Are you looking for effective accounting interview questions to ask job applicants?
You probably know about the challenges in the hiring process for today’s managers looking for skilled finance and accounting talent. If you’ve crafted job descriptions that have enticed accounting applicants to send you cover letters and resumes — and you see candidates you want to pursue — it's time to start the interview process.
We've covered the importance of assessing soft skills and fit with your company culture. We should also emphasize how critical it is to have a cache of accounting interview questions that will allow you to evaluate the technical knowledge and skill levels of potential hires.
Here are 20 interview questions for accounting and finance — and what you should look for in the answers:
1. "What is the difference between accounts receivable (AR) and accounts payable (AP)?"
This is one of many elementary accounting interview questions you can use to find out more about the general accounting knowledge of entry-level job candidates for bookkeeping or accounting clerk openings. Their responses, both verbal and non-verbal, will reveal whether they understand accounting fundamentals.
2. "When a company is using double-entry accounting, what elements of a given ledger must be equal?"
This is another fairly basic inquiry. Candidates with some accounting training or experience should have no trouble coming up with an answer. As with question one, the manner in which the applicants reply may show you they are under- or overqualified for a junior-level job at your company.
3. "What are two or three types of special journals?"
While this is still a fairly basic question, you may tailor your follow-up queries according to the specifics of your business or to the candidate’s work history. Or, as a skill test, you could present a few journal samples for the applicant to read and then explain. The way the person responds to this accounting interview question will show the skill level in identifying mistakes or omissions.
4. "If a company has three bank accounts for processing payments, what is the minimum number of ledgers it needs?"
Use this as a starting point in the interview to explore a candidate’s knowledge of ledgers. Observe the interviewee's initial reaction and use it as a leaping off point for further discussion of skills related to the opening you are trying to fill. Expect the response to reveal the extent to which the applicant has thought through how accounts relate to lines of business and generally accepted accounting principles.
Speaking of payments, have you thought about whether the salary you'll offer is competitive?
5. "What methods have you used for estimating bad debt?"
This accounting interview question can open a conversation about the ways the applicant has approached this routine process with previous employers. This line of inquiry allows recent grads to apply theoretical knowledge in venturing educated guesses. The answer will reveal the level of understanding of the methods most commonly used and could open a dialogue about how your company handles this.
6. "Why is it easier for someone to perpetrate fraud using a journal entry than with a ledger?"
Accounting professionals, particularly those who have managed ledgers or had jobs as full-charge bookkeepers for more than a couple of years, should be able to speculate on this scenario. A candidate with more formal training specific to auditing or fraud analysis will likely explain this thoroughly and be able to provide examples.
7. "Which enterprise resource planning (ERP) systems have you used?"
Most professionals, especially those with experience working for medium to large organizations, should have an answer for this. A response might include any of the following: Hyperion, Microsoft Dynamics GP or Oracle Enterprise Manager. For entry-level candidates, you might turn this into a discussion of accounting certifications and future training possibilities. For example, ask which ERP systems they would like to master. Discussion of these tools, how the applicants learned them and put them to work, and what applications your company uses will reveal how much, if any, training might be needed.
8. "What is your experience with developing business metrics?"
Though somewhat general, this finance interview question can elicit answers useful in evaluating entry-level business or financial analyst candidates all the way up to mid-career professionals who aspire to roles that come with budget and staff oversight responsibilities.
9. "If a private company with break-even operations received a $10 million investment, how would you develop a strategy to spend or invest that money?"
This is one of those interview questions for accounting that falls into the category of situational interview techniques, a tactic useful in gauging an applicant’s ability to think through a scenario like one that might be faced in a more senior finance role. The answers will show you if the approach is in alignment with that of your existing team, which will also indicate if this candidate is a good fit for your organization’s culture.
10. "What challenges have you faced in leading a team through an analysis project?"
We’ve left this question, designed for probing leadership skills, somewhat general. It is another interview question you can modify to better explore the particularities of your opening or the backgrounds of your candidates. As with question nine, the answers will reveal the levels of critical thinking skills and elicit a better picture of the leadership techniques of the people you're interviewing.
11. “What do you consider the top three skills of a great accountant?”
Yes, you’re looking for someone with numerical abilities, but not necessarily a mathematician. You also need someone with analytical know-how, who can communicate with others. Look for responses that show a recognition of the importance of general business knowledge, technology expertise, leadership abilities, customer service orientation and specialized experience that might apply to the role.
12. “Can you give me an example of how you would explain a complex accounting process or finance data to a staff member?”
Here’s where you’ll find out more about those communication skills. Look for an ability to simplify information and present it so people outside the department — those who may not speak the language of “FIFO” (First In First Out, a method of valuing inventory) or “EBITDA margins” (Earnings Before Interest, Taxes, Depreciation and Amortization) — understand it.
13. “When you buy a piece of equipment for a company, what is the impact on the three financial statements?”
This is another basic accounting question that will allow you to gauge an understanding of cash flow statements, balance sheets and income statements. But before the interviewees even get to those, they may have some questions for you, such as, should they answer for the time of acquisition or for some time in the future, and how is the equipment financed?
14. “How do you define big data, and why is it important for finance teams to have expertise in it?”
The advent of big data is prompting managers to look for these qualities in today’s accounting and finance hires. You may not need big data experts right now, but finding someone who has knowledge of data retrieval, interpretation and analysis could provide useful down the line when you decide to build your team’s expertise in this area.
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15. “Describe a time you’ve made an accounting error and how you handled it.”
Rather than making a judgment on the mistake, look for the lessons learned, whether they took responsibility, and how they managed it. Were they proactive? Strategic?
16. “How do you minimize the risk for error in your work?”
This is the second part of that question. The best responses should shed light on their process for reviewing their work and minimizing miscalculations.
17. “How do you differentiate between auditing and accounting?”
If you’re interviewing recent graduates, you’re looking to see how well they paid attention in class, rather than a deep level of expertise. Look for an ability to explain the fundamentals of the roles and processes, much like the AR/AP question.
18. “What accounting software are you most familiar with?”
While it may be ideal to find expertise in the same accounting programs you use in your company — Excel, Hyperion, IBM Cognos, QuickBooks, ERP and so on — it’s even more valuable to find someone who is software savvy and able to get up to speed with a variety of programs. Some companies have embraced cloud financial solutions, and while experience in online-based software and services is valuable, the ability to get comfortable with the new technologies is worthwhile, too.
19. “What criteria do you use to assess the reliability of the financial information you receive?”
Look for answers that show high performance standards. Perhaps the candidate has designed methods to check for bookkeeping errors or quality-control issues in the data-entry process. What you’re looking for are answers that help you evaluate attention to detail and accuracy.
20. “What do you think of the most recent updates in the accounting standards?”
Unlike questions that probe problem-solving abilities or relevant skills, this one explores knowledge and critical thinking. Are the candidates current on accounting standards such as Generally Accepted Accounting Principles (GAAP)? Are they aware of the new lease accounting standard? Have they had training in the new tax changes? Their responses will help you determine their commitment to the profession they’ve chosen and their ability to express themselves.
Now that you've examined these 20 technical questions, read our post on behavioral interview questions to ask.