KPMG, one of the “Big Four” audit firms, is known for its dynamic and rewarding audit opportunities. Whether you're a fresh graduate or an experienced professional, securing a role at KPMG is an exciting career move. As an audit professional, you’ll be responsible for examining financial records, ensuring compliance, assessing risks, and providing essential financial insights.
However, preparing for an audit interview at KPMG can be challenging without a structured approach. To help you ace your interview, we’ve compiled the top 30 audit interview questions asked at KPMG, along with how to answer them and sample responses to guide you through the process. Whether you’re applying for an audit associate, senior associate, or manager role, these questions will give you an edge in your preparation.
1. Tell me about yourself.
Provide a concise overview of your education, relevant work experience, and why you're interested in audit. Focus on highlighting your interest in the field and any specific skills you have that relate to audit.
Sample answer:
“I have a degree in accounting, and during my studies, I completed internships in financial reporting and auditing. I developed strong skills in financial analysis, internal controls, and accounting principles, which I believe are essential for a role at KPMG. I’m passionate about problem-solving and enjoy the challenges that come with audit work, especially in understanding how businesses operate from a financial standpoint.”
2. Why did you choose audit as your career path?
Explain your interest in financial analysis, compliance, and ensuring transparency in financial reporting. Talk about the intellectual satisfaction of solving complex problems and the importance of accuracy in financial matters.
Sample answer:
“I chose audit because it combines my interest in numbers with my passion for helping businesses maintain transparency and integrity in their financial reporting. I enjoy the challenge of analyzing complex financial data and ensuring compliance with accounting standards. The role allows me to constantly learn and grow while providing essential insights that support organizational success.”
3. What do you understand by auditing?
Explain auditing as the process of evaluating financial statements for accuracy and compliance, assessing internal controls, and providing recommendations to improve efficiency and risk management.
Sample answer:
“Audit is the process of examining a company’s financial records, ensuring they are accurate, complete, and in line with established accounting standards. It involves assessing internal controls to ensure that financial practices are being followed correctly and identifying areas of improvement to enhance financial efficiency and risk management.”
4. What are the key principles of auditing?
Discuss the fundamental principles like independence, objectivity, professionalism, confidentiality, and integrity that guide auditors in their work.
Sample answer:
“The key principles of auditing include independence, which ensures that auditors are free from any bias or conflict of interest; objectivity, meaning the auditor should base their conclusions on facts and evidence; professionalism, which is necessary to perform audits with high standards; confidentiality, which requires auditors to protect the client’s information; and integrity, ensuring that auditors act with honesty and fairness.”
5. What are some of the main audit techniques used?
Talk about techniques like sampling, substantive testing, control testing, and analytical procedures, and how each plays a role in ensuring accurate audit findings.
Sample answer:
“Common audit techniques include sampling, where auditors examine a representative portion of data instead of reviewing everything; substantive testing, which verifies the accuracy of financial statements by directly testing transactions; control testing, which assesses the effectiveness of internal controls; and analytical procedures, where auditors compare financial data to industry trends or prior periods to spot discrepancies.”
6. What is materiality in auditing, and why is it important?
Explain materiality as the threshold for determining whether an error or omission in financial statements could influence the decision-making of a user. Emphasize its role in focusing efforts on significant areas.
Sample answer:
“Materiality in auditing refers to the significance of an error or omission in financial statements that could affect the decision-making process of users. It helps auditors focus on areas that have the potential to impact financial outcomes, allowing them to allocate resources more effectively and ensure that their audit findings are meaningful.”
7. What is the difference between internal and external auditing?
Clarify that internal auditing focuses on evaluating and improving internal controls and risk management within the organization, while external auditing involves verifying financial statements and compliance for external stakeholders.
Sample answer:
“Internal auditing is focused on evaluating and improving an organization’s internal controls, risk management, and operational efficiency. External auditing, on the other hand, involves independently reviewing the financial statements of a company to ensure they are accurate and comply with accounting standards and regulations for external stakeholders like investors and regulators.”
8. How do you approach identifying and assessing risk during an audit?
Discuss how you would assess both inherent risks and control risks by analyzing the company’s financial processes and evaluating potential weaknesses in their controls.
Sample answer:
“I would start by identifying inherent risks, which are the risks that arise from the nature of the business and its environment. I would then assess control risks, which involve evaluating the company’s internal controls to identify any gaps or weaknesses. I’d look for areas that could lead to errors or fraud and focus my audit efforts on those areas to ensure thorough coverage.”
