Improving accounting system in Vietnamese public vocational training colleges_2

Do Ngoc Tram 2017, "Accounting of state budget in the context of financial autonomy and international accounting integration - Application for Vietnamese public vocational training coll

MINISTRY OF EDUCATION AND

MINISTRY OF FINANCE

ACADEMY OF FINANCE

     

DO NGOC TRAM

IMPROVING ACCOUNTING SYSTEM IN VIETNAMESE PUBLIC

VOCATIONAL TRAINING COLLEGES

Subject : Accounting Code : 9.34.03.01

SUMMARY OF PhD DISSERTATION

HANOI - 2019

THIS DISSERTATION IS IMPLEMENTED IN

ACADEMY OF FINANCE

SCIENCE INSTRUCTORS:

1 Prof Ngo The Chi, PhD

2 Assoc Prof.Doan Van Anh, PhD

- National Library of Vietnam

- Library of Academy of Finance

LIST OF SCIENCE WORKS WERE PRESENTED BY AUTHOR

1 Do Ngoc Tram (2011), "Promoting the role of accounting information in

the process of socialization in public services", Journal of accounting and auditing, No 10/2011 (97), p 32-34

2 Do Ngoc Tram (2011), "To make public sector accounting information

meet the requirements of the "Open and international integration"

process, Financial Inspection Magazine , No 110 (8-2011), p 19-20 (co-

author)

3 Do Ngoc Tram (2017), "Discussing the accounting regime of

administrative and non-business units using the state budget", Financial Inspection Magazine, No 175 + 176 (1 + 2-2017), p 82-83

4 Do Ngoc Tram (2017), "Accounting of state budget in the context of

financial autonomy and international accounting integration - Application for

Vietnamese public vocational training colleges "Research Journal in finance and accounting, No 02/2017 (163), p 25-29

5 Do Ngoc Tram (2017), "Financial autonomy, convergence of international

accounting and requirements of improving the quality of information on the financial reporting system - Application for Vietnamese public vocational

training colleges” Journal of Financial and Accounting Studies, No 03/2017

(164), p 38-41

INTRODUCTION

1/ REASON FOR CHOOSING RESEARCH TOPIC

Currently, like many Vietnamese public service organizations, accounting system of public vocational training colleges in Vietnam is facing many challenges when the Government changes its management method from input control to output control, attaching the business results to the assigned management head’s responsibilities, new financial management mechanisms in accordance with increasing autonomy and the trend of integration and convergence with international public accounting sector The application of one accounting according to any other accounting system must ensures that the working conditions of the unit are appropriate, providing information to both the government management and all other related parties such as investors, students, families, and society for the common purpose of effective management and investment decisions This becomes critical challenges for accountants of Vietnamese public professional high schools Improving accounting system in Vietnamese public vocational

training colleges on the aspect of applying appropriate accounting facilities

when determining the accounting objects as well as when receiving and processing supplies accounting information made the author to choose the

research topic "Improving accounting system in Vietnamese public

vocational training colleges "

2 / RESEARCH OVERVIEW

2.1 / Summary of previous research projects in the same field

Research on accounting in public service units - accounting basis Research

on accounting in public service units - an experience aspect when applying international public accounting standards Research on public service unit accounting - accounting information aspect and accounting information analysis Some researches on public service unit accounting - organizational aspects of accounting work, accounting use as financial management tools for public service units, etc From the author's review, it is assumed that the researching problems can be inherited as well as the content of the author can

be continued to study

2.2 / Gaps of the previous studies

Currently, Vietnam lacks empirical studies on the content of financial accounting work on the accounting basis, helps to affirming the accounting

base being applied and recommending future improvements to the establishment of the accounting work in accounting in Vietnamese public service units At Vietnamese public vocational training colleges (VPVTC), accountants comply with a common administrative and non-business accounting policy framework issued by the state, on the one hand, failing to fully reflect all activities according to the characteristics of short-term and real vocational training, implemented by work orders from enterprises, sell the accounting services, etc , on the other hand, it has not yet served the demand for accounting information of non-state objects (enterprises link to training, business associates, financial institutions, for debtors, etc.) In a constant movement socio-economic environment with many challenges from international integration trends, state policies must always be changed to fit

in Accounting for public vocational training colleges should not only focus

on complying policies and information provision for state management but also need to master and actively apply appropriate accounting facilities to accountants to reflect the broader and more diversified financial and economic activities, meet the needs of accurate and effective accounting information in order to serve users inside and outside the colleges There are still gaps of in-depth research on the above mentioned content

to improve accounting at Vietnamese public vocational training colleges according to appropriate accounting bases in the near future

