Client Serving Contractor

Client Serving Contractor Interview Questions and Answers

Updated 14 Jun 2024

Q1. Difference between amortisation deprication and impairment

Ans.

Amortisation is the allocation of the cost of intangible assets over time, depreciation is the allocation of the cost of tangible assets over time, and impairment is the reduction in value of assets.

Amortisation is used for intangible assets like patents and trademarks, while depreciation is used for tangible assets like buildings and machinery.
Amortisation and depreciation both involve allocating the cost of an asset over its useful life, while impairment is a sudden decreas...read more

Q2. Assertions at transaction level ?

Ans.

Assertions at transaction level refer to validating the accuracy and completeness of individual transactions.

Assertions at transaction level involve ensuring that each transaction is recorded accurately and completely.
Examples of assertions at transaction level include verifying that all necessary information is included in a sales invoice, confirming that the correct amount is recorded in a purchase order, and ensuring that all transactions are properly authorized.
These asse...read more

Q3. Materiality in audit processess

Ans.

Materiality in audit processes refers to the significance of an item or issue in relation to the financial statements as a whole.

Materiality helps auditors determine the importance of errors or discrepancies in financial statements.
It is used to decide what information should be disclosed to stakeholders.
Materiality is influenced by factors such as the size of the company, industry norms, and regulatory requirements.
For example, a small error in a large company may not be mat...read more

Q4. 5 steps of ind as 115

Ans.

Ind AS 115 outlines a comprehensive model for revenue recognition

Identify the contract with a customer
Identify the performance obligations in the contract
Determine the transaction price
Allocate the transaction price to the performance obligations
Recognize revenue as the entity satisfies a performance obligation

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Q5. Journal entry for impairment

Ans.

Journal entry for impairment

Impairment loss is recognized when the carrying amount of an asset exceeds its recoverable amount
The journal entry for impairment involves debiting the impairment loss account and crediting the asset's carrying amount
The impairment loss reduces the asset's value on the balance sheet

Q6. Types of audit reports

Ans.

Types of audit reports include unqualified, qualified, adverse, and disclaimer.

Unqualified report: No issues found, clean opinion.
Qualified report: Issues found but not pervasive.
Adverse report: Significant issues affecting financial statements.
Disclaimer report: Unable to form an opinion due to lack of information.
Examples: Enron scandal resulted in adverse audit report.
Examples: Qualified report due to inventory valuation issues.

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Q7. Materiality in detail

Ans.

Materiality refers to the significance or importance of information in relation to a decision or financial statement.

Materiality is a concept used in auditing to determine the impact of information on decision-making.
It helps in identifying information that is relevant and significant to users of financial statements.
Materiality is subjective and depends on the context of the situation.
For example, a small error in financial statements may not be considered material if it doe...read more

Q8. Types of opinions

Ans.

There are four types of opinions: Unqualified, Qualified, Adverse, and Disclaimer.

Unqualified opinion: The financial statements are presented fairly in all material respects.
Qualified opinion: Except for a specific issue, the financial statements are presented fairly.
Adverse opinion: The financial statements are not presented fairly.
Disclaimer opinion: The auditor is unable to form an opinion on the financial statements.