9. What steps do you take to ensure that the audit process is unbiased and objective?
Talk about maintaining independence from the client, following ethical standards, and documenting findings to ensure that conclusions are based on evidence rather than personal biases.
Sample answer:
“To maintain objectivity and avoid bias, I ensure complete independence from the client by adhering to strict ethical guidelines. I document all audit findings and base my conclusions solely on evidence from financial statements and supporting documentation, ensuring my decisions are driven by facts, not personal opinions.”
10. What is the role of an auditor in assessing fraud risk?
Explain that auditors are tasked with identifying potential fraud risks, investigating suspicious transactions, and assessing the adequacy of internal controls in preventing fraud.
Sample answer:
“As auditors, we have a responsibility to identify potential fraud risks within the company’s financial practices. This includes reviewing transaction patterns for any signs of unusual or suspicious activity, assessing the effectiveness of internal controls designed to prevent fraud, and ensuring that management is adhering to ethical standards and regulations.”
11. How do you stay up to date with changes in auditing standards and regulations?
Talk about methods such as continuous professional development, attending workshops, reading professional publications, and participating in industry webinars to stay informed about changes in auditing standards.
Sample answer:
“I stay up to date with auditing standards by regularly attending workshops and webinars hosted by professional bodies like the AICPA and IFAC. I also read relevant publications like the Journal of Accountancy and subscribe to newsletters from regulatory bodies. This helps me stay informed about the latest changes in auditing regulations and best practices.”
12. How do you prioritize your audit tasks during a busy season?
Discuss your approach to time management, prioritizing tasks based on materiality and risk, and ensuring that you meet deadlines without compromising quality.
Sample answer:
“During a busy audit season, I prioritize tasks by first focusing on the areas with the highest materiality and risk. I break down the audit into smaller tasks and allocate time based on their importance. I use project management tools to stay organized and ensure I meet deadlines, while also maintaining a high standard of work.”
13. What are some challenges you’ve faced during an audit, and how did you handle them?
Talk about a specific challenge you encountered in a past audit, how you identified the problem, and the steps you took to resolve it, demonstrating problem-solving skills.
Sample answer:
“During a past audit, I faced challenges with gathering sufficient evidence from a client who was slow in providing necessary documentation. To resolve the issue, I proactively communicated with the client and worked with them to streamline the document retrieval process. I also collaborated with my team to find alternative ways to verify the data, ensuring we met the audit requirements and deadlines.”
14. How would you handle a situation where you disagree with the client on an audit finding?
Explain how you would maintain professionalism, use evidence-based reasoning to support your position, and work collaboratively with the client to address any disagreements.
Sample answer:
“If I disagreed with a client on an audit finding, I would calmly explain my concerns using evidence-based reasoning to support my conclusions. I would approach the situation with professionalism, listening to the client’s perspective, and working with them to find a resolution. If necessary, I would escalate the issue to senior management while maintaining an open line of communication with the client.”
15. What is an audit risk and how do you mitigate it?
Discuss audit risk as the possibility that the auditor may fail to detect significant errors or fraud and describe how you mitigate it through proper planning, testing, and review.
Sample answer:
“Audit risk is the risk that the auditor may fail to detect material misstatements in the financial statements. To mitigate this risk, I conduct thorough planning at the start of the audit to identify high-risk areas, perform extensive testing of transactions and controls, and continuously review findings. I also ensure that the audit team is aligned on the procedures and methodologies used throughout the audit process.”
16. What are the key differences between internal audit and external audit?
Clarify that internal audit focuses on evaluating and improving a company’s internal controls, governance, and risk management processes, while external audit involves reviewing financial statements for accuracy and compliance with standards for external stakeholders.
Sample answer:
“Internal audit is primarily concerned with assessing and improving an organization’s internal controls, risk management, and operational effectiveness. It helps organizations manage risks and improve processes. External audit, however, focuses on independently evaluating the company’s financial statements to ensure they are accurate and in compliance with accounting standards, for the benefit of external stakeholders such as shareholders, regulators, and investors.”
17. What steps would you take if you identify discrepancies in a financial audit?
Discuss how you would identify the discrepancies, investigate further, and communicate findings with the relevant stakeholders. Emphasize the importance of professionalism, integrity, and transparency in addressing the issue.
