Low Employee Work Motivation - A Case Of South Tax Consulting Co., Ltd.pdf

Riordan Manufacturing Compliance Plan UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Pham Thi Thuy Trang LOW EMPLOYEE WORK MOTIVATION A CASE OF SOUTH TAX CONSULTING CO , LTD[.]

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

-Pham Thi Thuy Trang

LOW EMPLOYEE WORK

MOTIVATION: A CASE OF SOUTH

TAX CONSULTING CO., LTD

MASTER OF BUSINESS ADMINISTRATION

Ho Chi Minh City – Year 2019

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

-Pham Thi Thuy Trang

LOW EMPLOYEE WORK MOTIVATION: A CASE OF SOUTH

TAX CONSULTING CO., LTD

MASTER OF BUSINESS ADMINISTRATION

SUPERVISOR: ASSOC PROF DR NGUYEN THI MAI TRANG

Ho Chi Minh City – Year 2019

Contents

EXECUTIVE SUMMARY 3

ACKNOWLEDGEMENT 4

LIST OF TABLES 5

LIST OF FIGURES 5

1 Company introduction 7

1.1 Company background 7

1.2 Business performance 10

2 Symptoms 13

3 Problem analysis 18

3.1 Problem identification 18

3.1.1 Initial cause and effect map 19

3.1.2 Potential problems 24

3.1.2.1 Work overload 24

3.1.2.2 Employee with unqualified knowledge, skill and ability 25

3.1.2.3 Insufficient supervisor support 26

3.1.2.4 Low employee work motivation 26

3.1.3 Updated cause and effect map 28

3.1.4 Updated possible problems 29

3.1.4.1 Work overload 29

3.1.4.2 Employee with unqualified knowledge, skill and ability 31

3.1.4.3 Insufficient supervisor support 33

3.1.4.4 Low employee work motivation 34

3.2 Problem validation 36

4 Main problem definition and consequences 38

4.1 Main problem definition 38

4.2 Main problem consequences 39

5 Cause analysis 41

5.1 Potential causes 41

5.1.1 No appreciation for job well done 42

5.1.1.1 No performance appraisal system 42

5.1.1.2 No compliment from manager for outstanding employee 43

5.1.2 No promotion and career advancement for current employee 44

5.1.2.1 Unqualified for mid level supervisor position 44

5.1.2.2 Insufficient trust from manager 45

5.1.3 Unpleasant work space 45

5.1.3.1 Poorly equipped office 46

5.1.3.2 Poorly designed office 47

5.1.3.3 Working office impacted by so much noise 48

5.2 Cause validation 50

6 Alternative solutions 52

6.1 Alternative solution 1: Investing in necessary equipment for working 52

6.2 Alternative solution 2: Redecorating the current office 54

6.3 Alternative solution 3: Renting new office 55

6.4 Solution justification 57

7 Change plan design 59

7.1 Objectives 59

7.2 Targeted outcomes 59

7.3 Action plan implementation 60

8 Conclusion 62

9 Supporting information 63

9.1 Methodology 63

9.2 Interview guide 63

9.3 Transcripts 64

References 81

Appendix 90

EXECUTIVE SUMMARY

Recently, the financial statement of South Tax Consulting Co., Ltd has experienced a drop in revenue This circumstance is mostly impacted by increasing in number of defection customers Customers leaving South Tax Consulting Co., Ltd is mainly due

to dissatisfaction with service quality that the company provided, in specific, inaccuracy in preparing accounting reports In order to discover the issues that South Tax Consulting Co., Ltd is facing with, meeting with CEO of the company as well as interviewing relevant employee in accounting department and defection customers in

2018 has been implemented

Through interviewing relevant subjects, using data provided by the company and using related theory, main problem was identified as low employee work motivation Towards main problem of low employee work motivation, three potential causes have been found out are no appreciation for job well done, no promotion and career advancement for current employee and unpleasant work space After analysis, main cause that chosen to solve is unpleasant work space This study will focus on solution

to solve this cause in order to help the company improve business performance

ACKNOWLEDGEMENT

Firstly, I sincerely thank ISB for giving me useful knowledge which possibly applies

to my study as well as support during the time of thesis Secondly, I would like to express my gratitude to my Supervisor - Assoc Prof Dr Nguyen Thi Mai Trang who has supported me during the time doing this thesis Without the guidance and support from Supervisor, my thesis can not be completed promptly Thirdly, I am also grateful

to members of South Tax Consulting Co., Ltd who showed patient and support to help

me prepare this thesis Finally, I would like to express my deep sense of gratitude to

my family members for sympathizing and encouraging me to complete my Master program

