Audit Interview Questions: Technical & Behavioural

What mid-tier firms actually test in interviews

Big 4 interviews at junior level rely heavily on competency frameworks, case studies, and assessed group exercises. Mid-tier European firms (Mazars, BDO, Grant Thornton, Baker Tilly, Forvis Mazars, and the SRA member firms in the Netherlands) do something different. They ask you technical questions and expect technical answers.

The reason is practical. A Big 4 firm has structured training programmes that will teach you the methodology over your first two years. A mid-tier firm with 15 audit professionals and 60 clients needs you producing reviewable working papers faster. The interview filters for people who can already think through an audit problem, not people who will learn to think through one over the next 18 months.

This means the preparation that works for a Big 4 interview (practise STAR answers, memorise the firm's values, prepare two questions to ask the partner) is necessary but insufficient for a mid-tier interview. You also need to be able to answer questions like "walk me through how you'd test revenue recognition on a percentage of completion contract" with specific ISA references, specific procedures, and a specific sample approach. If your answer sounds like a textbook summary, the interviewer notices. If it sounds like you've done it on an engagement, you're ahead of 90% of candidates.

Technical questions: associate level

Associate-level technical questions test whether you understand the core audit concepts well enough to apply them, not just define them. The interviewer isn't looking for a perfect answer. They're looking for structured thinking and a willingness to reason through uncertainty.

What is materiality and how would you calculate it?

A weak answer defines materiality and stops. A strong answer walks through the judgment. Start with ISA 320.10: materiality is determined in the context of the financial statements as a whole and, where applicable, for particular classes of transactions, account balances, or disclosures. Then explain the benchmark selection. For a profitable trading company, 5% of profit before tax is the starting point. For a loss-making entity, revenue or total assets is more appropriate because a percentage of a loss produces an unstable number. Mention ISA 320.A3 and the qualitative factors that might adjust the percentage: are there debt covenants? Regulatory reporting obligations? A history of misstatements?

The interviewer doesn't expect you to have memorised the percentage ranges. They want to see that you understand why the benchmark matters, not just which one to pick.

What's the difference between a test of controls and a substantive test?

ISA 330.8 covers tests of controls. ISA 330.18 covers substantive procedures. The practical distinction: a test of controls asks "did the control operate effectively during the period?" A substantive test asks "is the recorded amount correct?" If you test whether purchase orders were approved before payment, that's a control test. If you test whether the recorded invoice amount matches the supplier statement, that's substantive.

Where candidates go wrong is treating them as interchangeable. Explain that the results have different consequences. A control failure means you can't rely on that control to reduce substantive testing, which typically increases your sample size under ISA 330.9. A substantive exception means you've found a potential misstatement that needs to be evaluated under ISA 450.

How do you determine sample size?

Reference ISA 530.A11 through A13. The sample size depends on four factors: the acceptable level of sampling risk, the tolerable misstatement, the expected misstatement in the population, and the stratification of the population. Don't just list these. Explain that reducing sampling risk (wanting more confidence) increases sample size, and increasing tolerable misstatement (accepting a wider margin) reduces it.

If you can mention the MUS sampling calculator concept (cumulative monetary amount sampling with a sampling interval derived from dividing the population by the sample size), you've demonstrated that you've done this on an actual engagement rather than learned it from a textbook.

Technical questions: senior and manager level

Senior and manager interviews go deeper. The interviewer assumes you know the basics and tests whether you can handle judgment calls, conflict, and ambiguity.

How would you assess going concern for a client with negative operating cash flow for two consecutive years?

This question tests whether you can work through ISA 570.10 and the distinction between events or conditions that may cast significant doubt (ISA 570.A3) versus events that confirm a going concern problem. Negative operating cash flow for two years is a condition under ISA 570.A3, not a conclusion. Your answer should explain that you'd first assess whether the condition, considered alongside other factors, raises significant doubt. Then evaluate management's plans to address it (refinancing, cost reduction, asset disposal) under ISA 570.A4. Then assess whether those plans are feasible and whether the disclosure in the financial statements is adequate.

