60+ Audit Assistant Interview Questions and Answers

Bank balance in financial statements can be audited by verifying bank statements, reconciling balances, and testing internal controls.

• Verify bank statements to ensure accuracy of reported balance

• Reconcile bank balance with general ledger balance

• Test internal controls related to bank transactions

• Confirm balances with the bank directly

• Review any unusual transactions or discrepancies

• Consider the risk of fraud or error in bank transactions

Limited review is a review of financial statements, less in scope than a full audit. Statutory audit is a comprehensive audit of financial statements.

• Limited review is a less extensive review of financial statements than a full audit.

• It provides a moderate level of assurance on the financial statements.

• Statutory audit is a comprehensive audit of financial statements that provides a high level of assurance.

• Statutory audit is mandatory for certain companies, while limited revie...read more

The five criteria to recognize revenue as per Ind AS 115 are identification of contract, identification of performance obligations, determination of transaction price, allocation of transaction price, and recognition of revenue when performance obligations are satisfied.

• Identification of contract

• Identification of performance obligations

• Determination of transaction price

• Allocation of transaction price

• Recognition of revenue when performance obligations are satisfied

A provision for doubtful debt is a journal entry made to account for potential losses from customers who may not pay their debts.

• Provision for doubtful debt is recorded as an expense in the income statement.

• It is created by debiting the provision for doubtful debt account and crediting the bad debt expense account.

• The provision is based on an estimate of the amount of debt that is likely to become uncollectible.

• The provision is usually a percentage of the accounts receivable ...read more

Audit revenue expense of rent by verifying lease agreements, rent invoices, and bank statements.

• Verify lease agreements to ensure rent amount and terms are accurate

• Check rent invoices for proper recording and classification

• Reconcile rent payments with bank statements

• Ensure rent expense is recognized in the correct period

• Consider any related party transactions or potential conflicts of interest

Materiality levels for mutual fund audit

• Consider the size and nature of the mutual fund company

• Assess the impact of misstatements on financial statements

• Refer to industry standards and regulatory requirements

• Consult with senior auditors and management

• Use professional judgement to determine materiality levels

Reconciling bank balances involves comparing the bank statement with the company's records to identify and resolve any discrepancies.

• Obtain the bank statement and compare it with the company's records of transactions.

• Identify any discrepancies such as missing deposits or withdrawals, bank errors, or outstanding checks.

• Adjust the company's records to match the bank statement by recording any necessary corrections.

• Ensure that the ending balance on the bank statement matches the...read more

To start an audit, plan and prepare the audit, conduct fieldwork, analyze findings, and issue a report.

• Plan and prepare the audit by understanding the client's business and risks, determining the scope and objectives of the audit, and developing an audit plan.

• Conduct fieldwork by gathering and analyzing data, testing controls, and assessing risks.

• Analyze findings by evaluating the significance of the issues identified and determining the root cause of the problems.

• Issue a rep...read more

Fixed assets are long-term tangible assets that are used in the production of goods or services and have a useful life of more than one year.

• Fixed assets include property, plant, and equipment (PP&E), such as buildings, machinery, and vehicles.

• They are recorded on the balance sheet at their original cost, less accumulated depreciation.

• Depreciation is the systematic allocation of the cost of a fixed asset over its useful life.

• Accounting standards require that fixed assets be r...read more

The 5 steps of Revenue recognition are identification of the contract, identification of performance obligations, determination of transaction price, allocation of transaction price, and recognition of revenue as performance obligations are satisfied.

• Identification of the contract: Determine the existence of a contract with a customer.

• Identification of performance obligations: Identify the separate performance obligations in the contract.

• Determination of transaction price: De...read more

Revenue audit focuses on verifying the accuracy of revenue transactions, while statutory audit is a legal requirement to ensure financial statements are accurate.

• Revenue audit is conducted to ensure that revenue transactions are accurately recorded and reported.

• Statutory audit is a legal requirement to ensure that financial statements are accurate and comply with accounting standards and regulations.

• Revenue audit focuses on revenue recognition, sales returns, discounts, and a...read more

General precautions to be taken while auditing include ensuring independence, verifying evidence, and maintaining confidentiality.

• Maintain independence and objectivity throughout the audit process

• Verify evidence through documentation and testing

• Maintain confidentiality of all information obtained during the audit

• Ensure compliance with relevant laws, regulations, and standards

• Communicate effectively with auditee and management

• Document all findings and conclusions accurately

• Rev...read more

Audit is a systematic examination of financial records, statements, and transactions to ensure accuracy and compliance with laws and regulations.

