At the same time, reconciliation is performed regularly to ensure that the information provided by accountants is accurate, honest, and meets internal control requirements.
2.2.6. Accounting work to minimize risks
Banking activities are always associated with potential risk factors. If the accounting work of a bank is not organized in a reasonable and scientific manner, and does not comply with business processes and inspection and control, it will face many different types of risks such as: incorrect account accounting, incorrect currency codes, incorrect deductions from customer accounts, officers taking advantage of their positions and powers to forge bank withdrawal documents, etc.
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2.2.6.1. Risks in organizing the accounting system
If the division of labor in the accounting system is not reasonable, such as one person doing many different jobs, it is easy to make mistakes, causing delays for customers. Post-audit staff cannot concurrently be a teller or controller. It is necessary to regularly review and rotate staff in departments. Rejuvenate the staff, screen out staff with poor professional qualifications and poor sense of organization and discipline.
2.2.6.2. Risks of non-compliance with business processes
(i), When transacting with customers, the teller skipped steps in the transaction process with customers such as: Not authenticating the customer, not checking, inquiring about customer account information, not comparing signature stamps, causing errors, loss of assets and affecting the reputation of the NHCT. Typically, at a NHCT branch, a customer reported to the police agency for losing 1.4 billion VND in his personal account. The reason was that the customer's wife took advantage of her husband's signature stamp (account owner) to stamp the account owner's section on the blank payment order, then asked the accountant to bring this payment order to the branch's transaction office to complete the transfer procedure. The incident was concluded to have no signs of criminality, but it caused a lot of incorrect information on the media channels, affecting the reputation of the NHCT.
(ii), Failure to comply with professional procedures can easily lead to officials abusing their authority and responsibility to defraud, falsify documents to appropriate money and assets of customers related to capital mobilization and lending at high interest rates.
2.3. Strengths, limitations and causes in accounting work
In general, the Bank's accounting organization has met the requirements of management work. All arising economic transactions are reflected and recorded accurately and promptly, fully complying with the principles of internal control such as the principle of clear assignment of tasks to each individual, the principle of authorization and approval, and the principle of non-concurrent holding of positions.
At the Bank, in addition to the inspection and supervision of the Central Internal Control Department, the inspection and control work is still carried out regularly and continuously by the staff in all departments in all daily activities and operations; in the spirit of promoting the initiative of the professional departments as well as the staff in the Bank. Specific business processes are implemented relatively well from the organization of the apparatus to the organization of accounting documents, the organization of the document system, the organization of the application of the accounting system, the organization of the accounting book and report system. The business processes are implemented accurately by the staff, ensuring compliance with the necessary internal control steps, minimizing possible risks. In addition, the accounting staff at the Bank all have university degrees or higher, have professional qualifications, and a high sense of responsibility, so the organization of accounting and bookkeeping is carried out scientifically and in accordance with regulations.
Currently, the innovation of a new, more synchronous software system has been implemented throughout the NHCTVN system, including Phuc Yen Branch. Therefore, the implementation of accounting organization at the branch is carried out more quickly, accurately, safely and securely, thereby the process of providing data to management levels and authorities is carried out promptly.
The staff force at the Bank is gradually getting younger, which is a favorable factor for the Bank in accessing new technologies in the direction of developing NHCTVN according to the modern banking model. However, this also has its limitations: the staff do not have much experience, professionalism and independence are not high. Therefore, internal control has not achieved the desired results, leading to limitations in the organization of accounting, there are still many potential risks that the internal control system has not prevented. Specifically
Firstly: Some operations such as automatic debit transactions can only be performed by Controllers. The maintenance screen does not display the name of the maintenance account, so it is difficult to control whether the automatic debit has been maintained from the correct deposit account of the business or individual or not? The risk is that the KSV mistakenly deducts from the deposit account of one individual to pay the loan account of another individual. The above unfortunate incident occurred at NHCTPY. This mistaken maintenance is only a risk during the operation process, but it has affected the reputation and brand of NHCTVN. Through the above incident, NHCTPY has sent a dispatch to the Internal Control Department to correct the system, avoiding future risks. Currently, the above maintenance has been done by GDV, when transferring to KSV for approval, the KSV screen will see the customer's deposit account number, customer name, customer's loan account number, customer name, monthly automatic debit date, and the number of days for debit extension if the customer's account has enough money. From there, risk control has been significantly limited, and the internal control system has been strengthened.
