ASSESSMENTS AND RECOMMENDATIONS TO IMPROVETHE ORGANIZATION AND OPERATIONS OF CPA VIETNAM AUDITINGCOMPANY LIMITED

Financial situation of CPA VIETNAM...14 CHAPTER 2: ORGANIZATION AUDIT PRACTICE AT CPA VIETNAM AUDITING COMPANY LIMITED...16 2.1.. Features of organizing audit quality control at CPA VIET

TABLE OF CONTENTS

INTRODUCTION 1

CHAPTER 1: FEATURES OF THE ORGANIZATION AND OPERATIONS OF CPA VIETNAM AUDITING COMPANY LIMITED 3

1.1 History of Establishment and Development of CPA VIETNAM 3

1.1.1 General information 3

1.1.2 Establishment and Development 4

1.1.3 Main results of financial performance 6

1.2 Features of operations at CPA VIETNAM 7

1.2.1 Auditing, accounting and consulting activities 8

1.2.2 Pricing consultancy activities 9

1.2.3 Main activities 10

1.3 Features of management organization at CPA VIETNAM 12

1.3.1 Organizational structure 12

1.3.2 Functions of each department 13

1.3.3 Human resources 14

1.4 Financial situation of CPA VIETNAM 14

CHAPTER 2: ORGANIZATION AUDIT PRACTICE AT CPA VIETNAM AUDITING COMPANY LIMITED 16

2.1 Features of organizing an audit team at CPA VIETNAM 16

2.1.1 Number of members in audit team 16

2.1.2 Interaction between members of the audit team 16

2.2 Features of organizing an audit in CPA VIETNAM 17

2.2.1 Make a survey, learn and accept clients 17

2.2.2 Audit planning 18

2.2.3 Stock count observation (If any) 23

2.2.4 Implement the audit at clients 24

2.2.5 Synthesis and preparation of audit reports 25

2.3 Features of organizing audit files at CPA VIETNAM 26

2.3.1 Features of organizing audit records and audit documents 26

2.3.2 Reference system 28

2.4 Features of organizing audit quality control at CPA VIETNAM 29

CHAPTER 3: ASSESSMENTS AND RECOMMENDATIONS TO IMPROVE ORGANIZATION AND OPERATIONS OF CPA VIETNAM AUDITING COMPANY LIMITED 32

3.1 Assessment on the organization and operations of CPA VIETNAM 32

3.1.1 Strengths 32

3.1.2 Shortcomings 34

3.2 Recommendations to improve the organization and operations at CPA VIETNAM: 35

3.2.1 The audit team organization and audit work 35

3.2.2 The assessment of client’s internal control system 35

3.2.3 The work recorded on working papers of auditors 36

CONCLUSION 37

REFERENCES 38

LIST OF ABBREVIATIONS

CRC Enterprise Credit Rating Appraise Science CenterVAA Vietnam Association of Accountants and Auditors

LIST OF FIGURES

Figure 1.1 Management apparatus of “CPA VIETNAM Company” 12 Figure 2.1 The audit process of CPA VIETNAM 17 Figure 2.2 The process of financial statement quality review and audit report issued at CPA VIETNAM 31

LIST OF TABLE Table 1.1 Services provided in “CPA VIETNAM Auditing Company Limited” 10 Table 1.2 Several indicators in financial situation of CPA VIETNAM 15Y Table 2.1 Reference system 28

Since the Vietnamese economy has been transformed into a marketmechanism, the enterprise system has constantly developed in both quantity andtype Especially in recent years, with the trend of globalization as well as the

