Accountant Interview Questions
An accountant’s primary job is to document the financial transactions of a business. Accountants make sure records are being kept accurately and the business is paying their fees and taxes on time. Smaller companies will typically have just one accountant while larger companies will have an accounting department where duties are split between specialized teams.
Accounting positions are one of the most important roles in a business. Aside from documenting financial transactions, an accountant will also act as a financial advisor when needed. They must have the ability to audit a business and identify weak areas in order to draft a plan to help that business run at full financial capacity.
Accountant responsibilities may include:
- Turning financial statements into quantifiable data for employers
- Reconciling financial discrepancies as they arise
- Performing a full audit of a business in order to identify weak points
- Creating a financial plan that will optimize business efficiency
- Creating policies and procedures that comply with state and federal laws
- Creating and organizing financial records
- Making sure taxes are filed and paid on time
Accountants are expected to optimize finances within the business. To effectively organize, improve, and maintain finances, a skilled accountant will need to be able to:
- Maintain a system to keep track of financial statements
- Manage their time in order to stay on top of all of their duties
- Have a keen eye for detail to catch discrepancies within the business
- Conduct research and analyze data to provide accurate financial feedback
Depending on the position, jobs in accounting can be found at a myriad of levels. Entry level jobs can be found with just an associate’s degree while positions within larger companies will require at least a bachelor’s degree. Regardless of degree, however, most companies will require their accountants to be CPA certified and take continued education courses to maintain their certification.
The typical salary range for an accountant is $40K to $77K with the median being $56K.
Factors impacting the salary you receive as an accountant include:
- Degrees and certifications (i.e., CPA, etc.)
- Years of experience
- Managerial responsibilities
- Type of practice (private, corporate, public)
ACCOUNTANT INTERVIEW QUESTIONS
Question: Most organizations use one of three systems of accounting. Can you name the three systems and briefly discuss them?
Explanation: This question is exploring your knowledge of accounting systems and your understanding of which types of business operations they are applicable to. You should also be able to identify which one the organization uses based on the type of business they are.
Example: “The three types of accounting systems are cost basis, accrual, and a blend of the two. Cost-basis systems deal with cash transactions, only recording entries when cash is exchanged. Credit transactions are deferred until they are resolved. Cost-basis systems work best in smaller businesses whose sales are done primarily in cash such as food trucks or specialty retail.
Accrual systems record all transactions, recognizing both revenues and payments when they occur during the period. This is the system used by the majority of organizations.
A blended system is less common. It is used by cash-based businesses that need additional accounting of items on their balance sheet and income statement. These organizations typically have more assets along with long-term debt.”
Question: What is management accounting, and how is it used?
Explanation: This is another question that seeks to learn more about your accounting knowledge and skills. If you are interviewing for an internal accounting position for a company, you will be doing this type of accounting and should be able to explain it. Accountants who may provide services to other businesses (such as CPAs) should also be familiar with this concept.
Example: “Management accounting is an all-inclusive service that supports the leadership and management team of organizations, providing them with the financial information they need to manage the business. Financial reports based on the accounting information generated through this practice enable managers to understand the performance of the company, develop budgets, create policies, and make operational decisions.”
Question: How do the managers of an organization use the information accountants provide?
Explanation: Professionals often know how to do their work very well but aren’t completely clear about how other people in the organization utilize the results they produce. This sometimes leads to results that meet the requirements of the job but don’t align well with the organization’s business objectives. The purpose of this question is to determine if you know how accounting information is used so you can tailor your work to the needs of the business.
Example: "This is an important issue because understanding how an organization uses accounting information helps accountants produce the reports a business needs. The first objective of accounting is keeping track of the business's financial information to determine how it is doing. Next, accountants can identify areas of the business that need to be addressed such as revenue generation or cost controls. The other use of accounting information is to address problems the organization is experiencing and help with data-driven decision making.”
Question: Can you discuss the difference between capital receipts and revenue receipts and provide some examples?
Explanation: This is a technical question and is meant to test your accounting skills. Qualified accountants should be able to easily answer questions related to their profession and the execution of accounting practices.
Example: “Capital receipts result from transactions related to capital assets. They don’t impact the profits of a company and are typically recorded as an expense or reduction of an asset. Examples include the owner’s capital invested in the company and receipts from the sale of an asset and loans.”
Question: Can you explain the difference between straight line and written down methods of depreciating an asset?
Explanation: This is another technical question that is intended to qualify your knowledge of accounting principles and practices. Practicing accountants will have no trouble answering this type of question about their profession.
Example: “Depreciation of an asset involves reducing the value of the asset over a period of time. This is based on the asset's predicated useful life and the manner in which it is used by the business. Straight-line depreciation devalues the asset by the same amount for each accounting period. Written-down depreciation varies from period to period because it uses a percentage of the asset’s value in the previous period to decrease the value of the asset in the subsequent period. Written-down depreciation results in a higher rate of depreciation and the asset never being fully depreciated.”
