Find Interview Questions for Mercer & hole

Right Answer:
The Prudence Principle emphasizes being cautious in financial reporting, ensuring that assets and income are not overstated, while liabilities and expenses are not understated. Conservatism, on the other hand, is a broader accounting approach that advises recognizing potential losses and liabilities as soon as they are foreseeable, but only recognizing gains when they are realized. In practice, both aim to avoid overestimating financial health, but prudence focuses more on caution in estimates, while conservatism emphasizes a more general approach to recognizing uncertainties.

Right Answer:
The Substance Over Form Principle means that the economic reality of a transaction should be reflected in financial statements, rather than just its legal form. This means recognizing the true nature of the transaction, such as treating a lease as a purchase if it effectively transfers ownership rights, ensuring that financial reporting accurately represents the underlying economic situation.

Right Answer:
Generally Accepted Accounting Principles (GAAP) are the accounting standards used in the United States, while International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) are used in many other countries. The relationship between them is that both aim to provide a framework for financial reporting, but they differ in specific rules and guidelines. Efforts are ongoing to converge GAAP and IFRS to create a more unified global accounting standard.

Right Answer:
The Consistency Principle ensures that a company uses the same accounting methods over time, making financial statements comparable across periods. Comparability allows users to compare financial statements of different companies or periods, ensuring that similar transactions are reported in a consistent manner. Together, they enhance the reliability and accuracy of financial reporting.

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The Revenue Recognition Principle impacts profit calculations by ensuring that revenue is recognized when it is earned, regardless of when cash is received. This means profits reflect the actual performance of a business during a specific period, aligning income with the expenses incurred to generate that income.

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TDS (Tax Deducted at Source) is a tax collected at the source of income, applicable on salary and other payments. Salary income is taxable under the Income Tax Act, and individuals must pay tax based on their income slab. VAT (Value Added Tax) is a consumption tax on goods, while sales tax is a tax on sales of goods and services. Service tax was levied on services provided but has been replaced by GST (Goods and Services Tax) in India.

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The TDS rate on contracts for a proprietor is generally 1% for individuals and Hindu Undivided Families (HUF) and 2% for others.

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A Diploma in Taxation Practice prepares individuals for careers in tax compliance, planning, and advisory roles, focusing on tax laws, regulations, and practices.

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Excise Duty is an indirect tax liability.

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Taxation in India includes various types of taxes such as income tax, goods and services tax (GST), corporate tax, and others, which are levied by the central and state governments based on income, consumption, and property.

Right Answer:
Some techniques used during an audit include:

1. **Sampling** - Selecting a representative subset of transactions.
2. **Observation** - Watching processes and controls in action.
3. **Inquiry** - Asking questions to management and staff.
4. **Recalculation** - Verifying numerical accuracy of calculations.
5. **Analytical Procedures** - Comparing financial data and ratios.
6. **Document Inspection** - Reviewing records and supporting documents.

Right Answer:
The Internal Auditor adds value to the company by identifying risks, improving processes, ensuring compliance with laws and regulations, enhancing operational efficiency, and providing insights for better decision-making.

Right Answer:
Employees' PF (Provident Fund) contribution is shown under "Current Liabilities" in the Balance Sheet.

Right Answer:
Could you please clarify the specific question related to the audit field?

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During my internship, I carried out financial audits, compliance audits, and operational audits.

Right Answer:
The cover for a column is the layer of concrete that protects the steel reinforcement bars (rebar) from environmental factors, ensuring durability and preventing corrosion.

Right Answer:
Beer Brew may be facing issues such as strong local competition, lack of brand recognition, misalignment with consumer preferences, ineffective marketing strategies, or distribution challenges in the UK market.

Right Answer:
The travel agency may be making less than the industry average due to factors such as higher operational costs, lower sales volume, less effective marketing strategies, or offering less competitive pricing compared to other agencies.

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To quantify the loss, analyze sales data over the past year, comparing it to previous years to identify the percentage decrease in sales and profits. For example, if sales dropped from $1 million to $700,000, that’s a 30% decrease, leading to a proportional profit loss.

To address the issue, conduct market research to understand customer needs, improve product features, enhance marketing strategies, and explore new markets or partnerships. Additionally, gather feedback from customers and sales teams to identify specific pain points and adjust offerings accordingly.

Right Answer:
Disposable diapers make up approximately 3-4% of total U.S. household garbage by volume.