LIST OF TABLES

Table 1 Fundamental information about competitors of South Tax Consulting Co.,

Ltd – March 2019 (Source: South Tax Consulting Co., Ltd) Table 2 Categories of service provided by South Tax Consulting Co., Ltd – March

2019 (Source: South Tax Consulting Co., Ltd) Table 3 Revenue in each group of customer at South Tax Consulting Co., Ltd in

2018 (Source: South Tax Consulting Co., Ltd) Table 4 Fluctuation in number of micro trading customer of South Tax Consulting

Co., Ltd in the period of 2014 - 2018 (Source: South Tax Consulting Co., Ltd)

Table 5 Details about cases that inaccurate in tax reports in micro trading group –

announced by tax authority in 2018 (Source: South Tax Consulting Co., Ltd)

Table 6 Number of customers in each accountant‟s portfolio at STC in 2018

(Source: South Tax Consulting Co., Ltd) Table 7 Measurement of average time to complete main task for accountant in

South Tax Consulting Co., Ltd (Source: Author synthesis) Table 8 Details about experience of accountants in South Tax Consulting Co., Ltd

– March 2019 (Source: South Tax Consulting Co., Ltd) Table 9 Assessment of knowledge, skill and ability of accountants in South Tax

Consulting Co., Ltd (Source: Author synthesis) Table 10 Measurement of average time to complete main task for manager in South

Tax Consulting Co., Ltd (Source: Author synthesis) Table 11 Assessment of motivation of accountants in South Tax Consulting Co.,

Ltd (Source: Author synthesis) Table 12 Fluctuation in number of customers at South Tax Consulting Co., Ltd in

2014 – 2018 (Source: South Tax Consulting Co., Ltd) Table 13 Assessment for “Poorly equipped office” (Author synthesis)

Table 14 Assessment for “Poorly designed office” (Author synthesis)

Table 15 Assessment for working environment in South Tax Consulting Co., Ltd

(Author synthesis) Table 16 Costs for alternative solution 1 (Author synthesis)

Table 17 Cost for alternative solution 2 (Author synthesis)

Table 18 Cost for renting – alternative solution 3 (Author synthesis)

Table 19 Costs for office decoration – alternative solution (Author synthesis)

Table 20 Costs for best solution (Author synthesis)

Table 21 Action plan (Author synthesis)

Table 22 Detailed description and objective for specific task (Author synthesis)

LIST OF FIGURES

Figure 1 Company structure of South Tax Consulting Co., Ltd – March 2019

(Source: South Tax Consulting Co., Ltd) Figure 2 Number of customers in each group of business of South Tax Consulting

Co., Ltd at the end of 2018 (Source: South Tax Consulting Co., Ltd)

Figure 3: Process in accounting service of South Tax Consulting Co., Ltd – March

2019 (Source: South Tax Consulting Co., Ltd) Figure 4 Revenue and profit from 2014 to 2018 of South Tax Consulting Co., Ltd

(Source: South Tax Consulting Co., Ltd) Figure 5 Revenue in each group of customer of South Tax Consulting Co., Ltd in

2018 (Source: South Tax Consulting Co., Ltd) Figure 6 The revenue growth rate of micro trading customers at South Tax

Consulting Co., Ltd from 2015 to 2018 (Source: South Tax Consulting Co., Ltd)

Figure 7 Number of micro trading customers at the year end in the period of 2014 –

2018 (Source: South Tax Consulting Co., Ltd) Figure 8: Initial cause and effect map (Author synthesis)

Figure 9 Updated cause and effect map (Author synthesis)

Figure 10 The growth rate of revenue from 2015 to 2018 of South Tax Consulting

Co., Ltd (Source: South Tax Consulting Co., Ltd) Figure 11 Fish bone diagram of main problem in South Tax Consulting Co., Ltd