• Audit is conducted to provide assurance to stakeholders that financial statements are accurate and reliable.

• The objectives of an audit include evaluating internal controls, detecting fraud, and ensuring compliance with laws and regulations.

• Auditors use various techniques such as sampling, testing, and analytical procedures to gather ...read more

Fixed assets are audited by verifying physical existence, ownership, valuation, and depreciation methods.

• Verify physical existence by conducting physical inventory counts.

• Confirm ownership by reviewing title deeds and purchase agreements.

• Ensure accurate valuation by comparing book value to market value.

• Review depreciation methods and calculations for accuracy.

• Check for impairment indicators and assess if any assets need to be written down.

• Examine maintenance records to ensure...read more

Deferred revenue refers to income received by a company in advance of earning it, resulting in a liability on the balance sheet.

• Deferred revenue is also known as unearned revenue.

• It is recorded as a liability on the balance sheet until the revenue is recognized.

• Common examples include magazine subscriptions, annual maintenance contracts, and advance payments for services.

• Once the revenue is earned, it is recognized on the income statement.

• Deferred revenue is important for acc...read more

Reasonable assurance is a level of assurance that is achievable and practical, but not absolute.

• Reasonable assurance is a concept used in auditing to describe the level of assurance provided by an audit.

• It is a level of assurance that is achievable and practical, but not absolute.

• It is based on the auditor's professional judgment and the nature and scope of the audit procedures performed.

• The level of assurance provided by an audit with reasonable assurance is higher than that...read more

The 3 golden principles of accounting are: 1) Debit the receiver, credit the giver 2) Debit what comes in, credit what goes out 3) Debit expenses and losses, credit income and gains.

• Debit the receiver, credit the giver: when an asset is received, it is debited and when a liability is given, it is credited

• Debit what comes in, credit what goes out: when cash is received, it is debited and when cash is paid, it is credited

• Debit expenses and losses, credit income and gains: when ...read more

To close treasury, reconcile all transactions and balances, ensure all necessary approvals are obtained, and update records accordingly. To check bank area, review bank statements and compare to internal records.

• Reconcile all transactions and balances

• Ensure all necessary approvals are obtained

• Update records accordingly

• Review bank statements

• Compare to internal records

Types of GST include CGST, SGST, IGST, and UTGST.

• Central Goods and Services Tax (CGST) - levied by the central government on intra-state supplies

• State Goods and Services Tax (SGST) - levied by the state government on intra-state supplies

• Integrated Goods and Services Tax (IGST) - levied by the central government on inter-state supplies

• Union Territory Goods and Services Tax (UTGST) - levied by the union territories on intra-UT supplies

Subsequent events are events that occur after the balance sheet date but before the financial statements are issued.

• Subsequent events can be classified as either adjusting or non-adjusting events.

• Adjusting events provide evidence of conditions that existed at the balance sheet date and require adjustment to the financial statements.

• Non-adjusting events do not require adjustment to the financial statements but may require disclosure in the notes to the financial statements.

• Exa...read more

Various items in balance sheet & PL are treated differently based on their nature. Assets can be classified as current, non-current, tangible, intangible, etc.

• Balance sheet items are classified as assets, liabilities, and equity.

• Assets can be further classified as current assets (e.g. cash, accounts receivable) and non-current assets (e.g. property, plant, equipment).

• Liabilities can be classified as current liabilities (e.g. accounts payable) and non-current liabilities (e.g....read more

The rate of GST varies depending on the type of goods or services being taxed.

• GST rates are categorized into different slabs - 5%, 12%, 18%, and 28%.

• Some items are exempt from GST, while others may have a special rate like 0.25% or 3%.

• For example, essential items like food grains are taxed at 0%, while luxury items like cars may be taxed at 28%.

The rate of income tax varies depending on the individual's income level and tax laws of the country.

• Income tax rates are typically progressive, meaning higher income levels are taxed at higher rates.

• Tax rates can also vary based on filing status (single, married, etc.) and deductions/credits claimed.

• For example, in the United States, income tax rates range from 10% to 37% for individuals in 2021.

The maximum exemption that a senior citizen can claim under 80C is Rs. 1.5 lakh.

• Senior citizens can claim deductions up to Rs. 1.5 lakh under section 80C of the Income Tax Act.

