40+ Financial Controller Interview Questions and Answers

Derivative is a financial instrument whose value is derived from an underlying asset or security.

• Types of derivatives include futures, options, swaps, and forwards.

• Futures are contracts to buy or sell an asset at a predetermined price and date.

• Options give the buyer the right, but not the obligation, to buy or sell an asset at a predetermined price and date.

• Swaps involve exchanging cash flows based on different financial instruments.

• Forwards are similar to futures, but are cu...read more

Goodwill is an intangible asset that represents the value of a company's reputation, brand, and customer base.

• Goodwill is calculated as the difference between the purchase price of a company and the fair market value of its net assets.

• Negative goodwill occurs when the purchase price of a company is less than the fair market value of its net assets.

• Negative goodwill is recognized as a gain in the income statement of the acquiring company.

• In case of business combination, goodwi...read more

Financial instruments are assets that can be traded. There are two types: cash and derivative instruments.

• Cash instruments include stocks, bonds, and currencies.

• Derivative instruments include options, futures, and swaps.

• Financial assets are recorded on the balance sheet at their fair value.

• Changes in fair value are recorded in the income statement.

• Hedge accounting can be used to reduce volatility in financial statements.

Individuals filing taxes do not need to follow GAAP or IFRS, but proper accounting practices are essential for accuracy.

• Tax filings can be done using simpler accounting methods, such as cash or accrual basis, rather than full GAAP or IFRS.

• Not maintaining proper books can lead to inaccuracies in tax returns, resulting in potential audits or penalties.

• For example, a small business may use a cash basis for tax purposes, which is simpler than GAAP, but must still track income and...read more

Answering questions related to financial accounting and auditing

• PBDD is calculated by subtracting direct costs from revenue

• Related party refers to a person or entity that has a close relationship with the company

• Contingent liabilities are potential liabilities that may arise in the future

• Audit adjustments are changes made to financial statements during the audit process

• They are done by identifying errors or omissions and making necessary adjustments

The steps suggested in the Revenue recognition standard are identification, performance, and control.

• Identification of the contract with the customer

• Identification of the performance obligations in the contract

• Determination of the transaction price

• Allocation of the transaction price to the performance obligations

• Recognition of revenue when (or as) the entity satisfies a performance obligation

• Control of the goods or services transferred to the customer

Deferred revenue is unearned income, accrual is earned but not yet received, prepaid is paid but not yet used, provision is an estimated expense.

• Deferred revenue is money received for goods or services not yet delivered

• Accrual is revenue earned but not yet received

• Prepaid is payment made for goods or services not yet received

• Provision is an estimated expense that has not yet been incurred

• Examples: Deferred revenue - magazine subscriptions, Accrual - interest income, Prepaid -...read more

Joint venture and associates are two types of business arrangements where companies collaborate and share resources.

• Joint venture is a partnership between two or more companies to undertake a specific project or business activity.

• Associates are companies in which another company holds a significant but not controlling interest.

• Joint ventures involve sharing of profits, losses, and control between the participating companies.

• Associates are accounted for using the equity method...read more

The statement showing financial status of the company is the balance sheet.

• The balance sheet shows the company's assets, liabilities, and equity at a specific point in time.

• It provides a snapshot of the company's financial position.

• The balance sheet is divided into two sections: assets and liabilities + equity.

• Assets include cash, accounts receivable, inventory, and property.

• Liabilities include accounts payable, loans, and taxes owed.

• Equity includes retained earnings and stoc...read more

Financial Controller must communicate effectively with stakeholders to understand their needs and concerns.

• Establish open lines of communication with stakeholders

• Understand the needs and concerns of each stakeholder group

• Maintain transparency and provide regular updates on financial performance

• Address any issues or conflicts promptly and professionally

• Collaborate with stakeholders to achieve common goals

• Build strong relationships with key stakeholders such as investors, board...read more

I stay updated by regularly reading financial publications, attending seminars, and networking with industry professionals.

• Reading financial publications such as The Wall Street Journal and Financial Times

• Attending seminars and workshops on financial topics

• Networking with industry professionals through events and conferences

• Following reputable financial websites and blogs for updates

I have successfully implemented IND AS on Leases and Employee Benefits, handled Tax Audit General questions, and chose Barclays for its reputation and growth opportunities.

• Implemented IND AS on Leases and Employee Benefits, ensuring compliance with accounting standards

• Handled Tax Audit General questions, demonstrating strong knowledge of tax laws and regulations

• Chose Barclays for its reputation as a leading financial institution and its potential for career growth

• Successfully...read more

Financial reporting preparation involves compiling and presenting financial information to stakeholders.

• Gathering financial data from various sources

• Organizing and analyzing the data to create financial statements

• Ensuring compliance with accounting standards and regulations

• Communicating the financial results to stakeholders

• Preparing reports for management decision-making

• Examples: Balance sheet, income statement, cash flow statement

Cashflow statement shows the inflow and outflow of cash in a business over a specific period of time.

• Cashflow statement is divided into three main activities: operating, investing, and financing.

