Hiring an accountant: 8 accounting interview questions to ask

Hiring an accountant can be an overwhelming process for many small business owners. Before you start searching, it is important to determine what type of experience and skills you need. Are you looking for someone to analyze the numbers for you and set a budget or do you really just need someone to enter the bills and invoices?

If you have someone to help you understand the numbers, or you have a strong background in accounting and financial management, it will probably work well to get a person who is adept at your accounting software and whose experience and personality fits your business. On the other hand, if you don’t have anyone making sure the numbers are correct, the data entry bookkeeper is not a good idea. In this case, you want to find someone with a full bookkeeping experience. That is, the ability to reconcile the balance and perform a monthly close. Typically, accountants don’t have the skills to help you with financial management in addition to accurate financial reports.

Once you place an ad, you will be treated to a variety of candidates. You will have to limit the stack of candidates to those who meet the needs of your job description and then the interview fun begins. You will want to ask questions that ensure that the accountant really has the right skills and fits the culture of your company. Here are 8 questions to ask your potential accountant:

1) Do you think transaction or cash reporting is better for business management?

Look for an advanced accountant to explain that accrual-based accounting provides better financial reports, but cash-based accounting is usually preferable for taxes. We can maintain accrual-based books for management reporting, and the tax accountant can make adjustments for cash-based taxes. A standard accountant will likely tell you what her experience has been and will have no preference.

2) What is the accounting equation (or the balance equation) or explain the balance.

A good accountant explains that the balance sheet has assets, liabilities and equity. This is mandatory for anyone you expect to provide accurate financial reports. Ideally, they will tell you that the equation is: Assets = Liabilities + Equity. If they cannot explain the balance sheet, ask them to describe an asset and liability account. You don’t want someone who doesn’t close the balance responsible for the end of the month, but if someone else guarantees accuracy, it’s fine to know how assets and liabilities are used.

3) The bank account is $ 0.72. How long do you spend looking for the problem and what steps do you take to find it?

This problem is tricky and really depends on what you would like to see in the right accountant. Some will not stop looking until they find it. Of course, there can be countless things that cause a discrepancy, so you want them to spend some time looking for the problem. But how much time? Is it best to spend 2 hours looking for $ 0.72? Looking at the return on investment, that’s definitely a bad use of time. If they answer for 2 hours, you’ll want to investigate their tolerance for imperfect conditions. If you’re creative, an extreme perfectionist can just drive you crazy. However, if they don’t look for the error at all, their attention to detail probably isn’t strong enough and you should keep looking.

When looking for the error, the ideal candidate will say that it is likely a conversion error and they would start there first (conversion errors are divisible by 9). They can simply say that they would compare each line item to the statement, which is completely valid.

4) How would you take out an annual insurance premium of $ 600 in cash accounting?

The correct answer for cash is the cost of $ 600 debit insurance, cash credit or creditors. All accountants should do this well.

5) How would you withdraw an annual insurance premium of $ 600 using accrual accounting?

The correct answer here is prepaid $ 600 debit insurance, cash or creditors. Prick them to find out when insurance costs are recognized. It should be $ 50 / month with an insurance charge collection and credit for prepaid insurance. If the candidate is unable to answer this question, do not expect to keep your books on a accrual basis. You want to depend on someone else for management reports.

6) How many gas stations (or coffee shops, etc.) do you think are in the United States?

With this question we are looking for good critical thinking skills. It’s not okay to just guess a number without an explanation or to say they would “google” it. You want the candidate to have a process to arrive at an estimate, no matter how far it is. There are so many gas stations in my city, I think so many cities in my state ….

7) Rank the following in order of importance for business success: Sales, Teamwork, Quality, Integrity, Profitability, Service

There is no right or wrong answer to this question, but it will indicate whether the candidate is aligned with your corporate culture and also demonstrate critical thinking skills. Look for a reason why they answered like that. Does it correspond to how you would answer the question? For example, if they say that profitability is the most important thing. Why is it like that? When they say teamwork is least important, you probably want to dig a little deeper if teamwork is high on your priority list.

Preferably, an accountant lists profitability lower on the list because you want to know that they consider the entire company, not just their job. You would also like to see integrity high on the list. Do you really want an accountant who doesn’t value integrity?

8) Tell me about a time when you disagreed with something your boss asked you to do.

The correct answer depends on the personality you are looking for. Do you want a follower who does what you say? Are you looking for an advisor to tell you what needs to be done? Perhaps a mix is ​​the right answer for you, someone confident enough to express his opinion, but willing to direct.

There are tons of potential interview questions you can ask when interviewing accountants. The above mentioned can give you a good indication of whether or not the candidate is suitable. For a better assessment of accounting skills, check out AIPB’s accounting test. Don’t forget to check the references and try talking to a CPA who has had an opportunity to see their work.

Copyright (c) 2010 Kelly Totten

Source by Kelly Totten