70+ Auditor Interview Questions and Answers

SBI is the largest bank in India with a wider network and more diverse services compared to other nationalised banks.

• SBI has a larger network of branches and ATMs across India

• SBI offers a wider range of services including investment banking, insurance, and credit cards

• SBI has a larger customer base and is considered more trustworthy by customers

• SBI has a higher market share and is more profitable compared to other nationalised banks

• SBI has a more modern and user-friendly onli...read more

I am currently using Colgate toothpaste, Dove toilet soap, and Durex condoms for personal hygiene.

• Toothpaste: Colgate

• Toilet soap: Dove

• Condoms: Durex

I would manage client's queries by actively listening, providing clear and concise responses, and following up to ensure satisfaction.

• Actively listen to the client's query to fully understand their concerns

• Provide clear and concise responses to address their questions or issues

• Offer additional assistance or resources if needed

• Follow up with the client to ensure their query has been resolved and they are satisfied

Retail refers to the sale of goods or services to consumers for personal or household use.

• Before opening a retail shop, one must research the market demand, competition, location, and target audience.

• Marginal costing is a technique used to determine the cost of producing an additional unit of a product.

• To recognize errors, one must conduct regular audits, reconcile accounts, and compare financial statements with previous periods.

Types of solder paste used in SMT include leaded, lead-free, water-soluble, no-clean, and low-temperature.

• Leaded solder paste contains lead and is commonly used in electronics manufacturing.

• Lead-free solder paste is environmentally friendly and complies with regulations such as RoHS.

• Water-soluble solder paste can be easily cleaned with water after soldering.

• No-clean solder paste leaves minimal residue after soldering and does not require cleaning.

• Low-temperature solder paste ...read more

Ensuring compliance with auditing standards involves thorough understanding, regular training, and meticulous documentation.

• Regularly staying updated on auditing standards and regulations

• Providing ongoing training to audit team members

• Conducting regular internal audits to ensure adherence to standards

• Maintaining detailed documentation of audit processes and findings

Limited review is done under Regulation 33 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

• Limited review is a type of audit engagement where auditors perform analytical procedures and inquiries to obtain limited assurance on the financial statements.

• Regulation 33 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 mandates listed companies to submit quarterly and year-to-date financial results to the stock exchanges along w...read more

Test of design checks if control is designed effectively while test of operating effectiveness checks if control is working as intended.

• Test of design evaluates the design of internal control to ensure it is effective in achieving its objectives.

• Test of operating effectiveness evaluates whether the internal control is operating as intended and achieving its objectives.

• Test of design is performed before the implementation of internal control while test of operating effectivene...read more

Organic certification process involves verifying that agricultural products meet certain standards.

• Farmers must follow specific guidelines for soil and water management, pest control, and livestock care.

• Certification bodies inspect farms and review records to ensure compliance.

• Products must be labeled and tracked to maintain their organic status.

• Certification can be costly and time-consuming for farmers.

• Examples of organic certification bodies include USDA Organic, Ecocert, a...read more

Supporting documents for accounts payable include invoices, purchase orders, receiving reports, and vendor contracts.

• Invoices from vendors for goods or services provided

• Purchase orders authorizing the purchase of goods or services

• Receiving reports confirming the receipt of goods or services

• Vendor contracts outlining terms and conditions of the transaction

The responsibilities of an Auditor include examining financial records, ensuring compliance with laws and regulations, and providing accurate and unbiased reports.

• Examining financial records to ensure accuracy and compliance

• Ensuring compliance with laws and regulations

• Providing accurate and unbiased reports to stakeholders

• Identifying and reporting any discrepancies or fraud

• Communicating findings and recommendations to management

The rate of income tax varies for different entities based on the provisions of the Companies Act and CARO 2020.

• Income tax rates for companies are different from those for individuals and other entities.

• Section 185 and 186 of the Companies Act provide guidelines for income tax rates for companies.

• CARO 2020 (Companies Auditor's Report Order) also impacts the income tax rates for companies.

• Auditors need to be aware of the specific income tax rates applicable to the entities the...read more

The zones name of a reflow oven typically include preheat, soak, reflow, and cooling zones.

