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Internal Auditor Interview
Questions

25 Questions and Answers by
| Brian Schuchart is a CPA with fourteen years of experience, including nine years in financial strategy roles. He has held the roles of auditor, staff accountant, manager of financial planning and analysis and senior finance partner.

Question 1 of 25

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?

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Internal Auditor Interview Questions

  1. 1.

    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?

      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.

      Brian's Answer

      "I am a firm believer in the benefits of managing my manager. At the end of the day, I want to make the internal audit engagements we work on together run as smoothly as possible. One area where I really focus on is communicating and prioritizing workload on a regular basis. This ensures that I'm always working on the highest-priority items. Another thing that is crucial is understanding my manager's style. For example, do they like regular check-ins by email throughout the day, scheduled catch-up meetings, etc. Then I tailor my communication to their style."

  2. 2.

    In an audit, who is primarily responsible for the prevention and detection of fraud?

      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.

      Brian's Answer

      "Ultimately, it is a company's management that is responsible for preventing and detecting fraud within their organization. They can achieve this by implementing effective internal controls and committing to a culture of honesty and ethical behavior. As internal auditors, our jobs are extremely important as by carrying out our responsibilities, we are giving management confidence in both the financial statements and the company's internal controls."

  3. 3.

    How do you keep up with the latest developments in auditing standards?

      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.

      Brian's Answer

      "I stay up to date in various ways. First, in school we learned the latest and greatest pronouncements and standards. I also subscribe to e-newsletters from the American Institute of Certified Public Accountants for auditing standards updates and the Financial Accounting Standards Board for updates to generally accepted accounting principles. Additionally, since I am a CPA, I stay up to date with new standards with continuing education courses."

  4. 4.

    What is the purpose of audit documentation?

      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.

      Brian's Answer

      "There are a couple of important purposes of audit documentation. First, the documentation needs to support the conclusion that the auditor reached in the audit report. Secondly, the documentation serves as evidence that the audit was planned and performed in accordance with generally accepted auditing standards."

  5. 5.

    Are you open to travel with this position?

      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.

      Brian's Answer

      "I am definitely open to travel. I saw on the job description that travel is estimated to be 25%-50%, which I am comfortable with. Since I am still growing in the profession, I think traveling would be a fantastic opportunity for me to immerse myself in the role and learn as much as possible from my colleagues."

  6. 6.

    How would you deliver excellent customer service to colleagues within the organization?

      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.

      Brian's Answer

      "I believe that being able to communicate with our colleagues effectively will be key from day one. Whenever I communicate with anyone, I make sure that I am responsive. If I can't give someone the information they are seeking right away, I make sure to let them know the anticipated timing. If there are unexpected delays, I provide updates. I would also make sure I review any documents or emails I send to other departments in order to build trust in my abilities. Finally, I would act professionally while out in the field at our company's various locations."

  7. 7.

    What is your experience with presenting to senior executives?

      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.

      Brian's Answer

      "I have ample experience getting in front of leadership and presenting. In my previous role as senior accountant, I would present to the CEO, CFO and other senior leaders during our monthly Finance Review meetings. I always felt the need to prepare in advance for any questions that might arise, and would often circle back promptly on follow-ups that developed during those meetings."

  8. 8.

    Describe your experience using ERP and general ledger software systems

      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.

      Brian's Answer

      " In my last role, I used SAP to pull down transaction-level data to perform analytical procedures. In previous accounting roles, I used Hyperion to book journal entries and run queries. Since I have an underlying understanding of accounting, I am easily able to learn new software packages and I welcome that challenge."

  9. 9.

    In your opinion, why is it important for organizations to have effective internal controls?

      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.

      Brian's Answer

      "Internal controls are vital for organizations of all sizes. First and foremost, internal controls are necessary to be in compliance with all relevant laws and regulations. Additionally, strong internal controls are necessary to prevent fraud and theft by employees. Finally, strong and effective internal controls result in improved timeliness and accuracy of financial reporting, which makes for smoother audits."

  10. 10.

    What are some of the ways that you can show professionalism when out on an internal audit assignment?

      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.

      Brian's Answer

      "It is extremely important to display professionalism when we are out in the field conducting internal audit procedures at the company's various locations. First and foremost, I know that I must look the part by adhering to the appropriate dress code. For some assignments, a suit is appropriate. For others, business casual attire. Secondly, I know I must act professionally. This means speaking respectfully to all personnel, whether it is the company's CFO or a personal assistant. I shouldn't take personal phone calls or play music loudly. As a general rule, I shouldn't do or say anything that would harm our team's reputation."

  11. 11.

    What are some ways that internal audit interacts with external auditors?

      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.

      Brian's Answer

      "As an internal auditor, I would interact with the company's external auditors in several ways. First, we would work together to schedule audit work and hold several planning and review meetings. I would also provide access to our working papers and other files as needed. Additionally, we would discuss any accounting issues discovered during the audit."

  12. 12.

    How do you mitigate and manage stress?

      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.

      Brian's Answer

      "Due to tight deadlines, travel and other demands of the internal auditor role, stress is inevitable. However, there are steps I take to help mitigate stress. First, I try to be as organized as possible. I am constantly prioritizing my workload to make sure time-sensitive tasks are handled before they are due. Next, I try to leave work at work. When not at work, I enjoy hiking, cooking and traveling. Being able to enjoy these activities makes me feel calmer and rejuvenated at work."

  13. 13.

    What is the difference between fraud and error?

      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).

      Brian's Answer

      "The main difference between fraud and error is that fraud is intentional and errors are unintentional. As internal auditors, we are primarily concerned with financial misstatements that are caused by fraudulent financial reporting and misstatements that are caused by theft and other misappropriation of assets."

  14. 14.

    Have you sat for the CPA exam or are you planning to sit for the CPA exam?

      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.

      Brian's Answer

      "Becoming a CPA is a major goal for me in my career, as it will help me grow in the accounting and auditing profession. By starting my career in public accounting, I have already satisfied the hours-worked requirement for obtaining a CPA license. Additionally, I have already sat for and passed two parts of the exam. My goal is to sit for and pass the remaining two parts of the exam within the next twelve months."

  15. 15.

    How would you handle working in an increasingly remote environment?

      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.

      Brian's Answer

      "I have experience working remotely. At my internship, we were able to work from home on Fridays since it was summer. I enjoyed working from home, and was able to stay on task and communicate effectively with my team members. There were some ground rules I implemented, such as maintaining regular hours, keeping my morning routine as if I was going to the office, and scheduling breaks to take care of non-work related tasks. I also had a standing meeting with my manager and team members every morning to discuss priorities for the day. Working remotely would not impact my productivity or the timeliness with which I correspond with colleagues."

  16. 16.

    Why do you want to be an internal auditor?

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  17. 17.

    What is the purpose of the internal audit function?

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  18. 18.

    What would you do if during an audit you found an accounting practice that was suspicious?

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  19. 19.

    Explain how the Sarbanes-Oxley Act changed the auditing profession.

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  20. 20.

    How do external auditors rely on the work of internal auditors?

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  21. 21.

    How do you feel your education has prepared you for the internal auditor role?

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  22. 22.

    What are the differences between an audit, a review and a compilation?

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  23. 23.

    Why do companies require audits?

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  24. 24.

    Where do you see yourself in five years?

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  25. 25.

    What qualities or skills do you believe a good internal auditor should possess?

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