What to expect in a graduate finance interview
Expect three kinds of question, sometimes in separate rounds and sometimes in one interview: technical questions (accounting concepts, the financial statements, basic valuation), commercial awareness (what's happening in the markets, how businesses make money, trends in the industry) and behavioural questions (examples from your own experience).
The Big Four all add online assessments before the interviews, such as a cognitive abilities test or a job simulation. Smaller firms may skip the tests and ask more technical questions in the interview itself.
What to show in a finance interview
Use financial terms precisely. If you're vague about a concept, the interviewer can't tell whether you understand it. Then show some commercial curiosity: an interest in what the numbers mean for the business, as well as how they're worked out.
Technical knowledge
Questions 1–8 · Technical
Question 01
"Can you walk me through the three main financial statements and how they connect?"
What they're really asking
This checks you know how the statements fit together. Most of the other technical questions here build on it.
How to answer it
The three statements are the income statement, balance sheet and cash flow statement. The income statement shows revenue, expenses and profit over a period, the balance sheet shows assets, liabilities and equity at one point in time, and the cash flow statement shows cash in and out over the period. They connect in three ways. Profit, less any dividends, adds to retained earnings on the balance sheet. Closing cash on the cash flow statement equals cash on the balance sheet. And under the indirect method, operating cash flow starts from profit, then adjusts for non-cash items such as depreciation and for changes in working capital.
Question 02
"What is the difference between revenue and profit?"
What they're really asking
A quick check that you use basic financial terms correctly.
How to answer it
Revenue (also called sales or turnover) is what a business earns from its normal activities, before any costs come off. Profit is what's left after costs. There are several profit lines: gross profit (revenue minus cost of goods sold), operating profit (after operating expenses too) and net profit (after interest and tax as well). A company can have high revenue and still make a loss if its costs are higher than its revenue.
Question 03
"What is working capital and why does it matter?"
What they're really asking
Do you understand liquidity, meaning having the cash to pay bills when they're due, as well as profit?
How to answer it
Working capital is current assets minus current liabilities, a measure of short-term liquidity. It's important because a profitable business can still become insolvent if it runs out of the cash to pay its debts when they fall due. The main parts that move are receivables, inventory and payables. A company that's slow to collect from customers but has to pay its suppliers quickly will run short of cash, even if its income statement looks healthy.
Question 04
"Can you explain what depreciation is and why it's important?"
What they're really asking
You've studied depreciation. This checks you can explain it clearly, including what it does to profit and to cash.
How to answer it
Depreciation spreads the cost of a physical asset, less what you expect to sell it for at the end (its residual value), over its useful life. A $100,000 machine used for five years and worth nothing at the end gives $20,000 of depreciation a year, which matches the cost to the years it helps earn revenue. Depreciation is a non-cash expense. It reduces profit each year, but the cash went out when the machine was bought, as an investing cash flow. That's why it's added back to profit to work out operating cash flow.
Question 05
"What is the difference between accrual accounting and cash accounting?"
What they're really asking
Do you understand the basis financial statements are prepared on, and why profit and cash flow differ?
How to answer it
Cash accounting records income and expenses when cash comes in or goes out. Accrual accounting records revenue when it's earned and expenses when they're incurred, whenever the cash moves. Financial statements prepared under accounting standards use the accrual basis, apart from the cash flow statement, because it matches revenue and expenses to the period they relate to. Much of the gap between profit and cash flow comes from this timing: a business can record a sale before the customer pays, and an expense before it pays the bill.
Question 06
"What is EBITDA and why do analysts use it?"
What they're really asking
You'll use EBITDA in analysis and advisory work. Do you know what it leaves out?
