Interview Questions in Statutory cum internal audit for Commerce

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Most important points and questions to be kept in mind at a glance:-

1. Basic INDAS conceptual & working knowledge. Why This INDAS has come , difference between
particular INDAS and AS for instance, INDAS 115, or indas on leases & relevant AS on Revenue.
2. SA 700, 705, 505 ,240 :- EOM, OMP, Going concern, Key Audit matters, Diff types of Audit opinions
3. CARO 2020 21 points , amendments points learn very well.
4. Schedule III Changes
5. Articleship Experience & Post Qualification experience., interviewer will drill down in each line item of
BS , PL & CFS and ask you to explain , for instance what are the components of OCI.
6. Journal Entries for prov, contingent liab , reserves, surplus, and FS disclosures.
7. Why Big4s, why Stat Audit, how to deal with long working hrs, expected CTC, what is your weaker
areas you come across in life as well in audit of clients.\
8. Whom do you give more preference :- Family time or Career when chose between one?
9. Are you open to travelling or working in Sunday or festivals?
10. How will do the work when seniors are not able to help you or not willing to work and there is an imp
assisgnment to complete?
11. Tell me about your tax audit experience and form 3CB-3CD, 3CA -3CD details could be asked in some
details

Other Questions:-

• How do you conduct statutory audit in your current organization?

• PL & BS Audit Assertions
• If the Trade receivables balance confirmation is not matching as per books while
conducting audit of trade receivables, what procedures you will apply.
• If you have debtors balance of Rs 2 crore, and having more than 200 customers then
as Statutory Auditor of the Company how will you verify the same, will you do
sampling , what will be your answer in case of bank balance confirmation will
sampling apply there ?
• If a company have two Government companies as clients which are comprising of
almost 30% of trade receivables and they are not responding to management at all,
how will you respond as an auditor?
• Other than balance confirmation what procedures will you adopt for audit of cash
and bank balance?
• Suppose the company is a big brand in Pen manufacturing industry holding more
than 150 bank accounts having balance of 1000cr. What audit procedures will you
adopt? Will you verify all the bank accounts or else do some sampling checks?
Reason if you verify all the bank accounts?
• There are 50 bank accounts having no balance, 120 bank accounts having very
minimum balance then what procedures will you adopt to verify them?
• How do you verify Fixed Assets and what procedures will you apply if there were
huge additions in Fixed Assets?
• How will you test the warranty in revenue?
• How do you check completeness assertion while performing audit of accounts
payable?
• Which balance would you like to verify the most while conducting statutory Audit?
• What is BRS (Bank Reconciliation Statement)? How do you use BRS in audit of cash
balance?
• What is Bank Confirmation? Who Sends it?
• How will you verify cash if its not possible to attend physical verification?
• Any specific procedures for covid?
• How to estimate NRV? What is the NRV if your competitor is selling same product at
lower price?
Example: -Organisation is selling pen at RS 10000 and competitor is selling the same for
Rs. 8000 so how as an auditor will you suggest a course of action to the management
regarding valuation of inventory?

o What is RAP (Risk Assessment Procedure)? Methods of RAP?

o What is Audit Risk? Types of Audit Risk?
o What is IFCR (Internal Financial Control Over Reporting)?
o Difference between Internal Audit and External Audit?
o What do you understand by Materiality? How and on what basis an auditor
assesses materiality? Components of Materiality? Why Performance
Materiality is set? What do you understand by clearly Trivial Threshold?
o What is the Risk of Material Misstatements? what do you do when you found
a material misstatement?
o What is the first step you take when you start Audit of new client?
o What are substantive Audit Procedures?
o Explain in brief what is opinion and types of opinion?
o Difference between Adverse Opinion and Qualified Opinion?
o Difference between Vouching and Verification?
o What is Internal Audit? What IC you check while performing Internal Audit?
o What are controls? How they are different from Procedures?
o What are the objectives of entity behind the imposition of controls?
o What are the deficiencies of control (Specifically asking about Design
Deficiency and Operating Effectiveness)? Limitations of IC?
o What are preventive, Detective Control? Give example.
o What is CARO? No. of clauses in CARO 20? Newly Additional clauses in CARO
20? Fixed Asset clause in CARO 20?
o What is sampling? How do you choose samples? Sampling Methods?
o What do you mean by Nature, Timing and Extent of Audit?
o What is EOM para? Does mention of this leads to qualification?
o Types of Audit Report? Difference between General Purpose Audit Report
and Special Purpose Audit Report?
o As an Auditor how will you report fraud?

• What is the use and purpose of Excel Pivot Table, VLOOKUP, HLOOKUP?
• Any experience in your current organisation where you find out something
important while conducting audit or a story you want to share with us?
• Is there any situation that you come across in your articleship that you advised the
client on some issue but later on it went wrong, then what did you do?
• Definition, Difference and Journal entry of: -
▪ Provision & Contingent Liability-D/F & JE
▪ Accrued Payable & Accrued Expenses-D/F & JE
▪ Prepaid Expenses -JE
▪ Dividend -JE
▪ Bad Debts and Provision for doubtful debts -JE
▪ Contingencies and Reserves-D/F
▪ Return on Capital and Return of Capital-D/F
▪ Deferred tax asset and liabilities - Definition
▪ Depreciation and Impairment- D/F
▪ Accumulated Depreciation -Definition

IND AS -115,116,16 or respective AS

• Accounting Concepts such as Going Concern concept and Prudence Concept
• What are the Golden Rules of Accounting? What are different types of Accounts
(Real, Nominal and Personal)?
• What is CFS? Components of CFS? What are reasons of differences in Cash Flow
Statement? What is the treatment of depreciation in CFS?
• Suppose there are two companies- Company A and Company B. What points will you
check to ensure consolidation of both companies?
• What is schedule III?
• Name any two AS that you applied during your articleship with practical examples?
• Definition of INDAS? Difference Between INDAS and AS?
• A person has brought M/C for $100 on 1st Feb
Dates: -1st March,31st March, 1st may
What entries will be passed on above respective dates if
1.If the payment was made on 1st MAY
2.If there is an exchange loss of $2 on 31st March

Internal Audit :-
1. How will you conduct internal audit of manufacturing company?
2. How will check control testing of purchases, revnenues, other exp.
3. What is the checklist to consider while checking internal compliance with respect
to treasury, purchases dept, three way match, PR, Indent, PO, GRN, Eway bill,
Store ledger, basic terms and understanding.
4. 2 imprtant terms : Control Design & operating effectiveness to be checked in
internal audit.
5. Turnover limits for Internal audit. Diff between Internal & statutory Audit.
6. IFCR Testing.
7. What is your personal experience, what mistakes & observations you find during
audit of a particular company, what was the turnover of the company you
audited.
8. What is the future you see in internal audit and why internal audit, why not any
other areas, what are the things you like in internal audit, the most imp & tricky
question?