Current status of auditing fixed assets items in financial statement auditing performed by International Financial Auditing and Consulting Company Limited (IFC)

Through detailed inspection of ABC Company's fixed assets, the auditor found that the Company's fixed asset increase transactions were reasonable. However, the accounting for the depreciation of financial leased fixed assets was incorrectly calculated. Therefore, to evaluate the Company's process of using and preserving fixed assets, the auditor conducted a fixed asset depreciation audit.

*Audit fixed asset depreciation costs

The audit of depreciation of fixed assets is also performed similarly to that of fixed assets items, including:

- Check opening balance

- Check the increase in the period

- Check the decrease in the period

To perform this task, the auditor also needs related documents such as: Fixed Assets Detail Book, Fixed Assets Handover Minutes, Account Ledger to determine the time the asset goes into operation as well as review the asset usage time and whether the depreciation is consistent. The auditor reviews the Balance Sheet with the Fixed Assets Detail Book, and calculates

Review some depreciation to see if it is reasonable. After calculating

Recalculate depreciation expenses Auditor found

IFC INTERNATIONAL AUDITING AND FINANCIAL CONSULTING COMPANY LIMITED

Customer name: ABC Company

Accounting year 12/31/2004

Account 211 Implementer DEF

Work steps to recalculate depreciation of fixed assets February 26, 2005

1, Generator 1

NG: 11,904,782, purchased and put into use on January 31, 2004

Depreciation from February: 11* 11,904,182/ (7*12) = 141,732*11 =1,558,957 v 2, Generator 2

NG: 11,8822,510, purchased and put into use on April 30, 2004

Depreciation from May: 8*11,882,500/(7*12) =141,458*8 = 1,131,667 v 3, Cable pull recorder

NG: 12,500,000 purchased on August 31, 2004

Depreciation from September: 4*12,500,000/(7*12) = 694,444 v 4, Photocopy machine on January 31, 2004

NG: 73,727,273

Depreciation from February: 11*73,727,273/(7*12) = 1,431,947 v

5. Computer

NG: 5,714,000, Usage time: 3 years Depreciation: 3*5,714,000/36 = 476,167 v

6, Automatic mixer

NG: 663,910,921, usage time 5 years Depreciation: 5 *663,910,921/(60) = 55325910 v

Note: v matches the books

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Consolidation of post-audit results:

Table 15: Extracts from working papers of

* T

After completing all the Audit procedures, the Auditor will complete the Audit for his/her part and resolve any outstanding issues and complete the working papers. Finally, the Auditor will base on the collected evidence to make comments and recommendations on the fixed assets part and make adjustment entries.

Comments and recommendations

of KTV after Auditing

item

Fixed assets of ABC Company are shown through the working papers of the auditor.

The final task of the Auditor is to type references for the working paper and attach it to the General Working File. This work will be reviewed and evaluated by the Audit Team Leader as a basis for issuing the Report and Management Letter later.

3. Completion of Audit work

During this phase, the technician must perform the following tasks:

- Review of Auditor's working papers

- Review of events occurring after the date of the Report

- Prepare Audit Report

- Post-Audit Meeting and Review

3.1. Review of KTV's working papers

After the auditors have completed their work, the Audit Team Leader will gather and review the working papers for the following purposes:

- Ensure that the evidence collected and evaluated is descriptive.

fully informed about the customer's business operations.

- Check the appropriateness in applying generally accepted auditing standards and professional standards.

maths,

- Ensure that the defined Audit objectives have been met.

- Confirm that the working papers contain all the necessary information to prove the conclusions on the financial statements later.

If during the review process any imperfections are discovered,

If the set goals are not met, the KTV's administrative part is required.

or directly correct and supplement. For those Audits that have

Due to its high legal nature, the IFC Board of Directors will directly review the Auditor's working papers related to the key Audit objectives.

Regarding the audit of fixed assets of ABC Company, after reviewing, the team leader assessed that the audit work had been performed quite fully by the auditor and had stated all the necessary information about the subject and objectives of the audit of the completed fixed assets item.

3.2. Review of events occurring after the date of financial statements

During the period from preparing the financial statements to issuing the financial statements, there are

a lot of things

new events.

This event may affect

material or immaterial to the financial statements. However, this consideration is necessary, in accordance with the principle of professional prudence.

To detect events that seriously affect the audit results, auditors often conduct interviews with the Board of Directors combined with auditors' experience.

Through review, regarding the fixed assets management of ABC Company, there are no arising problems affecting the financial statements and economic statements.

3.3. Prepare Audit Report

After collecting the explanation letter from the client's Board of Directors, the auditor will prepare a summary table of the audit results and prepare a draft audit report. Before

Upon completion of the Audit and issuance of the official Financial Statements, the Audit documents must undergo three rigorous reviews:

- Review by a Senior Auditor of the Audit team's working papers.

- Review by the Chief Auditor of the entire file before submitting it to the IFC Board of Directors for final review.

Audit

- Final review by the Board of Directors of the Audit documents before issuing the official Financial Statements.

After reviewing and evaluating the Audit findings, IFC will prepare and

Publish the Audit Report to the customer according to the signed contract. Audit Report

IFC's audit in the form of a management letter includes:

- Report of the Board of Directors.

- Independent Auditor's Report.

- Balance sheet as of December 31, 2004.

- Business results report for fiscal year 2004.

- Notes to Financial Statements.

3.4. Post-Audit Meeting and Review

With initial consensus on the Audit results in the form of the first draft of the audit report. In principle, both parties must discuss to

reach a final agreement on the financial statements. During the meeting, the auditor must explain

detected violations and provide evidence to prove them

demonstrate that the violations are correct and at the same time affirm that the preparation of the financial statements of that unit is completely honest and reasonable in all material aspects.

