What Interviewers Look For
Interviews for accounting and audit roles test three things:
- Technical competence: Can you apply accounting standards correctly?
- Professional judgment: Can you navigate ambiguity and explain your reasoning?
- Ethical reasoning: Do you understand professional responsibilities?
Interviewers want to hear why you chose an answer, not just the answer itself. They're testing your thinking, not your memory.
Technical Accounting Questions
Goodwill = £10M consideration less £7M fair value of identifiable net assets = £3M. That is the partial goodwill method; if non-controlling interest is measured at fair value under IFRS 3.19, goodwill is grossed up and the number changes.
On impairment, the point the interviewer is testing is that goodwill is never tested on its own. It generates no cash flows independently, so IAS 36.80 requires it to be allocated to the cash-generating units expected to benefit from the acquisition. You then test each of those CGUs as a whole: carrying amount including allocated goodwill against recoverable amount, which is the higher of fair value less costs of disposal and value in use.
If there is a shortfall, IAS 36.104 allocates it to goodwill first, then pro rata across the other assets in the unit, subject to the floors in IAS 36.105. Testing is annual regardless of indicators, plus whenever an indicator arises.
Two things candidates get wrong. First, comparing goodwill to a recoverable amount of its own, which cannot be calculated. Second, forgetting that a goodwill impairment can never be reversed (IAS 36.124), unlike impairments of most other assets.
Why this matters: impairment is a ceiling test, not a remeasurement to fair value. It confirms the carrying amount is recoverable. It does not write the asset up when the business does well.
Same five-step model, written jointly, and the core recognition principle is identical. Neither is stricter as a whole. Say that first, then name real differences rather than inventing one, because the interviewer is checking whether you know the boundary of your own knowledge.
Contract modifications are not a difference. IFRS 15.18 to .21 and ASC 606-10-25-10 to 25-13 are the same words. The genuine ones are narrow:
1. Collectability reassessment. ASC 606-10-25-7 gives detailed guidance on when to recognise cash received under a failed contract; IFRS 15.15 to .16 is briefer and reaches the same place by a different route.
2. Licence renewals. ASC 606-10-55-58C bars revenue on a renewal before the renewal period begins. IFRS 15 has no equivalent rule.
3. Shipping and handling. ASC 606 offers a policy election to treat post-transfer shipping as a fulfilment cost. IFRS 15 does not.
4. Sales taxes. ASC 606 permits a practical expedient to present all such taxes net. IFRS 15 requires assessment agent by agent.
5. Non-public entity reliefs in ASC 606 that have no IFRS counterpart, and interim disclosure differences.
Why this matters: the honest answer, "they are converged, and here are the four or five places they are not," beats a confident wrong one. Manufacturing a difference is the failure mode interviewers watch for.
Lease payments = 5 × £100k = £500k total. Discount at 5% IBR:
PV of lease payments = £100k × 4.3295 (PVAF at 5%, 5 years) = £432,950.
Liability = £432,950. Each year, accrue interest at 5% on the opening balance and reduce the liability by the £100k payment. Depreciate the right-of-use asset straight-line over five years, or over the useful life if ownership transfers.
State your assumptions out loud. That 4.3295 factor assumes payments in arrears. Office rent is usually payable in advance, which gives a factor of 4.5460 and a liability of £454,600, with the first payment leaving the liability immediately. Interviewers give credit for naming the assumption; they mark down candidates who reach for a number without checking.
And the asset is not always equal to the liability. IFRS 16.24 builds the right-of-use asset from the liability plus payments made at or before commencement, initial direct costs, and dismantling or restoration costs under IAS 37, less lease incentives received. They match only when all four of those are nil.
Why this matters: lease accounting is a high-risk audit area, and the mechanics are easy. What separates candidates is whether they notice the inputs they were not given.
Audit & Professional Scepticism
Frame it as two separate questions. Did control transfer on 29 December, and if it did, was the transaction price measured correctly?
On control (IFRS 15.38). Shipment is not the test. The indicators are present right to payment, legal title, physical possession, risks and rewards, and customer acceptance. If the terms are ex-works and title and risk passed at the loading bay, control transferred in December and the December entry stands. If they are delivered duty paid and the goods were still in transit at 31 December, control had not transferred and the revenue is simply premature.
On a right of return, correct the common error. A right of return does not defer revenue. IFRS 15.B21 treats it as variable consideration: recognise revenue for the amount you expect to be entitled to, constrained under IFRS 15.56, and set up a refund liability under B21 plus a right-to-recover-goods asset under B25 at former carrying amount less recovery costs. So the December entry is not reversed in full. It is remeasured.
On the January call. Under IAS 10.3(a), a cancellation two days after year end is an adjusting event if it provides evidence of a condition that existed at 31 December. If the customer had already signalled it, or the sale was structured to hit a December target, that is evidence of a year-end condition and the estimate of expected returns has to reflect it.
Procedures:
1. Read the contract for Incoterms, acceptance clauses and return rights.
2. Trace the despatch note and carrier documentation to establish where the goods were at midnight on 31 December.
3. Test the returns provision against historical return rates for that customer and product.
4. Review post-year-end credit notes and correspondence for side agreements. A £2M order cancelled inside 48 hours in the highest-risk area of the audit is a fraud-risk indicator under ISA 240, not a routine cut-off item.