The strong answer includes a concrete follow-up: "I'd ask for the cash flow forecast for the next 12 months from the balance sheet date, test the key assumptions against historical accuracy, and check whether the client has committed financing to cover any projected shortfalls." The weak answer stops at "I'd apply professional judgment."

A client disagrees with your proposed audit adjustment. How do you handle it?

This tests conflict resolution and professional skepticism simultaneously. The right framework: first, confirm your technical position. Re-read the relevant IFRS paragraph. Discuss with your manager or the firm's technical department if the issue is genuinely ambiguous. Second, present the adjustment to the client's finance director with the specific standard reference and the quantification. ISA 450.8 requires you to request management to correct all misstatements. Third, if the client refuses, document the uncorrected misstatement in the summary of audit differences under ISA 450.12, assess whether it's material individually or in aggregate, and consider the impact on the audit opinion.

The interviewer wants to hear that you don't fold under client pressure, but also that you don't escalate unnecessarily. Reasonable professional disagreement is normal. What matters is that you follow the standard's process rather than making it personal.

What would you do if you discovered a related party transaction that wasn't disclosed?

ISA 550.20 requires you to evaluate identified related party relationships and transactions. An undisclosed related party transaction is a red flag for both fraud risk (ISA 240) and disclosure completeness. Walk through your response in order: confirm the transaction is genuinely with a related party (check the shareholder register, director interests, and group structure), assess whether it was conducted on arm's-length terms, evaluate the disclosure requirements under IAS 24, and discuss with the engagement partner before raising it with the client. The interviewer is testing whether you understand the fraud risk dimension, not just the disclosure angle.

Behavioural questions: what interviewers are really asking

Behavioural questions in audit interviews aren't testing your personality. They're testing whether you can describe real situations with enough specificity to be credible.

Tell me about a time you found an error that others had missed

The interviewer is testing attention to detail and professional skepticism. The wrong approach is to tell a vague story about "spotting something in the numbers." The right approach is to describe a specific working paper, a specific balance, and a specific consequence. "During the trade payables testing at a logistics client with €12M in payables, I noticed that one supplier balance of €340K hadn't been reconciled to a statement. The prior year working paper had marked it as confirmed. When I requested the supplier statement, the actual balance was €280K, creating a €60K overstatement that had been carried forward for two years." Specific numbers. Specific consequence. A reviewer can picture this.

How do you handle tight deadlines?

Don't give a generic answer about time management. Describe a specific engagement where the deadline was tight, what you did to meet it, and what you would do differently. "On a March 31 year-end client with a two-week fieldwork window, I was assigned five sections. By Wednesday of week one, I realised the inventory count procedures would take longer than planned because the client's warehouse management system didn't reconcile to the GL. I told my senior on Wednesday afternoon, not Friday. We reallocated one section to another associate and I completed the remaining four on time with one round of review notes each."

The detail matters. An answer that includes the day you escalated, the number of sections, and the specific problem is credible. An answer about "prioritising effectively" is not.

Why do you want to work at a mid-tier firm instead of a Big 4?

Be honest. Mid-tier firms offer earlier client responsibility, direct partner access, and broader exposure across industries. You'll be on five to eight clients per year instead of sitting on one large group audit for six months. The ISA 220 quality management requirements apply identically regardless of firm size, so the professional standard is the same. The difference is the operating model: at a mid-tier firm, a second-year associate might run sections on a €50M revenue client. At a Big 4 firm, a second-year associate on a €50M client is one of 15 people on the team.

How to structure your answers

Every technical answer should follow a four-part structure. State the standard reference. Explain the principle. Apply it to a specific scenario. State the consequence of getting it wrong.

For behavioural answers, use a modified version: state the situation with specific numbers. Describe what you did (not what "the team" did). State the outcome. Then add what you'd do differently, because every interviewer knows you're selecting a curated example, and the "what I'd change" section proves you've actually reflected on it rather than rehearsed a polished story.

Keep answers under 90 seconds for technical questions and under two minutes for behavioural ones. Interviewers at mid-tier firms typically ask eight to twelve questions in a 45-minute interview. If your first answer takes five minutes, you're reducing the number of questions you can answer well, which reduces the evidence the interviewer has to support hiring you.