How to answer it
EBITDA stands for Earnings Before Interest, Taxes, Depreciation and Amortisation. Analysts use it to compare companies' operating performance because it leaves out how each one is financed (interest), how it's taxed (taxes) and the effects of past investment and accounting choices (depreciation and amortisation). It's the basis of common valuation multiples such as EV/EBITDA. Know its limits: it ignores the cost of replacing equipment, which flatters capital-intensive businesses, and changes in working capital, so it can differ a lot from the cash a business generates.
Question 07
"What is the purpose of an audit?"
What they're really asking
If you're applying for audit, this is the job, so have a clear answer.
How to answer it
An audit is an independent examination of a company's financial statements, ending in an opinion on whether they give a true and fair view and follow the accounting standards that apply. The opinion gives reasonable assurance that the statements are free from material misstatement, whether from fraud or error. That's a high level of assurance but not an absolute one, because auditors test samples and focus on amounts big enough to affect decisions. Investors, lenders and others rely on it when they use the figures.
Question 08
"If a company's net income increases by $10, what happens to the three financial statements?"
What they're really asking
Questions like this come up in investment banking and corporate finance interviews. Can you follow one change through all three statements?
How to answer it
Income statement: net income (profit after tax) is $10 higher. Balance sheet: retained earnings is $10 higher, and if the profit came in as cash, with no change in working capital, cash is $10 higher too, so it still balances. Cash flow statement: operating cash flow starts from net income, so it's up $10, and so is closing cash, which matches the balance sheet. If you're given a pre-tax change, such as revenue up $10, take tax off first: at a 30% rate, net income, retained earnings and (once the tax is paid) cash all rise by $7. Say your assumptions out loud as you go.
Practise the behavioural questions out loud
InterviewZap runs behavioural interviews, with questions like 14 to 20 below, written from your CV and the job description. After each answer, it shows you what was missing and a better way to say it.
Start Practising Free →No credit card. Free to start.
Commercial awareness
Questions 9–13 · Commercial Awareness
Question 09
"Tell me about a recent business or financial news story that caught your attention."
What they're really asking
Do you follow business news because you're interested, or did you read up the night before?
How to answer it
Pick a story you've actually been following: a big deal, a company's results, a Reserve Bank rate decision or a company in trouble. Say what happened, why it's important and what it tells you about the economy or the industry. Have a view of your own rather than repeating the headline. "I'm not convinced the cost savings from the mergers in [sector] will make up for how hard the businesses are to combine" says much more than "I read that Company X acquired Company Y."
Question 10
"Why might a company choose to lease an asset rather than buy it outright?"
What they're really asking
Can you think through a business decision, as well as the accounting for it?
How to answer it
Leasing avoids a large upfront payment, which helps a business that's watching its cash, and can offer flexibility, such as upgrading equipment when the lease ends. Don't say it keeps debt off the balance sheet, though. Since 2019, AASB 16 (the Australian version of IFRS 16) has required a lessee to record a right-of-use asset and a lease liability for almost every lease; only short-term and low-value leases can be left off. Over the life of the asset, leasing usually costs more than buying, because the lessor charges for its own financing and margin. The right choice depends on the company's cost of capital, its cash position and how quickly the asset will go out of date.
Question 11
"How does a rise in interest rates affect a business?"
What they're really asking
Can you follow a change in the economy through to a business's profit and cash?
How to answer it
Higher rates make borrowing more expensive, so a business with variable-rate debt pays more interest and makes less profit. They also raise the cost of capital, so a new project needs a higher return to be worth doing. Households with mortgages have less to spend, which hurts businesses that sell to consumers. Some businesses are hit harder than others. Banks can earn wider margins, at least for a time, and businesses with a lot of debt or big capital needs usually feel it most.
Question 12
"Why do companies go public (IPO)?"
What they're really asking
Do you understand why companies list, and what it costs them?
How to answer it
Companies go public to raise money for growth or to pay down debt, or to let founders and early investors sell some of their shares. A listing also raises the company's profile, gives it shares it can use to pay for acquisitions, and makes employee shares easier to value and sell. Against that, an IPO is expensive and slow to prepare for, a listed company has ongoing reporting and disclosure obligations, and public shareholders can push hard for short-term results.