“WTO” accession process, the development of Vietnamese enterprises has becomemore and more powerful and diversified: in addition to a number of leadingenterprises There are also joint stock companies, limited companies, privateenterprises, and notably the participation of more and more foreign-investedenterprises Therefore, the competition in manufacturing business and in attractinginvestment capital is increasingly fierce; at the same time, the management of theauthorities for businesses as well as in internal affairs is more complicated Prior tothat fact, the need for financial transparency became an urgent need for thedevelopment of the economy To meet this demand, the enterprises which provideaudit services with the primary function of auditing financial statements (verifyingand expressing opinions about the objects) prepare an audit report Auditingcompanies have provided one of the important tools to perform the inspection andcontrol of economic and financial activities of the market economy After the

“Decree No 105 / ND-CP” of the Government, regulations on independent auditingactivities have formed a clear legal corridor, creating a favorable environment forthe explosion of types of auditing companies “CPA VIETNAM Auditing CompanyLimited”, also known as “CPA VIETNAM”, was born in the trend of rapiddevelopment of independent auditing companies, meeting the increasing demandfor domestic audit services After establishing and operating, “CPA VIETNAM” hasbecome a prestigious company in the industry with many professional experiences

in the fields of Accounting, Auditing and Financial Consultancy quickly After aperiod of time practicing at “CPA VIETNAM Company”, I found that it is a greatopportunity for me to have access to audit practices and conditions to learn andcompare with the theory that I have learned

I would like to thank sincerely to the leaders of the company for facilitating theprovision of the company's documents as well as the brothers and sisters in theprofessional department 2 who have instructed me well in about six-working weeks

at the company I would like to express my special gratitude to my instructor TranManh Dung, Assoc Prof You not only support me practice at “CPA VIETNAMCompany” but you also guide our group dedicatedly and enthusiastically I wouldlike to thank you!

My audit report is generally divided into 3 chapters:

CHAPTER 1: FEATURES OF THE ORGANIZATION AND OPERATIONS

OF CPA VIETNAM AUDITING COMPANY LIMITED

CHAPTER 2: ORGANIZATION AUDIT PRACTICE AT CPA VIETNAM AUDITING COMPANY LIMITED

CHAPTER 3: ASSESSMENTS AND RECOMMENDATIONS TO IMPROVE THE ORGANIZATION AND OPERATIONS OF CPA VIETNAM AUDITING COMPANY LIMITED

CHAPTER 1: FEATURES OF THE ORGANIZATION AND OPERATIONS

OF CPA VIETNAM AUDITING COMPANY LIMITED

1.1 History of Establishment and Development of CPA VIETNAM

1.1.1 General information

Transaction name of the company: “CPA VIETNAM AUDITINGCOMPANY LIMITED - A member of Moore Stephens International Limited”

Short name: “CPA VIETNAM”

Address: “Headquarter: 8th Floor, VG Building Office Building, 235 NguyenTrai Street, Thanh Xuan District, Hanoi, Vietnam”

As “a member of Moore Stephens International Limited”, “CPA VIETNAMhas conditions to access vast resources from a network of 668 members and 27,100employees operating in 105 countries worldwide CPA VIETNAM also receivessupport from experienced professionals, helping to ensure that the services that CPAVIETNAM provides are on par with the services of other members of the globalnetwork.”

- Offices, branches of CPA VIETNAM:

+ “CPA VIETNAM AUDITING CO., LTD - HEAD OFFICE - AUDIT, BUSINESSVALUATION:

Address: 8th Floor, VG Building Office Building, 235 Nguyen Trai Street, ThanhXuan District, Hanoi, Vietnam

+ CPA VIETNAM AUDITING CO., LTD - TRANSACTION OFFICE OF TAXAND FINANCIAL CONSULTANCY, BUYING AND SELLING:

Address: 97 Tran Quoc Toan Street, Hoan Kiem District, Hanoi, Vietnam

+ CPA VIETNAM AUDITING CO., LTD HO CHI MINH CITY BRANCH:

Address: Floor 11, Nam A Bank Building, 201-203 Cach Mang Thang 8, Ward 4,District 3, Ho Chi Minh city, Vietnam

+ CPA VIETNAM AUDITING CO., LTD - NORTH BRANCH:

1.1.2 Establishment and Development

- CPA VIETNAM was established on June 23, 2004, as the first company inthe field of auditing and accounting in Vietnam under “Decree No 105 / ND-CPdated March 30, 2004 of Government” on independent audit

- On January 9, 2007, CPA VIETNAM was officially granted a businesslicense number 4115025675 by Ho Chi Minh City Department of Planning andInvestment on the establishment of Ho Chi Minh City branch Address of thebranch: Room 502, 5th Floor, Office Building Thien Son Plaza, Ward 6, District 3,

Ho Chi Minh City

- At the end of 2007, the branch at Da Nang city was officially put intooperation under the “Business Registration License No 3215000001” after DaNang City’s Department of Planning and Investment issued on December 11, 2007.

- On 10 January 2008, the Minister of Finance issued “Decision No 61 /QD-BTC” announcing the list of companies eligible to provide business valuationservices in 2008 Accordingly, CPA VIETNAM is one of the companies authorized

to provide this service

- Since the “Decision No 89/2007 / QD-BTC dated October 24, 2007 of theMinistry of Finance (Decision promulgating the Regulation on selection ofapproved auditing enterprises for issuing and organization organizations Listed andorganized for securities business)”, the Company was continuously approved by theState Securities Commission to audit securities issuers, listing organizations andsecurities business organizations

- In April 2008, CPA VIETNAM officially became the representativecompany of Moore Stephens International Limited in Vietnam - one of the majorinternational audit firms, including 301 independent firms with 636 representativeoffices operating in 100 countries in the world

- In July 2009, CPA VIETNAM became an official member of “VietnamAssociation for Anti-Counterfeiting and Trademark Protection (VATAP)”

- In October 2009, CPA VIETNAM became an official member of “VietnamTax Consultants' Association”

- On April 21, 2011, “CPA VIETNAM became an official member of MooreStephens International Limited.”

- On November 21, 2011, CPA VIETNAM decided to convert Da NangCity’s branch into Central Representative Office

The address of Central Representative Office: 528 Dien Bien Phu, Thanh Khe DongWard, Thanh Khe District, Da Nang City

- In December 2014, CPA VIETNAM was awarded the title of "Vietnam'sleading products and services in 2014" by consumers’ vote

- In January 2015, CPA VIETNAM opened the Northern Branch, markingfurther development of CPA VIETNAM in the North market.

- In October 2015, carrying out the development policy of the Company inaccordance with the model of “Moore Stephens International Limited”, CPAVIETNAM is a member as well as the orientation of developing independentauditing, empowering and service quality on the market CPA VIETNAM officiallyconverted its ownership form and changed its name to “CPA VIETNAM AuditingCompany Limited” (abbreviated name as CPA VIETNAM) from October 1, 2015according to “Business Registration Certificate No 0101917917 issued by theDepartment of Planning and Investment of Hanoi, which issued on October 1,2015”

- In the year 2015, CPA VIETNAM was granted the "Certificate of CreditAssessment" by CRC This is a prestigious certificate to contribute to affirm itsposition, improve competitiveness and be a reliable base on the capacity ofbusinesses Enterprises with credit rating must be well-developed enterprises withhigh competitiveness in the domestic and foreign markets and have high reputation

in society

- In June 2016, CPA VIETNAM was honored to receive 2 especiallyoutstanding achievements: Firstly, CPA VIETNAM Auditing Company Limitedwon the title of Organization Member with many achievements in operations andprofessional development of Vietnam Independent Audit in the period of 2011-

2016 Secondly, Mr Nguyen Phu Ha - Chairman of the Membership Council wonthe title of Individual with many achievements in operations and professionaldevelopment of Vietnam Independent Audit in the period of 2011-2016

- In July 2016, CPA VIETNAM launched the Representative Office of CPAVIETNAM Auditing Company Limited in Hanoi