Sample answer:
“If I identified discrepancies in an audit, I would first investigate the source of the issue by reviewing the relevant documents and transactions. I would then verify the discrepancies by cross-referencing the data with other records. If the issue persists, I would discuss my findings with the client or relevant team members. Transparency and professionalism are key in ensuring that the issue is properly addressed, and I would follow up with clear documentation to support any conclusions.”
18. How do you handle tight deadlines during audit seasons?
Talk about your time management skills, how you prioritize tasks based on materiality and complexity, and the importance of staying organized during high-pressure periods.
Sample answer:
“During audit season, tight deadlines are inevitable. I focus on staying organized by breaking down the audit into manageable tasks. I prioritize tasks based on their importance and the level of materiality. I also communicate regularly with my team to ensure we are on track. Using tools like project management software helps me keep track of deadlines, while maintaining a high standard of work.”
19. Can you explain the concept of audit risk?
Audit risk refers to the risk that an auditor may issue an incorrect opinion on the financial statements, either due to failing to detect material misstatements or being unaware of fraud. Talk about the importance of minimizing audit risk to maintain the integrity of the process.
Sample answer:
“Audit risk is the risk that the auditor may fail to detect material misstatements or fraud in the financial statements, leading to an incorrect audit opinion. To minimize audit risk, we conduct thorough planning, perform extensive testing, and apply professional skepticism throughout the audit process. Understanding the company’s environment and risks allows us to focus on areas with the highest likelihood of material misstatement.”
20. What is a substantive test in auditing?
Explain that a substantive test is designed to verify the accuracy of financial information by examining detailed transactions and balances, ensuring they align with the financial statements.
Sample answer:
“A substantive test involves checking financial transactions and balances to verify the accuracy and completeness of financial statements. The purpose is to detect material misstatements. For example, substantive tests could include confirming receivables or reviewing revenue recognition procedures. This process is essential for ensuring that the financial statements are free from material misstatement.”
21. How would you perform a risk assessment in an audit?
Discuss how you would assess both inherent and control risks by evaluating the company’s internal processes, financial reporting systems, and the broader industry and economic environment.
Sample answer:
“To perform a risk assessment, I would begin by evaluating the inherent risks associated with the business, such as industry-specific challenges, financial volatility, or economic conditions. Then, I would assess control risks by reviewing the company’s internal controls and risk management processes. This includes evaluating whether internal policies and procedures adequately mitigate potential risks and ensure compliance with regulations.”
22. What is sampling in auditing?
Explain that sampling in auditing refers to the practice of selecting a subset of transactions or balances to examine, based on the idea that the sample represents the larger population.
Sample answer:
“Sampling in auditing involves selecting a representative sample of transactions or balances for testing rather than examining every item. This approach is often used when it’s not feasible to audit every transaction. By analyzing a sample, auditors can make conclusions about the entire population. The key is ensuring that the sample is statistically valid and reflects the characteristics of the full population.”
23. How would you perform an audit of accounts payable?
Discuss how you would verify the company’s liabilities by reviewing vendor statements, testing transactions, and ensuring proper reconciliation between the general ledger and subsidiary ledgers.
Sample answer:
“To audit accounts payable, I would start by reviewing the company’s accounts payable ledger and verifying individual transactions against vendor invoices and payment records. I would test the completeness of the payables by reviewing vendor statements and ensuring proper reconciliation between the general ledger and subsidiary ledgers. Additionally, I’d look for any signs of fraudulent activity, such as duplicate payments or unusual patterns in payment timing.”
24. How do you manage and document audit evidence?
Explain how audit evidence is collected, evaluated, and documented to support audit conclusions. Stress the importance of ensuring that the evidence is sufficient, relevant, and reliable.
Sample answer:
“I collect audit evidence through a variety of methods, including reviewing documents, performing tests, and obtaining third-party confirmations. The evidence must be sufficient, relevant, and reliable to support my conclusions. I document all evidence carefully, ensuring that it is clearly organized and properly linked to my findings and the audit report. Documentation also ensures transparency and allows for the audit trail to be reviewed by other auditors or stakeholders.”
25. Can you explain the concept of audit sampling methods?
Discuss various audit sampling methods, such as random sampling, systematic sampling, and judgmental sampling, and when each is appropriate to use.
