Deloitte Audit Associate Interview Questions and Answers

The fraud triangle explains the three elements that lead to fraudulent behavior: opportunity, pressure, and rationalization.

• Opportunity: Weak internal controls can allow fraud to occur, e.g., an employee manipulating financial records.

• Pressure: Financial difficulties or personal issues may drive individuals to commit fraud, such as needing money for medical bills.

• Rationalization: Perpetrators justify their actions...read more

CARO 2020 outlines key reporting requirements for auditors to enhance transparency and accountability in financial statements.

• Clause 3(i): Details of fixed assets - Auditors must verify the existence and condition of fixed assets.

• Clause 3(ii): Inventory verification - Requires auditors to assess the physical verification of inventory.

• Clause 3(iii): Loans and advances - Auditors must report on the nature and purpos...read more

Equity decreases must be debited.

• Equity is a credit balance account, so when it decreases, it must be debited to reduce the credit balance.

• Debiting equity reduces the owner's or shareholder's equity in the business.

• Examples of equity decreasing transactions include paying dividends, recording losses, or issuing treasury stock.

Operating expenses are costs incurred in running a business, while COGS are expenses directly related to producing goods or services.

• Operating expenses include salaries, rent, utilities, and marketing expenses.

• COGS include the cost of raw materials, labor, and manufacturing overhead.

• Operating expenses are recorded on the income statement, while COGS is deducted from revenue to calculate gross profit.

• Operating expe...read more

Petty cash book is used for small cash transactions while cash book is used for all cash transactions.

• Petty cash book is used for small cash transactions like buying office supplies or paying for small expenses.

• Cash book is used for all cash transactions including receipts and payments.

• Petty cash book is maintained by a petty cashier while cash book is maintained by the main cashier.

• Petty cash book is usually a si...read more

Bank Reconciliation Statement is a document that matches the bank balance with the company's balance.

• It is used to identify any discrepancies between the two balances.

• It includes items such as outstanding checks, deposits in transit, and bank fees.

• A practical example would be comparing the company's records of deposits and withdrawals with the bank statement to ensure accuracy.

• Any differences found are then invest...read more

Audit is a systematic and independent examination of financial statements, records, operations, and performance of an organization.

• Audit is a process of evaluating an organization's financial and operational activities.

• It involves examining financial statements, records, and transactions to ensure accuracy and compliance with laws and regulations.

• Auditors provide an independent opinion on the fairness and reliabil...read more