involves examining key financial line items, BRS is used for bank reconciliation, types of audit reports include unqualified, qualified, adverse, and disclaimer, external balance confirmations are used to verify account balances, Sch III refers to Schedule III of the Companies Act which outlines the format for financial statements.

• Audit methodology involves detailed examination of key financial line items such as revenue, expenses, assets, and liabilities.

• Ba...read more

Substantive tests are procedures performed to detect material misstatements in financial statements, while tests of controls evaluate the effectiveness of internal controls.

• Substantive tests are used to gather evidence about the completeness, accuracy, and validity of the financial information.

• Examples of substantive tests include analytical procedures, substantive analytical procedures, and tests of details.

• Tests of controls assess the design and operating effectiveness of i...read more

Substantive testing involves testing the accuracy and completeness of financial information, while control testing evaluates the effectiveness of internal controls.

• Substantive testing is used to gather evidence on the accuracy and completeness of financial information.

• Control testing is used to evaluate the effectiveness of internal controls in place to prevent and detect errors or fraud.

• Substantive testing includes procedures like analytical procedures, substantive analytica...read more

Materiality is the concept of determining the significance or importance of information in relation to a specific context.

• Materiality is a subjective concept that varies depending on the nature of the information and its impact on decision-making.

• It involves assessing whether the information, if omitted or misstated, would influence the decisions of users of the financial statements.

• Materiality is often considered in terms of both quantitative (financial impact) and qualitati...read more