1.1.3 Main results of financial performance

“In 2017, Moore Stephens reported its revenue of £ 121.4 million, up 15% from the £ 105.5 million of 2016 Despite major investments, Moore Stephens reported profits (before taxes and wages) increased by 10% to £ 24.1 million

Revenue growth has been achieved in all core service sectors in the past year - including outsourced services (up 45% to 11.7 million), management consulting (up29% to 10, 9 million pounds), tax advice (up 12% to 22.9 million pounds)),

restructuring and bankruptcy (growth of 12% to 5.5 million pounds) and audit and assurance (growth 11 % to £ 63.2 million)

Standing in the Top 10 Organic Growth Strategies are targets set by the Company two years ago, as well as the results of a successful merger with Chantrey Vellacot

in 2015, as a result, the company has increased Chief and far beyond financial goals The company has also developed its talented team with 100 new employees

in the past year

The recent merger of Moore Stephens with James, Brennan & Associates, a

consulting firm, will continue to support its growth strategy The company also focuses on investment in innovative programs, such as ‘Hatched’, supporting fast start-up technologies

According to Simon Gallagher, Partner of Moore Stephens, "In the past few years,

we have embarked on an important change program, including new strategies and prospects, new management, governance and structure structure and merger to value growth.”

“The approach has helped us build and develop customer relationships, continue to attract top talent to improve our capacity and improve our performance, as well as win numerous awards We look forward to maintaining these achievements in the coming years."

In 2016, Moore Stephens reported a 14% growth

Recently, Moore Stephens International announced the appointment of Anton Colella as global CEO.”

1.2 Features of operations at CPA VIETNAM

CPA VIETNAM was established to meet the following objectives:

- Constantly improve the legitimate interests of shareholders

- Increased accumulation of service business development

- Contribute to clean up the national financial background, fulfill obligations to theState budget properly and sufficiently as prescribed

As a specialized and experienced independent auditing company, CPAVIETNAM currently provides specialized services in the areas of auditing,accounting, asset valuation, financial consulting, taxation, investment, reports oncapital settlement in Vietnam, specifically:

1.2.1 Auditing, accounting and consulting activities

Through auditing, accounting and consulting, CPA VIETNAM will help theboard of directors of the audited company complete the accounting system andestablish a reasonable internal control process On this basis, CPA VIETNAM willregularly update information to help the Board of Directors of audited units timelyand accurately implement the legal documents of the state

Auditing, consulting and accounting services at CPA will be carried out inaccordance with generally accepted international auditing standards, Vietnameseauditing standards, guidelines for practicing accounting standards issued at Vietnamand the current Government regulations on accounting and auditing The audit must

be done by checking on the basis of the sample of accounting records, the evidencerelating to the data and information presented in the Financial Statements, and at thesame time evaluating the plans Are the planning and critical decisions of the Board

of Directors audited during the preparation of the Financial Statements and review

of the accounting policies audited? Therefore, the task of audit activities at thecompany includes:

- Complete accounting documents to ensure reasonable, valid and legal as a basisfor tax finalization

- Complete the system of detailed reports, comprehensive reports to ensure thecoincidence and logical arithmetic between documents and reports, betweensynthesis and details.

- Check the legality of the project and compliance with the order and procedures forconstruction investment

- Check the settlement valuation of equipment and materials

- Check the valuation of other settlement

1.2.2 Pricing consultancy activities

CPA VIETNAM has qualifications and experience to analyze all thenecessary factors for the valuation of businesses We incorporate legal and financialstandards to determine the value of a business, including its nature, history andeconomic prospects

Becoming a public company, companies will have the opportunity to access largeinvestment capital from the stock market, thereby opening up many opportunities tobuild up brand and enhance business value in public

CPA VIETNAM provides equitization consulting services to privatebusinesses as well as state-owned companies We work with clients throughout theentire equitization process to ensure that this transition takes place smoothly whenclients switch from a state / private enterprise to a joint stock company