Detail objectives: (i) Study the factors that govern accounting of public non-business units; Summarize the fundamental theoretical issues about accounting of public non-profit units based on accumulated accounting and cash accounting facilities; Learn the patterns of public service unit accounting content that follow international accepted accounting facilities from which to draw experience for Vietnam (ii) Research on actual survey of accounting contents at VPVTC; Identify the current accounting basis as well

as evaluate, analyze the advantages and disadvantages in financial accounting when following this accounting basis at VPVTC (ii) Proposing solutions to

complete the accounting contents at VPVTC on the perspective of applying accounting facilities

4 / RESEARCH QUESTIONS

The tasks of this thesis is to study, analyze and evaluate theory and practice to answer the following research questions:

Question 1 : What is the basic theory of accounting in public non-profit units

based on the accounting basis?

Question 2: How do changes in accounting base apply to accounting of public service units according to international experience?

Question 3 : What is the current status of accounting contents of basic economic

activities in VPVTC in the aspect of accounting application taking place?

Question 4 : Analyzing and evaluating accounting contents at VPVTC on

aspects of accounting application

Question 5 : What are the solutions to complete accounting content at

VPVTC according to appropriate accounting basis?

5 / SUBJECTS AND SCOPE OF RESEARCH

5 1 / Research object

The thesis focuses on studying accounting contents on the basis of applying accounting facilities in VPVTC under conditions governed by the following factors: financial autonomy mechanism; the process of educational socialization to attract non-state financial investment sources; accounting information requirements must ensure quality for internal management and aim to serve the process of consolidating the national financial statements in the future; requires standardization of accounting in accordance with international public accounting standards to meet the requirements of economic integration and globalization

5.2 / Scope of research:

In terms of space: independent Vietnamese public high schools are managed by the Department of Education and Training of provinces or cities (from 2016 onwards) and the Department of Labor, Invalids and Social Affairs (from then on) 2016) In terms of time: the last 5 years were divided into two periods with the 31/12/2017 mark In terms of content: focus on research and financial accounting

6 / RESEARCH PROGRAMS AND METHODS

The research process is performed by the author in the following steps: Forming research ideas; Research materials and research reviews; In-depth

interviews; Designing questionnaires and selecting samples; Send questionnaires; Summary of survey forms; Evaluation from the survey results; Verifying results through case studies; Research conclusions The author used SPSS20 software to support information processing and summarize survey results with each content in accounting work at units The author performs descriptive statistical steps with questions in each content of the survey In order to verify the investigation results, contributing to affirm the effectiveness of the questionnaire, the authors performed a case study of financial accounting in a few units in the survey sample medicate herself

7 / RESEARCH MEANING

In theory: (i) Having generalized the characteristics of public non-profit

units, determining the elements of financial accounting for public non-profit

units (ii) Having generalized the content of financial accounting of public

non-profit units on the basis of accounting, interpreting suitable accounting bases for financial accounting in these units according to the level of funding

dependence state budget and sources controlled by the state (iii) Learning the

international accepted mold rules for public service delivery units from which

to draw experience for Vietnam

In practice: (i) Reviewing and evaluating the advantages and disadvantages of financial accounting at the current secondary schools The assessment is set in the context that the factors that govern accounting work

in high school are changing (ii) Proposing solutions to improve the financial

accounting contents at VPVTC towards the quality of accounting information provided Solutions to focus on perfecting the financial accounting of VPVTC in the direction of separating financial accounting into two systems for processing and providing information from the same input data sources, including financial accounting based on accrued basis and the cash

basis (iii) Proposing a solution to complete the legal framework of

accounting policies for public service units or for research and training

8 / STRUCTURE OF THE THESIS

Chapter 1: Basic theory of accounting in public non-profit units

Chapter 2: Current situation of accounting in Vietnamese public vocational training colleges

