8 Common Internal Audit Interview Questions
- April 27, 2021
- Posted by: sunaina rani
- Category: Uncategorized
An internal auditor examines all issues related to a company’s activities and provides independent and objective evaluations. This job requires extensive knowledge about a particular business and the industry it operates in.
In this article, we’ll provide sample interview questions, information about the requirements to become an internal auditor and tips for an internal auditor interview.
What is an internal auditor?
An internal auditor is a professional who evaluates a company’s financial and business practices. They usually have an accounting degree, finance or a related business field. Internal auditors should be organized and tactful and have strong critical thinking skills.
To become an internal auditor, understand risk management, compliance auditing, corporate governance, control principles and audit planning. For a senior position, you may need to become a Certified Internal Auditor (CIA) or get Certification in Risk Management Assurance (CRMA) by taking a written exam. If you are looking for a job like this, you should be prepared for a screening interview, a behavioral interview and technical questions.
Common questions for internal audit interviews
Here are some example questions and answers to help you prepare for an internal audit interview:
- Why did you apply for this position?
- Why are internal audits necessary?
- Explain the steps to prepare for and perform an internal audit.
- Can you describe substantive tests?
- What should you do after an internal audit?
- What is ISO 9001:2000?
- What are the differences between regulatory or statutory audits and performance audits?
- What are the purposes of ISA 610 and INTOSAI standards?
1. Why did you apply for this position?
Employers ask this question because they want to discover how much you know about their company and the position you applied for. Before your interview, do some research and learn about the most important areas of the company and what departments need an internal audit most. That way, you can give detailed, enthusiastic reasons why you are interested in the job.
Tell your interviewer about your passion for optimizing business processes and discuss any relevant experiences. If you have worked as an internal auditor before, mention your previous successes. For instance, you could talk about how you saved your past employer money and made the business more efficient.
Example: “Your business is growing, and using my internal auditing skills to help you become even more successful sounds very exciting. Your company also offers excellent benefits, and I have spoken to current employees who love the friendly atmosphere.”
2. Why are internal audits necessary?
Interviewers ask this question because they want to make sure you understand the benefits of internal audits and exactly how they can help businesses. An internal audit helps management plan, organize, direct and control their operations. By doing so, companies can make the changes needed to comply with laws and regulations, increase their profits and achieve their goals faster.
Example: “An internal audit lets you know which parts of your company are successful and which ones need some improvements. It can help you reduce costs, increase profits and make your business more appealing to investors. It also makes creating monitoring procedures, streamlining business processes and following laws easier.”
3. Explain the steps to prepare for and perform an internal audit.
Interviewers will often ask this question to make sure you understand all aspects of the internal auditing process. A skilled internal auditor should also make sure the authority of the audit team is well-established to improve cooperation from those being audited. Auditors should decide which departments will need internal audits and how often. They should prepare and distribute a yearly audit schedule and make sure the audit complies with government regulations, quality standards and internal procedures and systems.
Before starting an internal audit, the treasurer of the business must give all financial records to the auditor. These include check registers, bank statements, deposit slips, canceled checks, bills, receipts, expense vouchers, tax returns and the treasurer’s reports. Auditors should also organize a meeting to identify risks and discuss the plan, scope and purpose of the audit. Finally, they should review all documents and develop a report that will drive action.
Example: “I always get to know my team members and department leaders well so we can work together smoothly during the audit. I also prepare a yearly audit schedule to give management plenty of time to get ready for each audit. Then, I discuss the purpose and scope of each audit with the relevant departments. After I receive the financial records I need from the treasurer, I work with my team to identify the areas that need improvement. Finally, I compose a concise report with recommendations for improvements.”
4. Can you describe substantive tests?
Your interviewer could ask this question to make sure you know why reviewing documents thoroughly is important. Substantive testing examines financial statements and supporting documentation to look for errors or discrepancies. It helps companies support assertions that financial records are complete, valid and accurate. It also reassures inventors and prevents fraud.
Example: “During substantive testing, auditors examine all the documents they receive very thoroughly. Catching and correcting a small error that seems insignificant to others could save your company thousands of dollars and help people learn to prevent future mistakes. Meticulous substantive testing also assures the accuracy of all financial records. During my first audit, I will check everything in detail. In future auditing cycles, I will focus on areas that seem questionable based on data from the financial statements.”
5. What should you do after an internal audit?
Like the previous question, employers ask this to give you a chance to show your knowledge. Auditors should meet with the people involved to discuss nonconformances. A nonconformance is an issue, a problem or a violation of company regulations that could cause a business to lose money. Reports, data, test results, intellectual property and more could be nonconforming. Internal auditors should also set reasonable deadlines for corrective actions, get feedback about their team members and keep thorough records of completed corrective actions.
Example: “I would discuss nonconformances with the departments audited and make sure that managers understand which corrective actions they should take. I would also get feedback about my performance and my team’s performance. I would make sure the deadlines for corrective actions are reasonable and keep detailed records of the changes that managers make.”
6. What is ISO 9001:2000?
This question tests your knowledge of international management standards. The International Organization for Standardization (ISO) gives specifications for products and services to ensure excellent quality, safety and efficiency. They are essential for international trade, and their headquarters are in Geneva, Switzerland.
ISO 9001:2000 specifies quality management requirements, helping companies provide consistent products and services to meet customer and regulatory requirements. It helps keep people satisfied and defines the processes needed to improve businesses. Employees should understand product requirements from customers, legal regulations, and any additional needs. ISO 9001:2000 also requires well-documented, up-to-date, readily available information about each product.
Example: “ISO 9001:2000 is a list of specifications for products and services from the International Organization for Standardization or ISO. Following it can keep customers satisfied and increase quality, safety and efficiency. ISO 9001:2000 also requires companies to keep plenty of up-to-date information about each product or service, making internal auditors’ jobs much easier.”
7. What are the differences between regulatory or statutory audits and performance audits?
Employers will likely ask this question to make sure you have a wide range of skills and can complete different types of internal audits based on the company’s needs. A regulatory or statutory audit looks at the financial reporting or budget reporting of the audited business, and it contains the auditor’s opinion about what changes the company should make.
A performance audit examines programs or projects along with their functions and their daily operations. It can also look at the management systems and procedures of government or nonprofit entities to make sure the organization is using resources efficiently and effectively. It contains a statement of assurance about the items tested for compliance instead of the auditor’s opinion.
Example: “A regulatory or statutory audit should focus on financial reporting. My regulatory or statutory audit would include my thoroughly researched opinions about the changes your company should make to increase its efficiency and profitability. In contrast, a performance audit is more about daily operations and individual programs or projects. Instead of an expert opinion, it should contain a detailed statement of assurance with all the facts that managers need. That way, they can form their own opinions about which improvements are best.”
8. What are the purposes of ISA 610 and INTOSAI standards?
Employers ask this question to make sure you are familiar with auditing organizations, regulations and working with other auditors. ISA stands for the International Standards for Auditing, and ISA 610 gives guidelines about how internal and external auditors should work together. The International Organization of Supreme Audit Institutions (INTOSAI) is a group of government entities. Its members include the Chief Financial Controller, the Comptroller General and the Auditor General Offices of many countries.
The INTOSAI started in Havana, Cuba in 1953, and its headquarters are in Vienna, Austria. It produces standards and guidelines about regulatory or statutory audits and performance audits.
Example: “ISA 610 is part of the International Standards for Auditing. It gives useful guidelines about how internal and external auditors can work with each other efficiently and smoothly. The International Organization of Supreme Audit Institutions or INTOSAI is a group of government offices and organizations that produces standards and guidelines about regulatory or statutory audits and performance audits.”