25 Staff Auditor Interview Questions & Answers
1. Identify a time when you made a mistake and the actions you took to correct it.
How to Answer
Everyone makes mistakes, so don't be tempted to say you don't! This is a good opportunity to show that you don't let a bad situation become worse. It is an opportunity to speak to your honor and integrity.
Answer Example
"One time at internship last summer, I caught a formula error in a file that I had already sent to a client. Even though I was embarrassed, I knew that the mistake needed to be corrected. I immediately told the intern manager what had happened and asked for her advice. We called the client and explained what had happened, and they were fine with us sending the corrected file."
2. Explain the steps involved in a bank confirmation process and what it helps evaluate.
How to Answer
This question dives into a common responsibility for first year staff on audits. Bank confirmations test the existence, ownership and accuracy of bank accounts. Answering this question correctly will show that you paid attention in class and are ready to take on responsibilities right away.
Answer Example
"Bank confirmations are a key test for auditing cash. Confirming bank accounts involves compiling a list of the clients bank accounts from the balance sheet and then sending letters to the banks to confirm the balances. By completing these procedures, the existence, accuracy and ownership of the bank accounts on the client's balance sheet are properly tested."
User-Submitted Answer
"Verify account information: The bank will verify account information to ensure the accuracy of the transfer or transaction. This includes verifying information such as the name, address, and account number of the account holder.
Confirmation of transaction amount: The bank will confirm the amount of the transaction to ensure the accuracy and completeness of the transaction. This means that the bank will check for any errors or unusual transaction amounts.
Confirmation of account balance: The bank will check if the account balance is sufficient to execute the transaction. If the balance is insufficient, the bank may reject the transaction or offer the customer other options.
Confirming security: The bank performs security checks on transactions to ensure that no unauthorized transactions have taken place. This may include checking the customer's identity and transaction history.
Execute the transaction: Once the bank confirms all the necessary steps, it will execute the transaction or transfer.
The bank confirmation process helps assess the transaction's security, accuracy, and integrity. Through this process, the bank can ensure that only authorized personnel have access to the account and that only authorized transactions can be executed. In addition, the bank confirmation process protects both the customer and the bank by reducing the risk of incorrect transactions."
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Marcie Wilmot Reviewed the Above Answer
Excellent! You have provided a thorough and accurate description of all the steps involved in a bank confirmation process. Any interviewer will be highly impressed. Amazing job!
3. 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.
Answer Example
"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."
User-Submitted Answer
"Protecting Organizational Assets: Internal controls ensure that organizational assets are safe from theft, damage, or misuse. By establishing effective monitoring, auditing, and audit mechanisms, internal controls can help organizations reduce risk and protect organizational assets.
Improving the reliability of financial reporting: Internal controls ensure that an organization's financial reporting is accurate, complies with applicable financial reporting standards and regulations, and provides transparency regarding the organization's financial position and business activities. This helps to increase the confidence and trust of investors and other stakeholders in the organization.
Compliance with laws and regulations: Internal controls ensure that the organization complies with applicable laws, regulations, and requirements, including regulatory requirements, industry standards, and tax regulations. This helps the organization avoid legal risks and fines and maintains the organization's reputation.
Promote operational efficiency: Internal controls promote operational efficiency and increase the productivity and effectiveness of the organization. By ensuring that an organization's business processes are smooth and efficient and that resources are properly allocated, internal control can help an organization reduce costs and waste.
In summary, effective internal control is critical to the sound operation and sustainability of an organization. It can help organizations reduce risks and losses, improve efficiency and productivity, and protect the organization's reputation and interests."
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Marcie Wilmot Reviewed the Above Answer
Wow! It definitely sounds like you have a thorough understanding of the importance of internal controls. Excellent job!
4. 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.
Answer Example
"I am a firm believer in the benefits of managing my manager. At the end of the day, I want to make the 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."
User-Submitted Answer
"First, I will identify common goals for my boss and me. I think the premise of making both our lives easier is that we have a common goal, and secondly, I will communicate with my boss regularly. I think the process of cooperation because of the different working styles of each person may lead to misunderstanding of information, so I think it is very important to communicate in a timely manner. The most important thing is that I will take the initiative to show my value so that my boss can see what I am good at doing, and make him feel comfortable to give me the task."
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Marcie Wilmot Reviewed the Above Answer
Excellent! Identifying common goals, communicating effectively and regularly, and taking the initiative to show your value are all great ways to ensure you work well together. Is there an example you can include here of a time when you built a strong relationship with a manager? Great job!