A dynamic business environment opens up opportunities for businesses aswell as big challenges in Vietnam in recent years Stemming from the needs ofinvestors and businesses, enterprise valuation services, corporate valuation,valuation of assets has officially become a fast-growing professional service inVietnam This service meets the needs of authorities and businesses in the transfer

of shares, loans, capital transfers, capital contributions, … and especially in theprocess of equitization in Vietnam today

Recently, implementing the policy of the state under “Decree No 59/2011 /ND-CP” on transforming enterprises with 100% state capital into joint stock

companies CPA VIETNAM has also provided equitization advisory services for100% state-owned enterprises to joint stock companies to implement the programuntil 2018, all enterprises must be converted into joint stock companies (based on

“Circular No 127/2014 / TT-BTC” guides financial handling and valuation ofenterprises when converting 100% state-owned enterprises into joint-stockcompanies.)

1.2.3 Main activities

CPA VIETNAM Company provided services for clients in the below table:

Table 1.1 Services provided in “CPA VIETNAM Auditing Company Limited”

Auditing service - Auditing financial statements according to

law;

- Operational audit;

- Compliance audit;

- Auditing the project settlement report;

- Review internal control system;

- Auditing financial information on the basis

of prior agreed procedures;

- Auditing Financial statements for tax purposes and tax settlement services;

- Special audit works;

- Review financial information;

- Prepare a report for the purpose of merger, separation, dissolution,

- Auditing the report on investment capital finalization (including auditing annual financial statements);

Pricing consulting services - Property valuation service (not including

valuation of assets under State authority)

- Real estate valuation

- Real estate brokerage

Accounting services - Building accounting system;

- Help accounting and keeping accounting books;

- Accounting consulting services;

- Converting financial statements between VAS, IAS, IFRS and other standards;

- Service providing accounting software, etc

Financial advisory services - Consulting on mergers and acquisitions;

- Equitization, privatization and listing procedures (IPO);

- Consulting on merger and dissolution of enterprises;

- Consulting on corporate restructuring;

- Investment consulting etc

Tax consulting services - Accounting for income tax and making a tax

return;

- Planning tax strategies;

- Interstate tax consulting services;

- Support services to solve tax problems;

- Effective business structure for tax purposes;

- Review compliance with tax laws of businesses;

- Personal income tax and international tax services, etc

1.3 Features of management organization at CPA VIETNAM

1.3.1 Organizational structure

Here is the organization structure of CPA VIETNAM Company:

Figure 1.1 Management apparatus of “CPA VIETNAM Company”

1.3.2 Functions of each department

Moore Stephens International (MSI) and Membership Council: is the

highest management part of the company, has legal rights and obligations with thecompany

+ Mr Nguyen Phu Ha : Chairman of the Members' Council+ Mr Phan Huy Thang : General Director

Board of Directors: The Company issues a management system under

which the management apparatus will be responsible and under the leadership of theMembers' Council which is the Board of Directors There are General Director andDeputy General Director The General Director and Deputy General Directors mayconcurrently be members of the Members 'Council and be appointed or dismissed

by the Members' Council according to the Resolution adopted in a lawful manner

+ General Director: operating business activities of the Company, responsible to

the Members' Council for the implementation of his rights and obligations daily.Each member of the Board of General Directors in addition to being in charge of anarray of the Company's affairs, is also directly in charge of professionaldepartments

+ Deputy General Director: is responsible for directing the audit of financial

statements, auditing reports of capital construction investment settlement reports,consulting and valuation of enterprises to implement plans according to thedevelopment strategy of company The Deputy General Director is responsible forthe assignment and authorization of the General Director

Quality control – Control Board: this department is undertaken by highly

qualified and qualified auditors This is an important part of the company,conducting reviews and inspections to ensure the quality of the audits At the sametime, this is also the department implementing customer consulting service

Department 1: Auditing Financial Statements; Capital construction audit

(report on investment capital settlement )

Department 2: Auditing Financial Statements; Audit of production units.

