[mike_terror]

I’ve been out of school for close to a year now and I don’t have much real world experience related to accounting because I’ve been working with a company that is unrelated to the field. I plan to soon look for another job in the auditing field and want to sharpen up and prepare on my interviewing skills.

I have interviewed with a couple of companies in the past (names which I won’t disclose), but I’ve been out of the game for a while and took a long break. I’ve kept a note to myself on a handful of questions that were quite difficult for me to answer and made me sweat during the interview! These questions were from my own experience and were quite technical being related to accounting / auditing and made me sweat!!

For those of you who have mastered the art of interviewing OR have auditing experience, can I ask how you guys would have answered these questions during an interview? These questions were really challenging for me in the past and really stumped me when I was expected to answer right on the spot. I have no actual work experience so it was hard for me to pull information that I didn’t use outside of school. I want to be well prepared before I go in to any other interviews in the future. If anyone can help me out, I’d greatly appreciate it!

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1) The city manager is concerned about the operation of the city’s public transit system. He would like to determine if the transit system is an efficient operation and is meeting the needs of the city’s residents. What type of information you would gather to complete this assignment, where you would obtain this information, and why this information is vital for the city manager’s needs.

2) The college president is concerned about the operation of his school’s bookstore. He would like to determine if the bookstore is meeting the needs of the students and is an efficient operation. Give thorough descriptions of the types of analyses you would conduct to complete this assignment and how these analyses could aid the college president in drawing conclusions about the school bookstore.

3) If you were auditing company XYZ and they said that they earned $XXX amount of capital gain, but they lost all their documents because of a fire, how would you verify this?

4) If you are auditing a tax return and the client has expenses that they said were for business related expenses (supplies, equipment, meals & entertainment, travel), how would you verify this?

5) How would you verify a company’s revenue account and expense account, what documents would you need? What are the steps and procedures?

6) How long would it take to complete a financial audit? (I’m not sure if this was the exact question, it was a while back and I was nervous)

7) How would you convert a company from a fiscal year basis to calendar year basis and vice versa.

8) If you were given multiple assignments and different deadlines, how would you organize yourself to handle this situation?

9) How would you explain technical procedures and information to someone who is not familiar or as technical as you are?

10) Sometimes you may be situated to give unfavorable news and results to a client and they become very upset and angry, how would you handle this?

[jenuno01]

LOL @ questions 1-7 are you applying for a Director of Audit position?!

Class of 2012

[mike_terror]

@ jenuno01 – haha, sadly no, I'm not apply for a Director of Audit position. These were all from the past when I applied for an entry level audit positions / tax auditor position.

Trust me, it was pretty brutal when I sat down and was asked these questions.

[Anonymous]

I thought the same thing as Jenuno…Back in the old days I had an interview for an audit/tax position and they never asked me anything about it, except if I had taken Audit in school.

[Texas27]

@mike_terror…. Those questions are absolutely ridiculous for an interview.

To give you some of my background info before I give you advice on these questions. I have interviewed with 15-20 firms/companies including all of the Big 4 (audit and tax). Most of these I also did a second interview with as well. I also work for career services part-time for two years at the school I am attending conducting mock interviews, critiquing resumes and cover letters, and giving career advice to students in the business college. Needless to say I have a lot of experience with employers, interviewing, resumes, and every other thing you might need to know about getting a job.

With that being said, I have never once heard of an employer asking those type of questions in an entry level position. A few exceptions to this are Deloitte consulting and private equity firms which do tend to ask business related questions or put together a proposal/idea. Don't get me wrong, I believe you when you said you were asked those questions, but it is highly unlikely that you will be asked questions like that again. I thought the interviews I had with accounting firms were much easier compared to other companies (non-accounting firms) because they were more of a conversation rather than a typical “tell me about a time when…” interview. I was never once asked anything in all my interviews about accounting other than why I chose it and what classes I had taken. Most employers don't expect you to know anything when you are coming in as an entry level employee and they understand that they will have to train you. All second interviews and some first interviews are solely for determining if you are a fit with their company. I would not worry about getting those type of questions again unless you are interviewing for an experienced position like a manager or director.

It is possible that some smaller firms or companies may require you to take a test that might ask these types of questions but rarely, if ever, will they ask them in the interview.

BEC - Feb 2012: 80
AUD - Feb 2012: 84
FAR - Apr 2012: 78
REG - May 2012: 90

Thanks Becker!

[Keely]

These questions make me want to cry.

BEC: (4/2012) 88
AUD: (5/2012) 91
REG: (8/2012) 82
FAR: (1/2013) 78 🙂

VA CPA #42010

[FARoadAhead]

Frankly speaking, technical questions asked during an interview is a horrific experience especially when there is a panel of interviewers just staring right at you in dead silence. I was asked some technical auditing questions during an interview at one time and I knew the answer I just couldn't spit it out because I was thinking too much on how to word it so I ended up saying “I don't know” and I just felt so defeated that I might as well just walked out of that room right then and there. Obvioiusly, I didn't get the job. The way you present your answer in a confident manner without BS is a huge plus because not only are they testing your knowledge but also your ability to perform under pressure. With a tight and competitive job market these days you better bring your A-GAME!