Worked example: full answer to a materiality question

The interviewer asks: "Schilder Electronics N.V. is a Dutch electronics distributor. Revenue is €65M. Profit before tax is €800K. Total assets are €44M. It's a listed company on Euronext Amsterdam. How would you set materiality?"

"I'd start with ISA 320.10 and select the benchmark. Profit before tax is the default for a profitable listed company, but €800K on €65M revenue is a 1.2% margin. That's thin. A 5% benchmark on PBT gives €40K, which is too low relative to the size of the balance sheet and would make the audit scope disproportionately large."

"I'd consider total assets as an alternative benchmark. At 1% of total assets, materiality is €440K. That's more proportionate. But since Schilder is listed, I'd also check the revenue benchmark: 1% of revenue gives €650K. I'd set materiality at €440K using total assets, because the listing means investors focus on the balance sheet (net asset value, working capital) and because the PBT margin is volatile enough that a profit-based benchmark would fluctuate year on year."

"ISA 320.A3 requires me to consider qualitative factors. Schilder is listed, so there's a public interest dimension. The thin margin means small misstatements have a proportionally larger impact on reported profit. I'd set performance materiality at 70% rather than 75%, giving €308K, to provide more buffer against aggregate misstatements. Clearly trivial at 5% of materiality: €22K."

Documentation note: In a real engagement, this reasoning goes into the materiality working paper (WP B.1), citing ISA 320.10 for the benchmark selection, ISA 320.A3 for the qualitative adjustment, and ISA 320.12 for performance materiality. The reviewer should be able to follow the logic from benchmark selection through to the final number without asking a question.

"I'd also note that ISA 320.12 requires me to revisit materiality if I become aware of information during the audit that would have caused me to set a different amount initially. If Schilder's Q4 results change the profit picture materially, the materiality needs to be recalculated at completion."

This answer took about 90 seconds. It cited four ISA paragraphs, used the actual numbers from the scenario, and explained why each judgment was made rather than just stating the conclusion.

Your interview preparation checklist

1. Re-read ISA 320 (materiality), ISA 530 (sampling), ISA 315 (risk assessment), and ISA 570 (going concern) at the paragraph level. These four standards generate the majority of technical interview questions at all levels.
2. Prepare two specific engagement examples you can adapt for behavioural questions. Each example should include: the client type, a specific number (revenue, balance, adjustment amount), the action you took, and the outcome. Rehearse each to under two minutes.
3. For senior and manager candidates: prepare a going concern scenario, a client disagreement scenario, and a fraud risk scenario. Walk through each using the ISA paragraph references, not the textbook summary.
4. Research the firm you're interviewing at. Identify the industries they serve, the size of their audit practice, and any recent regulatory news. Mid-tier firms notice when candidates have done this homework because most don't.
5. Prepare one technical question to ask the interviewer. "How does your firm handle the ISA 540 (Revised) requirements on accounting estimates for smaller clients?" signals that you're thinking about practical application, not asking a question for the sake of asking.
6. Time yourself answering practice questions out loud. Under 90 seconds for technical, under two minutes for behavioural. If you're over, cut the preamble, not the substance.

Common mistakes candidates make in audit interviews

• Defining a concept without applying it. The interviewer asks "What is performance materiality?" and the candidate recites the ISA 320.11 definition, then stops. The candidate who adds "On a recent engagement with €30M revenue, we set performance materiality at 75% of overall materiality because the prior year had low misstatements, giving us €337K as the threshold for our substantive testing" gets the offer. Application separates candidates.
• Giving behavioural answers without specific numbers. "I worked on a challenging engagement" tells the interviewer nothing. "I worked on a €22M revenue manufacturing client where inventory represented 40% of total assets and required a full physical count at two locations" tells them you've done the work. The numbers are your credibility.
• Not knowing the firm's client base. If the firm audits primarily construction and real estate, and you can't discuss percentage of completion accounting or IAS 40 investment property valuation, you've signalled that you didn't prepare. Ten minutes on the firm's website gives you the industry context to tailor your examples.

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