• Operating activities include cash received from sales, payments to suppliers, and salaries paid to employees.

• Investing activities include cash spent on purchasing assets like equipment or investments like stocks.

• Financing activities include cash received from issuing stocks or bonds, ...read more

Bank reconciliation statement is a process of matching the balance in the bank account with the balance in the company's accounting records.

• Bank reconciliation statement is prepared to identify any discrepancies between the bank statement and the company's accounting records.

• It helps in identifying any errors or omissions made by the bank or the company.

• The process involves comparing the bank statement with the company's cash book and making necessary adjustments.

• Examples of ...read more

Budgeting is a plan for future expenses and revenues, while financial forecasting is an estimate of future financial outcomes.

• Budgeting involves setting financial goals and creating a plan to achieve them.

• Financial forecasting involves predicting future financial outcomes based on past data and current trends.

• Budgeting is usually done on an annual basis, while financial forecasting can be done on a monthly or quarterly basis.

• Budgeting is more focused on controlling expenses a...read more

Deferred revenue is reconciled by comparing the beginning and ending balances, adjusting for any changes during the period.

• Start by comparing the beginning and ending balances of deferred revenue accounts.

• Identify any changes in the period, such as new revenue recognized or revenue that was previously deferred being recognized.

• Adjust the balances accordingly to ensure they match the recognized revenue for the period.

• Ensure that all adjustments are properly documented and supp...read more

Sales provision entry is a journal entry made to account for potential future losses on sales.

• Sales provision is a liability account on the balance sheet.

• It is created when there is a likelihood of returns, discounts, or warranty claims on sales already made.

• The entry involves debiting the provision for sales account and crediting the relevant expense account (e.g. provision for sales returns).

The entry for the sale of a fixed asset involves recording the proceeds received and removing the asset from the balance sheet.

• Debit the Cash or Bank account for the amount received from the sale

• Credit the Fixed Asset account for the original cost of the asset

• Credit the Accumulated Depreciation account for the total depreciation accumulated on the asset

• Any difference between the sale proceeds and the net book value of the asset is recorded as a gain or loss on sale of fixed a...read more

I believe in teamwork as it fosters collaboration, enhances problem-solving, and drives better financial outcomes.

• Teamwork encourages diverse perspectives, leading to innovative solutions. For example, collaborating with the accounting team can uncover cost-saving opportunities.

• Effective communication within a team ensures that everyone is aligned with financial goals, reducing errors and improving efficiency.

• In my previous role, I led a cross-functional team to streamline bu...read more

I manage funds effectively by creating detailed budgets, monitoring expenses, and maximizing returns.

• Create detailed budgets to allocate funds appropriately

• Monitor expenses regularly to ensure they are within budget

• Maximize returns by investing wisely and minimizing unnecessary costs

I handle corporate governance by implementing policies and procedures to ensure compliance and ethical practices.

• Developing and implementing corporate governance policies and procedures

• Ensuring compliance with regulatory requirements and industry standards

• Establishing internal controls and monitoring systems

• Promoting transparency and accountability

• Providing training and education on corporate governance principles

• Regularly reviewing and updating governance practices

• Collaborat...read more

Derivatives are financial instruments whose value is derived from an underlying asset or group of assets.

• Types of derivatives include futures contracts, options, swaps, and forwards.

• Derivatives can be used for hedging against risk, speculation, or arbitrage.

• Examples of derivatives include stock options, commodity futures, interest rate swaps, and currency forwards.

Depreciation is the decrease in value of an asset over time due to wear and tear, obsolescence, or other factors.

• Depreciation is a non-cash expense that is recorded on the income statement.

• It is used to allocate the cost of an asset over its useful life.

• Depreciation methods include straight-line, declining balance, and units of production.

• For example, a company may depreciate a vehicle over 5 years, spreading the cost evenly each year.

• Depreciation reduces the value of an asse...read more

I manage cost cutting by analyzing expenses, identifying inefficiencies, negotiating with vendors, and implementing cost-saving measures.

• Analyze current expenses to identify areas for potential cost savings

• Negotiate with vendors for better pricing or terms

• Implement cost-saving measures such as reducing waste, optimizing processes, or renegotiating contracts

• Monitor and track expenses regularly to ensure cost-cutting efforts are effective

Operating lease is a type of lease agreement where the lessee uses an asset for a specific period without ownership rights.

• Operating lease is a short-term lease agreement where the lessee uses an asset for a specific period without ownership rights.

• The lessor retains ownership of the asset and is responsible for maintenance and repairs.

• Operating leases are commonly used for equipment, vehicles, and real estate.

• The lease payments are treated as operating expenses and are tax-d...read more

Finalization of CTC and joining date are important aspects of the hiring process.

• CTC should be finalized based on the candidate's experience, skills, and market standards.

• Joining date should be mutually agreed upon by the candidate and the company.

• CTC and joining date should be communicated clearly to the candidate in the offer letter.

• Any negotiations regarding CTC or joining date should be handled professionally and transparently.

• Timely finalization of CTC and joining date c...read more