- Must be suitable to the conditions and characteristics of the Auditing Company and have a positive impact on improving the quality of the Company's auditing services.
3.3.3. Solutions to improve the work of auditing cash capital
Solution 1: Improve the quality and increase the number of staff
- Solutions to improve staff quality:
The quality assurance team not only aims at high efficiency of the audit but also complies with the generally accepted auditing standards. The first general auditing standard states that “ the audit process must be performed by one or more persons who have been fully trained and proficient as an auditor ”. According to Article 13 of Decree 105/2004/ND-CP, the standards of auditors are: “ Having professional ethics, honesty, integrity, and a sense of law compliance; Having a bachelor’s degree in Economics - Finance - Banking or Accounting - Auditing and having at least 5 years of actual work experience in finance and accounting or 4 years of actual work experience as an audit assistant at an auditing enterprise; Having the ability to use common foreign languages and be proficient in using computers; Having an Auditor Certificate issued by the Minister of Finance ”. Currently, the company's staff is mainly young employees, just graduated from university, so they have no experience and have not met auditing standards. Therefore, the company needs to increase the number of exams and tests every year to assess the capacity of auditors and assistant auditors. From there, there will be plans for training, the company needs to create conditions for employees to participate in advanced training courses, participate in studying and taking exams to obtain the Auditor Certificate issued by the Minister of Finance. In addition, the company should create conditions for employees with good capacity to attend specialized auditing training courses abroad.
The limited foreign language proficiency of auditors makes it difficult for auditors to access professional documents in foreign languages as well as to participate in auditor training courses abroad. This also makes it difficult to expand the auditing market to foreign-invested companies in Vietnam. Therefore, the Company needs to create conditions to encourage auditors to participate in English training courses, especially English training courses in auditing.
- Solution to increase the number of KTV:
Currently, in Vietnam, there are many universities that provide auditing training. The Company can cooperate with these universities to discover excellent students and attract them to become employees of the Company in the future while they are still in school. This can be done through training cooperation with universities. The Company can send experienced auditors to directly participate in teaching students to help students have the most practical knowledge and be able to perform their jobs well after graduation. The Company can create conditions for students in the internship period to participate in internships at the Company, thereby discovering capable students to keep working at the Company.
Moreover, in the current period, with the attractiveness of the banking, finance and securities sectors, the change in human resources at auditing companies is gradually becoming an issue that managers at auditing companies are most concerned about. Therefore, to avoid the situation of personnel change and to be able to attract more talents, in addition to the existing salary regime, incentive and support policies, the company needs to create a positive working environment, have activities, appropriate reward regulations and improve attractive salary regimes to make employees feel secure and long-term commitment to the strong development of the company.
Solution 2: Develop a questionnaire to evaluate the internal control system for cash
The auditor used the “Questionnaire for assessing the internal control system for cash” by interviewing cash accountants, treasurers, and bank deposit accountants.
Table 3.1: Questionnaire for assessing the internal control system for cash items at Van Long Company Limited
Questions to learn about HT KSNB
Have | Are not | Note | |
1. Are the cashier and cash accountant jobs done by the same person? | |||
2. Does the company have regulations on maximum cash balance? The prescribed level (if any) is……, | |||
3. Are expenditures planned for approval by the Director in advance? If so, expenditure plans are prepared weekly/monthly/ quarterly. (underline the implementation plan) | |||
4. Does the cash accountant reconcile with the cashier monthly? | |||
5. Is the reconciliation between the accountant and the cashier documented? | |||
6. Cash on hand is inventoried once a month / quarter / year (underline the implementation plan) ? | |||
7. Is there a rule that the collected funds must be deposited into the bank at the end of the day? | |||
8. Are bank reconciliations done monthly? |
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9. Are the differences between the figures in the accounting books and the bank subsidiary ledger recorded?
find the cause and solve it?
10. Are foreign currency deposits tracked separately? | |||
11. Are receipts/payments numbered sequentially according to the actual time of receipt/payment? | |||
12. Are all payment vouchers required to have the Director's approval before payment? If not, payment vouchers are signed daily, weekly, monthly. weekly or monthly? | |||
13. There are regulations on authorizing the Deputy Director or Chief Accountant to sign and approve expenditures. What if the director is on a business trip? | |||
14. Are the vouchers and accompanying documents stamped [paid] to avoid payment? duplicate, reuse? | |||
15. Are the cancelled receipts and payment vouchers marked with a cancellation mark to avoid their use? All Are the links saved at the stub? | |||
16. The management requires the preparation of monthly cash flow statements to monitor cash flow? | |||
17. Does management perform irregular cash audits? | |||
22. If so, does the unit make a record of the audit and keep it in the accounting documents? |
Solution 3: Complete the analysis procedure
Analytical procedures can help auditors have an overview of this item, provide preliminary assessments of cash, and from there have a detailed audit plan suitable to the characteristics of the audited unit, helping auditors reduce detailed tests, save time and increase the effectiveness of the audit. For cash items, auditors should apply analytical procedures to the Cash Flow Statement, this is a useful tool for auditors to see the cause of cash fluctuations this year compared to last year.