Department 3: Review financial reports and information; Foreign funded

project audit

Department 4 (Consulting Department): Tax consulting, finance,

accounting; Training services, knowledge updates, staff recruitment; Auditingforeign invested enterprises; Service of asset valuation and equitization

Department of Basic construction audit: This department performs the

audit of construction settlement reports, investment appraisal, etc

General Administrative Office: Perform administrative, organizational,

documentary, archival, administration and accounting tasks

Department of International Relations: has external functions, organizes

training links with foreign countries, creates relationships to attract more foreigncustomers or foreign-invested enterprises, VND Time to learn and absorb valuableexperiences of your country, etc

1.3.3 Human resources

Human resources are the key success factors of CPA VIETNAM Thiscompany has a team of more than 140 most qualified, dynamic and creativeprofessional staff, including more than 20 practicing auditors approved All of themhave graduated from prestigious universities in Vietnam and abroad

CPA VIETNAM's personnel are experienced people in the auditing field inVietnam and at the same time have an understanding of national and internationalpractices The main customers of CPA VIETNAM come from diverse sectors of theeconomy, from limited companies, joint stock companies to national economicgroups, as well as foreign-invested companies and international projects

As “a member of Moore Stephens International Limited”, CPA VIETNAM isexpanding its resources from MSI's membership system in 98 countries worldwide.With experience and understanding of over 100 years, MSI has helped CPAVIETNAM to become one of the big companies in Vietnam, the country in whichthe industry is in the new development stage

1.4 Financial situation of CPA VIETNAM

With the common slogan "Quality of service, understanding and globalvision", CPA VIETNAM has constantly tried to improve the quality of auditors aswell as the quality of services provided That is reflected in the company's financialsituation in four-recent years:

Table 1.2 Several indicators in financial situation of CPA VIETNAM

Revenue 46,206,140,53

4

42,876,091,926

47,163,701,119 50,225,127,12

5

Profit

after CIT 266,477,889 204,332,800 211,443,581 218,322,345Charter

capital

9,500,000,000 9,500,000,000 10,100,000,00

0

10,100,000,000

CHAPTER 2: ORGANIZATION AUDIT PRACTICE AT CPA VIETNAM

AUDITING COMPANY LIMITED

2.1 Features of organizing an audit team at CPA VIETNAM

2.1.1 Number of members in audit team

The audit is conducted directly at the auditing audience conducted by anaudit team consisting of the audit team leader, auditing assistants and trainees.Usually an audit team consists of about 5 or 6 people Only for a maximum of 2accompanying trainees The audit team leader is the main person responsible forassigning and coordinating the members of the audit team They are auditors,consisting of 2 levels: auditors (S2) level 2 and auditors (S1) level 1 Auditassistants include 2 levels: level 2 auditing assistant (A2) and level 1 auditingassistant (A1) These auditing assistants are guided and instructed directly by theaudit team leaders In addition, the audit team also has interns These trainees areguided by the brothers and sisters in the group and also instructed the work directlyfrom the audit team leader The audit work after being carried out by the audit teamswill undergo the inspection and supervision phase at the higher levels of auditleaders and audit department heads and deputy heads Before giving it to theGeneral Director and his / her partners for approval and signing the audit report, theaudit team leader is responsible for checking and reviewing the audit report

2.1.2 Interaction between members of the audit team

- Audit assistants and interns help auditors focus properly on important parts of theaudit;

- Audit assistants support auditors to identify and resolve issues that may occur in atimely manner;

- Audit assistants support auditors to organize and manage audits appropriately toensure the audit is conducted effectively;

- Audit assistants also support the team leader in selecting audit team members withthe appropriate professional capacity and ability to handle the expected risks, andassign appropriate tasks to each member

- Trainees do some basic parts to support the auditing assistants and the audit teamleader