Second: The State Bank of Vietnam issued Decision No. 02/2008/QD-NHNN of the Governor of the State Bank of Vietnam dated January 15, 2008 on Amending and Supplementing a number of accounts in the Accounting System of Credit Institutions, Decision No. 479/2004/QD-NHNN dated April 29, 2004 and Official Dispatch No. 2321/NHNN-KTTC of the Governor on guiding accounts used to account for mandatory State Bank bills according to Decision No. 346/QD-NHNN dated February 13, 2008. To comply with the above changes of the State Bank of Vietnam, the State Bank of Vietnam needs to make adjustments and supplement a number of general accounts and detailed accounts to suit the situation.
actual situation at the unit. Furthermore, currently, the Vietnam Bank for Industry and Trade is modernizing the banking system, so building a unified account system in accordance with the State's laws and the instructions of the State Bank is something that must be done immediately.
Third: The current accounting apparatus is not really effective, especially the number of post-audit staff is too small and has to take on many tasks, so the quality of post-audit work is still limited. On the other hand, the post-audit department is currently still under the Accounting Department, so the work of the Post-audit Department is not really independent from the work of the remaining departments in the Department. In addition, the work in the department has not been rotated periodically for some positions, so there is still a situation where a person holds a job position for too long, which will lead to "boredom" in the work and reduce the learning spirit of the staff.
Fourth: Currently, many accounting operations still have to be recorded and monitored manually, especially the internal accounting part because the Bank's Accounting Program does not meet the requirements. This manual monitoring not only wastes human resources and time, but also easily leads to errors, significantly affecting the quality of accounting information in particular as well as reducing the effectiveness of internal control in general.
CONCLUSION OF CHAPTER 2
The banking industry plays an important role in the economy, due to the impact of the 2008 currency crisis, banks are facing many challenges. Vietnam Joint Stock Commercial Bank for Industry and Trade in general and Phuc Yen Bank for Industry and Trade in particular have made many efforts to overcome difficulties and develop.
In this Chapter, the Author has outlined the process of formation and development as well as the characteristics of business activities, the achievements that the Vietnam Joint Stock Commercial Bank for Industry and Trade in general and the Phuc Yen Bank for Industry and Trade in particular have achieved. In addition, the Author also analyzed the characteristics of the organization of activities and accounting work at the Vietnam Joint Stock Commercial Bank for Industry and Trade - Phuc Yen Branch. The thesis has deeply studied the basic elements of accounting work and assessed the current status of accounting work at the Phuc Yen Bank for Industry and Trade.
CHAPTER 3
SOLUTIONS TO IMPROVE ACCOUNTING WORK AT PHUC YEN INDUSTRIAL AND COMMERCIAL BANK
3.1. Development orientation of NHCTVN and NHCTPY to 2015.
3.1.1. Development orientation of NHCTVN
The goal of VietinBank from now until 2015 is to develop a multi-functional, multi-utility banking system on the basis of continuing to improve the quality and efficiency of services, improve transaction procedures, especially retail banking services, comprehensively approach modern banking activities, with high technology content, best meeting the needs of the economy. At the same time, effectively implement the objectives, tasks, and strategic orientations of VietinBank's operations until 2015 as follows:
- Total assets increased by an average of 20%;
- Capital increased by 20%;
- Return on equity (ROE): from 18% - 19%;
- Return on total assets (ROA): 1.53%;
- Capital adequacy ratio (CAR) > 10%.
- Bad debt ratio < 2.5%.