Based on the audit results of the previous period, the auditor concluded that the cash balance of the previous year had no material errors and found that the cash balance this year was 1,593,460,576 and the previous year was 2,263,880,321. From the above figures, the auditor analyzed the reason for the 29.61% decrease in cash this year and whether there was anything unusual in this decrease. Therefore, the auditor analyzed the Cash Flow Statement to examine the decrease in cash.
Table 3.2: Analysis table of indicators on the Cash Flow Statement
STT
Target | 2012 (VND) | 2011 (VND) | Difference | ||
Absolute (VND) | Soy sauce opposite to(%) | ||||
1 | Net cash flow from business activities | (8,954,026,849) | 6,757,623,741 | (15,711,650,590) | (233) |
2 | Net cash flow from investment activities | (4,098,650,163) | (1,282,092,515) | (2,816,557,648) | (220) |
3 | Net cash flow from financial activities | 12,378,417,220 | (4,612,729,750) | 16,991,146,970 | 368 |
4 | Net cash flow during the period | (674,259,792) | 862.801.476 | (1,537,061,268) | (178) |
5 | Cash and cash equivalents beginning of period | 2,263,880,321 | 1,536,047,068 | 727,833,253 | 47 |
6 | Cash and cash equivalents end of period | 1,593,460,576 | 2,263,880,321 | (670,419,745) | (30) |
Through the above calculations, we see that revenue from business activities in 2012 decreased by 233% compared to 2011. This shows that the cash flow from production and business activities decreased mainly due to increased payments to suppliers of goods and services and for business activities, while revenue from this activity increased but the growth rate was much smaller than the growth rate of expenditure. The reason is that the company has just expanded production, so expenditure will increase, while revenue from this activity may increase in the coming years. However, in the process of conducting detailed inspections, auditors should carefully consider whether expenditures on production and business activities such as purchasing goods and materials are reasonable.
Based on the above results, we can see that the revenue from investment activities in 2012 decreased by 220% compared to 2011. This decrease in cash flow is due to the fact that during the year, the unit liquidated old and outdated equipment to change machinery and equipment to develop production and business. As a result, fixed assets increased from 12,548,699,102 to 13,843,641,023. Auditors need to pay attention to whether the liquidation of fixed assets and the purchase of new fixed assets are correct or not during the audit process.
Next, the auditor relies on the cash flow from financial activities, we see that the cash flow in 2012 increased by 368% compared to 2011 because during the period the company borrowed more than it paid back the principal. The borrowing unit mainly aims to serve the production and business purposes. But the auditor needs to consider whether the loan contracts of the unit actually exist or not.
So through the preliminary analysis results above, we see that such changes in net cash flow are consistent with the development trend of the unit which is to expand production and business. Thus, the auditor needs to pay attention to the expenditures for investment activities, business activities and financial activities during the detailed inspection process.
CONCLUDE
Through a short period of graduation internship, I have learned a lot of practical knowledge about auditing at An Phat Auditing and Accounting Consulting Company Limited. I had the opportunity to apply the knowledge I learned at school to a part of my work and at the same time improve my understanding of the auditing process in general and cash capital auditing in particular at the Company. During the internship, my colleagues in the Company created favorable conditions and enthusiastically helped me. Therefore, I was able to perform my work well during my internship at the Company.
In addition, thanks to the enthusiastic guidance of Ms. Tran Thi Thanh Phuong, I have completed my thesis. Although I have tried my best, due to certain limitations, I certainly still have many shortcomings in the process of writing the thesis. I hope the teacher will comment and give suggestions for this graduation thesis so that I can gain experience for future research.
I would like to sincerely thank my colleagues at An Phat Auditing and Accounting Consulting Company Limited and my supervisor, Master Tran Thi Thanh Phuong, for helping me complete my thesis in the best way possible.
REFERENCES
1. Financial Auditing Textbook - Co-editors: Prof. Dr. Nguyen Quang Quynh - Dr. Ngo Tri Tue - National Economics University Publishing House.
2. Practice auditing some basic parts of financial statements – Dr. Luu Duc Tuyen, Master Dau Ngoc Chau – Financial Publishing House.
3. Vietnamese Standards on Auditing (VSA)
4. Audit records of Van Long Company Limited in 2012 conducted by An Phat Auditing and Accounting Consulting Company Limited.