(Author synthesis) Figure 12 Final cause and effect map (Author synthesis)

Figure 13 Gantt-chart for action plan (Author synthesis)

1 Company introduction

1.1 Company background

South Tax Consulting Co., Ltd (STC) was established in July 2011 The company is located in Phu Nhuan District, Ho Chi Minh City The firm‟s business is providing accounting service for small and medium-sized enterprises (SMEs) in Phu Nhuan District CEO of South Tax Consulting Co., Ltd is Mr Vuong who has over 10 years experience in accounting service area The structure of the company is simple It has

11 employees, in specific, 10 people in Accouting department (4 senior employees including 2 employees with more than 3 years experience and 2 employees with more than 2 years experience and 6 junior employees under 1 year up to 1 year experience) and 1 delivery man The responsibility of Mr Vuong – CEO is general management, developing new customers (as sales employee role), taking care of existing customers and supervising for accounting department Accountants are responsible for directly serving the accounting service to customers and delivery man is responsible for receiving – delivering accounting documents between the company and customers Company structure is presented as following

Figure 1 Company structure of South Tax Consulting Co., Ltd – March 2019 (Source: South Tax Consulting Co., Ltd)

Up to the end of 2018, STC has got 182 customers In terms of customer‟s business area, they have 4 groups of customer, such as service, manufacturing, construction and trading In terms of customer size, they have 3 groups of customer, such as customers who have under 10 billion VND in revenue per year, customers who have 10 up to 50 billion VND in revenue per year and customers who have over 50 billion VND in

revenue per year At the end of 2018, the main group of customer of South Tax Consulting Co., Ltd are the corporates which run business in trading and have the size under 10 billion VND per year in revenue (counted for 65/182 customers of the company) According to Clause 1, Article 6 of Decree 39/2018/ND-CP on 11 March

is determining as micro enterprises Thus the main group of customers of STC is micro

2018, thus it takes a trivial part of market share of this area in Ho Chi Minh City Accounting service providers in Phu Nhuan District do not have big difference in service as well as price offering to customers As responses of Mr Vuong, he recognized 3 companies as his company‟s competitors in the area of Phu Nhuan

District These corporates provides the same service to customers and the price of service that they offer to customers are equivalent to each others In the aspect of company size, their revenue in 2018 is around 3.3 – 5 billion VND In details:

establishing

Revenue in 2018 (VND) - in rounded

Price (VND/issuer client/month)

Tran Cuong Co., Ltd 2012 3,300,000,000 800,000 - 4,000,000

is not much different Thus the price that they offer to customers is very competitive

Services are offered by the company as follows:

Core service Accounting service:

 Preparing tax reports

 Preparing accounting books

 Preparing financial reports

Supplementary service  Classifying, arranging and storing accounting

documents

Table 2 Categories of service provided by South Tax Consulting Co., Ltd – March

2019 (Source: South Tax Consulting Co., Ltd)

STC has two types of service providing to customers Firstly, core service is accounting service including preparing tax reports, accounting books and financial reports for customers This is the main source that generates revenue for the company Secondly, supplementary service is the service added for customers and this type of service is free Supplementary service includes classifying, arranging and storing accounting documents for customers

The process for main accounting service such as preparing tax reports, financial reports and accounting books for customers at STC is presented as below diagram

Figure 3 Process in accounting service of South Tax Consulting Co., Ltd – March

2019 (Source: South Tax Consulting Co., Ltd)

The Figure 3 shows main steps in the accounting service such as preparing tax reports, financial reports and accounting books for clients at STC from gathering accounting documents from customers to the end of the process that finishing tax reports, financial reports and accounting books Tax reports and financial reports after completing will

be submitted to tax authority Accounting books and documents of the whole calendar year will be returned to customers

1.2 Business performance

Based on the Figure 4, in the period of 2014 – 2018, the company‟s revenue tends to increase In specific, the revenue in 2018 increases 554 million VND (equivalent to the growth rate of 17.6%) compared to revenue in 2014 From 2014 to 2017, the revenue increases from 3.15 billion VND to 3.75 billion VND (equivalent to the growth rate of