3.1.2. Development orientation of NHCTPY
In 2013, NHCTPY has made continuous efforts to overcome difficulties and was ranked by NHCTVN as having excellently completed its tasks. Development orientation for 2014-2015, NHCTPY will continue to promote growth, dominate the market including 3 basic goals covering the whole year 2014-2015 as follows:
(i), Growth in outstanding loans, capital sources and service development. Specifically:
Total mobilized capital increased by 13.8%, reaching 4,347 billion VND, residential deposits reached
1,140 billion, up 28%.
Outstanding loans increased by 31.3%, reaching 1,800 billion VND. Of which, outstanding loans to corporate customers reached 1,190 billion VND, an increase of 261 billion, accounting for 66% of total outstanding loans; outstanding loans to individual customers reached 610 billion VND, an increase of 152 billion VND, accounting for 34% of total outstanding loans.
Rated by the State Bank of Vietnam as “Excellently completing tasks”. (ii), Complying with Vietinbank's discipline, order and culture (iii), Effectively handling and recovering problem debts.
3.2. Orientation to improve accounting work at Vietnam Joint Stock Commercial Bank for Industry and Trade and Phuc Yen Bank for Industry and Trade
As a multi-functional and comprehensive bank operating in all fields but focusing mainly on industry and services, Incombank has identified the leading role and position of a state-owned bank in economic development.
In the context of the global economic recession, NHCTVN, like many other businesses, was affected early and faced many difficulties. This has partly required banks to innovate their operations and management mechanisms to ensure work efficiency in order to stand firm and develop. In addition, NHCTVN has only transformed its model from a state-owned bank to a joint stock commercial bank since 2009, so the organizational model is still in the process of being rearranged and reorganized to strengthen management and administration, with special attention to perfecting accounting work. With the ambition to become a leading financial and banking group, accounting work is an issue that needs to be addressed in order to create a transparent financial environment, and information provided to interested parties is timely and reliable. Therefore, perfecting accounting work at NHCTVN is extremely necessary, and for the following reasons:
Firstly, the world economic situation is very quiet, countries are facing many difficulties due to the economic crisis in 2008 and the public debt crisis of the Eurozone also creating a not very optimistic "picture" for the world economy. From there, competition in the economy is increasingly fierce, the Bank needs to have an effective accounting organization to provide timely and reliable information for the Bank's Board of Directors to make decisions.
timely and flexible decisions to manage the unit's business operations to overcome difficult times;
Second, the current economic situation changes every day, every hour, the currency market is constantly changing, so to maintain stability for the macro economy, the State Bank always has new decisions, circulars, new laws... Therefore, the accounting organization of banks also needs to be innovated to suit the new conditions. In particular, the large quantitative target for 2013 of the Incombank is the total asset growth rate of 15-20%/year; the commercial credit growth rate of 15-20%/year; mobilized capital increases from 15-20%/year; bad debt under 3%, pre-tax profit increases from 15-20%, budget contribution of over 4,000 billion VND, charter capital reaches over 30 thousand billion VND. With the above goals, the Vietnam Prosperity Bank in general and the Vietnam Joint Stock Commercial Bank for Industry and Trade in particular must continue to focus on enhancing financial capacity, improving operations, and taking advantage of conditions with the following tasks: Continuing to be the leading financial service provider in Vietnam and expanding operations internationally; Improving the financial situation, thoroughly handling bad debts, improving operational capacity towards international standards; Innovating governance, business management and operating models; Developing networks in areas with great potential, helping the Vietnam Prosperity Bank have many advantages in business; In addition, modernizing technology is a solid foundation for developing new banking products and services in a society where science and technology have developed widely as it is today.
Third, accounting is a function of management. Therefore, it has both the characteristics of management and also brings its own characteristics associated with the activities of each specific unit. Therefore, with the goals and plans of 2014, the strengthening of accounting work is carried out with the following main requirements:
- Ensure that the bank's operations comply with the law and regulations, internal procedures on management and operations, and ethical standards set by the bank itself;