• Preheat zone

• Soak zone

• Reflow zone

• Cooling zone

I am very familiar with various programs used in auditing, including accounting software and data analysis tools.

• Proficient in using accounting software such as QuickBooks and SAP

• Skilled in utilizing data analysis tools like ACL and IDEA

• Familiar with Microsoft Excel for data manipulation and analysis

The latest guidelines of APEDA are related to the export of organic products.

• APEDA has issued guidelines for the export of organic products.

• The guidelines cover the certification process for organic products.

• They also provide information on the labeling and packaging requirements.

• The guidelines aim to promote the export of organic products from India.

• APEDA has also set up a certification system for organic products.

• The certification system ensures that the products meet the r...read more

Reconciling items in a Bank Reconciliation Statement (BRS) are differences between the bank statement and the company's records.

• Outstanding checks: Checks issued by the company but not yet presented for payment by the recipient.

• Deposits in transit: Cash or checks received by the company but not yet recorded by the bank.

• Bank errors: Mistakes made by the bank in recording transactions.

• Interest earned: Interest income earned by the company but not yet recorded in the bank statem...read more

Debits and credits are used in double-entry accounting to record financial transactions.

• Debits increase assets and expenses, and decrease liabilities and revenues.

• Credits increase liabilities and revenues, and decrease assets and expenses.

• Debits are recorded on the left side of an account, while credits are recorded on the right side.

• The accounting equation must always balance, with total debits equaling total credits.

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

• Auditing helps to detect and prevent fraud and errors in financial statements.

• It provides assurance to stakeholders that the financial information is reliable.

• Auditing is required by law for publicly traded companies to protect investors.

• It helps improve internal controls and operational efficiency.

• Auditors also provide recommendations for improvements based on t...read more

Deloitte is a multinational professional services network known for providing audit, tax, consulting, and advisory services.

• Deloitte is one of the Big Four accounting firms in the world.

• It offers services in audit, tax, consulting, and advisory.

• Deloitte has a global presence with offices in over 150 countries.

• The company is known for its expertise in various industries such as technology, healthcare, and financial services.

SMT (Surface Mount Technology) is a process used in electronics manufacturing to mount electronic components directly onto the surface of a printed circuit board (PCB).

• Components are placed onto the PCB using pick-and-place machines.

• Solder paste is applied to the PCB pads before components are placed.

• The PCB is then heated in a reflow oven to melt the solder and create a permanent connection.

• SMT allows for smaller, lighter, and more efficient electronic devices.

• Common compone...read more

ESD stands for Electrostatic Discharge. Its role is to prevent damage to electronic components.

• Preventing damage to electronic components

• Protecting sensitive equipment from electrostatic discharge

• Implementing ESD control measures in manufacturing facilities

• Training employees on ESD prevention techniques

Companies Act requires internal audit to be conducted by a qualified auditor to ensure compliance and accuracy of financial statements.

• Internal audit must be conducted by a qualified auditor appointed by the company.

• The auditor must report directly to the Board of Directors.

• The scope and frequency of internal audit must be determined by the Board.

• Internal audit must ensure compliance with laws and regulations, accuracy of financial statements, and effectiveness of internal co...read more

Auditing is the process of evaluating an organization's financial records to ensure accuracy and compliance with laws and regulations.

• Auditing involves examining financial statements, records, and transactions to verify their accuracy and compliance with laws and regulations.

• Auditors assess internal controls to identify weaknesses and recommend improvements.

• There are different types of audits, such as financial audits, operational audits, and compliance audits.

• Auditors may wo...read more

Auditing trade receivables involves verifying the accuracy and completeness of accounts receivable balances.

• Reviewing the aging schedule to ensure proper classification of receivables based on their age

• Confirming the existence of receivables by sending confirmation letters to customers

• Testing the valuation of receivables by assessing the allowance for doubtful accounts

• Checking for any potential impairment of receivables due to customer defaults or bankruptcy

• Analyzing the coll...read more

The Fifa method for petrol price fluctuation involves monitoring and adjusting prices based on market conditions.

