What Are The Most Commmonly Asked Interview Question In Statutory Audit Interview ?

Statutory Audit

1. Situation-Based Questions:

 – How do you handle balance confirmation mismatches in trade receivables?
  – What approach would you take when physical verification of stock is not possible?
– Explain your method for verifying fixed assets and stocks.
– How do you send confirmations during the audit process?
– What actions do you take when the rates on Purchase Orders and Invoices don’t match?
– Define and discuss the concept of “Three-way match.”
 – What is MRL, and can it be considered as evidence?
 – How should income from dividends be presented in financial statements?
 – If a company is not following Schedule II for depreciation, what steps would you take as an auditor?
– What indicators do you check for assessing going concern, and how do you address going concern issues?
– When identifying an error exceeding the material amount, what procedures do you follow?
– How do you handle errors of trivial amounts?– What actions would you take upon discovering a fraud worth Rs 2 crores?

2. Audit Basics:

– Explain Audit Assertions and their relevance.
– Define Risk Assessment Procedures (RAP) and discuss the methods.
– Define Audit Risk and its types.
– Explain Internal Financial Control Over Reporting (IFCR).
– Differentiate between Internal Audit and External Audit.
– Define Materiality and discuss factors influencing percentage materiality.
– Why is Performance Materiality set, and what is clearly trivial threshold?
– Describe the first step in auditing a new client.
– What are Substantive Audit Procedures?
– Briefly explain audit opinions and their types.
– Define preventive, detective, and corrective controls with examples.
– What is CARO (Companies Auditor’s Report Order), and how many clauses are in CARO 20 and what are the changes made in CARO 20 from 2016 ?
– How do you identify fraud in an audit?

3. Important Standards and Tech- Functions :

– Briefly summarize Ind AS 115, 116, and 109.
– Explain the purpose of Excel Pivot Table, VLOOKUP, HLOOKUP, and XLOOKUP and how they can be used?

– Share a personal experience from your current organization related to an audit discovery.

4. Accounting Concepts and Standards

 – Discuss key accounting concepts like Going Concern and Prudence.
– Explain CFS (Consolidated Financial Statements) and its components, particularly how depreciation is treated.
– Define Schedule III.
– Mention two AS (Accounting Standards) applied during your articleship with practical examples.
– Differentiate between INDAS and AS. ( carve in & outs, applicability , measurements principles )

5. Process Flow and Assertions:

 – Describe the order-to-cash process and related assertions and procedures.
– Explain the procurement-to-pay process and associated audit procedures.
– Discuss the production/inventory process and relevant assertions and procedures.

6. Accounting Entries:

 – Provide journal entries for various accounting concepts, including provisions, contingent liabilities, accrued payables, prepaid expenses, dividends, bad debts, contingencies, and more.

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