[mike_terror]

I'm glad I'm not the only one who feels so intimidated by these technical interview questions.

@FARoadAhead – that's exactly what happened to me, I was being asked these similar questions in front of 3 other interviewers!

These questions were not all from 1 interview, but from maybe 3-4 different interviews that I have had within the year. I felt so defeated and thought that I must have been the dumbest interviewee in the eyes of the interviewer.

Even if the chances would be slim for me to be asked these questions again in the future, I would feel much much more comfortable if I knew the answer and could be prepared for those “just in case” moments. I think it'll be beneficial for others candidates who plan to start sending out their resume and having interviews too.

If anyone can help out on the questions that would be great, doesn't have to be wordy, but on what the correct answers would be. Short and precise would be appreciated too! Especially questions #1 to #7. Help another A71 brother out!

[Jennifer241]

How are you suppose to answer these questions with little to no experience?!? I have never had an interview like that and have 15 years experience.

1) The city manager is concerned about the operation of the city's public transit system. He would like to determine if the transit system is an efficient operation and is meeting the needs of the city's residents. What type of information you would gather to complete this assignment, where you would obtain this information, and why this information is vital for the city manager's needs.

Review their audit of the city’s public transit system and analytically compare it to prior years. Also research other cities audits (they are public information), of similar size, that have a city public transit system and compare the expenditures by line item to see if there are any significant variances that could be looked into.

2) The college president is concerned about the operation of his school's bookstore. He would like to determine if the bookstore is meeting the needs of the students and is an efficient operation. Give thorough descriptions of the types of analyses you would conduct to complete this assignment and how these analyses could aid the college president in drawing conclusions about the school bookstore.

Not sure on this one, number wise you would look at their profitability and if its to high then maybe they need to lower the costs passed onto the students. Find ways to provide their current services for fewer costs to the bookstore.

3) If you were auditing company XYZ and they said that they earned $XXX amount of capital gain, but they lost all their documents because of a fire, how would you verify this?

Send a confirmation to the company that sent out the capital gain.

4) If you are auditing a tax return and the client has expenses that they said were for business related expenses (supplies, equipment, meals & entertainment, travel), how would you verify this?

Review receipts and invoices that have the business name on them and that the items purchased seem to apply to the type of industry they are in. (Unless you’re an IRS agent, why would you want to do this?)

5) How would you verify a company's revenue account and expense account, what documents would you need? What are the steps and procedures?

Ask the source of the revenue, then ask for the paperwork that backs up those numbers. i.e. If they are grant revenue, ask to see the grant request and award letter. If they are rents, ask to see the rental contract so you can compute the rental income for the year.

Ask what types of expenses the company needs to do its business. Also review the industry standard for what types of expenses are typically found in that industry. Review any contracts they may have with subcontractors, leases, etc.

6) How long would it take to complete a financial audit? (I'm not sure if this was the exact question, it was a while back and I was nervous)

Every financial audit is unique in and of itself. If they keep good records and the bookkeeping is clean, then it will take you less time than one that is not as kept. Also each firm that does their audit has different procedures so it’s difficult to answer this question directly. It also depends on your audit staff size. Guesstimates: Small clean audits, typically 20-40 hours. Medium audits, 40-120 hours. I have not done a large audit.

7) How would you convert a company from a fiscal year basis to calendar year basis and vice versa.

1-11 month depending on which year they are changing to and from, short year tax return. Then file the documents legally changing their tax year, and change year end in accounting software.

8) If you were given multiple assignments and different deadlines, how would you organize yourself to handle this situation?

Request a priority status from my employer, then FIFO. This gets tricky with multiple managers giving you different workloads. Sometimes you may have something on your desk that will take a couple of hours and everything else will take days or weeks to finish, I would finish the shorter thing during overtime hours.

9) How would you explain technical procedures and information to someone who is not familiar or as technical as you are?

Throughout your explanation, have them ask questions if they don’t ask anything, then ask them “Am I being clear, or does this make sense?” Stop frequently to give them time to digest what you are saying and interject if they need to.

10) Sometimes you may be situated to give unfavorable news and results to a client and they become very upset and angry, how would you handle this?

Schedule another meeting to go into more detail and/or re-evaluate things if they feel that is necessary. Often times a client just needs time to think about what you just told them. Coming in the next day can give them time to calm down and come in with a fresh mindset. Always be understanding of how they are feeling and try to help them so that this doesn’t happen in the future. Clients like to know that you are there to help them.