5. What are some of the ways that you can show professionalism when on an audit engagement?
How to Answer
In public accounting (as well as many other service-based professions), showing professionalism while interacting with clients is essential. Since professional behavior may not be obvious to someone who is new to the workforce, the interviewer is gauging how much awareness the candidate has.
Answer Example
"It is extremely important to display professionalism when we are out in the field conducting audits at the client's place of business. First and foremost, I know that I must look the part by adhering to the appropriate dress code. On some engagements, a suit is appropriate. At others, business casual attire. Secondly, I know I must act professionally. This means speaking respectfully to all personnel, whether it is the client's CFO or a security officer. 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 the firm's reputation."
User-Submitted Answer
"I believe it is important to first comply with auditing standards and regulations, this includes the requirements of impartiality, integrity, confidentiality, independence, skill, discretion, and prudence. Secondly having professional knowledge and skills this includes knowledge and skills in finance, tax, audit, risk management, etc.
Most importantly Maintain objectivity and independence Avoid any situation that may affect the outcome of the audit or violate audit standards. Finally, I believe there is a need to provide clear and accurate reports that reflect the findings and conclusions of the audit."
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Marcie Wilmot Reviewed the Above Answer
Awesome! This is a strong answer that shows the many ways you would convey professionalism while on an audit engagement. Excellent.
6. What is the auditor's responsibility when planning an audit?
How to Answer
Auditing standard AU-C Section 300 Planning an Audit covers what the auditor's responsibility is during the planning phase of the audit. The engagement partner and other key members of the audit team should be involved. As a staff auditor, you will be heavily involved in the planning process, so it's important to brush up on the requirements detailed in the standard.
Answer Example
"During the planning phase of an audit, the engagement partner and other key engagement team members should establish an understanding of the terms of the engagement, assess the continuance of the client relationship and develop an overall audit strategy that sets the scope, timing and direction of the audit."
User-Submitted Answer
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Marcie Wilmot Reviewed the Above Answer
To answer this question, discuss how the objective of an auditor is to plan an audit that will be performed effectively. Hence, the auditor will set the scope, timing, and direction of the audit.
7. 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, the client'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.
Answer Example
"Ultimately, it is the client'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 auditors, we are responsible for conducting our audit in accordance with generally accepted auditing standards. However, there will always be an inherent risk that the limitations of an audit prevents us from detecting all material misstatements."
8. How do you mitigate and manage stress?
How to Answer
The life of an auditor can be stressful, especially during "˜tax season' which runs from January through April. The interviewer wants to gain insight into how you react to stressful situations.
Answer Example
"Due to tight deadlines and the demands of the 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."
9. 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 auditor should be concerned with: fraudulent reporting and misappropriation of assets (ie theft)
Answer Example
"The main difference between fraud and error is that fraud is intentional and errors are unintentional. As 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."
10. 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.
Answer Example
"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, after obtaining my CPA license, I plan on staying up to date with new standards with continuing education courses."
11. 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 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. But if this is not the case for you, it is likely expected that you will obtain your CPA license within the first couple of years of employment at the firm.
Answer Example
"Becoming a CPA is a major goal for me in my career, as it will help me grow in the accounting profession. I plan on sitting for all four parts of the exam within the first eighteen months of employment with the goal of becoming a licensed CPA within two years."
12. 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
Answer Example
"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."
13. How would you handle working in an increasingly remote environment?
How to Answer
This is a question to gage 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.
Answer Example
"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."
14. Why do you want to be an 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.
Answer Example
"Since I was young, I have always liked math and have been good with numbers. I took an accounting class in high school and really enjoyed it - the concepts came naturally to me. As I researched careers in accounting, auditing really appealed to me because it is almost like being an accounting "˜detective'. I think working as an auditor will be a great way to apply my skill set in math and accounting to an exciting career."
15. Do you have experience handling massive amounts of data? Give an example of how you used data to solve a problem?
How to Answer
Due to the advancement of technology, auditors have the ability to take massive amounts of data and analyze it. For example, an auditor may be asked to review exported data from a client's general ledger. Give a specific example of a time when you used data to answer a question or solve a problem.
Answer Example
"Yes, in my internship I was tasked with taking a data export file with 65,000 rows and summarizing by customer type. Utilizing Excel skills I developed in school, I first filtered the data on the required population. I then created a pivot table that allowed me to summarize the data according to the criteria. As technology continues to advance, I understand that it is expected that I can work with Big Data and I feel very comfortable doing so."
16. Are you open to travel with this position?
How to Answer
The topic of travel will almost certainly come up during your interview. Almost any auditing role involves some travel, so 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.
Answer Example
"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 just out of school, 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."
17. During an audit, you discover one of the firm's largest clients uses a questionable methodology to value receivables. What would be your course of action?
