Statutory Audit Domain - Frequently
- Asked Technical Interview Questions

Average CTC: 7 to 11 LPA (approx.)

Technical Questions :

• Can you please explain me what do you understand from the audit cycle/process in brief?
• What is materiality and why it is relevant for audit/What is the use of materiality in Audit?
• How is materiality being calculated? Considerations while calculating materiality?
• a) Have you done/heard of controls testing/ IFC in audit? What is it and why it is important?
•  b) Is there any reporting requirement for IFC in audit?
• What is the impact on your audit if the controls are not operating as expected/intended? Will you qualify your audit report directly?
• What were the key observations which you identified during your articleship and how you handled them? What was the final outcome of those?
• a) What are key differences between Ind AS 116 and erstwhile IND AS 17. b) ROU and Lease liabilities concept/calculations c) 2 Exemptions provided by Ind AS 116 ie. Short term leases and Low value leases d) Whether the concept of finance lease and operating lease still there in Ind AS 116?"
• a) Read IND AS 115 thoroughly and how it is appliable for the industry/sector you have worked on.
•  b) What is the 5 step revenue recognition model as per Ind AS 115? 
•  c) Methods of revenue recognition - ie. Point in time and Over time - when which method is applied - 3 conditions.
•  d) Assertions covered while testing revenue and what procedures do you perform while testing revenue/those assertions.
•  e) Cut off procedures - basic Journal entries for cut off."
• Audit procedures for a) PPE (useful lives - Schedule II), Depreciation calculation.
•  b) Trade receivables (including ageing and provision for doubtful debts/ ECL model), 
•  c) Payroll and 
•  d) Revenue testing - Whole process is very very very important but The que mentioned below is something where many candidates get stuck. Please Don't consider that this is the only question which will be asked in revenue. Que - How can you ensure that revenue is not fraudulent or has occurred in real ?
• Ind AS 109 - not the whole IND AS but you should be aware of following at minimum (anything more you can do is anytime better):
• a) What do you mean by Financial instruments?
• b) Basic accounting - like discounting, Amortizing/unwinding of the liabilities and recording interest on regular basis 
• c) Basic Journal Entries
• d) Expected credit loss concept

• 1 - CARO 2020 - key differences between CARO 2020 and 2016? Say que may come like - Tell me any 2 or 3 differences or can be on any specific change as well.
•  2 - Whether CARO is applicable for Audit report on consolidated financial statements.
• 1 - CARO 2020 - key differences between CARO 2020 and 2016? Say que may come like - Tell me any 2 or 3 differences or can be on any specific change as well.
•  2 - Whether CARO is applicable for Audit report on consolidated financial statements.
• Schedule III Amendments - key changes.
• Types of audit reports, opinions and situations when you issue different reports
• Limited review (LR) - what are some of the basic differences between LR and Statutory Audit
• 1 - Procedures performed for testing the cash and bank balances?
•  2 - And what procedures you would perform to ensure these balances actually exists and are not fudged?
• Alternate procedures for confirmations not received - receivables, payables and Specifically Bank? Also what you do after receiving the confirmations?
• What are Audit Assertions/Financial Statements Assertions/Balance sheet and
• Profit and Loss statement Assertions? How is it classified?
• Explain Income Statement Assertions.
• Explain Balance Sheet Assertions.

• What is RAP (Risk Assessment Procedure)?
• What is included in Risk Assessment Procedures?
• What is Audit Risk? Types of Audit Risk?
• What is IFCR (Internal Financial Control Over Reporting)?
• Difference between Internal Audit and External Audit?
• 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? (Mandatory ques -Go through entire SA-320)
• What is the Risk of Material Misstatements? What would you do when you identify any material misstatement?
• What is the first step you take when you start Audit of a new client?
• What are substantive Audit Procedures?
• Explain in brief what is Audit opinion and types of Audit Opinion?
• What is Internal Audit?
• What are controls? How are they different from Procedures?
• What are the objectives of the entity behind the imposition of controls?
• Benefits of Understanding of Internal Control? Limitations of Internal Control?
• What are the deficiencies of control (Specifically asking about Design
• Deficiency and Operating Effectiveness)?
• What are preventive, Detective Control? Give an example.
• What is CARO? No. of clauses in CARO 20? New Additional clauses in CARO
• What are Fixed Asset clause in CARO 20?
• What is sampling? How do you choose samples? Sampling Methods?
• What do you mean by Nature, Timing and Extent of Audit?