How do you handle a disagreement with management about an accounting treatment?
A core Audit & Assurance interview question — asked in analyst and associate interviews across IB, PE, and the Big 4.
THE SHORT ANSWER
Research the applicable standard (IFRS, HGB). Prepare a technical memo with analysis. Discuss with engagement partner and the firm’s technical department. Present to management with references. If management won’t change and the treatment is materially wrong: it’s a misstatement leading to a modified opinion.
WHAT INTERVIEWERS LISTEN FOR
- ✓Research applicable accounting standard
- ✓Prepare technical memo
- ✓Consult engagement partner and technical department
- ✓Present analysis to management
- ✓Modified opinion if material misstatement
COMMON MISTAKES
- ✗Ignoring professional standards
- ✗Giving in to management pressure
- ✗Failing to document disagreement
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