Interview questions for Auditing

Auditing is a process of examining an organization’s financial records to determine if they are accurate and in accordance with any applicable rules, regulations and laws. External auditors come from outside the organization to examine accounting and financial records and provide an independent opinion on these records. Internal auditors work for their organizations as internal employees to examine records and help improve internal processes such as operations, internal control, risk management and governance.

1. Explain what is internal audit?

An independent and objective evaluations or examination of the company’s financial and operational business activities is referred as internal audit.

2. What is an Audit process?

The word ‘Audit’ is a derivative of the word ‘Audition’ which means ‘to hear’. In earlier times, the Kings used to hear their accountants narrate the accounts verbally. However, as the complexity of the accounting function grew, need was felt to thoroughly check the accounts for mistakes misclassification and document the findings in a written form so that it can be used by the Management, stakeholders, investors, Government and various other bodies. This process is known as Auditing or Audit.

3. Mention what is the difference between internal and external audit?

External audit’s main focus is on the accuracy of the financial statements and annual report, while the internal audit has a wide prospective and looks into anything that is important for the organization’s success.

4. What is Statutory Audit?

It is a compulsory audit done by a CA.
Finance Audit conduct by the CA to compliance the legal requirements of monitory issues

5. Explain the steps before an audit processes?

• Ensure the authority of the audit team is established- it will enhance the co-operation from the auditees
• Decide which areas of the company will be audited and the frequency of the audits. Prepare as yearly audit schedule and distribute
• Determine the purpose of the audit whether it complies with government regulations, quality standards, internal procedures and systems
• Organize a meeting with the auditors to discuss plan, scope and purpose of the audit
• Read the documents you are auditing against.

6. Tell us about some recent developments within the audit industry?

This is a great opportunity to show an understanding of the audit industry as a whole, through ongoing professional development, keeping up with industry communications or through your professional network for example. Make sure your answer is as relevant as possible to the prospective employer and the role in question.

7. What Is Non Statutory Audit?

This is the audit not specially required by law this scope of the audit will be outline by the contract between the auditor and the clients.

8. Do You Know The Different Types Of Audits?

o Statutory Audit
o Non-statutory Audit
o External Audit
o Internal audit
o Final Audit
o social audit
o performance Audit

9. what examples do you have of demonstrating excellence in stakeholder management?

In addition to technical competencies, prospective employers will want reassurance that candidates have the right people skills and are able to apply these effectively with colleagues and clients at all levels of seniority.

10. What Is Audit Control Procedure?

Audit control procedures are policies and procedures in addition to control environment, (altitude,awareness and actions of directors and management regarding the internal control system) which the management has established to achieve the entity specific objectives.the mix of type of controls implemented by the management will depend on the control objectives and the size of the entity.

11. What Are Tangible Assets?

Tangible Assets are those assets which we can see or touch like fixed asset ,machinery,etc.

12. What Is The Mean Of Decommission Liability?

Decommission Liability is costs that a company expects to incur in the future when the plant is shut down.

13. How Does The Internal Audit Differ From An External Audit?

o Internal audit nothing but the checking the product that you produced.
o External audit is checking your product by your customer.
o Here it means you may not find mistakes in your processes but a third man who comes and check the system he may see some deviations in the system and give suggestions for the improvements of the system.
Explain The Difference Between Internal Audit And Statutory Audit?
An internal audit is one which is conducted by the internal auditors of the company. It is not mandatory for the company and the company just conducts it to keep a check on the operations of the company. On the other hand statutory audit is very important because it is by the external auditors and it is mandatory for all kinds of companies. Statutory audit is usually conducted for various purposes like tax regulatory requires it for taxation purposes.

14. Explain how you should conduct an internal audit?

To conduct an internal audit you should
• Decide what you want to achieve
• Identify risks and review objectives
• Plan and audit activities
• Validate the facts and complete the work
• Develop a deliverable or report that will drive action
• Follow up

15. Explain what is the meaning of plan drawn up in internal audit?

Plan drawn up is the assessment of the risk that is mutually agreed between the internal audit, senior management and audit committee determines the frequency with which particular audits take place.

16. Explain what you should do after the internal audit?

After the internal audit,
• Hold an auditors meeting with auditees involved with the audit, discuss the non-conformances and what part is missed
• Issue the audit report in a timely manner
• Encourage auditees to take corrective actions again flaws
• Help and guide those responsible for completing the corrective actions with setting reasonable deadlines
• Take the feed-back of the auditees and how your audit team were perceived.