List of 25 Internal Auditor Interview Questions & Answers
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1.
Why do companies require audits?
How to Answer
This question tests your understanding of the audit process beyond just the technical aspects one would learn through college coursework. Being able to answer this question shows you have a firm understanding of one of the basics of the profession.
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2.
How do external auditors rely on the work of internal auditors?
How to Answer
As part of their responsibilities, internal auditors document policies and procedures. In some cases, external audit firms can rely on the work of the internal audit team in conducting the financial statement audit.
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3.
What would you do if during an audit you found an accounting practice that was suspicious?
How to Answer
This is an opportunity to highlight your integrity and honesty. The high-level answer should be obvious - that the concern must be addressed immediately.
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4.
What is the purpose of the internal audit function?
How to Answer
This question is an opportunity to show what you know about the profession of internal auditing. In addition to mentioning the purpose of internal audit, also mention some key responsibilities.
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5.
Have you sat for the CPA exam or are you planning to sit for the CPA exam?
How to Answer
Obtaining a CPA license is a major step an auditor (both internal and external) can take to show they are committed to growing in the accounting profession. These days, many students are able to sit for the CPA exam before they graduate. Additionally, many internal auditors have already spent enough time in public accounting to satisfy the hours worked requirement.
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6.
How do you mitigate and manage stress?
How to Answer
The life of an internal auditor can be stressful, with a lot of travel and deadlines The interviewer wants to gain insight into how you react to stressful situations.
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7.
Why do you want to be an internal auditor?
How to Answer
This question is a way for the interviewer to find out a little bit about what makes you tick. Be honest and direct - don't give a phony answer that the interviewer will see through. Try to tie the roles and responsibilities of an internal auditor to your background.
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8.
What qualities or skills do you believe a good internal auditor should possess?
How to Answer
This question is a good opportunity to show you have an understanding of what qualities make a good auditor generally, and a good internal auditor specifically. Some key areas to hit are ethics (honesty/integrity), ability to interact with others in the organization (communication skills, people person), ability to limit mistakes (focused/attention to detail) and ability to get to the correct answer (skeptical/inquisitive/problem solver).
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9.
Where do you see yourself in five years?
How to Answer
This question is a good opportunity to highlight that you want to continue growing professionally and help the organization grow. This question is not a good opportunity to say you want the interviewer's role. The interviewer is trying to see that you have goals for your career.
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10.
What are the differences between an audit, a review and a compilation?
How to Answer
Audits, reviews and compilations are the three main types of engagements an auditor will perform. Being able to articulate the differences between these services is essential. Conversely, not being able to state the differences could be a disqualifier from the role you are interviewing for.
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11.
How do you feel your education has prepared you for the internal auditor role?
How to Answer
Be sure to highlight all of the different subjects within accounting you have studied to show you have a well-rounded education. To not sound like a 'know it all', make sure to acknowledge that there is still plenty to learn once you have been hired.
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12.
How would you deliver excellent customer service to colleagues within the organization?
How to Answer
Being able to interact and communicate effectively with colleagues is a key skill for an internal auditor, and also shows that the candidate possesses the ability to grow into larger roles within the organization such as manager and director. Even new internal auditors will need to email and call colleagues at all levels within the organization, so be sure to mention that you have attention to detail and are responsive.
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13.
Explain how the Sarbanes-Oxley Act changed the auditing profession.
How to Answer
The Sarbanes-Oxley Act is major legislation passed in 2002 that substantially changed the accounting and auditing professions. It was enacted in response to major fraud scandals such as Enron and WorldCom. The interviewee should know the Act in detail as it is a key driver of the profession, but a summary here will suffice.
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14.
Are you open to travel with this position?
How to Answer
The topic of travel will almost certainly come up during your interview. Many large companies have a centralized internal audit function, where the internal audit team travels to various locations to perform their duties. Given this, be prepared to articulate how much travel you are comfortable with (for example, 25%, 50%, etc). Most job descriptions will include the expected amount of travel. The interviewer is gauging whether you are a candidate that is willing and able to meet the travel requirement, so try to align your answer with the expectation of the role.
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15.
What is your experience with presenting to senior executives?
How to Answer
An internal auditor will at times be expected to present to senior leadership. Highlight that you not only have experience presenting in front of leadership, but also that you are comfortable doing it. Be specific with what you presented.
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16.
How would you handle working in an increasingly remote environment?
How to Answer
This is a question to gauge if you are disciplined enough to work from home. Be sure to touch on how you would stay focused and communicate with team members. Even after things return to normal, remote work may continue to be more common across many industries including auditing.
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17.
What is the purpose of audit documentation?
How to Answer
This is a technical question to see if you are able to articulate the information that is gathered in the field to support the audit. According to auditing standards (pronouncement AU-C Section 230), the two primary purposes of audit documentation are 1) to provide evidence to support the auditor's conclusion and 2) to provide evidence that the audit was planned and performed appropriately.
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18.
How do you keep up with the latest developments in auditing standards?
How to Answer
This question is to see if you take the initiative to stay current on the latest accounting developments. If you are a CPA, talk about how you use mandatory continuing education requirements to stay up to date on the latest trends and regulations.
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19.
What is the difference between fraud and error?
How to Answer
This is a technical topic covered in the auditing standards under AU-C Section 240. The key difference between fraud and error is that the former is intentional and the latter is unintentional. There are two main types of fraud that an internal auditor should be concerned with: fraudulent reporting and misappropriation of assets (ie theft).
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20.
In an audit, who is primarily responsible for the prevention and detection of fraud?
How to Answer
According to auditing pronouncement AU-C Section 240, a company's management is primarily responsible for detecting fraud and preventing it in the first place by having effective internal controls. An auditor must conduct an audit in accordance with GAAS (generally accepted auditing standards). However, given the limitations of an audit, there is an inherent risk that not all material misstatements will be detected. Given this, an internal auditor's role is integral in giving management confidence in both the financial statements and internal controls.
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21.
What are some ways that internal audit interacts with external auditors?
How to Answer
Auditing standard AU-C Section 322 The Auditor's Consideration of the Internal Audit Function covers what the external auditor's ability to rely on the work of internal auditors. According to the standard, the two parties (internal and external auditors) can: hold periodic meetings, schedule audit work, provide access to the internal auditors' working papers, reviewing audit reports, and discussing possible accounting and auditing issues.
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22.
What are some of the ways that you can show professionalism when out on an internal audit assignment?
How to Answer
In public accounting (as well as many other service-based professions), showing professionalism while interacting with clients is essential. For an internal auditor, colleagues in other divisions should be considered their 'clients'. The interviewer is gauging how much awareness the candidate has.
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23.
How do you manage your manager? In other words, what steps do you take to make sure you get what you need from your boss and make both your lives easier?
How to Answer
Also known as 'managing up', 'managing your manager' is a soft skill that can be developed over time. It essentially means doing whatever is necessary to make your manager's job easier. Some clear-cut benefits of managing up include increased productivity and better working relationships between boss and employee.
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24.
In your opinion, why is it important for organizations to have effective internal controls?
How to Answer
Internal controls are rules, regulations and safeguards that an organization puts in place to ensure integrity of financial information and to prevent fraud. There are several benefits to having robust and effective internal controls, including preventing fraud/theft, improving accuracy of financial reporting, and complying with laws and regulations.
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25.
Describe your experience using ERP and general ledger software systems
How to Answer
An internal auditor will need to be able to navigate ERP and general ledger software systems. Speak specifically to the ERP and other accounting systems you have used and some of the functions you performed. Many job descriptions specifically state which accounting software the company uses. In any event, make sure to highlight that you are quick to learn new software systems.
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