• Fifa method involves closely monitoring market trends and adjusting petrol prices accordingly

• It may involve setting a base price and making adjustments based on factors like crude oil prices, demand, and competition

• This method aims to ensure competitive pricing while also maximizing profits for the company

• Example: If crude oil prices increase, the company may raise...read more

Materiality refers to the significance or importance of an item, transaction, or event in relation to financial statements.

• Materiality is a concept used in auditing to determine the importance of an item in relation to financial statements.

• It is based on the principle that only items that are material need to be disclosed in financial statements.

• Materiality is subjective and depends on the specific circumstances of each case.

• Examples of material items include large transactio...read more

Professional scepticism is the attitude of doubting and questioning information, evidence, and assumptions in auditing to ensure objectivity and thoroughness.

• Professional scepticism involves maintaining a questioning mindset throughout the audit process.

• Auditors should not automatically accept information provided by the client, but instead critically evaluate and verify it.

• It is essential for auditors to remain independent and objective, avoiding biases and assumptions.

• Examp...read more

The best way of cost control is through budgeting, monitoring expenses, reducing waste, and negotiating with suppliers.

• Create a detailed budget outlining all expenses and revenue projections

• Regularly monitor expenses to identify any deviations from the budget

• Reduce waste by implementing efficient processes and procedures

• Negotiate with suppliers to secure better pricing and terms

• Implement cost-saving measures such as bulk purchasing or outsourcing non-core functions

Digital marketing is the use of online channels to promote products or services, reaching a wider audience and driving sales.

• Digital marketing includes strategies such as social media marketing, email marketing, search engine optimization (SEO), and pay-per-click advertising.

• It allows businesses to target specific demographics, track performance metrics, and adjust campaigns in real-time.

• Examples of digital marketing tools include Google Ads, Facebook Ads, email marketing pla...read more

It seems like the interviewer is asking if you have ever used the Panicle tab for any specific function.

• Yes, I have used the Panicle tab for organizing financial data during audits.

• No, I have not used the Panicle tab for any specific function.

• I am not familiar with the Panicle tab and its functions.

BRS stands for Bank Reconciliation Statement, which is a statement prepared to reconcile the balance as per bank statement with the balance as per company's books.

• BRS is used to ensure that the company's records match the bank's records.

• It helps in identifying any discrepancies or errors in recording transactions.

• Common items in BRS include outstanding checks, deposits in transit, bank charges, and interest earned.

• Example: If a company's books show a balance of $10,000 but th...read more

Proficient in advanced features of MS Office including Excel, Word, and PowerPoint.

• Advanced knowledge of Excel functions such as VLOOKUP, PivotTables, and Macros

• Experience creating complex formulas and data analysis in Excel

• Proficient in creating professional presentations in PowerPoint with animations and transitions

• Skilled in using Word for formatting documents and mail merge

Cash flow statement is a financial report that shows the inflows and outflows of cash in a business over a specific period of time.

• It provides insights into a company's liquidity and ability to meet its financial obligations.

• Consists of three main sections: operating activities, investing activities, and financing activities.

• Helps investors and analysts assess the financial health of a company.

• Example: Cash flow from operating activities includes cash received from customers ...read more

I have 5 years of experience working as an auditor in a public accounting firm.

• Performed financial audits for various clients to ensure compliance with regulations

• Conducted risk assessments and identified areas for improvement in internal controls

• Prepared detailed audit reports and communicated findings to management

• Collaborated with cross-functional teams to address audit issues and implement solutions

Audit assertions are the claims made by management regarding the financial statements being audited.

• Existence - assets and liabilities exist at a given date

• Completeness - all transactions and accounts are recorded

• Accuracy - amounts and other data are accurate

• Valuation - assets, liabilities, and equity are valued correctly

• Rights and obligations - entity has legal rights to assets and liabilities are obligations

• Presentation and disclosure - financial statements are properly pre...read more

Risks in p2p include fraud, security breaches, regulatory compliance issues, and credit risk.

