Describe a situation where you had to analyze financial statements and reports for accuracy. What did you discover?

Sample answer to the question

In my previous role as an auditor at a public accounting firm, I regularly analyzed financial statements and reports to ensure their accuracy. During one particular audit, I discovered a discrepancy in the company's balance sheet. After further investigation, I found that a significant amount of revenue had been recorded twice, causing an overstatement of the company's financial position. This error was due to a system glitch that resulted in the duplication of sales entries. I promptly reported my findings to the senior management and worked closely with the finance team to rectify the error and adjust the financial statements. This experience highlighted the importance of thorough analysis and attention to detail when reviewing financial reports.

A more solid answer

During a recent financial audit, I had to analyze the company's profit and loss statement in detail. In the process, I noticed a significant increase in the cost of goods sold compared to the previous year. This raised a red flag, as it seemed disproportionate to the company's sales growth. To investigate further, I reviewed the inventory turnover ratio, researched industry benchmarks, and analyzed the company's pricing strategy. It became evident that the company had been experiencing cost inefficiencies and overpaying suppliers. I compiled my findings in a comprehensive report, highlighting the potential cost-saving opportunities. I presented these findings to the senior management, providing recommendations on negotiating better supplier contracts and implementing cost control measures. This experience showcased my analytical thinking skills in identifying anomalies and my ability to effectively communicate complex financial information.

Why this is a more solid answer:

The solid answer provides more specific details about the situation, including the specific financial statement analyzed and the specific issue discovered. The candidate also demonstrates their skills in analytical thinking and attention to detail by explaining the steps they took to investigate further, including reviewing the inventory turnover ratio, researching industry benchmarks, and analyzing the company's pricing strategy. Additionally, the candidate showcases their strong communication and presentation skills by mentioning the comprehensive report they compiled and the recommendations they provided to senior management. However, the answer can still be improved by providing more specific examples of how the candidate utilized their skills in analytical thinking and attention to detail, as well as their communication and presentation skills.

An exceptional answer

In my role as a Senior Auditor at a large corporation, I was assigned to review the financial statements of a subsidiary company. As I analyzed the statements, I noticed inconsistencies in the revenue recognition process. To investigate further, I requested supporting documentation and conducted interviews with the subsidiary's finance team. Through my thorough analysis, I discovered that the company had been recognizing revenue prematurely, inflating their financial performance. This raised concerns about the accuracy of their financial statements and compliance with accounting standards. To address the issue, I collaborated with the finance team to implement a new revenue recognition policy and provided training to ensure compliance moving forward. I also presented my findings and recommendations to the subsidiary's management and the company's executive team. This experience showcased my exceptional analytical thinking and attention to detail, as well as my strong communication and presentation skills.

Why this is an exceptional answer:

The exceptional answer goes above and beyond by providing even more specific details about the situation, including the specific issue discovered (inconsistent revenue recognition) and the actions taken to address the issue (implementing a new policy and providing training). The candidate also highlights their exceptional analytical thinking and attention to detail by mentioning the thorough analysis they conducted, including requesting supporting documentation and conducting interviews. Additionally, the candidate emphasizes their strong communication and presentation skills by mentioning that they presented their findings and recommendations to multiple levels of management. This answer effectively demonstrates how the candidate's skills align with the job requirements and showcases their ability to handle complex financial analysis and communicate the findings effectively.

How to prepare for this question

Brush up on your knowledge of financial statements and accounting principles.
Practice analyzing financial statements and reports for accuracy, paying attention to specific details and anomalies.
Develop your skills in using auditing software and Microsoft Office suite, as they are often used in financial analysis.
Improve your communication and presentation skills by practicing presenting complex financial information in a clear and concise manner.
Stay up-to-date with the latest regulatory changes and industry best practices in financial reporting and internal controls.

What interviewers are evaluating

Analytical thinking and attention to detail
Strong communication and presentation skills