Top Audit Interview Questions and Answers | Internal Auditing Interview Questions

Summary

This video provides a comprehensive overview of auditing, covering its definition, various types, key purposes, and practical aspects like vouching and internal audit checklists. It also delves into differences between internal and external audits, accounting vs. auditing, and introduces relevant qualifications and standards like ACA, ISO 9001, ISA 610, and INTOSAI. Additionally, it explains management audit, decommissioned liability, steps before auditing, the five Cs of internal audit, IRS tax audits, and common audit findings.

Highlights

What is Auditing?00:00:09

Auditing is the examination or inspection of something to ensure accuracy, validity, and compliance with rules, usually conducted by an independent party. Its purpose is to identify discrepancies, errors, or fraud and provide assurance that information is reliable.

Different Types of Auditing00:00:47

Various types of audits include Financial, Internal, Operational, Compliance, Information Technology, Forensic, Environmental, and Social audits. Other notable audits are external, IRS tax, payroll, pay, value for money, and special audits. The specific type depends on organizational needs and scope.

Auditing in Depth and Reasons for an Audit00:03:03

Auditing in depth is a detailed approach examining financial and operational systems beyond just financial statements. Audits are conducted for compliance, financial reporting, and risk management. Triggers include regulatory requirements, suspicion of fraud, changes in ownership, and random selections.

What is Vouching?00:04:17

Vouching is an audit process to test the validity of transactions and balances by examining underlying source documents to ensure they are valid and properly recorded, thus confirming the accuracy and reliability of financial statements.

ACA Qualifications00:05:05

ACA stands for Associate Chartered Accountant, a professional qualification awarded by the ICAEW. It's a highly recognized qualification in accounting and finance, often required for audit careers.

Internal vs. External Audit00:05:30

Internal audit focuses on improving organizational operations and is conducted by employees. External audit provides assurance to stakeholders on financial statement accuracy and reliability, performed by third-party auditors.

Examples of Internal Audit00:06:01

Examples include compliance audit, internal financial audit, performance audit, technology audit, construction audit, special investigation, and informational systems audit.

Accounting vs. Auditing00:06:27

Accounting involves recording, classifying, and summarizing financial transactions to produce financial statements. Auditing is the independent examination of these statements to assess their reliability and accuracy.

Management Audit00:06:49

A management audit reviews a company's planning, organizing, actuating, and controlling processes against successful operation norms, examining past, present, and future performance to ensure maximum results.

Steps Before an Audit Process00:07:21

Before an audit, steps include planning the scope and objectives, preparing documentation, determining the audit's purpose, communicating with relevant parties, conducting a risk assessment, and preparing the audit team. These ensure an efficient and effective audit process.

Five Cs of Internal Audit and Decommissioned Liability00:08:28

The five Cs of internal audit are Compliance, Control, Confidentiality, Communication, and Competence. Decommissioned liability is the financial obligation to retire or remove an asset, including costs for dismantling, decontamination, disposal, and site restoration.

Internal Audit Checklist00:09:24

An internal audit checklist ensures all essential areas are covered, including financial statements, warrants, vouchers, bills, receipts, disbursements, checks, bank reconciliation, income, risk management, treasurer's reports, and taxes.

ISO 9001 2000, ISA 610, and INTOSAI Standards00:10:01

ISO 9001 2000 was a previous QMS standard focused on customer satisfaction and continuous improvement. ISA 610 guides external auditors on using internal auditors' work. INTOSAI (International Standards of Supreme Audit Institutions) provides guidance for public sector auditors on financial, performance, and compliance audits.

Regulatory/Statutory Audits vs. Performance Audits00:11:36

Regulatory or statutory audits focus on compliance, while performance audits prioritize performance improvement.

IRS Tax Audit00:11:54

The IRS (Internal Revenue Service) is the U.S. federal government's tax collection agency, responsible for enforcing federal tax laws and funding government programs.

Common Audit Findings00:12:45

Common audit findings include inaccurate financial statements, non-adherence to GAAP, non-compliance with laws, lack of documentation, inefficiencies, inadequate risk management, and improper transaction classification.