but still adhere to the program of determining the materiality level issued by VACPA. Depending on the type and risk of the enterprise, the auditor needs to be flexible in determining the materiality rate from 50% - 70% to establish the materiality level for each item. In addition, the auditor can also flexibly change the threshold of errors that can be ignored, not necessarily 4%. Because each different item contains different risks leading to errors in the financial statements.
4.2.2 Audit implementation phase
- For control testing, the auditor needs to study carefully and research more deeply, so he should present it on paper to keep it during the working process. This will help with the audit in the following years as well as help the auditor save time and effort in studying the client's internal control system.
- Regarding sampling methods, the company needs to combine the company's current sampling method with the statistical sampling method on the computer to help quantify risks, optimize the selected sample size and be less subjective, reducing the time in collecting evidence.
- Because the analytical procedures only stop at analyzing the fluctuations of items in this period compared to the previous period, the company needs to add other analytical procedures, expanding the comparison to businesses in the same industry. The company should expand the analysis of revenue fluctuations by each item or group of items, because when only analyzing fluctuations like Hoang Gia CBTSXK Co., Ltd., only the total number can be considered without details of each item, this can lead to the company selling this item but recording it as another item, causing revenue fluctuations.
- In performing analytical procedures, the company should combine comparing revenue from two consecutive periods with comparing revenue indicators of the client company, with other companies in the same industry or with competitors. In addition, it is also necessary to learn about the general situation of the industry in which the client unit is operating to have a more complete and accurate assessment of the unit. From there, specific and strict directions for the audit can be given, and detailed tests can be expanded or narrowed, helping the auditor save time and bring higher audit efficiency.
- The company needs to analyze ratios such as gross profit/revenue ratio. Based on the fluctuations in gross profit ratio, accountants will have assessments of the business situation of the unit or can detect errors in accounting data.
- The company needs to conduct auditing procedures to compare and reconcile sales revenue and service revenue from documents to books to achieve full compliance in case of any discrepancy.
In case the revenue is likely to be under-reported. In addition, the company should design additional procedures for estimating output tax to compare with the company's output tax. If there is a large difference, it is necessary to re-check the unit's calculation method. For revenue from financial activities, the company should conduct additional procedures for estimating exchange rate differences and estimating deposit interest. If there is a difference, it is necessary to re-check whether the unit has calculated correctly or not. In addition, the company should also design additional auditing procedures for revenue from financial activities to ensure the accuracy and reasonableness of this item.
4.2.3 Audit Completion Stage
Accountants regularly update information on changes and additions related to revenue items.
Auditors must constantly learn and improve their own experience to be able to make decisions or judgments in the most reasonable way because there are many jobs that require auditors to make a lot of personal judgments such as: selecting samples for testing, assessing risks, and establishing materiality levels.
Arrange personnel and work schedule reasonably (the company should increase the time for audits at the client's unit or increase the number of auditors for each audit) to ensure that auditors have enough time to collect full audit evidence at the client's company as well as complete working papers and issue reports on time. Increase support for the main auditor in completing the audit report, specifically:
Table 4.1: WORK PLAN BY CUSTOMER SIZE
Client Company Size
Human resources | Audit time (days) | Time of issuance of financial statements (days) | |
Small | 3-4 | 2-4 | 7-10 |
Small and medium | 4-6 | 4-6 | 10-15 |
Big | 6-8 | 7-9 | 15-20 |
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CHAPTER 5: CONCLUSION AND RECOMMENDATIONS
5.1 Conclusion
Revenue auditing plays an important role in financial statement auditing, because revenue items directly affect the company's profits, which investors as well as the company's management are interested in when presented.
on the income statement. Errors and fraud in this item may materially affect the truthfulness and fairness of the financial statements.
Auditing revenue items is a synthesis work, which means that revenue items are related to many other items such as money, receivables, taxes, expenses, etc. Therefore, when auditing this item, the auditor will combine auditing with many other items as mentioned above (corresponding checks), besides, it also contributes to detecting fraud and errors of other related items such as money, receivables, etc. if checking and comparing because they are closely related to each other. And giving reasonable opinions for revenue items will contribute to increasing the value of the audit report and minimizing audit risks. On the other hand, if auditing the entire financial statements, when auditing revenue items, the auditor can refer to the previously audited parts related to revenue without having to do it again, wasting time and effort.
Through this research topic, the author has studied and met the research objectives. The solutions proposed by the author can only contribute to partially improving the revenue audit process in particular and the financial statement audit in general. Because in reality there is a certain gap compared to the learned theory, the application of the process into practice is always affected by other subjective and objective factors such as: time limit, the relationship between the cost and the profit, the professional judgment of the auditor... Therefore, the auditor only needs to apply the auditing procedures to ensure the honesty and reasonableness of the financial statements is acceptable but still must ensure the quality of the audit. Therefore, SVC Company constantly improves the quality of auditing, maintaining the trust of customers.
However, due to time constraints to learn the process, limitations in the writer's qualifications and experience, the solutions are inevitably flawed in terms of practical applicability, so consideration and deliberation by the SVC Board of Directors is needed so that the solutions are selected and implemented effectively.
