10+ Audit Staff Interview Questions and Answers

I audited Sales and Marketing by reviewing sales contracts, analyzing marketing campaigns, and assessing revenue recognition.

• Reviewed sales contracts to ensure accuracy and compliance

• Analyzed marketing campaigns to assess effectiveness and ROI

• Assessed revenue recognition methods to ensure compliance with accounting standards

I am interested in statutory audit as it provides a challenging and dynamic work environment where I can enhance my analytical skills and gain valuable experience.

• Opportunity to work with a variety of clients and industries

• Developing strong analytical and problem-solving skills

• Gaining exposure to different accounting standards and regulations

• Opportunity for career growth and advancement

• Enjoy the challenge of working in a fast-paced and dynamic environment

The appropriate discount rate for an unlevered DCF analysis is the weighted average cost of capital (WACC).

• The WACC is the rate at which a company's future cash flows are discounted to their present value.

• It is calculated by taking the weighted average of the cost of equity and the cost of debt.

• The cost of equity is calculated using the capital asset pricing model (CAPM), while the cost of debt is the interest rate on the company's debt.

• The WACC reflects the risk of the compa...read more

To audit cash and bank, I would verify bank reconciliations, examine cash receipts and disbursements, and test internal controls.

• Verify bank reconciliations to ensure they are accurate and complete

• Examine cash receipts and disbursements for proper documentation and authorization

• Test internal controls related to cash handling and bank transactions

• Perform surprise cash counts to verify physical cash on hand matches accounting records

Major findings in audit engagements include control deficiencies, financial misstatements, regulatory non-compliance, and operational inefficiencies.

• Identified control deficiencies in the inventory management process resulting in increased risk of theft and errors.

• Discovered financial misstatements due to improper revenue recognition practices leading to inaccurate financial reporting.

• Noted regulatory non-compliance with tax laws and regulations, potentially exposing the comp...read more

My favorite Ind AS is Ind AS 115 - Revenue from Contracts with Customers.

• Ind AS 115 provides a comprehensive framework for recognizing revenue from customer contracts.

• It focuses on the transfer of control of goods or services to customers.

• The standard requires companies to use a five-step model to determine when and how revenue is recognized.

• It has significantly impacted revenue recognition practices across various industries.

• Examples include software companies recognizing re...read more

Ind AS 115 and 116 are accounting standards that deal with revenue recognition and leases, respectively.

• Ind AS 115 deals with revenue recognition and establishes principles for recognizing revenue from contracts with customers.

• Ind AS 116 deals with leases and requires lessees to recognize assets and liabilities for all leases with a term of more than 12 months.

• Both standards are part of the Indian Accounting Standards converged with International Financial Reporting Standards...read more

Purchase can be checked by reviewing purchase orders, invoices, receipts, and comparing them to budgeted amounts.

• Review purchase orders to ensure they are properly authorized and match the goods or services received

• Check invoices for accuracy in terms of pricing, quantity, and terms of payment

• Verify receipts to confirm that the goods or services were actually received

• Compare all documentation to budgeted amounts to identify any discrepancies or potential fraud

• Perform vendor r...read more

Supply chain is the network of individuals, organizations, resources, activities, and technology involved in the creation and sale of a product.

• Supply chain involves the flow of goods, services, information, and finances from the initial supplier to the end customer.

• It includes processes such as sourcing, production, distribution, and delivery.

• Efficient supply chain management can lead to cost savings, improved customer satisfaction, and competitive advantage.

• Examples of supp...read more

Top 5 cash and bank issues include reconciliation discrepancies, fraud, insufficient controls, inaccurate recording, and cash flow problems.

• Reconciliation discrepancies between bank statements and internal records

• Fraudulent activities such as embezzlement or unauthorized transactions

• Insufficient controls leading to misappropriation of funds

• Inaccurate recording of transactions resulting in financial misstatements

• Cash flow problems affecting liquidity and financial stability

COSO stands for Committee of Sponsoring Organizations of the Treadway Commission. It is a framework for internal controls.

• COSO provides guidelines for organizations to design, implement, and evaluate internal control systems.

• It consists of five components: Control Environment, Risk Assessment, Control Activities, Information and Communication, and Monitoring Activities.

• COSO helps organizations in achieving their objectives and managing risks effectively.

• Example: A company imp...read more

CARO stands for Companies (Auditor's Report) Order. It includes various clauses that auditors need to report on.

• CARO requires auditors to report on matters such as fixed assets, inventory, loans, etc.

• Auditors need to report on whether the company has maintained proper records of its transactions.

• CARO also requires auditors to report on the internal control systems of the company.

• The order aims to enhance the credibility and reliability of financial statements.

• Non-compliance w...read more