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.
Answer Example
"If I was working on an audit and discovered a practice that I found questionable, I would immediately voice my concern to the audit manager. As a new auditor, perhaps I was misinterpreting the situation. If not, my manager would provide good counsel on next steps to resolve the situation. The most important thing is to be honest and ethical - two character traits that I am proud to say I possess."
18. 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.
Answer Example
"The Sarbanes-Oxley Act was passed into legislation in 2002 in response to fraud scandals like Enron. The goal of SOX was to protect investors and employees from fraudulent reporting. As a result, there is a greater onus on auditors to provide assurance that financial statements are free of material misstatement. For example, auditors are now required to test a company's internal controls and report on their effectiveness. Additionally, there are stricter requirements for financial statement disclosures."
19. How would you deliver excellent customer service to clients?
How to Answer
Being able to interact and communicate with clients is a key skill for a new auditor, and also shows that the candidate possesses the ability to grow into larger roles within the firm such as manager and director. Even new auditors will need to email and call clients, so be sure to mention that you have attention to detail and are responsive.
Answer Example
"I believe that being able to communicate with clients 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 the client in order to build trust in my abilities. Finally, I would act professionally while at the client's place of business."
20. Why do you want to work at ABC Public Accountants?
How to Answer
This question is an opportunity to show you have done your research on the firm. Be sure to mention some of the firm's biggest clients, as well as some of the industries they specialize in.
Answer Example
"I believe starting my career at ABC Public Accountants would be a very rewarding experience. First, the firm specializes in industries that I find interesting, such as aerospace and technology. It would be a very exciting opportunity to work with clients such as XYZ Aeronautics and American Technologies. Secondly, I have heard about ABC's amazing culture and how they promote continuing education and mold leaders. Alumni from my school have talked about ABC's Leaders of Tomorrow mentorship program, which sets the firm apart from others. For these reasons, this auditor role at ABC was very appealing to me."
21. How do you feel your education has prepared you for the 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.
Answer Example
"I have been fortunate enough to study various accounting subjects at a great business school, including auditing, financial accounting and taxation. In addition to book learning, the accounting curriculum also allowed us to interact with accounting and auditing professionals on a regular basis, as well as obtain on-the-job immersive experience as part of a robust co-op program. The knowledge and experience obtained from this coursework provided me with a solid foundation for my future career. Of course, there will always be more to learn as I grow in the profession."
22. 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 accounting firm 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.
Answer Example
"The main differences between the three types of engagements are the scope of services performed and the level of assurance provided. A compilation is simply financial statement preparation by the auditor based on representations from management. In a compilation, the auditor is not required to provide any assurance that the financial statements are accurate and free from errors/fraud. A review is more involved, and requires the auditor to perform analytical procedures and inquiries of management to ascertain that information contained in the financial statements is correct. In a review, the auditor provides limited assurance that the financial statements do not require any material modifications. In an audit, the auditor provides assurance that the financial statements are free of material misstatement or errors. This requires the auditor to expand the scope of the engagement to test ending balances, perform tests of internal controls, acquire third party confirmations and physically confirm assets, among other procedures."
23. 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.
Answer Example
"Audits can be required for a variety of reasons. Most commonly, lenders and investors demand audits to ensure that an organization's accounting and financial reporting is free of material misstatement or errors. Some organizations, such as not-for-profits, may be required to have an audit performed by a regulatory body or grant stipulation. In some cases, an organization may choose to have an independent audit performed as good practice."
24. Where do you see yourself in five years?
How to Answer
DO highlight that you want to continue growing professionally and help the firm grow. DO NOT say you want the interviewer's role. The interviewer is basically probing to see that you have goals for your career.
Answer Example
"If I am fortunate enough to be hired for this role, my goal in the near term is to learn as much as possible about our clients as well as the technical components of the auditing profession. I would like to study for and pass the CPA exam in the next two years so I can contribute even more to the firm. I would also like to be viewed as a leader in the firm by my colleagues. As long as I am growing professionally and acquiring new knowledge and skills, I believe I would be very happy."
25. What qualities or skills do you believe a good 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. Some key areas to hit are ethics (honesty/integrity), ability to interact with clients (communication skills, people person), ability to limit mistakes (focused/attention to detail) and ability to get to the correct answer (skeptical/inquisitive/problem solver)
Answer Example
"First and foremost, I believe an auditor should be honest and have great integrity. Without this, it will be impossible for the person to perform the role effectively. Next, the auditor should have the education and technical skills to perform the job. They should have exceptional people skills as they will be required to communicate effectively with clients, colleagues and external parties. Finally, they should have an inquisitive mind and a keen attention to detail."