19%) In 2018, the revenue decreases slightly from 3.75 billion VND to 3.7 billion VND (equivalent to the growth rate of -1.22%)

Figure 4 Revenue and profit from 2014 to 2018 of South Tax Consulting Co., Ltd (Source: South Tax Consulting Co., Ltd)

The growth rate of revenue tends to decrease from 10.57% in 2015 down to minus 1.22% in 2018 The revenue growth rate tends to decrease continuously from 2015 to

2018 These numbers indicate that the business of South Tax Consulting Co., Ltd is facing with big trouble If we can not identify the problem and have suited solution for

it, the firm‟s business may get worse

Based on data that the company provided, revenue in each group of customer is listed

as follows:

Type of

customer

< 10 billion VND/year

10 - 50 billion VND/year

> 50 billion VND/year Total (VND)

53.7% over total sales Particularly, the group of micro trading customer takes 65.8% sales in trading group This is the one that contributes the most in total revenue at STC

Figure 5 Revenue in each group of customer of South Tax Consulting Co., Ltd in 2018 (Source: South Tax Consulting Co., Ltd)

From the company data in Figure 5, there are 3 group of customers which contributed the most in revenue such as trading – sales under 10 billion VND per year (35.29%), trading – sales from 10 to 50 billion VND per year (16.93%) and construction – sales under 10 billion VND per year (12.83%) The group of customer in trading – sales under 10 billion VND per year is the main group of customer of STC which contributes the most in proportion of sales for the company Therefore, micro trading customers is the group of customer that the study focuses on The below chart will present the revenue growth rate of micro trading customers from 2015 to 2018

Revenue growth rate (%)

Figure 6 The revenue growth rate of micro trading customers at South Tax Consulting Co., Ltd from 2015 to 2018 (Source: South Tax Consulting Co., Ltd)

From Figure 6, the revenue growth rate of micro trading customer group tends to decrease continuously in the period of 2015 – 2018 In specific, the revenue growth rate was 9.52% in 2015 and it decreased consecutively until down to minus 1.79% in

2018 In the next part, the symptom that links to sequential decrease in revenue growth rate of this group of customer will be figured out

2 Symptoms

As interview with Mr Vuong – CEO:

„In recent years, my company performance is not good The revenue growth rate of

my company tends to be slow down, especially the main group of customer – micro trading customers The number of existing customers that leaving my company tends

to increase more than new customers Thus it impacts on the revenue of my company.‟ (Mr Vuong, CEO of STC, 34 years old)

As Mr Vuong mentioned, the revenue growth rate tends to be slow down recently He claimed for the decrease in number of existing customers had overcome the increase in new customers, thus it impacts to the revenue of the company The chart below will show the number of micro trading customers at STC at the year end in the period of

Number of micro trading customers

Figure 7 Number of micro trading customers at the year end in the period of 2014 –

2018 (Source: South Tax Consulting Co., Ltd)

In general, the number of micro trading customers increase in the period of 2014 –

2018, in particularly, there were from 53 customers in 2014 up to 64 customers in

2018 However, the growth rate of customer of the firm tends to decrease in this period We can see that the increment in number of customers each year from 2014 to

2018 has decreased continuously in this period of time In 2018, number of micro trading customers in STC is 64, decreased 2 customers compared to the one in 2017

On the other hand, the number of customers who stop working with STC tends to overcome the number of new customers of the company That makes the number of customers of the firm decrease, especially in 2018 In the period of 2014 – 2018, the number of micro customers in trading stop using the accounting service of STC reach

23 firms, account for 29.87% over the total of ex-customer in this period of time This group of customer is the main one in STC Thus it impacts the most on the total revenue of STC Details are as follows

Table 4 Fluctuation in number of micro trading customer of South Tax Consulting Co., Ltd in the period of 2014 - 2018 (Source: South Tax Consulting Co., Ltd)

Based on data in Table 4, the leaving customer number tends to increase year by year from 2 up to 8 customers from 2014 to 2018, especially increase sharply in the period

of 2016 – 2018 There are 5 customers leaving in 2016, 7 customers leaving in 2017 and 8 customers leaving in 2018 In contrast, new customer number tends to downturn, especially from 2016 to 2018, from 9 customers in 2016 down to 6 customers in 2018

