After completing the audit work in individual departments, the auditor prepares the audit report. This is essentially the stage of completing the audit work to summarize the results of the audit and provide the auditor's opinions and comments.
Check audit records
The lead auditor is responsible for summarizing and checking the work of the audit staff in the group. If the auditor discovers an error that the client agrees to correct, the auditor will make the adjustment on the error summary sheet.
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On the contrary, if the client does not agree to the adjustment, the auditor will state it in the audit report or management letter depending on the materiality of the errors. Then, the main auditor will submit it to the Audit Director to re-check the work of the audit team. The Director's decision is the final decision in the audit report.
Send draft for comments: After completing the work, the main auditor issues a draft audit report to the client. When both parties agree on the figures, the company will issue the official audit report.
Complete final report
The audited financial statements must include all forms as prescribed by the State and will be reviewed and officially drafted for signing and issuance. The client must first sign the financial statements and then the head of the audit department submits them to the Board of Directors for approval and issuance.
Release of official report
Depending on the results of the audit, the auditor may issue one of the following four types of audit reports:
- Report accepted in full.
- Report accepted in part.
- Report not accepted.
- Report denied.
Before being issued, the audit report is carefully reviewed by the company's auditors in a strict order to limit errors that affect the quality of the audit report. This demonstrates the auditors' sense of responsibility for the products they produce.
Follow up on issues arising after reporting
After the release, there may be information related to the audited financial statements. In principle, everyone in the company, when receiving information about audit risks, must immediately notify the head of the audit department and the audit team to report to the Board of Directors.
2.3 Research methods
2.3.1 Methods of analysis, description and synthesis
- Based on information collected from reading documents at the auditing company, analyze the company's auditing process, then summarize and describe it in theoretical form.
- Describe each step when conducting an audit of a client company, how to analyze data provided by the client.
2.3.2 Observation method
- Observe how auditors and audit assistants at the auditing company summarize data and audit results.
- When actually participating in auditing at the client company, observe the working style of auditors and audit assistants, especially how to perform revenue audits.
2.3.3 Listing method
- List the balance and revenue generated on the summary table.
2.3.4 Comparison and contrast method
- Compare the balance of revenue items in 2015 with 2014, compare the differences to find out the differences or fluctuations of the research objects.
- Compare and contrast necessary data and information between books and related documents such as invoices, delivery notes, etc. Compare similarities and differences between actual processes and learned theories.
2.3.5 Method of volatility analysis
- List the balances of revenue accounts over the years 2014 and 2015, then compare and give the fluctuations in both relative numbers (the rate of change is shown below).
%) and absolute numbers (changes expressed in specific numbers). From there, we will make judgments and consider the causes of those fluctuations.
2.3.6 Correspondence analysis method
- List the corresponding debit and credit accounts of revenue items to see if any unusual transactions occur.
2.3.7 Sampling method
- Based on the detailed account statement, select transactions to check. For transactions that occur infrequently, select 100% of the sample size.
2.3.8 Detailed inspection method
- After selecting the sample, we will check and compare the information of the transactions in the books with the original documents.
2.3.9 Evaluation method
- Based on theory and practice, evaluate the strengths and weaknesses of the revenue item audit process that SVC Company performs.
CHAPTER 3: APPLYING THE AUDIT PROCESS OF REVENUE ITEMS OF SAO VIET AUDITING COMPANY TO
REALITY
3.1 Introduction to Sao Viet Auditing Company Limited
3.1.1 History of formation and development
Faced with the increasing demand for auditing by companies and businesses, more and more auditing companies are being established. As one of the first auditing companies established in the Southern region, Sao Viet Auditing Company Limited is considered to have more favorable conditions than other auditing companies in the same region.
Sao Viet Auditing Company Limited was established on July 17, 2006 under Decree No. 133/2005/ND-CP dated October 31, 2005 of the Government on Independent Auditing and Circular No. 60/2006/TT-BTC dated June 28, 2006 of the Ministry of Finance, business registration certificate No. 0304457750. On December 6, 2010, the company merged with Quang Minh Auditing Company Limited to establish Sao Viet Auditing Company Limited (SV).
The company's headquarters is located at 386/51 Le Van Sy, Ward 14, District 3, Ho Chi Minh City.
• Phone: (08) 35261358
• Fax: (08) 35261359
• Email: svc-hmc@vnn.vn
The company's business lines include: Accounting and auditing; finance - financial consulting; tax accounting - tax accounting services. Currently, SV provides products and services including: Accounting services; Auditing services; Tax accounting; Financial consulting.
With the desire to further improve the quality of service, since its establishment, SV has tried and had cooperation with research institutes, universities and experts with a lot of experience in the fields of tax, finance, banking, law, information technology, ...
To achieve its long-term development goals and expand its market share in its field of operation, meet the needs of domestic economic construction and development as well as integration into the world market economy, SV has now opened three more branches:
- Branch No. 1 is located at Lot 66, Road No. 11, Residential Area of Can Tho City Construction Joint Stock Company, Hung Thanh Ward, Cai Rang District, Can Tho.
