From the course: Job Interview Tips for Accountants

How to approach this question

From the course: Job Interview Tips for Accountants

Start my 1-month free trial

How to approach this question

“

- This is a managerial accounting question, and is about assessing potential project risks and project profitability. Your answer can take several forms, but it should always include these three points. First, address potential underlying issues. Accountants are expected to provide a structured analysis to determine profitability and identify potential risks. This is because long-term projects require significant upfront financial commitment. Your accounting skills are to assess the level of financial risk balanced against the expected outcomes. Second, detail the steps you'd take. First, clearly state that this is a capital investment requiring the application of ROI and profitability calculations. Suggest specific calculations, such as a net present value or internal rate of return, or even a breakeven analysis. Then offer examples of the questions you'd ask to conduct the calculation properly. And finally, balance your answer with qualitative analysis. The interviewer wants to know you can deliver a complete and balanced response. They don't just want an accountant, they want to hire a business professional. Share that you'd conduct a financial risk assessment like a sensitivity analysis to evaluate the worst-case scenario. Then, identify and extrapolate qualitative risks using the financial results. This question is all about project financial viability, but make sure to mention qualitative elements, like how it would align to the company mission or its performance objectives to provide a more complete response. Like many of the interview questions you'll be asked, offering a balanced response is always a sure bet.

Contents