Question 13
"What does our firm do, and why do you want to work here specifically?"
What they're really asking
Have you researched the firm, and do you have a reason for wanting to join it beyond its name?
How to answer it
Before the interview, find out the firm's service lines, any deals or clients it's been in the news for, and how its graduate program works. Then make it personal by linking something specific about the firm to something specific about you: "I want to join transaction services because I like analysis that feeds into a real decision, and your recent work in [sector] is the kind I'd like to learn from." "You're a market leader with great training" could be said of any firm, so it doesn't tell them why you chose this one.
Behavioural questions
Use the STAR method for these.
Questions 14–20 · Behavioural
Question 14
"Tell me about a time you had to work accurately under time pressure."
What they're really asking
Finance runs on deadlines, and mistakes creep in when people rush. Can you stay accurate when time is short?
How to answer it
Use a real situation: a tight assignment deadline, an exam, or work where a mistake would have had consequences. Say what you did first, how you checked your work and when you asked for help. Focus on your method. You want them to think you have a way of staying accurate under pressure, rather than that you stayed up all night and got lucky.
Question 15
"Describe a time you identified an error or problem that others had missed."
What they're really asking
Accounting work depends on attention to detail. Can you show yours with an example?
How to answer it
Pick a specific time your checking caught a real problem: a spreadsheet error, figures that didn't reconcile, or a report that contradicted itself. Say how you found it, how you raised it and what difference it made. A small example is fine. You're showing a habit of checking your work, so it doesn't need to be a dramatic catch.
Question 16
"Tell me about a time you had to explain something complex to someone without a finance background."
What they're really asking
A lot of finance work is explaining numbers to people who aren't accountants. Can you do that?
How to answer it
Say who you were explaining to, what the idea was and how you adapted your explanation for them: an analogy, no jargon, and what it means for them before how it works. A good explanation is one the person understood well enough to make a decision with, even if it left out some of the technical detail.
Question 17
"Give an example of a time you worked as part of a team to deliver something under pressure."
What they're really asking
Finance teams work long hours at busy times of year. Can you work well with others when everyone's under pressure?
How to answer it
Use a specific group project, internship or extracurricular activity. Focus on what you contributed and how you helped the others. You want them to hear that you're reliable, you keep people informed, and stress doesn't make you hard to work with.
Question 18
"Why did you choose accounting / finance over other career paths?"
What they're really asking
Was this a considered choice, or did it just seem like a safe option?
How to answer it
Be honest and specific about what drew you in: a subject you enjoyed, an internship that confirmed it, a family business, or curiosity about how companies work. Don't lead with "because it's a stable career with good pay", even if that's part of it. Talk about what interests you in the work itself.
Question 19
"Where do you see yourself in five years?"
What they're really asking
Are you planning to build a career in this field, and does this role fit that plan?
How to answer it
Be realistic and specific to the role. For an audit graduate program, that might be: qualified as a Chartered Accountant (or CPA), and starting to specialise or move into advisory work. For a corporate finance role: working towards senior analyst or manager, with some real deal experience. Link your five-year view to what this role gives you: the training, the client work and the path to qualifying. Avoid a vague ambition like "I want to be in a senior leadership position" unless you can show how you'd get there.
Question 20
"Do you have any questions for us?"
What they're really asking
Are you interested enough to have thought about what you want to know?
How to answer it
Good questions for finance roles: "What does the path from graduate to manager usually look like here?" / "What kinds of clients or deals do graduates work on in their first year?" / "How does the team fit study for the CA or CPA around client work?" / "What do the graduates who do well here tend to have in common?"
One more thing
Read the business news regularly in the weeks before your interview, such as the Australian Financial Review or the business pages of a major paper. Being able to talk about a current story shows you're interested in business itself, beyond your exams.