5.2 Recommendations
5.2.1 For audited companies
It can be seen that the result of the audit depends not only on the auditing company but also on the audited company itself . Because of the
Coordination and enthusiastic and honest support from the staff in the audited company will help the auditors' understanding and assessment of the unit to be more accurate and consistent with reality. Therefore, in order for the audit to achieve the expected results as well as the audit completion time as scheduled, the unit needs to:
- Provide complete and accurate information: when auditors conduct interviews to learn about the production and business situation, organizational structure, internal control system, etc. of the unit, the unit needs to require the interviewed individuals to provide complete and accurate information, and not to conceal important information that affects the auditor's decision making.
- Documents and accounting books must be clearly recorded, especially for revenue items. Provide complete documents and books when requested by the auditor.
- The unit needs to continue to strengthen and improve the internal control system in the unit, in order to minimize fraud and errors in the unit's accounting information system, contributing to limiting errors in the unit's financial statements.
5.2.2 For SVC Company
- Regularly open professional training courses to help improve the experience and professional judgment of auditors. At the same time, create conditions for auditors to participate in competitions to improve their professional qualifications such as: Talented Auditor, CEO....
- Recruit more technicians to reduce work pressure, have appropriate compensation to facilitate technicians to have a good life and create good motivation to work more effectively.
5.2.3 For relevant agencies
- In fact, the current legal documents on the accounting and auditing industry in our country still have many incomplete points, causing difficulties for auditors when practicing. Therefore, it is hoped that in the near future, the State and the Ministry of Finance will pay attention to and try to improve the general legal basis for auditing activities, promulgate accounting and auditing standards in a clear, specific and easy-to-understand manner, combined with references to international accounting and auditing standards to help auditing enterprises apply easily, limiting errors due to misunderstanding or misunderstanding of regulations.
- Improve and enhance the quality of training courses and auditor competitions to train excellent and experienced auditors to perform audits well.
- Strengthen the quality control of auditing companies and practicing auditors and take timely and strict measures to handle violations. At the same time, improve the quality of auditing and build trust with customers.
- Regularly open knowledge update classes and accounting-auditing seminars to help auditors improve their knowledge and skills.
- Expanding international exchange relations to create integration conditions for domestic auditors to access, learn experience, and collaborate with international auditing corporations.
5.2.4 For the Association of Certified Public Accountants (VACPA)
- Always monitor and remind auditing companies to correct violations and weaknesses, and take strict measures to handle violations.
- Strengthen management of auditing companies and practicing auditors. Especially the management of auditors' professional ethics, because auditing is a special activity whose results depend largely on the capacity and professional ethics of auditors.
REFERENCES
- Ministry of Finance, Vietnamese accounting standards system and Vietnamese auditing standards system.
- Sao Viet Auditing Company Limited, Can Tho branch, audit file of customer Hoang Gia Export Processing Joint Stock Company.
- VACPA sample audit program.
- Nguyen Minh Nhat. 2015. Teaching materials. Auditing lecture 1.
- Nguyen Quang Nhon. 2015. Teaching materials. Auditing lecture 2.
- Circular 200/2014/TT-BTC issued on December 22, 2014.
- Information from the sites: www.gdt.gov.vn, www.kiemtoan.com.vn and https://www.google.com/search
- Nguyen Tan Dat. 2009. Evaluation of the audit process of revenue and receivables of SGN Auditing Company at Tay Do Seafood Company Limited. Bachelor's thesis in Economics, University system, Can Tho University.
- Dinh Ngoc Bich.2012. Auditing of sales revenue and customer receivables of XYZ Company Limited. Bachelor of Economics thesis, University system, Can Tho University.
APPENDIX
APPENDIX 01: SAMPLE AUDIT PROGRAM OF REVENUE ITEMS.
APPENDIX 02: BALANCE SHEET OF HOANG GIA TRADING AND EXPORT COMPANY LIMITED.
APPENDIX 03: BUSINESS PERFORMANCE REPORT OF HOANG GIA TRADING AND PRODUCTION SERVICES COMPANY LIMITED.
APPENDIX 04: INSPECTION OF INTERNAL CONTROL FOR SALES, RECEIVABLE, AND CASH COLLECTION CYCLES.
APPENDIX 05: DETAILED CHECKLIST OF SALES AND SERVICE PROVISION REVENUE SAMPLE.
APPENDIX 06: DETAILED CHECKLIST OF BANK INTEREST AND EXCHANGE RATE DIFFERENCE DOCUMENTS.
APPENDIX 07: CUT – OFF DOCUMENT CHECKLIST.
APPENDIX 01
SAMPLE AUDIT PROGRAM OF REVENUE ITEM
STT
Procedure | The performer | References | |
I. General procedures | |||
1 | Check that the accounting principles applied are consistent with the previous year and in accordance with the provisions of current accounting standards and regimes. | Chapter | G140 |
2 | Prepare a summary table comparing with the previous year's ending balance. Compare the balances on the summary table with the BCĐPS and the previous year's audit working papers (if any). | " | G140 |
II. Analysis test | |||
1 | Compare sales revenue and sales returns, the ratio of sales deductions to total revenue between this year and last year, and collect explanations for unusual fluctuations. | " | G140 |
2 | Analyze the fluctuations of total revenue, revenue by type of activity between this year and last year. | ||