Sample answer:
“Audit sampling methods include random sampling, systematic sampling, and judgmental sampling. In random sampling, every item in the population has an equal chance of being selected, ensuring unbiased results. Systematic sampling involves selecting every nth item from a population, and it’s useful when there’s a need to cover a wide range of data systematically. Judgmental sampling is based on the auditor’s expertise and is typically used when the auditor needs to focus on specific high-risk areas or items.”
26. What is the importance of audit controls?
Talk about how audit controls ensure accuracy and integrity in financial reporting, safeguard assets, and ensure compliance with legal and regulatory requirements.
Sample answer:
“Audit controls are essential in ensuring that financial reporting is accurate and compliant with regulations. They help safeguard company assets, ensure the reliability of financial statements, and mitigate risks such as fraud or errors. Effective audit controls allow auditors to assess whether a company’s internal processes are functioning as intended, providing assurance that financial reporting is accurate and reliable.”
27. How would you perform an audit of inventory?
Discuss how you would examine physical inventory, compare it with the company’s records, and perform tests to ensure inventory values are accurate and properly reported.
Sample answer:
“To audit inventory, I would start by observing the physical inventory count and comparing it with the company’s records to ensure they match. I would also perform tests such as cut-off testing to verify that inventory transactions are recorded in the correct period and examine internal controls around inventory management. I would assess the valuation of inventory by reviewing pricing methods and ensuring compliance with accounting standards like FIFO or LIFO.”
28. How do you assess fraud risk during an audit?
Explain how you would evaluate the risk of fraud by examining financial statements, reviewing unusual patterns in transactions, and assessing the effectiveness of internal controls.
Sample answer:
“To assess fraud risk, I would look for any red flags in financial transactions, such as unusual patterns of large transactions or discrepancies between different financial records. I would also assess the company’s internal controls to determine whether there are weaknesses that could allow fraud to occur. In addition, I’d consider the company’s industry, history, and management practices, as these factors may increase the likelihood of fraudulent activity.”
29. How would you handle an audit where the client is uncooperative?
Discuss how you would maintain professionalism, follow company policies and ethical standards, and communicate clearly with the client to resolve the issue.
Sample answer:
“If I encountered an uncooperative client during an audit, I would remain professional and ensure that I am clear about the audit requirements and their legal obligations. I would document all communication and escalate the issue to senior management if necessary. I would also offer to assist the client in understanding the audit process and provide clear explanations of the audit’s goals and how it benefits them.”
30. What do you think are the biggest challenges facing auditors today?
Talk about current challenges such as adapting to new regulations, dealing with the increasing complexity of financial systems, and addressing risks like cybersecurity.
Sample answer:
“Some of the biggest challenges facing auditors today include staying up to date with evolving regulations and accounting standards, especially with the introduction of new technologies and financial products. Another challenge is ensuring accuracy and transparency in a world where financial systems are becoming increasingly complex. Additionally, with the rise of cybersecurity risks, auditors must ensure that companies have effective controls in place to protect financial data from cyber threats.”
Conclusion
Preparing for an audit interview at KPMG can be demanding, but by understanding the key principles, techniques, and methodologies in auditing, you can approach the interview with confidence. Familiarize yourself with the technical questions, demonstrate your knowledge of auditing practices, and apply real-world scenarios to showcase your skills.
Good luck with your interview preparation, and we hope you feel ready to tackle the challenges of an audit career at KPMG!
FAQs
Focus on understanding key audit principles, audit procedures, and financial reporting standards. Practice answering both technical questions related to audit practices and situational questions to demonstrate your problem-solving and interpersonal skills.
Key skills include attention to detail, strong analytical abilities, knowledge of auditing standards, effective communication, and the ability to work independently and as part of a team. Familiarity with financial reporting and auditing software is also crucial.
Internal auditing focuses on evaluating and improving a company’s internal controls, risk management, and operational efficiency. External auditing, on the other hand, involves independently reviewing a company’s financial statements to ensure compliance with accounting standards and regulations for external stakeholders.
Common techniques include sampling, substantive testing, control testing, and analytical procedures. These methods help auditors verify the accuracy of financial statements and assess the effectiveness of internal controls.
To assess fraud risk, auditors review financial transactions for unusual patterns, assess internal controls for weaknesses, and evaluate the company’s overall risk environment. They may also perform tests to identify discrepancies and fraudulent activities in financial records.