Chapter 3: Solutions to complete accounting in Vietnamese public vocational

training colleges

CHAPTER 1 BASIC THEORY OF ACCOUNTING IN PUBLIC NON-PROFIT

UNITS

1.1 GENERAL CHARACTERISTICS OF PUBLIC NON-PROFIT UNITS - MAIN FACTORS AFFECTED TO ACCOUNTING

1.1.1 Operational characteristics and classification of public non-profit units

Public non-profit units are organizations established by competent agencies of the State, political organizations and socio-political organizations under the provisions of law, it has legal status and provide public services, serving state management Financial resources to ensure the operation is funded by the state budget or originated from the budget The activities of the unit to serve the society, therefore, the expenditure is not directly reimbursed

by economic benefits, but by social efficiency in order to achieve macroeconomic objectives The mode of operation of public non-business units is very diverse, but all have the following basic characteristics: The purpose of non-profit operation is mainly to serve the community's benefits; Creating products that bring common benefits with long-term sustainability for society; Activities associated with and dominated by socio-economic development programs of the State

1.1.2 Financial resources and financial management in public service units

1.1.2.1 Financial resources of public service units: Financial resources from

the state budget Financial resources outside the state budget

1.1.2.2 Management of mobilizing financial resources of public service units: Managing financial resources from the state budget Managing non-

state budget resources

1.1.2.3 Managing and using financial resources of public non-business units

1.1.3 Regulatory regulations on accounting and accounting infrastructure of public non-business units

* Regulations on accounting: In order to meet the requirements of economic

and financial management, strengthen management of national budget spending control, public asset management, improve the quality of accounting and management efficiency in the units public and accounting enterprises in public non-business units must ensure the consistency between accounting and management requirements of the state in general and of units

in particular; ensure consistency in the content and method of accounting

with the current accounting regimes of the State; ensure conformity with the characteristics of the unit

* Accounting infrastructure:Human resources to do accounting work

Control accounting and pressure on accounting information Other factors such as accounting, professional occupations, accounting and vocational education, management culture, etc

1.1.4 Effect of general characteristics of public non-business units on the application of accounting basis

Factors related to operational characteristics, operation management regime, financial policies of public non-profit units are factors affecting the selection of accounting basis of these units

1.2 ROLE, DUTIES AND REQUIREMENTS OF PUBLIC PAYMENT FINANCIAL UNITS

1.2.1 The role of financial accounting public non-business units

Accounting of public non-profit units is the accounting of the observance of the state budget at public non- profit units, this is the organization of data information system to manage and control funding sources, the situation of using decisions budgeting, figuring out the management and use of public supplies and assets, the situation of observing the revenue-expenditure estimates and implementing the criteria and norms

of revenues and expenditures at the units An accounting system at the completed public service unit will promote the following roles: Serving the macro management of the State; Serving micro management of unit operators; Supporting for other management tools

1.2.2 Duties and requirements of financial accounting of public entities

Accounting of public non-profit units must carry out the following main tasks: Recording and reflecting accurately and promptly on assets, materials, capital, the process of forming funding and using funding sources, situation and results of production and business activities at the units To inspect and control the situation of observing the revenue and expenditure estimates; To prepare and submit financial statements on time

1.3 CONTENT OF FINANCIAL ACCOUNTING IN PUBLIC PROFIT UNITS

NON-1.3.1 Accounting basis of financial accounting in public non-business units

Financial accounting on a cash basis based on the principle of recording all changes in the budget of an accounting unit and eliminating all other

fluctuations Cash basis state accounting allows to track the movement of cash flows into expenditures of the budget (including the state budget) The main drawback of cash-based accounting is that it does not identify all the situation of capital and assets

