Client Serving Contractor Interview Questions and Answers

Pervasive refers to something that is widespread or all-encompassing, affecting many areas or aspects.

• Pervasive issues affect multiple areas, like a systemic problem in an organization.

• For example, pervasive fraud would indicate widespread fraudulent activities across various departments.

• In contrast, a material issue might be significant but limited to a specific area, like a single project's budget overrun.

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

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

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

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

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.

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