• This deduction can be claimed for investments in various instruments such as PPF, NSC, tax-saving FDs, etc.

• Apart from section 80C, senior citizens can also claim deductions under section 80D for health insurance premiums.

• The maximum deduction under section 80D is Rs. 50,000 for senior citizens.

• Senior ci...read more

Accounting standards and principles are guidelines for financial reporting and ensure consistency and transparency in financial statements.

• Accounting standards are rules and regulations set by accounting bodies to ensure consistency in financial reporting.

• Accounting principles are fundamental concepts that guide accounting practices.

• Examples of accounting standards include IFRS and GAAP.

• Examples of accounting principles include the matching principle and the revenue recogniti...read more

Financials refer to the financial statements of a company that provide information about its financial performance.

• Financials include the income statement, balance sheet, and cash flow statement.

• They provide information about a company's revenue, expenses, assets, liabilities, and cash flow.

• Financials are used by investors, analysts, and other stakeholders to evaluate a company's financial health and performance.

• Examples of financials include annual reports, quarterly reports...read more

The 3 Golden rules of accounting are principles that guide the preparation of financial statements.

• 1. Revenue Recognition: Recognize revenue when it is earned, not when cash is received. Example: A company sells goods on credit, revenue is recognized at the time of sale.

• 2. Matching Principle: Match expenses with revenues in the period they are incurred. Example: If a company incurs expenses to produce goods, those expenses are matched with the revenue from selling those goods...read more

Yes, I can adopt for rotational shifts.

• I am flexible and adaptable to different work schedules.

• I understand the importance of rotational shifts in the audit field.

• I have previous experience working in rotational shifts.

• I am willing to adjust my personal schedule to accommodate rotational shifts.

Expected CTC for Audit and internal Audit varies based on experience and qualifications.

• Expected CTC for Audit Assistant can range from entry-level salaries to higher salaries for experienced professionals.

• Qualifications such as CPA, CIA, or CISA can impact the expected CTC for internal audit roles.

• Industry and location also play a significant role in determining the expected CTC for audit positions.

Audit procedure for fixed assets involves verifying existence, ownership, valuation, and depreciation of assets.

• Verify existence of assets by physically inspecting them

• Verify ownership by reviewing purchase documents and title deeds

• Verify valuation by comparing with market prices and depreciation by reviewing depreciation schedules

• Check for impairment or obsolescence

• Ensure proper classification and disclosure in financial statements

GST stands for Goods and Services Tax, a consumption tax levied on the supply of goods and services.

• GST is a value-added tax levied on most goods and services sold for domestic consumption.

• It is a single tax that replaces multiple indirect taxes like VAT, service tax, etc.

• GST is divided into Central GST (CGST), State GST (SGST), and Integrated GST (IGST) depending on the type of transaction.

• It aims to simplify the tax structure, reduce tax evasion, and promote ease of doing b...read more

The fundamental of Auditing is to evaluate the financial statements of an organization to ensure accuracy and compliance with laws and regulations.

• Auditing involves examining financial records, transactions, and operations of an organization.

• It aims to provide an independent assessment of the organization's financial position and performance.

• Auditors must follow auditing standards and guidelines to ensure the integrity and reliability of their work.

• Auditing helps stakeholders...read more

Yes, I thrive under pressure and am able to prioritize tasks effectively.

• I have experience working in fast-paced environments and have learned to remain calm and focused under pressure.

• I prioritize tasks based on urgency and importance, ensuring that deadlines are met.

• I communicate effectively with team members and superiors to ensure that everyone is on the same page and working towards the same goals.

• For example, during my previous internship, I was given a tight deadline t...read more

Audit procedures are conducted by planning, testing, evaluating, and reporting on the financial statements of a company.

• Planning phase involves understanding the client's business, assessing risks, and developing an audit plan.

• Testing phase includes gathering evidence, performing analytical procedures, and testing internal controls.

• Evaluation phase involves assessing the results of testing, forming conclusions, and issuing an audit report.

• Reporting phase includes communicatin...read more

The question is asking about IND AS 12, IND AS 115, DTAA, and due dates of GST return.

• IND AS 12 refers to Indian Accounting Standard 12 which deals with income taxes.

• IND AS 115 refers to Indian Accounting Standard 115 which deals with revenue from contracts with customers.

• DTAA stands for Double Taxation Avoidance Agreement, which is an agreement between two countries to avoid double taxation of income.

