Audit technical questions
"What is the difference between external audit and internal audit?" External audit: independent examination of financial statements to give an opinion on whether they present a true and fair view — legally required above certain company thresholds, governed by ISAs. Internal audit: an assurance function within an organisation reviewing governance, risk management, and internal controls — governed by IIA standards. External audit has a legal mandate and focuses on financial statements; internal audit scope is broader and risk-based. "What is materiality in audit and how is it calculated?" Materiality is the threshold above which a misstatement could influence a reasonable user. Benchmarks: 5% of profit before tax, 1% of revenue, 0.5-1% of total assets. Performance materiality (50-75% of overall) is used during testing. Trivial errors below clearly trivial thresholds (typically 5% of overall materiality) are not accumulated.
Risk assessment questions
"Walk me through how you would assess audit risk for a new client." Audit risk = Inherent risk x Control risk x Detection risk. Inherent risk: susceptibility to misstatement before controls (industry, complexity, management integrity). Control risk: risk controls will not prevent or detect misstatements. Detection risk: risk audit procedures will not detect misstatements — the only risk the auditor controls, managed through procedures and sample sizes. Higher inherent and control risk requires lower detection risk (more extensive testing). "What are fraud risk indicators you look for in a client?" The fraud triangle: incentive (pressure to meet targets), opportunity (weak controls, management override), rationalisation (culture of aggressive accounting). Red flags: unusual journal entries late in the period, revenue recognition at period-end, related party transactions at non-market terms.
Behavioral questions for auditors
"Tell me about a time you challenged a client on an accounting treatment." Show professional scepticism: you identified the area, what standard was at issue, how you raised it professionally, and how it resolved. Include what the impact would have been unchallenged. "Describe a time you worked under significant time pressure to meet a deadline." Audit is deadline-driven. Show how you prioritised, escalated where necessary, and maintained quality standards despite pressure.
Audit qualifications and career path
External auditors in the UK qualify as ACA (ICAEW) or ACCA, typically via training contracts at Big Four (Deloitte, PwC, EY, KPMG) or mid-tier firms (BDO, Grant Thornton). Qualification takes three years alongside exams. Internal auditors may hold CIA (Certified Internal Auditor), CISA (IT audit), or a chartered accountancy qualification. Career paths span industry, consultancy, and specialist risk functions.