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What Are Accounting Skills Tests? Types, Hiring, FAQs

accounting skills test
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Crunching numbers happens in every industry. From finance and banking to retail and healthcare, every company relies on accurate financial reporting and analysis to make decisions and sustain business operations.

Whether forecasting future revenues, managing budgets, or ensuring you stay compliant with tax laws, every team needs someone with excellent accounting skills.

Hiring a candidate with the proper skill set can be challenging. Mistakes in financial statements can lead to profitability losses and legal issues. Aside from bookkeeping, modern accountants need to understand newer technology and stay updated with any change in regulations.

When assessing your candidate s’ abilities, you can use accounting skills tests such as those provided by EmployTest. These tools help you determine whether a new hire can come into your company and hit the ground running.

There are various tests available, each evaluating different skills required for accounting and finance. Learn all about them in this comprehensive guide.

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What is an Accounting Skills Test?

An accounting skills assessment or test evaluates a candidate’s proficiency in accounting principles and practices. These tests measure good accounting skills such as financial reporting, bookkeeping, tax compliance, and analysis to determine if a candidate will be able to be successful in their role within your company.

The tests come in various formats, including multiple-choice questions, practical exercises, and simulations, and can be tailored to different levels of expertise depending on the role. 

By having your candidates go through an accounting skills assessment, you can objectively gauge their capabilities and hire those who best fit the job responsibilities.

what is an accounting skills test

Types of Accounting Skills Tests

1. Technical accounting tests

These tests assess some of the hard skills of an accountant, in particular, the knowledge of fundamental and advanced accounting principles. They cover technical accounting skills and topics such as Generally Accepted Accounting Principles (GAAP), International Financial Reporting Standards (IFRS), financial statements, and regulatory compliance. 

Candidates need to have a solid foundation in accounting standards and can apply these principles in their work. Not only can it help you gauge their knowledge, but it allows you to identify those capable of maintaining financial integrity within your company.

2. Software proficiency tests

Because of technological innovations, an accountant must be proficient in standard accounting software tools such as QuickBooks, OutlookSAP, Oracle, and Microsoft Excel. Skills tests for these tools typically involve practical exercises where candidates show their abilities in data entry, financial analysis, and report generation. 

Most companies rely on these programs for day-to-day tasks, so someone proficient in these tools is an excellent addition to the team.

3. Analytical skills assessments

A skill assessment test for accounting evaluates an accountant’s expertise in analyzing financial data. These tests often involve problem-solving scenarios where candidates identify trends, perform variance analysis, and make data-driven decisions. 

Strong analytical skills are crucial for roles involving budgeting, forecasting, and financial planning, as they allow accountants to present valuable insights that can influence company strategies and decisions.

4. Soft skills

Working for a company means working with a team, and soft skills tests assess accounting communication skills and build strong professional relationships. One key soft skill is emotional intelligence, which can be evaluated using tests like the Emotional Intelligence Profile for Candidates provided by EmployTest.

For instance, accountants often need to explain complex financial information to non-financial stakeholders, making clear communication a critical skill. Teamwork and problem-solving are vital, as accountants must work with their teams and other departments to ensure accurate and effective financial management.

By assessing these skills, you ensure that your hires have the know-how and can work well with the rest of the workforce and thrive.

Why An Accounting Skills Test is Essential in Hiring

Here are some of the reasons why you must have an accounting skills test for interviews:

Ensures candidate competency

Talent assessments for finance provide an objective way to measure a candidate’s proficiency and knowledge in financial reporting, bookkeeping, and tax compliance. For instance, these tests might tackle preparing financial statements, reconciling accounts, and understanding various accounting standards. 

A competent accountant can work without constant oversight and effectively perform their duties without making errors that can cost the company. 

Identifies potential skills gaps

Sometimes, a candidate may lack the skills needed for your hiring role. This area is where you can check for accountant-required skills through a test and tailor your hiring decisions to those who pass.

Understanding these skill gaps early in the process allows you to determine which candidates best fit the role and where you can provide additional training.

For instance, if a candidate shows strong analytical skills but lacks familiarity with specific accounting software, you can provide training to bridge this gap. Implementing these measures ensures new hires can effectively handle their duties and have a clear path for growth within the company.

Checks understanding of regulations

Being in hot water due to accounting errors or violating regulations tanks a company’s reputation. Gauging if a candidate understands laws such as the Sarbanes-Oxley Act can help keep financial reporting transparent and reliable and avoid trouble with authorities.

Staying current with evolving regulations is also a significant challenge in accounting. Regular updates to laws and standards mean accountants must continually educate themselves to remain compliant. 

Accounting knowledge tests can help determine whether candidates have up-to-date knowledge of the latest changes and show they can keep up. 

Enhances hiring efficiency

Adding skills tests into the hiring process streamlines candidate evaluation and helps to more quickly identify top talent. These tests provide immediate and objective data on a candidate’s competencies.