Why this matters: Revenue is the highest-risk audit area. Interviewers want to see you ask the right questions and challenge management, not accept initial explanations.
Steps:
1. Ask management for supporting documentation (invoice, approval, memo).
2. Trace to the GL and identify the accounts affected (e.g., Dr Inventory, Cr Payables).
3. Obtain and review the original business transaction (PO, receipt, invoice).
4. If documentation is missing, request management to provide it or investigate the entry as a potential misstatement.
5. If the entry is unsupported, propose an adjustment to reverse it or request more evidence.
Why this matters: Professional scepticism means you don't accept explanations without evidence. Manual entries near year-end are fraud risk areas. Interviewers want to see you press for documentation.
Ethics & Professional Judgment
Materiality is not just quantitative; it's qualitative too. A £100k misstatement may be immaterial to profit but material if it:
− Affects compliance (debt covenants, regulatory ratios)
− Relates to management compensation
− Involves fraud or related parties
My response: I would ask my manager to reconsider, showing the qualitative factors. If they insist, I would escalate to the audit partner or Ethics Hotline. As a professional accountant, I have a duty to act in the public interest, not to compromise audit quality for client relationships.
Why this matters: This tests your professional values. Interviewers want to see you have integrity and understand that ACCA membership comes with ethical obligations, not just technical skills.
Real-World Scenarios
Scenario 1: Acquisition Integration A client acquires a competitor. Post-acquisition, the acquired company's customers leave. How would you assess goodwill impairment?
Model answer: Customer attrition is an impairment indicator under IAS 36.12(g), so test now rather than waiting for the annual date. Identify which CGU or group of CGUs the goodwill was allocated to on acquisition, then compare that unit's carrying amount to its recoverable amount. Obtain the post-acquisition projections and hold them against the assumptions in the acquisition model: if the deal was priced on a customer base that has since walked, the value in use falls with it. Watch for management substituting new growth assumptions to plug the gap, which IAS 36.34 requires to be reasonable and supportable, and which the auditor should test against the entity's own historical accuracy.
Scenario 2: Provision Timing A client announces a restructuring with a plan but doesn't communicate it to employees until Q2. When does the provision get recognised?
Model answer: Under IAS 37.72, a restructuring provision needs a detailed formal plan and a valid expectation raised in those affected, either by starting to implement the plan or by announcing its main features. A board decision alone is not enough (IAS 37.75). So on these facts, Q2.
US GAAP reaches a similar answer by a different route, and candidates often state the old rule. SFAS 146, now ASC 420, deliberately removed commitment to an exit plan as the trigger in 2002. For one-time termination benefits, ASC 420-10-25-4 requires the plan to be approved, the affected employees identified, the benefit terms specified, and the plan communicated to employees. Communication is the pivot under both frameworks. The residual difference is that ASC 420 recognises other exit costs, such as contract termination, only when the liability is actually incurred, which can push parts of the charge later than IAS 37 would.
Role-Specific Questions
For audit candidates: "Tell me about a time you discovered a misstatement and how you challenged management."
For corporate finance candidates: "Explain a time you prepared financial projections. How did you build credibility in your assumptions?"
For tax candidates: "How would you identify aggressive tax positions? What's your threshold for escalation?"
Interview Prep Tips
- Know IFRS/ASC cold: Have three or four standard references (IFRS 15, IFRS 16, IAS 36, IAS 37) at your fingertips. Be able to cite paragraphs.
- Prepare examples from your work: Have three or four real scenarios you've encountered. Practice explaining each in about two minutes.
- Understand the "why": Don't just recite rules. Explain the business purpose (why we impair goodwill, why revenue timing matters).
- Show professional scepticism: When asked a question, ask clarifying questions back. "What's the business purpose?" "Who approved this?" "Do we have evidence?"
- Use the ACCA code: Reference ACCA values (integrity, competence, professional behaviour) when discussing ethics.
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About the author — Usman Qureshi (ACCA)
Usman Qureshi is a Chartered Certified Accountant (ACCA). He writes the interview and career guides published on this site.
Not an ACCA publication and not endorsed by ACCA. Interview formats are set by individual employers and vary by firm, role and jurisdiction. For the requirements of ACCA membership itself, and for the Code of Ethics and Conduct, go to accaglobal.com. Technical answers here reference the standards in force at the review date and are general guidance, not advice on any specific transaction.
Real-Life Case Study: Preparing for a Big 4 Audit Interview
Scenario. "Aisha", a part-qualified ACCA candidate with two years in a small practice, applies for an audit associate role at a Big 4 firm. Her first-round competency interview asks: "Tell me about a time you found an error in a client's records."
What worked. Rather than a vague answer, she used the STAR structure: Situation (a client's trade payables ledger did not reconcile to supplier statements), Task (investigate a £40k difference), Action (traced unrecorded invoices and a duplicated payment), Result (adjusting entry proposed, control weakness reported to the manager). She then linked it to professional scepticism and the audit assertion of completeness.
Takeaway. Interviewers score evidence of behaviour, not opinions. Prepare three or four STAR stories that each cover several competencies (scepticism, teamwork, deadline pressure) so you can flex them to whatever is asked.
Illustrative composite scenario for educational purposes. Figures are indicative and do not represent any specific company.