Accumulated accounting is the committed accounting ("commitment" associated with all real obligations and benefits arising in the process of conducting transactions and operations of the accounting unit) For the state, full-blown accounting records all transactions when there are legal signs

of the state 's financial rights and obligations, regardless of whether or not the money has been received or paid for

Modify cash basis or modify accrual basis is the combination of two bases is cash and accrual Here, the accrual basis is applied when recording long term objects are less likely to change in the fiscal year (fixed assets, long-term long term investments, ) and lead to information on the Balance Sheet, the cash basis is used to record short-term objects (monthly interest expenses, monthly business expenses, monthly sales revenue, ) and provide the information of Income statement In recognition of revenue and cost, it is always associated with each type of revenue generation and expenditure activities

1.3.2 Content of financial accounting in public non-profit units

1.3.2.1 Financial accounting of public non-profit units based on cash basis

1.3.2.1.1 Identification - record the measurement of the accounting object

a) Determination of accounting objects:

Assets include: Money, Non-cash assets Source of asset formation: loans, owners' equity The objects are income / income and expenses / expenses

b) Recording and measuring accounting objects:

The accounting assumption "going concern" governs the principle of measurement and recognizes the accounting objects If the assumption of

"going concern" exists, the value of the established accounting object is determined by the cost principle

1.3.2.1.2 Receiving - processing - providing information of accounting objects

a) Receive initial information from accounting documents

Each object has a corresponding type of voucher recognizing an increase

or decrease of the object

b) Processing information through accounts

* Accounts: A t paragraph reflects cash and cash equivalents Accounts of funding,funds Accounts Receivable, Accounts Expenses A t paragraph reflects assets other than cash A t the tracking account liabilities

* Reflecting changes of accounting objects into accounts:

Accounting uses dual recording method to reflect the change of accounting objects during the operation of the unit Principles of real revenue

- real spending determines the time of recording the increase or decrease of objects Depending on the needs of management, the arising is not associated with the actual revenue - the money and cash equivalents are not recorded to the targets of Income - Expense Report that are tracked separately to update information on theory prove financial statements

c) Providing accounting information through the financial statements

The financial statements prepared on a cash basis provide the reader with information on the increase in cash during the period, the purposes for which the money is used and the cash balance at the date of the report

1.3.2.2 Financial accounting public non-profit units based on accrual basis

1.3.2.2.1 Identify - record the measurement of the accounting object

a) Determination of accounting objects: Assets include short-term assets (cash, inventory, financial investments, receivables), the long-term assets Source of asset formation includes liabilities, net assets / equity The object is revenue and cost

b) Measure and record accounting objects: Accounting on the basis of accumulation records and measures specific accounting objects according to consistent principles, specifically: For asset types that are money, inventories, fixed assets are usually based on the original cost principle if assuming continuous operation is guaranteed or fair value / net worth can be realized if this assumption violated

1.3.2.2.2 Receiving - processing - providing information of accounting objects

a) Receive initial information from accounting documents:

Including: accounting documents reflecting increasing or decreasing assets; reflect debts, etc

b) Processing information through accounts:

* Account: opens according to accounting objects

* Reflecting changes of accounting objects into accounts:

Accounting uses dual recording method to reflect the change of accounting objects during the operation of the unit The principle of

" executing/ realizing", "matching between income and expenses" determines the time when the object will be increased or decreased Accounting based on accruals records changes of subjects belonging to financial activities; investment activities; operates other than the above two operations into the accounting account

c) Providing financial and economic information through the financial statements: Based on the cumulative basis, the financial statements must provide information about the financial position, activities and cash flows of

a unit that helps to evaluate the analysis and make decisions about the allocation of resources

1.4 ACCOUNTING OF THE PUBLIC SERVICE UNITS IN SOME COUNTRIES IN THE WORLD AND EXPERIENCE FOR VIETNAM

1.4.1 Accounting of public service units in some countries in the world

Many countries around the world have been applying international accounting standards (or IFRS or IPSAS) or based on international public accounting standards to build the national public accounting standards applied to their country These ways were suitable for political institutions, allocation and payment relations between the state budget and public sector and public finance units

