Internal audit organization in economic groups of Vietnam

Appendix 2.8: Official dispatch announcing compliance audit plan of Vietnam Posts and Telecommunications Group

GROUP

Vietnam Post and Telecommunications

No. /QĐ/KTNB regarding: Auditing year 2006

SOCIALIST REPUBLIC OF VIETNAM

Independence – Freedom – Happiness

------------------------

Hanoi, date…. Month.. year 200..

To: Vinh Long Province Telecommunications

Pursuant to Decision No. /QD-KTNB dated .../../.... on auditing compliance with debt management and compliance with the capital management regime for basic construction investment of the General Director of Vietnam Posts and Telecommunications Group, the Internal Audit Board would like to announce the list of staff and the time to conduct the audit for the unit as follows:

I. List of audit team:

1. Mr. ….- Deputy Head of Internal Audit Department - Head of Delegation

2. Ms. …. – Member

3. Ms. …. - Member

4. Mr. …..- Member

II. Scope and content of audit

Check financial and accounting data and documents arising in 2008 up to the audit date.

III. Audit time

Audit period starts from September 1, 2008 to September 10, 2008

During the implementation process, if due to work requirements, it is necessary to adjust the working time and personnel of the audit team, the team will discuss directly and reach an agreement with the unit.

IV. Unit proposal

- Collect documents in the field of financial and accounting management issued by the unit's Director to provide data to the accounting team before the team arrives to work.

- Prepare data, documents, vouchers, books, financial reports and other relevant documents.

- Prepare working location, means of transportation to affiliated units and notify affiliated units

- Arrange staff to coordinate with the audit team during the time the team comes to work at the unit.

Recipient:

- As above

- CEO, Deputy CEOs

- KTTKTC Board for coordination

- Save VP, KTNB

General Director

VIETNAM POSTS AND TELECOMMUNICATIONS GROUP

Head of Internal Audit

Appendix 2.9: Official dispatch announcing the audit plan of the Internal Audit Department for Cao Bang Minerals and Metallurgy Company (excerpt)

- Audit period: From August 14, 2006 to August 20, 2006

- Audit team members:

1. Mr. Vu Viet H - Deputy Head of TBK Department - Team Leader

2. Mr. Nguyen Dang T - TBK department specialist - Team member

3. Ms. Nguyen Thi T - TBK department specialist - Team member

4. Mr. Dang Xuan T - Investment and Development Department Specialist - Team Member

- Audit content: Basic construction investment project of Cao Bang Minerals and Metallurgy Joint Stock Company Headquarters:

 Check the legal documents of the project

 Check construction quality management records

 Check payment records

- Request the unit to prepare necessary documents for the audit.

Appendix 2.10: Financial Statement Audit Program - Internal Audit Department of Vietnam Posts and Telecommunications Group

GROUP

Vietnam Post and Telecommunications

References

INTERNAL AUDIT DEPARTMENT

Audit Program: Financial Statements

Unit name: Created by:

Accounting period: Reviewer:

Audit procedures

References

People

perform

Day

perform

1. Check the arithmetic calculations on the reports

2. Check the consistency between reports:

- Compare the Cash item index on the Financial Statement with the balance on the Cash Flow Statement

- Reconcile tax item balances on the financial statements and report on budget obligation implementation status

- Compare the corporate income tax payable during the year between part I and part II of the business performance report

- Compare the indicators on the financial statements with the financial statement notes

3. Check the beginning of the year figures on the financial report

- Collect financial reports of the year immediately preceding the audited year, approved financial reports of the previous year, approved financial statements of superior agencies, functional agencies (inspection, tax,....)

- Compare the opening balance on the audited financial statements with the closing balance on the previous year's financial statements that have been collected. If there is a difference, explain the reason.

- Check adjustments on accounting documents according to data from auditors, superior agencies, and competent agencies (if any).

4. Compare the beginning balance and the ending balance on the balance sheet (absolute and relative numbers). Analyze and explain major fluctuations.

5. Check whether the financial statements are presented (in terms of form) according to current regulations?

6. Interview the unit about the assumptions when preparing financial statements, have they taken into account events occurring after the end of the accounting period?

7. Prepare an audit conclusion page based on the results of the work performed.

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Appendix 2.11: Some audit topics in compliance audit conducted by the Internal Audit Department of Vietnam Posts and Telecommunications Group