Seeing the data means you can quickly differentiate between candidates with the skills needed for accounting and expedite the hiring process.

Gives benchmarking data

Hiring isn’t a vacuum; you must also consider trends and what is happening within the industry. 

Skills tests generate benchmarking data that you can use to compare candidates against industry standards and norms. This data allows companies to assess how candidates stack up against their peers regarding their expertise and skills.

There is more information you can glean from hiring tests. Learn more: Accounting Shortage: How Pre-Employment Tests Can Help and Accounting Skills: Are Your Hires Really Ready?

Which Accounting Skills to Test For 

When looking over candidates, it’s vital to look at the range of skills the company needs to fill the role. Some of the abilities to test for are:

Core accounting skills

Core accounting skills are the foundation of any accounting role. Candidates should show proficiency in tasks such as preparing, analyzing, and interpreting financial statements, including balance sheets, income statements, and cash flow statements.

They should also be familiar with auditing procedures, encompassing risk assessment, evaluation of internal controls, and meticulous audit documentation. Through these skills, hires can identify errors, discrepancies, and potential fraud or mismanagement during audits.

Software proficiency

Candidates must showcase their mastery over industry-standard software relevant to the job role. Accountants rely on various software tools to manage financial data, including spreadsheet applications like Microsoft Excel and accounting software such as SAP and QuickBooks. 

Proficiency with these technologies enables accounting professionals to streamline processes, make operations more efficient, and make decision-making easier.

Analytical abilities

Analytical abilities are necessary for accountants, letting them dissect complex data and discern trends crucial for evaluating a company’s performance, profitability, and financial health. Their capacity to look for patterns and anomalies helps them make decisions that keep the organization afloat.

These skills help management allocate resources and capitalize on opportunities that allow the company to grow.

Communication skills

Being an accountant means that you will be working with different teams, and not all may be able to understand the technical jargon. Your hires should excel in both written and verbal communication and can explain financial insights through reports, memos, and emails.

Good communication skills mean your company is more transparent and trustworthy to the other employees and the stakeholders at the top.

Attention to detail

Attention to detail is paramount to ensure the accuracy and precision of every document, thereby maintaining company integrity. Candidates must have a keen eye for detail when reviewing financial documents to spot errors, discrepancies, and inconsistencies. 

These skills prevent costly errors that could tank the company and foster trust among the employees and management.

Behavioral skills

Behavioral skills are crucial in accounting roles because everyone within the company must be able to work together. A candidate’s personality profile should include the ability to work collaboratively, adapt to changing environments, and have strong problem-solving and critical-thinking skills.

Custom pre-employment tests can evaluate these skills, ensuring that your accountant can make informed decisions, meet critical deadlines, and effectively collaborate with others. 

Find out what other skills you need to watch out for. Learn more: Effective Hiring With Accounting Skills Tests

FAQs About Accounting Skills Tests

Some common questions about accounting skills tests are:

1. What types of skills are typically assessed in accounting skills tests?

Accounting skills tests typically assess a range of skills, including core accounting competencies such as financial reporting, auditing procedures, and tax compliance. 

You can also test candidates’ proficiency in industry-standard accounting software, their analytical abilities to analyze complex financial data, and their communication skills to effectively convey financial information.

2. How are accounting skills assessment tests administered?

Accounting skills tests can be administered in various formats, including written exams or practical exercises.

Written exams may require candidates to solve accounting problems or answer theoretical questions. Practical exercises may involve performing accounting tasks using software or analyzing financial data in real-world scenarios.

3. Are accounting skills tests tailored to specific job roles or industries?

Yes, you can customize accounting skills tests with specific job requirements and industry standards to reflect the skills the company needs. For instance, a test for an analyst position may focus more on financial analysis and modeling skills. In contrast, a test for a tax accountant role may emphasize tax laws and regulations.

4. Can candidates prepare for technical accounting skills tests in advance?

Yes, candidates can prepare for accounting skills tests by reviewing accounting principles, practicing with sample questions or exercises, and familiarizing themselves with industry-standard accounting software. 

They can also benefit from participating in training programs or courses to improve their skills and increase their chances of passing.

5. How do employers use the results of accounting skills tests in the hiring process?

Employers use the results of accounting skills tests to assess candidates’ suitability for positions and identify areas for further development. These results provide insights into a hire’s strengths and weaknesses, allowing you to determine if they will succeed within the company.

Gain more insights into other desirable skills through our blog. Learn more: Skills Needed for Accounting Clerks & Bookkeepers.

Wrap Up

Accounting skills tests are invaluable tools for identifying top talent, mitigating hiring risks, and bolstering a company’s success by adding another valuable team member. By assessing candidates’ accounting skills, software proficiency, analytical abilities, and more, employers can determine if they’re a great fit and asset to the organization.

EmployTest offers pre-hiring assessment tests to assist in finding the perfect fit. Check out the accounting pre-employment test and other resource tools to help streamline your recruitment process. Get started with a free sample test today and experience the difference it can make in your hiring process.