Question: Please discuss the meaning of a fixed cost and the forms it can take.
Explanation: The interviewer is seeing to further understand your knowledge of accounting practices. This question is more complex than the previous technical questions and will test your advanced knowledge of accounting.
Example: “Fixed costs are costs that remain constant and are not affected by the amount of production, output, sales, or other business factors. Examples of these are rent, insurance, business services, and other items the organization uses regardless of changes in the scope of its operations. The two types of fixed costs are committed and discretionary. Committed costs are things such as buildings, equipment, and other big-ticket items. Discretionary costs are policy-based and usually exist for shorter accounting periods. They can be eliminated if necessary to meet financial objectives.”
Question: What are the key contributions the accounting department makes to the overall organization?
Explanation: The purpose of this question is to determine your understanding of the mission of the accounting department and how it impacts the success of the business. You should be able to summarize the importance of accounting in helping the business manage its operations.
Example: “Accounting is a critical part of a business enterprise. Accounting practices enable managers to quickly determine how the operation is performing and if there are any issues that need to be addressed. Accounting also provides the information needed to develop budgets and set policies. Accounting can be thought of as the internal eyes and ears of the company without which the company would be operating blindly.”
Question: “What are the key certifications accountants can obtain, and why are they important?
Explanation: Accountants can practice with just a basic degree, but obtaining a certification provides the employer with the assurance that the accountant’s skills have been tested and confirmed by the certifying organization. It also indicates the accountant has some special skills the business may require.
Example: "The three main certifications accountants can obtain are CPA (Certified Public Accountant), CMA (Certified Management Accountant), and EA (Enrolled Agent). CPAs are certified to perform audits and work on tax filings. CMAs have skills and competencies geared toward management accounting and helping organizations run their business. EAs are certified by the U.S. Internal Revenue Service to be able to practice before them.”
Question: What is the difference between business and public accounting?
Explanation: When answering this question, it is important to give examples of both business and public accounting, highlighting the differences between the two.
Example: "Business accounting is used by companies for their internal account and bookkeeping functions. Public accounting is performed by firms with a staff of Certified Public Accountants (CPAs) to help companies assess their financial records and meet regulatory requirements. Public accountants often have experience in multiple industries while business accountants may only have experience in a single industry.”
Question: If asked to provide a recommendation for the purchase of an accounting software package, which do you feel is more important - the cost or the features the software has?
Explanation: This question appears to be a choice between one or the other answer. However, when answering it, you should include both features (cost and functionality) and state the relevance of both of them.
Example: "If asked to provide a recommendation for a specific accounting software package, I’d start by determining the needs of the client and then ensure the software options they were considering included these. In today’s market, most accounting software has similar features. The key differences are the user interfaces and structure of the products. I’d then rank the products from least expensive to most expensive. Finally, I’d recommend the product which met the client’s needs in the most cost-effective manner.”
Question: How do you reduce the occurrence of human errors in the accounting department?
Explanation: Accounting professionals must have a keen eye for detail. However, even with these skills, errors can still occur. The interviewer is hoping you have a system for ensuring errors are identified before they impact the quality of work the accounting department performs.
Example: "My experience indicates that errors occur in accounting practices for two reasons: the work isn’t reviewed before being submitted, or the accountant doesn’t understand the information they are provided. Both of these are a result of either a lack of training or not enough time due to improper workloads. The accounting management team should ensure their staff is trained in both basic accounting practices and the specifics of the organizations they are working for. Management should also keep workloads reasonable, especially during periods of high activity such as quarterly closings or tax deadlines.”
Question: What are your career options right now?
Explanation: The purpose of this type of question is to see how confident you are and if you may be willing to accept any offer.
Prior to starting your job search, you should determine what your career strategy is and what you feel your next position should be. Knowing this will also help you respond to the "where will you be in five years" question. Once you have determined your career path, you should only apply to positions that match the next step in your career plan, then when you are asked this question, you can respond by providing a brief overview of your career plan and how the job you are applying for fits in. You can also state that you are exploring similar positions with other organizations. Here's an example of this type of answer:
Example: "My career plan calls for me to be a senior manager in this industry five years from now. In order to achieve this, the position we are discussing is the next logical step for me which is why I have applied for the job. In addition to this opportunity, I have identified several others with similar companies in the industry. I am currently pursuing these while also talking to you about this job."
ADDITIONAL ACCOUNTANT INTERVIEW QUESTIONS:
If a company has four bank accounts for processing payments, what is the minimum number of ledgers you would recommend?
What accounting software do you have knowledge of?
There is a major accounting report due the next day. You have almost completed the report near the end of your shift and find an error. What would you do?
What are some strategies you use to organize yourself?
What process do you use for developing business metrics?