Topic	Content
1	Audit of cash capital items	The money must be real. The actual money in hand must match the figures in the accounting books and cash books. Accounting documents, accounting books, and open fund books must comply with regulations and form. Accounting documents are fully recorded and certified by relevant persons.
2	Audit of purchasing and payment activities	Audit of procurement methods Check the management and tracking of debts with suppliers. Check inventory management and accounting.
3	Cost aggregation audit	Review and evaluate compliance with cost management and accounting regimes. Evaluate and confirm that costs are calculated correctly and fully in accordance with regulations. Ensure costs are calculated correctly and completely. Evaluate the presentation and classification of costs according to their nature, items, and statistical codes.
4	Audit of investment capital management activities	Evaluate whether the form of selecting construction contractors is in accordance with the State's prescribed procedures (bidding, designated contractor, self-investment). Evaluation of investment procedures: suitability between investment scale and investment decision authority, investment sequence, procedures for submission to leadership for approval, design estimates, economic contracts, acceptance and handover minutes, contract liquidation minutes, and settlement documents. Evaluate the progress of construction works to ensure compliance with regulations? Evaluate compliance with accounting principles and requirements: original cost, consistency, completeness, correct accounting period, accrual... Evaluate difficulties and obstacles in each investment stage. Assessment of related parties: main contractors, legal status of contractors… Assess the independence and coordination between relevant departments in the construction investment process
5	Audit of fixed asset management activities	Determine the intangible and tangible fixed assets currently available at the enterprise. The value of fixed assets is correct, excluding elements recorded in expenses. Fixed asset records are complete, clear and in accordance with regulations, Classify fixed assets according to the correct group and source of formation (from the Group, from self-funded capital, from borrowed capital, etc.) Determine depreciation and amortization of fixed assets with the correct method, at the correct time, and in accordance with regulations.

Appendix 2.12: Audit program for basic construction items - Vietnam Posts and Telecommunications Group

References

Audit program: Construction in progress Unit name: Prepared by:

Accounting period: Reviewer:

Target:

- The unfinished construction activities are real, owned by the enterprise and paid accurately.

- All elements corresponding to unfinished basic construction and not yet put into use

Audit procedures

References

People

perform

Day

perform

I. General audit procedures

1. Analytical procedures

2. Collect aggregate data

3. Check basic construction cost details

4. Check the division of the year

5. Contractor tax check

II. Detailed audit procedures

Detailed instructions for synthesis steps

1. Analytical procedures

- Compare and study the fluctuations in the ending balance of this period with the previous period, with the investment plan, discuss with the unit about unusual fluctuations.

- Compare investment values with estimates or investment plans to detect sudden increases and find out the causes

- Review the investment progress and initial plan. Discuss with the unit the reasons for the extension of the investment period.

2. Collect aggregate data

2.1. Prepare a detailed table of unfinished basic construction works showing: opening balance, increases and decreases during the period, closing balance, compare the closing balance with the detailed accounting books, general accounting department and financial statements at the end of the accounting period. Compare the opening detailed balance with the previous closing balance.

2.2. Make a list of basic construction contracts (purchases, major repairs) signed and implemented related to the accounting period, the main contents of the contract. Check the progress of settlement implementation for completed investment and repair projects; check the decentralization of investment decision making and settlement approval;

2.3. Prepare a summary table of the arising numbers according to the corresponding accounts to detect unusual economic transactions. Check a sample of unusual economic transactions.

3. Check basic construction cost details

- Select samples of basic construction projects, major purchases and repairs with large and unusual occurrences, check the content of documents and accounting

- Ensure that construction in progress costs are collected during the period and investment capital has been approved by competent authorities.

- Check the legality and validity of original documents of arising economic transactions:

* For unfinished basic construction costs: There must be an estimate, a decision approving the estimate, a decision approving the final settlement, an economic contract, a liquidation of the economic contract, a material delivery note or other original documents proving the actual costs incurred for the project.

* For fixed asset purchases: Must have budget, decision approving budget (high value assets), financial invoice, economic contract, liquidation of economic contract, asset handover minutes,...

* For fixed asset repair costs: There must be a decision of the Board of Directors deciding to repair the asset, original documents proving the actual repair costs incurred.

* Procedures for basic construction works completed during the settlement period and put into use: Decisions of competent authorities, Final settlement of works (Construction estimate, design, minutes of construction handover)

* Procedures for transferring fixed asset repair costs to period expenses: Acceptance minutes, repair settlement,... minutes approving major repair settlement by competent authorities.

* Are the bidding and competitive bidding procedures in accordance with state regulations?

* Is the settlement form for investment projects in accordance with state regulations?

* Consider whether interest payable during the period on loans for unfinished projects can be capitalized?

4. Check the annual expenditure:

Search for construction investment costs that are eligible for recognition as fixed assets or costs that have not been recognized in the period:

* Observe the progress of basic construction projects to see if they are completed and recorded as assets or expenses?

* For the cost of investment in purchasing completed fixed assets, has the original cost of fixed assets been recorded as an increase?

5. Collect and check contractor's payable tax based on contract information and relevant regulations.

Note: In case the approved settlement is less than the cost

If the balance is still in account 241, the cause must be found and a solution must be found .

III. Conclusion:

1. Provide adjusting entries and issues addressed in the management letter

2. Create audit conclusion page for the performed item

3. Repeat detailed explanations if there are any adjustments by the auditor.

Appendix 2.13: Summary table of audit results of contractor's product supply contracts

GROUP

VIETNAM NATIONAL OIL

FINANCE ACCOUNTING AND AUDIT DEPARTMENT

Audit results summary table

Check the contractor's product supply contract

Procedure: Send quotation letter to supplier No:

Save file:

Unit: Million VND

TT	Product Name	Value according to winning bid documents	Actual audited value economy	Difference
1	Anti-corrosion pipe	42000	39500	- 2500
2	Hydraulic pump	9000	7900	- 1100
3	Pressure pump	11000	10500	- 500
4	Drilling rig	29000	29000	-
Total				- 4100

Internal audit organization in economic groups of Vietnam - 28

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