Through that, both sides can also

raise issues

exist in work

manage to

together to solve. In the meantime, the opinions

still

provided by KTV to customers to further enhance the management role of the unit's Board of Directors.

III – SUMMARY OF AUDIT PROCESS OF FIXED ASSETS ITEMS IN AUDIT

FINANCIAL STATEMENT AUDIT PERFORMED BY INTERNATIONAL AUDIT AND CONSULTING COMPANY LIMITED

FINANCIAL ADVICE

After studying the Audit of Fixed Assets items performed by IFC at ABC Company, the Audit process of Fixed Assets items in a Financial Statement Audit can be summarized according to the following model:

1. Audit Planning

Customer outreach

Strategic Audit Planning

Understand your customer's business

Preliminary understanding of internal control system and technical system Perform preliminary analytical procedures Initial assessment of potential risks Determine key audit objectives and audit approach

Expected team leader and implementation time

Overall Audit Planning and

Auditing program

Objectives Audit and preliminary analysis of fixed assets

Materiality and risk assessment for fixed asset items

Evaluation of the internal control system

Fixed Asset Audit Program

2. Conduct Account Audit

Fixed Assets Item

System check for account

Fixed Assets Item

Perform analytical procedures

Perform detailed testing steps

3. End of Inspection work

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Review of KTV's working papers

Review of events occurring after the date of financial statements

Prepare Audit Report

Post-Audit Meeting and Review

Diagram 9: General Fixed Asset Audit Model

Table 16: Audit Program for the Account

General Audit Procedures

1. Check account balances for existence, completeness, correctness and recording

2. Check fixed asset depreciation costs and accumulated depreciation of fixed assets for existence,

completeness, timeliness and recording

3. Check the asset price details

4. Check the presentation of account balances

5. Check the existing basic depreciation fund (off-balance sheet account)

6. Check the financial leased assets for value, existence, completeness, and correctness.

period and notes

7. Check transactions with relevant parties for existence, completeness,

Periodicity and recording

8. Revaluation of fixed assets

9. Provide consulting opinions

10. Check transactions recorded in foreign currency

11. Check the value and existence of intangible fixed assets

12. Check the recording and existence of intangible fixed assets

13. Check the depreciation of intangible fixed assets and depreciation expenses of intangible fixed assets on the

record, existence, completeness, timeliness

14. Check the presentation of intangible fixed assets

In fact, with most Audits, the Auditor will not have to perform all of the above procedures. Depending on the characteristics of each client unit, the Auditor will reduce or add alternative Audit procedures as appropriate.

CHAPTER III

SOME COMMENTS AND EVALUATIONS ON THE AUDIT PROCESS OF FIXED ASSETS IN FINANCIAL STATEMENT AUDIT PERFORMED BY IFC

I - GENERAL COMMENTS ON AUDITING WORK AT THE COMPANY LIMITED

INTERNATIONAL FINANCIAL AUDIT AND CONSULTING (IFC)

Although the International Auditing and Financial Consulting Company Limited has been established for less than four years, the quality of the services provided by the Company has always been highly appreciated by customers. During its operation, the Company has conducted hundreds of audits of financial statements of enterprises, audits of capital investment settlements, tax consulting, accounting consulting, financial consulting... This is achieved thanks to the following main points:

- Has a highly experienced management team.

The success of the Company is first and foremost due to the role of

The Board of Directors in managing and operating the Company's activities. The leadership of the Board of Directors with rich experience in the profession and in management not only creates trust for the Company's staff but also wins the trust of customers. The Company's Board of Directors are all the first certified Auditors in Vietnam, have many years of experience and high professional qualifications in the fields of Auditing, Finance and Accounting.

The Company's management and operation apparatus is organized in a compact but scientific and effective manner. The arrangement of departments in charge of specific tasks creates specialization for employees, bringing high efficiency to the work. However, the transfer of employees between the two departments of Basic Construction Audit and Financial Audit in the Company is very flexible. This has proven to be very suitable for a young Auditing Company like IFC, especially during the Auditing season. Moreover, this helps in training and at the same time can promote the experience and ability of employees.

In every Audit, the Company's Board of Directors always closely supervises the Audit work and is often the one directly involved in the main stages of the Audit.

To survive and develop in today's economy, IFC always puts quality first. Therefore, all work is carefully planned with clear assignment and strict control from top to bottom. Training policies to improve employee quality as well as working conditions for employees are always created by the Company to the extent possible.

Besides, the Board of Directors also cares a lot about the spiritual life of employees. The Company often organizes sports and football matches with other companies to create good relationships in all fields.

- About staff:

Have a team of young and dynamic employees united to build the Company to develop and grow.

To get results

as good as

the past years must tell

to the team

The Company's staff is extremely united and has built the Company from the very first difficult days.

Most of the Company's employees transferred from VACO with good professional quality, are very dynamic, creative and full of enthusiasm in their work.

- About Auditing method

IFC's Auditing method is based on the guiding principles of Vietnamese Auditing Standards and International Auditing Standards in accordance with the laws and regulations of the Vietnamese government, creating high efficiency in Financial Statement Auditing services at the Company.

For each audited part of the Company, there is a standard audit program. However, based on the experience of the Auditor, the application of the audit programs is very flexible and ensures the requirements.

pray

on the time and cost of the Audit, from

that increases competitiveness

Painting for the Company.

II – DIFFICULTIES AND CHALLENGES FOR THE COMPANY