As an accountant, what red flags in the books might suggest fraud or error, and what would you do if you found one?

What the interviewer wants to hear

• Unusual journal entries: round sums, late night, period end, by senior staff
• Vendors with no GSTIN, PAN or address, or matching employee bank details
• Duplicate invoices or payments, split purchases below approval limits
• Unreconciled or aged balances and suspense items
• Escalates through proper channels and preserves evidence

Model answer

Some patterns deserve a closer look. Manual journal entries with round amounts, posted at period end, late at night or by senior staff who do not usually post, especially to revenue or reserves. Vendors without GSTIN or PAN, with addresses matching an employee, or whose bank details changed just before a large payment. Duplicate invoice numbers, payments just under approval limits, or one purchase split across several orders. Sales booked near year end and reversed afterwards, or credit notes clustering after the close. Old unreconciled balances, suspense accounts that never clear, and one person who controls a process end to end and never takes leave. If I found something, I would not confront the person or delete anything. I would gather the facts and documents quietly, check whether there is an innocent explanation, and escalate to my manager, finance head or the whistleblower channel, following company policy.

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