AUD - Jan 9,13 Pass
REG - Aug 30,13 Pass
BEC - Oct 26,13 Pass
FAR - Dec 4,13 Pass

Licensed CPA in the state of Oregon

[Anonymous]

Dang! The worst question I have ever gotten on an interview was “How do you deal with difficult people?” This is brutal! But I'll give it a shot. I don't know if I could have come up with these answers on the spot. I've had time to think and plan an answer.

Q1&2 – Both questions use the word “efficient”, when ever I hear this word I immediately think about revenues versus expenditures. It the venture profitable or a sink hole. I audit small governmental agencies so I'm thinking in terms of a small town and not a city with a transit system. Most people complain about their water bill but they don't realize that sewer is usually included in that bill. Sewer takes a lot more chemicals and a lot more money to treat than water. Sewer is always a sink hole but sometimes the Water dept can show a profit. The city manager and university president would want to know if they had a money maker or a sink hole. They would also want to know where they could cut costs to turn a sink hole into a money maker, i.e. salaries, benefits, supplies, etc.

Q3 – I would ask if the investment was publicly traded. If so it would be fairly simple, but with a lot of leg work, to determine if they owned it and what their gain should have been. If not publicly traded, then I would ask if the business was still in operation and interview them. If it is property, then I would seek the advice of a licensed appraiser to determine it's value.

Q4 – I would ask the client to provide some sort of documentation of their expenses. If they couldn't produce the documentation then I would explain the potential ramifications of deducting expenses with no support.

Q5 – To verify revenue I would look at their billing system, their shipping documents, Accounts Receivable and send out confirmations. To verify expenses, I would look at actual bills, send out confirmations and analyze A/P for unusual amounts and vendors that have had large payments made to them, especially on the last day of the year.

Q6 – The length of time it takes to complete an audit depends upon the records of the client, the type of business they are involved in, and your familiarity with the clients internal controls.

Q7 – Very, Very Carefully! Sorry! This one stumped me.

I'm so very, very, very glad I have a job right now! Good Luck!

[Mayo]

Double u, tee , eff… Seriously?

My audit interviews were like basic behavioral questions…if I were asked that I would ask if I can change my application to sales :p

Mayo, BBA, Macc

[jenuno01]

Interview technical questions I've had for audit (straight out of college):

What are the basic Financial Statements?

Explain Retained Earnings.

What is the normal balance of a revenue account?

What would you consider “material”?

What is the purpose of an audit function?

These questions were in person….I also had to take an auditing computerized test.

Class of 2012

[KassiusKlay]

…

Form is temporary, class is permanent.

Audit 4/19/12 - 77
BEC 5/31/12 - 75
FAR 8/30/12

[mike_terror]

Thank you both Jennifer241 & Kricket for taking a stab at it!

[tua022012]

Hi,

Thanks very much for this comment. It help me to think about my ideals.

Tks again and pls keep posting.

[jelly]

Wow. These types of interview questions are pretty out of whack with most entry-level auditor positions that students apply for. I can see a few of these being asked if you're on the experienced side, particularly on the junior-to-senior cusp, but just a few. I can see gov't positions asking for these as screeners, but they'd still only be appropriate for someone with 6-12 months of experience.

My own personal experience has been that for places that ask endless technical questions, there's something wrong going on, i.e. the place has poor leadership/management (b/c management sent in an interviewer with no direction, and this is the best they could do), little to no training, high turnover, and is generally a dungeon to work in.

Same goes with being asked about difficult situations and people: Well then, are you implying that you have bad, messy, shady clients, or that you have annoying managers no one likes to work with, but the firm can't get rid of either for political/financial reasons? (You can ask how typical and frequently encountered such scenarios are, internally within the company, and with the company's clients. Wait for the interviewer's reaction and answer!)

As an interviewee, feel free to dig in to get an idea of what the company management and politics might be like, and more/less flip the interview questions in the other direction to make it a behavioral interview for your own advantage. For instance, what kind of training or mentoring does the company provide, and the turnover rate, i.e. “How did this position become available?” If the interviewer hasn't already said so in the beginning, feel free to ask how long they've been with the firm, as well as the staff and senior accountants, and how each of these people got hired (Referrals? Related to someone in the company? Went to school together? Share a hobby?).

Ask about the client base, i.e. where/how are they getting new clients from, and what kind of areas the company is looking to grow or shrink.

Unless the interviewer(s) is very good at poker, the reaction to these questions will likely give you an idea as to what's under the hood. If you have separate interviewers, you can use this to your advantage and compare answers; other than for extraordinarily strict business secret reasons, the one who seems to give you vague or uncertain answers is probably out of the loop for some reason, and is fair indication of general poor management (in theory, everyone should be on the same page and know what's going on!). You can also pick this up during group interviews, based on the glances and reactions you get after you ask your questions, i.e. who seems to know and say the most, and who isn't chiming in with supportive replies?

Couldn't pass again!

[Author]

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