1.4.2 Experience for financial accounting of public non-business units in Vietnam

There are many differences between the accounting of Vietnamese public non-business units and the similar accounting system of countries around the world The accountants of Vietnamese public non-business units have not provided useful information for accountability and decision making With the rapid development of the public sector in the last decade and the orientation of public financial management reform towards increasing the efficiency of using public resources in Vietnam, public sector accountants must be restructure positively Experiences from countries around the world show that accounting of public service units are affected by the model of General State Accounting, the level of application of IPSAS, the accounting basis of public accounting system in that country

CONCLUSION OF CHAPTER 1

Chapter 1 presents the concepts, meanings and requirements, principles and tasks of accounting in public non-business units and comprehensive public service units In-depth analysis of the factors that influence accounting work at public non-business units Analyzing and systematizing the basic arguments about the content of financial accounting of public non-business units on the cash basis and on an accrual basis Provide analysis of the situation of applying different types of accounting facilities to public service unit accounting in the countries around the world today and the general trend The above content provides a basis for the process of analyzing the situation and proposing solutions to complete the accounting work of Vietnamese public professional secondary schools in the following section

CHAPTER 2 CURENT SITUATION OF ACCOUNTING IN VIETNAMESE

PUBLIC VOCATIONAL TRANING COLLEGES

2.1 GENERAL CHARACTERISTICS OF VIETNAMESE PUBLIC VOCATIONAL TRANING COLLEGES

2.1.1 Definition, classification of public vocational training colleges in the Vietnamese national education system

Vocational training colleges is the basis education in the national education system, carrying out human resources training and professional training skills corresponding to the intermediate-level vocational qualifications, having professional ethics and responsibility to directly serve units production, sales and services

- Classification of vocational training colleges based on management unit criteria: 4 types

- Classify the vocational training colleges based on the criteria of the decision-making unit: 2 types

2.1.2 The role of Vietnamese public vocational training colleges

As a "vocational training channel" at the intermediate level, the division of students after junior and senior high schools is carried out Training human resources directly for production, business and services, with professional competence corresponding to the level of training at the following levels: primary, intermediate, college and contribute to training high quality human resources, etc

2.1.3 Factors controlling financial accounting of public vocational training colleges in Vietnam

2.1.3.1 Operation characteristics

The Vietnamese vocational training colleges operates according to the regulations of the vocational training colleges charter (Circular No 54/2011 / the Ministry of Education and Training dated November 15, 2011, effective from December 31, 2011 and the Circular No 47/2016 / Ministry of Labor, Invalids and Social Affairs takes effect from February 15, 2017)

2.1.3.2 Financial management process

Estimating revenue and expenditure - Implementing estimates - Settlement

2.1.3.3 Financial and economic activities in Vietnamese vocational training colleges - the factor that governs the selection of accounting basis

In order to be compatible with the theoretical study, the practical approach can divide the operation of VPVTC into three areas: financial activities affect the capital structure; investment activities affect the structure

of long-term assets; operates other than the above two activities All three areas of this work share the financial nature of creating resources and using resources The recognition of financial and economic activities in the secondary schools will affect the content of financial accounting on a cash basis or on the basis of accumulation in the colleges that the author studied and presented in the following section

2.1.3.4 Organizational characteristics of management apparatus

Organization of the VPVTC is based on the charter of the VPVTC, including: Director, the specialized training departments, the faculties that do not have specialized training and the subordinate departments, functional departments, training facilities research, socio-political organizations

2.1.3.5 Characteristics of accounting apparatus

The Finance - Accounting Department is one of the functional departments, advising the Principal in the field of financial management, assets, capital sources, funding sources, internal and external funds in accordance with State regulations; directly carry out accounting work to provide economic and financial information to serve inside and outside the VPVTC

2.1.3.6 Accounting legal framework

The system of legal documents is a basis for VPVTC to implement the current accounting work Legal documents affecting the surveyed accounting