- Branch No. 2 is located at 292/33/33, Binh Loi Street, Ward 13, Binh Thanh District, Ho Chi Minh City.
- Branch No. 3 is located at No. 41, Ngo 62, Tran Binh Street, Mai Dich Ward, Cau Giay District, Hanoi City.
Established close to the time of the company's establishment, branch No. 1 - Sao Viet Auditing Company Limited, Can Tho branch (abbreviated as SVC), was established in 2010, with Mr. Nguyen Quang Nhon (Director) as the legal representative with 20 members. Although it was established not long ago, with the efforts and wholehearted attempts of the Board of Directors and all employees, SVC has gradually affirmed its position.
• Phone: (0710) 3765999
• Fax: (0710) 3765766
Email: sgn@.vnn.vn
3.1.2 Organizational structure
Organizational structure is a synthesis of different departments (units and individuals), which are interdependent, specialized and have certain responsibilities and powers, arranged at different levels and stages to ensure the implementation of management functions and serve the common purpose of the enterprise. A good organizational structure will directly affect the development of the company and vice versa.
Room
Plan – Summary
Audit Department
The organizational structure of SVC is shown in the following diagram:
Manager
Room
Vice president
Room
Vice president
Room
Accounting – Finance
(Source: Sao Viet Auditing Company Limited, Can Tho branch, 2016)
Figure 3.1: Organizational chart of SVC
Functions and tasks of each department
- The director is the person who directly manages all general activities of the company.
- The Deputy Director will assist the Director in managing the company and be in charge of managing the audit departments.
When accepting to perform an audit contract, the Director or Deputy Director, collectively referred to as the (Board of Directors), will appoint personnel and require the audit team leader to prepare an audit plan and report the results of the audit process for the Board of Directors to review and sign the audit report.
- Auditing Department: Under the direct management of the Board of Directors. The function of the department is to conduct audits for customers according to the signed contract. The structure of each department includes:
+ Headed by the Audit Manager.
+ Chief auditor, auditor and audit assistant.
- Planning and Synthesis Department: Implement the company's audit contracts that have been and are being signed with customers. Check the financial revenue and expenditure plan, promptly detect and prevent wasteful phenomena, violations of the company's regime and regulations. Disseminate the State's financial management policies and regimes to relevant departments when necessary. Check and analyze financial activities, serving the work of planning and monitoring.
- Accounting and Finance Department: Providing data and documents for business operations. Providing reporting data to relevant agencies according to current financial reporting and accounting regimes. Reporting performance results to the Board of Directors. Responsible for labor, human resources, salary and accounting issues of the company.
Comment
It can be seen that: SVC's organizational structure is designed to suit its current scale. As a branch of SV and its main business is auditing; therefore, SVC's organizational structure is quite simple and compact, without many departments. Each department is assigned specific functions and tasks. This has facilitated the Board of Directors in operating and controlling general activities. There is a clear connection and hierarchy between departments, ensuring good performance of their own functions and tasks, and helping and supporting each other in their work. With a small number of members in the company and a simple organizational structure, it has helped members become closer and more intimate with each other. The working environment is comfortable and fun; the staff are friendly, capable, and hard-working. These are the things that have contributed to the development of SVC.
3.1.3 Company services
3.1.3.1 Auditing services
This is the main service in business activities, accounting for 80% of total revenue. SVC's special auditing services include:
- Auditing financial statements;
- Auditing financial information;
- Auditing of basic construction works;
- Auditing of investment capital settlement;
- Auditing financial statements for tax purposes and tax settlement services;
- Check financial information based on pre-agreed procedures.
3.1.3.2. Consulting services
- Financial consulting; tax consulting.
- Human resource consulting.
- Management consulting.
- Tax planning, consulting, advising on issues related to income tax (corporate, individual), tax incentives, fees and charges, indirect taxes.
- Assist in tax compliance including preparation and filing of tax returns for companies and individuals.
- Prepare application for preferential tax rate.
- Prepare application for exemption from import tax and special consumption tax.
- Consulting foreign investors and traders to choose the most suitable business form in Vietnam.
- Support business registration, investment license application.
- Registering personnel, applying for tax codes, registering import and export... ensuring that businesses operate in compliance with Vietnamese law.
3.1.3.3. Other services
- Accounting services.
- Valuation services.
- Financial statement review service.
- Training services, updating knowledge of finance, accounting, auditing.
3.1.4 Company performance
3.1.4.1. Customer characteristics
SVC's customer base has been relatively stable recently. The company currently has a large number of regular contract customers and is constantly accepting new customers.
Focusing on retaining traditional customers and maintaining reasonable prices is the long-term development policy that the company has set for itself. At the same time, the company also constantly proposes measures to improve the quality of services provided, increase sales, increase market share, promote the image and reputation of the company. The company always follows the principle: "Choosing customers. Building traditional customers".