It results in the downturn of customer number at the year end from 2014 to 2018 The downturn trend of the group of micro trading enterprise is the same as the trend of the total customer portfolio of the company Thus it may represent for the whole customer portfolio of the company However, there is a noticeable fluctuation in the period of

2016 – 2018 in this kind of customer The decrease in new customers and loss in current customers in micro trading group of customers that partly contribute to the decrease in sales growth at STC

Furthermore, the revenue of the corporate comes from two sources: revenue from existing customers and from new customers Therefore, the issue of decreasing in total number of customers indicates something wrong with the business of STC We need to

consider two aspects of the issue: Firstly, why number of existing customers leaving

the company increase? Secondly, why number of new customers decrease? It is the

starting point that we need to work with in order to find out the trouble in the business

of STC However, based on Pareto Rule (1), it mentioned the rule that a small proportion of a total input contributed for a large proportion of the total output It is commonly called as the 80/20 rule (1) In case of STC, the study will focus on the main group of customer – micro trading customers, which possibly represents for the all groups of customer at STC Thus if we can figure out the problem that occurred to micro trading customers, it can be the one that happened to the company business In addition, researchers also stated that in managing customer relationship, it is necessary for corporates to emphasize on long-term relationship customers in order to increase their profitability (2) Based on the aforesaid study (2), it stresses on the important role

of existing customers towards the company business Thus, in case of STC, this study focuses on the issue that why number of existing customers leaving the company increase rather than why number of new customers decrease Therefore, the study will focus on the issue that number of existing micro trading customers leaving STC increases

Why number of existing micro trading customers leaving the company increase?

As responses of Mr Sang – CEO of Minh Sang Co., Ltd:

„I can not trust in STC when they prepared my company tax reports inaccurately My company was fined by tax authority and this made me unsatisfied with accounting service provided by STC.‟ (Mr Sang, CEO of Minh Sang Co., Ltd, 38 years old) Due to the reason that Minh Sang Co., Ltd was punished by tax authority and the cause was because South Tax Consulting Co., Ltd prepared their tax reports with deficit corporate tax value, it leads to the circumstance that customers must submit supplementary tax and fines for tax authority It caused a loss for customers thus it made customers feel dissatisfied and unable to trust in accounting service quality that South Tax Consulting Co., Ltd provided to them

As interview Mr Vuong – CEO of South Tax Consulting Co., Ltd:

„There are two elements that we need to satisfy customers‟ expectation: accuracy in preparing tax reports and timeliness in delivery tax reports Recently, there are various cases happen in STC mainly related to failure in preparing accurate tax reports for clients, in specific, inaccurate calculation on client‟s corporate income tax.‟ (Mr Vuong, CEO of STC, 34 years old)

As responses of Mr Vuong, in accounting service, customers require for accuracy in preparing tax reports and timeliness in delivery tax reports from accounting service

provider Based on interview with Mr Vuong and data from company, there is a serious problem that has happened to STC recently: inaccurate calculation on client‟s corporate income tax After tax finalization in 2018, as statistics of South Tax Consulting Co., Ltd, there were total 25 customers in which there were 8 micro trading customers (focus group of customer) cut accounting service with South Tax Consulting Co., Ltd due to this reason

According to responses from Mr Vuong:

„In corporate‟s tax finalization, corporates are mostly fined by tax authority when there is a deficit in corporate tax that submitted to tax authority In case insufficient tax submission, the firm is required to submit supplementary tax and fines for submitting late that amount of tax.‟ (Mr Vuong, CEO of STC, 34 years old)

As Mr Vuong sharing, if his company prepare customer tax reports with deficit in customer‟s corporate tax value, it leads to the problem that customer will submit corporate tax insufficiently to tax authority In tax finalization, tax authority will find out the insufficiency in tax value submission from corporate They will ask the corporate to submit supplementary tax and fines for late submission that amount of tax It leads to the issue that customers were fined by tax authority for insufficient tax submission and this made customer dissatisfaction with accounting service quality that STC provides and they cut accounting service contract with STC Details about cases that inaccurate in corporate tax value in tax reports are listed as follows:

No Name of customer Year of report Missing tax (VND) Total fine (VND)

Table 5 Details about cases that inaccurate in tax reports in micro trading group – announced by tax authority in 2018 (Source: South Tax Consulting Co., Ltd)

From the data that the company provided in Table 5, there were eight micro trading customers that STC prepared inaccurate tax reports for in tax finalization in 2018 These customers cut accounting with STC in 2018 after this circumstance The total fine that tax authority announced in these 8 cases reached 103,012,137 VND In these cases, STC prepared tax reports for customers with inaccuracy in tax reports In specific, there was a negative discrepancy in corporate tax value in customer‟s tax reports It leads to the issue that customers will pay corporate tax based on the corporate tax value that STC calculate in tax reports Then when tax authority checks these customer‟s tax reports, they will figure out the inaccuracy in the tax reports They will punished these firms by requesting submit the discrepancy in tax report compared to the value that they supposed to submit and a sum of fine for late submit this amount of tax

As interview Mr Vuong:

„In 2018, when these unexpected cases occurred, I had to pay the cost for customers They did not accept to pay the fine due to mistakes came from my company In 2018, I had to pay 103,012,137 VND for the fine This expense was not brought to reasonable cost for my company.‟ (Mr Vuong, CEO of STC, 34 years old)

Through the interview with Mr Vuong, he states that when his company prepares inaccurate tax reports for customers, it also impacts to his company in terms of loss In case his company prepares inaccurate tax reports for customers, it is his company‟s fault and it leads to the issues that customers may have to spend a sum of money for tax fine in tax finalization And customers may ask him to pay this expense Moreover, this kind of cost is not allowed to add in reasonable cost for the company, thus the company can not deduct tax for this amount of expense It leads to a loss for STC As

Mr Vuong sharing, tax authorities will request a firm for tax finalization once for several years, thus if there is any inaccuracy in tax reports that can not be detected promptly, the firm will be fined by tax authority Hence, preparing accurate tax reports for customers is very important and the issue of preparing inaccurate tax reports happened in STC and it results in a loss of 103,012,137 VND for company in 2018 According to research (3), the paper mentioned relationship quality in business to business which comprises of “trust, commitment and satisfaction” had influence on customer‟s business retention Besides, according to Lee et al (4), the authors state

that service quality is a frequent element which is used by both researchers and practitioners in order to evaluate variables of trust, commitment and satisfaction of customer It is generally accepted that the satisfaction of customer depends on the product or service quality that offered by provider thus researchers have stressed the significant of service quality perceptions and their relevance with customer satisfaction (4) Moreover, according to the research of Jamali in 2007 (5), the author mentioned SERVQUAL instrument which was mostly utilized to measure service quality Authors mentioned determinant of reliability which affects to service quality and reliability was descripted as providing service accurately, on time and dependently Combining related theories and the issue of providing inaccuracy tax reports to customer of STC, in case of STC, they provide accounting service inaccurately to customers thus it leads to customer dissatisfaction to service quality that the firm offers In case customers do not satisfy with the service from STC, they might stop using accounting service from the company and even worst, they can choose to switch

to another rival of the company Moreover, with inaccuracy in accounting service providing to customers, it partly has negative impact on customer‟s trust to the corporate‟s service quality and commitment with doing business with such firm It leads to a decrease in the strength of business relationship and also limits the possibility for customers to maintain the business with STC Thus assurance the accuracy in tax reports for customers play an important role in adapting customer‟s service quality perception so that it leads to customer satisfaction and repeating business with STC Therefore, in the scope of this study, I will focus on the issue that occurred in STC: deficit in client‟s corporate income tax, which results in the circumstance that customers submit insufficient corporate tax for tax authority and they receive punishment from tax authority due to insufficiency in tax submission In the next part of problem analysis, potential problems that lead to these symptoms will

be in turn figured out

3 Problem analysis

3.1 Problem identification

In accounting process in STC, there are four elements that participate in the process to make tax reports such as customers, accountants of STC, accounting supervisor in