• Fraudulent transactions leading to financial losses

• Security breaches compromising sensitive data

• Regulatory compliance issues related to money laundering or data protection

• Credit risk associated with borrowers defaulting on loans

7 QC tools are a set of basic statistical tools used for quality control and process improvement.

• Check sheet: Used to collect and organize data in a structured format.

• Histogram: Represents data distribution visually to identify patterns and trends.

• Pareto chart: Helps prioritize issues by showing the most significant factors affecting quality.

• Cause-and-effect diagram (Fishbone diagram): Identifies root causes of problems by categorizing potential causes.

• Scatter diagram: Shows ...read more

Wi,Twi is a programming language used for statistical computing and graphics.

• Wi,Twi is a dialect of the R programming language.

• It is commonly used for data analysis, statistical modeling, and visualization.

• Wi,Twi has a large number of packages available for various statistical tasks.

• Some popular packages in Wi,Twi include ggplot2 for data visualization and dplyr for data manipulation.

Yes, audit happens in banks to ensure compliance with regulations and identify potential risks.

• Audits are conducted to ensure compliance with regulations and identify potential risks

• Auditors review financial statements, internal controls, and operational processes

• Examples of audits in banks include financial audits, compliance audits, and operational audits

Internal audit is an independent, objective assurance and consulting activity designed to add value and improve an organization's operations.

• Internal audit evaluates the effectiveness of an organization's risk management, control, and governance processes.

• It provides recommendations for improvement and helps the organization achieve its objectives.

• Internal audit can cover a wide range of areas, such as financial, operational, and compliance audits.

• Examples of internal audit a...read more

Financial statements include balance sheet, income statement, cash flow statement, and statement of changes in equity.

• Balance sheet shows assets, liabilities, and equity at a specific point in time.

• Income statement shows revenues, expenses, and net income over a period of time.

• Cash flow statement shows cash inflows and outflows from operating, investing, and financing activities.

• Statement of changes in equity shows changes in equity from transactions with owners and non-owner...read more

Depreciation is the allocation of the cost of tangible assets over their useful life, while amortization is the allocation of the cost of intangible assets over their useful life.

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

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

• Both depreciation and amortization help in spreading out the cost of an asset over its useful life.

• Depreciation is typically calculate...read more

Employees are provided with various facilities to ensure their well-being and productivity.

• Facilities may include health insurance, retirement plans, paid time off, and flexible work arrangements.

• Employers may also offer on-site amenities such as gyms, cafeterias, and childcare services.

• Providing these facilities can improve employee satisfaction and retention, as well as attract top talent.

• Facilities should be regularly evaluated and updated to meet the changing needs of emp...read more

Payment of bonus is crucial for employee motivation and retention.

• Timely payment of bonus boosts employee morale

• Delayed payment can lead to dissatisfaction and demotivation

• Bonus should be paid as per the agreed terms and conditions

• Proper documentation and communication is necessary for transparency

• Examples: Annual bonus paid at the end of the financial year, performance-based bonus paid monthly

I will audit revenue by examining financial records, conducting interviews, testing transactions, and analyzing revenue recognition policies.

• Reviewing financial records such as sales invoices, receipts, and bank statements

• Conducting interviews with key personnel involved in the revenue generation process

• Testing transactions to ensure accuracy and completeness

• Analyzing revenue recognition policies to ensure compliance with accounting standards

• Comparing revenue figures to indus...read more

Sanction refers to a penalty or punishment imposed on an individual, organization, or country for violating a law or regulation.

• Sanctions can include economic restrictions, trade embargoes, travel bans, or asset freezes.

• They are often used by governments or international organizations to enforce compliance with laws or policies.

• Examples of sanctions include the United Nations sanctions against North Korea for its nuclear weapons program, or the US sanctions against Iran for i...read more

Audit is a systematic and independent examination of financial statements, records, operations, and performance of an organization.

• Audit is conducted to ensure the accuracy and reliability of financial information.

• It involves examining financial statements, records, and transactions to identify errors, fraud, and non-compliance with laws and regulations.

• Auditors provide an opinion on the fairness and accuracy of financial statements.

• There are different types of audits, such a...read more