• Due dates of GST return vary based on the type of taxpayer and the state th...read more

Yes, I have experience in Auditing.

• I have completed courses in Auditing during my accounting degree

• I have worked as an intern at a CPA firm where I assisted in auditing financial statements

• I have experience using auditing software such as ACL and IDEA

• I have conducted inventory audits for a retail company

Appeal forms are filed under Section 246A of the Income Tax Act.

• Appeal forms are filed under Section 246A of the Income Tax Act.

• Section 246A provides the procedure for filing appeals against orders of the Assessing Officer.

• The appeal form must be submitted within the specified time limit mentioned in the Act.

• The appeal form should contain all relevant details and grounds for appeal.

Stock audit involves verifying the physical existence and condition of inventory items, comparing them with records, and identifying discrepancies.

• Conduct a physical count of all inventory items

• Compare the physical count with the records in the inventory system

• Identify and investigate any discrepancies found

• Ensure proper valuation of inventory items

• Review the internal controls related to stock management

ITGC controls are essential for ensuring the integrity of financial information and safeguarding assets.

• Access controls to restrict unauthorized access to systems and data

• Change management controls to ensure proper authorization and documentation of changes

• Backup and recovery controls to protect data from loss or corruption

• Segregation of duties controls to prevent fraud and errors

• Physical security controls to protect IT assets from theft or damage

Bank reconciliation is the process of comparing a company's records of its bank transactions with the bank's records to ensure they match.

• Bank reconciliation helps identify discrepancies between the company's records and the bank's records.

• It involves comparing the ending balance on the bank statement with the ending balance in the company's general ledger.

• Common reasons for discrepancies include outstanding checks, deposits in transit, bank fees, and errors.

• Reconciling the b...read more

To verify accounts receivable, one must reconcile the accounts, confirm balances with customers, and review supporting documentation.

• Reconcile accounts receivable ledger with general ledger to ensure accuracy

• Confirm account balances with customers through statements or direct communication

• Review supporting documentation such as invoices, purchase orders, and shipping records

• Perform aging analysis to identify overdue accounts and follow up on collections

• Consider using accounts...read more

Amortization is the gradual reduction of an intangible asset's value, while depreciation is the gradual reduction of a tangible asset's value.

• Amortization applies to intangible assets like patents, copyrights, and trademarks.

• Depreciation applies to tangible assets like buildings, vehicles, and machinery.

• Amortization is typically calculated using the straight-line method.

• Depreciation can be calculated using various methods such as straight-line, declining balance, or units of ...read more

Form 3CA and 3CB are audit reports required to be submitted by a taxpayer under section 44AB of the Income Tax Act.

• Form 3CA is applicable when the taxpayer is required to get their accounts audited under any other law.

• Form 3CB is applicable when the taxpayer is not required to get their accounts audited under any other law.

• Both forms require the auditor to provide details of the audit findings and financial statements of the taxpayer.

• These forms are used to ensure compliance ...read more

Audit procedures are specific tasks and methods used by auditors to obtain evidence and evaluate the financial statements of a company.

• Audit procedures involve gathering evidence to support the financial information presented in the company's financial statements.

• They include activities such as inspection, observation, inquiry, confirmation, and recalculation.

• Examples of audit procedures include examining invoices and receipts, testing internal controls, and confirming accoun...read more

Bank reconciliation is the process of comparing and matching the balances in a company's accounting records with the balances shown on the bank statement.

• Bank reconciliation ensures that the company's records accurately reflect the transactions and balances in its bank accounts.

• It involves comparing the company's cash account balance, including deposits and withdrawals, with the bank statement.

• Any discrepancies between the two balances are identified and resolved, such as out...read more

GST stands for Goods and Services Tax, a value-added tax levied on most goods and services sold for domestic consumption.

• GST is a consumption tax that is collected on the value added to goods and services at each stage of the supply chain.

• It replaced multiple indirect taxes in India and aims to simplify the tax structure and reduce tax evasion.

• GST has different rates for different goods and services, such as 5%, 12%, 18%, and 28%.

• Businesses registered under GST can claim inpu...read more

Audits are necessary to ensure accuracy, compliance, and transparency in financial reporting.

• To verify the accuracy of financial statements

• To ensure compliance with laws and regulations

• To detect and prevent fraud or errors

• To provide assurance to stakeholders

• To improve internal controls and processes