Hiring an Accountant: 8 Accounting Interview Questions

Hiring an accountant can be an overwhelming process for many small business owners. Before you begin your search, it’s important to determine the type of experience and skills you need. Are you looking for someone to analyze the numbers and create a budget for you, or do you really just need someone to catch the bills and invoices?

If you have someone to help you make sense of the numbers, or if you have a strong background in accounting and financial management, finding someone who is knowledgeable about your accounting software and will match their experience and personality to yours will likely work well company fits. On the other hand, if you don’t have someone to make sure the numbers are correct, the accountant for data entry is not a good idea. In this case, you should look for someone who has extensive accounting experience. That is, the ability to reconcile the balance and do a month-end close. Typically, accountants do not have the skills required to assist you with financial management beyond accurate financial reporting.

As soon as you place an ad, you are treated to a smorgasbord of candidates. You need to narrow down the stack of candidates to those who fit the requirements of your job description, and then the fun of the interview can begin. You should ask questions that ensure the accountant really has the right skills and fits the culture of your company. Here are 8 questions to ask your prospective accountant:

1) Do you think period or payment based reporting is better for business management?

Look for an experienced accountant who will explain that accrual accounting provides better financial reporting, but that cash basis is usually preferred for taxes. We can keep the books on an accrual basis for management reporting and the tax advisor can make adjustments for taxes on a cash basis. A regular accountant will likely share her experiences with you and have no preference for either.

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

A good accountant will explain 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 can’t explain the balance sheet, ask them to describe an asset and liability account. You won’t want someone who doesn’t know the balance sheet responsible for the month-end closing, but if someone else is ensuring accuracy, just knowing how assets and liabilities are used is enough.

3) The bank account costs $0.72. How long have you been looking for the problem and what steps will you take to find it?

This problem is tricky and really depends on what you want to see in the right accountant. Some don’t stop looking until they find it. Sure, there could be numerous things causing a discrepancy, so you want them to spend some time looking for the problem. But how much time? Is it the best time to spend 2 hours looking for $0.72? If we look at the return on investment, it’s a dead bad waste of time. If they respond within 2 hours, examine their tolerance for less than perfect circumstances. If you’re in the creative field, being an extreme perfectionist can just drive you insane. However, if they aren’t looking for the bug at all, their attention to detail is probably not strong enough and you should keep looking.

When looking for the error, the ideal candidate will say it’s probably a transposition error, and would start there first (transposition errors are divisible by 9). They can only say that they would compare each position to the statement, which is perfectly valid.

4) How would you account for a $600 annual insurance premium if billed on a cash basis?

The correct answer for cash basis is $600 insurance charge, cash credit, or accounts payable. All accountants should get this right.

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

The correct answer here is Debit Prepaid Insurance $600, Credit Cash or Accounts Payable. Challenge them to find out when insurance costs are recognized. It should be $50/month, with an insurance cost debit and a prepaid insurance credit. If the candidate cannot answer this question, do not expect them to keep your books on an accrual basis. You’re going to want to rely on someone else for management reports.

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

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

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

There is no right or wrong answer to this question, but it does indicate whether the candidate fits into your organizational culture and also demonstrates critical thinking skills. Look for a reason why they answered the way they did. Does it match how you would answer the question? For example, when they say that profitability is the most important thing. Why is that? When they say teamwork is least important, you should probably dig a little deeper if teamwork is high on your priority list.

An accountant would prefer to put profitability lower on the list because you want to know they’re considering the entire business, not just their job. You also want integrity to be at the top of 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 here depends on the personality you are looking for. Want a follower who does what you say? Are you looking for an advisor to tell you what to do? Perhaps a mix is ​​the right answer for you, someone who is confident enough to speak their mind but willing to take the lead.

There are countless potential interview questions to ask when interviewing accountants. The ones listed above can give you a good indication of whether the candidate is a good fit or not. For a better assessment of accounting skills, check out AIPB’s Accountant Test. Don’t forget to check references and try to speak to an accountant who has had a chance to see his work.

Copyright (c) 2010 Kelly Totten