STC – Mr Vuong, and accounting software that Mr Vuong‟s company has utilized (CeAC software) Thus there are four aspects that possibly lead to mistakes on client‟s corporate income tax Therefore, interview was organized in order to find out which elements cause the mistakes in customer‟ tax report the STC prepared for customers

3.1.1 Initial cause and effect map

Based on in-depth interview with CEO of STC – Mr Vuong and his accountants – 10 accountants at Accounting department (Bui Thi My Oanh, Tran Ngoc Vy, Nguyen Thi Nga, Tran Thi Anh Tuyet, Tran Thi Lan, Phan Thanh Thanh, Nguyen Tram Anh, Phan Kim Thy, Ta Ngoc Lien and Huynh Thi Hong), the summary of initial cause and effect map is presented as follows There are three symptoms: deficit in corporate tax value

in client‟s tax reports, insufficient in customer‟s tax submission to tax authority and tax authority‟s punishment for insufficient tax submission Problem leads to deficit in corporate tax value in client‟s tax reports is discrepancy in sales or costs value in client‟s tax reports From the side of accountants, problems lead to discrepancy in sales or costs value in client‟s tax reports are inserting inaccurate invoice value to accounting software, insufficient invoice input, insufficient manipulation in accounting software and wrong account determination From the side of Mr Vuong as a

supervisor, insufficient manager‟s supervision that results in hidden mistakes in client‟s tax reports leads to discrepancy in sales or costs value in client‟s tax reports

Potential

Figure 8: Initial cause and effect map (Author synthesis)

Discrepancy in sales or costs value in client’s tax reports

In case of South Tax Consulting Co., Ltd, based on interviews from Mr Vuong and his accountants, they mentioned about discrepancies in clients‟ sales or costs which will lead to discrepancy in corporate tax value, in specific:

accountants sometimes miss some particular steps on software; or wrong account determination by accountants Each of these problems will be in turn explained clearly

as following

Inserting inaccurate invoice value to accounting software

In the process to prepare tax reports in STC, customers provide input accounting documents for accounting service provider to prepare tax reports for them After receiving invoices and related accounting documents from customers, accountants in STC will insert information of invoices into accounting software As responses of accountants at STC, they usually make mistakes as inserting inaccurate invoice value

to accounting software

As response from Ms Oanh – accountant in STC:

„The stage of inputting information is very important, especially value of invoices If the invoice value is inserted inaccurately, it will lead to inaccuracy in customer sales

or costs in tax reports.‟ (Bui Thi My Oanh, STC accountant, 25 years old)

In case of STC, one of the problems is because STC‟s accountants input invoice value inaccurately Thus it impacts to the value of revenue as well as expenses of customer‟s firm This resulted in the discrepancy in customer‟s corporate tax that needed to submit to tax authority In most of cases occurred with clients of STC, the tax amount that the firms submitted at that time was insufficient and the firms must submit supplementary tax and fines for late submit tax for tax authority

Insufficient invoice input

in negative discrepancy in corporate tax that needs submit to tax authority Thus the tax amount that the firm submitted at that time was insufficient and the firm must submit supplementary tax and fines for late submit tax for tax authority

Insufficient manipulation on accounting software; Wrong account determination

Through interview Mr Vuong, he emphasized the essential role of accounting software in his business Suitable accounting software helps decreasing accountant‟s manual manipulation as well as mistakes in inputting and processing data Mr Vuong mentions that his company is using CeAC accounting software with basic package The software has run quite well to support his work However, there are several inconveniences about the accounting software that he thinks it might impact on the accuracy of customer‟s tax reports In details:

„There are various functions in the software still not automatic such as account determination, account closing and forwarding, awareness of coincident codes and so

on, accountants must process and recheck manually thus it may result in inaccuracy in tax reports.‟ (Mr Vuong, CEO of STC, 34 years old)

After interviewing Ms Nga – accountant in STC, in case of T&F Co., Ltd – the company that she handled to prepare tax reports for, she missed a step in manipulation

on accounting software In specific, she forgot to make account closing and forwarding for account of revenue in May 2017, thus it resulted in the shortage of 527 million VND in revenue Due to this shortage amount in revenue of T&F Co., Ltd, it impacted

on revenue of the company in Quarter II, 2017 Revenue of the company in this quarter decreased 527 million VND, equivalent to a decrease of 105 million VND in income tax that T&F Co., Ltd must submit to tax authority Thus, after tax finalization, T&F Co., Lt must submit supplementary tax and fine for late submit this amount of tax

to tax authority Besides, in case accountants make wrong account determination, it also leads to errors in clients‟ tax reports As Ms Thanh – accountant in STC mentioned:

„Account determination is very important However, with inexperienced accountants,

it is difficult for them to accurately determinate account in complex case.‟ (Phan Thanh Thanh, STC accountant, 24 years old)

As Ms Thanh explain, one of difficulties that inexperienced accountants may face with is account determination and with current accounting software in STC, they have

to do it manually thus it is easy to make mistakes in this stage As Ms Thanh sharing,

in accounting reports, there are many types of account and each account has its own use If the accountants choose wrong account for a particular expense, it will affect to the accuracy of client‟s tax reports In addition, as Ms Tuyet‟s response, in case of Hanh Ngan Co., Ltd – the company that she handled to prepare tax reports for, she admitted that she often made mistake in determining wrong account when she prepared tax reports for customer since at that time, she had not much experience as well as deep knowledge in accounting Therefore, insufficient manipulation on accounting software and wrong account determination partly impacts on the accuracy

of tax reports that STC prepares for clients

Insufficient manager’s supervision; Hidden mistakes in client’s tax reports

According to responses from Mr Vuong and his accountants, they mentioned about lacking prompt supervision from manager, in specific:

„At the current, there is not enough supervision from manager – Mr Vuong in order to recheck the work result of accountants in accounting team or give us support promptly.‟ (Nguyen Tram Anh, STC accountant, 24 years old)

In accounting process, the manager take responsibility to check in 3 stages: after accountants input information into accounting software, after exporting draft tax declaration and after exporting draft tax reports However, due to taking multiple jobs

in the company such as developing new customers, taking care of existing customers, accounting supervision, general management… thus Mr Vuong does not have enough time to complete all the jobs with full of attention, especially supervise accounting team‟s work result Thus it led to the result that there were many mistakes that could not be figured out and it affected to the accuracy of customer‟s tax reports Moreover, sometimes Mr Vuong assigned the job to supervise the junior employee‟s work to senior employee without cross-check the job that he assigned Those senior employees also do not have enough time as well as capability for managing their own job and supervising job of other junior accountants with the best result Thus it also resulted in the inaccuracy in customer‟s tax reports It can be shown that supervision form manager – Mr Vuong is very important in supervising the work quality of accountants

in his company Therefore, without sufficient supervision from manager, mistakes in accountant‟s work can not be figured out thus it results in the discrepancy in corporate tax in client‟s tax reports

3.1.2 Potential problems

From the aforesaid problem mess, in-depth interview with Mr Vuong and his accountants to explore potential problems was continued As result, four potential problems identified are work overload, employee with unqualified knowledge, skill and ability,insufficient supervisor support and low employee work motivation

According to responses of accountants in STC, they opine that with such high workload that they are handling, they have to work up to 10 hours/day and overtime for Saturday every week, especially it becomes normal in tax finalization in the first quarter of the year They admit that they just concern about meeting the deadline and finish all tasks that they are assigned, not about the quality of the work Thus, with high workload assigned, accountants just focus on how to complete all the tasks that they assigned, in specific, get all customer‟s tax reports done within time given but not pay much attention on the quality of the work that presented through the accuracy in customer‟s tax reports

As Mr Vuong sharing:

„If we are late in preparing tax reports for customers, it affects to the deadline that we must submit customer‟s tax reports If it is late, customers will be fined by tax authority Thus meeting the deadline is very important.‟ (Mr Vuong, CEO of STC, 34 years old)

He believes that the most important thing is that his employees complete their assigned job within deadline so that client‟s tax reports can be submitted to tax authority on time In case his accountants seem to get behind the schedule, he will push them for complete the workload as soon as possible They can stay at the company late for doing their job, especially in tax season or they can come to the company in Sunday if they need more time for the job The accountants admit that they feel extremely exhausted with the work, particularly in tax season Thus it is easy to make mistakes in