SGS India Audit Associate Interview: Rounds, Questions and Preparation

What the job involves

An Audit Associate at a GCC, consulting firm, or Big 4 in India supports statutory, internal, and process audits for clients across industries. Day to day work includes vouching transactions, testing internal controls, preparing working papers, and drafting audit observations under the guidance of a senior. Freshers typically start on smaller assignments and gradually handle client coordination and fieldwork.

Role and Technical Knowledge

1. 1

   What is the difference between statutory audit and internal audit?

   Explain that statutory audit is required by law to express an opinion on financial statements, while internal audit is a management tool to improve processes and controls. Give one example of each from a company context.

2. 2

   How would you verify the existence of fixed assets during an audit?

   Mention physical verification, checking purchase invoices, comparing with fixed asset register, and reviewing depreciation calculations. Highlight the importance of observing the client's process and documenting findings.

3. 3

   What are the key assertions in auditing for revenue?

   Cover occurrence, completeness, accuracy, cut-off, classification, and presentation. Explain how you would test each assertion using sample invoices and shipping documents.

4. 4

   Explain the concept of materiality in audit.

   Define materiality as the threshold above which misstatements could influence economic decisions of users. Mention that it is often based on a percentage of profit before tax, revenue, or total assets, and that it affects the nature and extent of testing.

Practical Scenarios

1. 5

   You find a payment voucher without a supporting invoice. What do you do?

   State that you would not accept the voucher as valid evidence, ask the client for the missing invoice, and if unavailable, report it as a deficiency to your senior. Emphasise professional scepticism and documentation.

2. 6

   The client is delaying providing bank confirmations. How do you handle it?

   Suggest sending a reminder, escalating to the client's finance head, and documenting the delay. If unresolved, discuss with the engagement manager to consider a modified opinion or alternative procedures.

3. 7

   You notice a large cash transaction just before year-end with no clear business purpose. What steps do you take?

   Say you would examine the transaction's nature, check approvals, and see if it relates to revenue or expense cut-off. Flag it as a potential risk of misstatement or fraud and report to the senior.

4. 8

   How would you test the accuracy of GST input tax credit claims?

   Mention reconciling purchase register with GSTR-2A/2B, checking eligibility conditions, and verifying that credits are not taken on blocked items. Highlight the need to document exceptions and discuss with the tax team.

Behavioural and HR

1. 9

   Tell me about a time you worked in a team to meet a deadline.

   Use the STAR method: describe the situation, your task, the action you took, and the result. Focus on collaboration and how you handled pressure, ideally from a college project or internship.

2. 10

   Why do you want to join a Big 4 or GCC audit role?

   Show awareness of the firm's client base, training, and exposure to diverse industries. Link it to your long-term goal of becoming a CA or a finance professional, and mention willingness to learn and travel.

3. 11

   How do you handle criticism from a senior on your work?

   Demonstrate a positive attitude: listen, ask clarifying questions, correct the work, and learn from it. Give an example from an internship or college where feedback improved your output.

4. 12

   Are you comfortable with frequent travel and long working hours during audit season?

   Answer honestly but positively. Mention that you understand the demands of the role and are willing to adapt, while also highlighting your time management and stamina.

Accounting and Standards

1. 13

   What is the difference between Ind AS and Indian GAAP?

   Explain that Ind AS is converged with IFRS and focuses on fair value and substance over form, while Indian GAAP had different treatments for items like financial instruments. Give one example such as lease accounting.

2. 14

   How do you treat a contingent liability in financial statements?

   State that it is disclosed in notes if probable but not recognised, and recognised only if outflow is probable and can be estimated. Mention the role of legal confirmations and management discussion.

3. 15

   What is the purpose of a trial balance?

   Explain that it lists all ledger balances to check arithmetical accuracy of debits and credits. It is the starting point for preparing financial statements and for audit sampling.

4. 16

   Explain the concept of going concern and how an auditor assesses it.

   Define going concern as the assumption that the entity will continue operations for the foreseeable future. Mention reviewing cash flow forecasts, loan covenants, and management plans, and disclosing any material uncertainty.