Completing the process of auditing the receivable items and revenue at TV audit and consulting company limited

AND CONSULTING COMPANY LIMITED S K L 0 0 7 8 2 0 MINISTRY OF EDUCATION AND TRAINING HO CHI MINH CITY UNIVERSITY OF TECHNOLOGY AND EDUCATION FACULTY HIGH QUALITY GRADUATION THESIS MAJOR

AND CONSULTING COMPANY LIMITED

S K L 0 0 7 8 2 0

MINISTRY OF EDUCATION AND TRAINING

HO CHI MINH CITY UNIVERSITY OF TECHNOLOGY AND EDUCATION

FACULTY HIGH QUALITY

GRADUATION THESIS MAJOR ACCOUNTING

COMPLETING THE PROCESS OF AUDITING THE RECEIVABLE ITEMS AND REVENUE AT TV AUDIT

STUDENT’S NAME: NGUYỄN THỊ QUỲNH STUDENT’S ID: 17125083

INSTRUCTOR: NGUYEN THI LAN ANH

HOCHIMINH CITY UNIVERSITY OF TECHNOLOGY AND EDUCATION

FACULTY HIGH QUALITY

GRADUATION THESIS

COMPLETING THE PROCESS OF AUDITING THE RECEIVABLE ITEMS AND REVENUE AT TV AUDIT

AND CONSULTING COMPANY LIMITED

STUDENT’S NAME : NGUYỄN THỊ QUỲNH STUDENT’S ID : 17125083

ACCADEMIC YEAR : 2017 MAJOR : ACCOUNTING

GVH : NGUYEN THI LAN ANH

Tp Hồ Chí Minh, ngày tháng năm 2021

NHIỆM VỤ KHÓA LUẬN TỐT NGHIỆP

Ngày nh n ề tài: Ngày nộp ề tài:

1 Tên ề tài:

2 Các số liệu, tài liệu ban ầu:

3 Nội dung th c hiện ề tài:

4 Sản phẩm:

TRƯỞNG NGÀNH GIẢNG VIÊN HƯỚNG DẪN

CỘNG HÒA XÃ HỘI CHỦ NGHĨA VIỆT NAM

Độc l p – T do – Hạnh phúc

***

CỘNG HOÀ XÃ HỘI CHỦ NGHĨA VIỆT NAM

Độc lập – Tự do – Hạnh Phúc

*******

PHIẾU NHẬN XÉT CỦA GIÁO VIÊN HƯỚNG DẪN

Họ và tên Sinh viên: MSSV:

Ngành:

Tên ề tài:

Họ và tên Giáo viên hướng dẫn:

NHẬN XÉT 1 Về nội dung ề tài & khối lượng th c hiện:

2 Ưu iểm:

3 Khuyết iểm:

4 Đề nghị cho bảo vệ hay không?

5 Đánh giá loại:

6 Điểm:……….(Bằng chữ: )

Tp Hồ Chí Minh, ngày tháng năm 20…

Giáo viên hướng dẫn

(Ký & ghi rõ họ tên)

CỘNG HOÀ XÃ HỘI CHỦ NGHĨA VIỆT NAM

Độc lập – Tự do – Hạnh Phúc

*******

PHIẾU NHẬN XÉT CỦA GIÁO VIÊN PHẢN BIỆN

Họ và tên Sinh viên: MSSV:

MSSV:

MSSV:

Ngành:

Tên ề tài:

Họ và tên Giáo viên phản biện:

NHẬN XÉT 1 Về nội dung ề tài & khối lượng th c hiện:

2 Ưu iểm:

3 Khuyết iểm:

Tp Hồ Chí Minh, ngày tháng năm 20…

Giáo viên phản biện

(Ký & ghi rõ họ tên)

ACKNOWLEDGEMENTS

In order to be able to perform and complete this graduation thesis well, over the past time I have received a lot of attention and enthusiastic help from many sides including the teachers in the Faculty High Quality Training of HCMUTE, the instructor and the company in which I intern

I would like to sincerely express my gratitude and appreciation to the teachers in the Faculty High Quality of Ho Chi Minh City University of Technology and Education for equipping me with knowledge and help throughout my time studying at the school

In particular, I would like to send my sincere and deep appreciation to teacher Ms Nguyen Thi Lan Anh, who gave me a lot of guidance and supported me in the process

of researching and implementing this thesis

In addition, I would like to thank the Chief of Accounting - Auditing Department

of TV Audit and Consulting Company limited and the brothers and sisters in the department for guiding, helping and creating favorable conditions for me to successfully complete work during the internship as well as completing the thesis

Because of limited knowledge and experience, the thesis will inevitably avoid some shortcomings Therefore, I hope to receive sincere comments and suggestions from teachers and readers for my research thesis to be broader and more complete

SUMMARY

Receivable and Revenue audit are indispensable activities of the business when auditing financial statements Because those items are spone to frauds and errors that can have a significant impact on the financial situation of enterprises During the internship at TV Audit and Consulting Company limited the writer recognized the importance of those items in Auditing Financial Statement Therefore, the writer has chosen the topic “Completing the process of auditing the receivable items and Revenue at TV Audit and Consulting Company limited” for the graduation thesis

In this thesis, the writer will go from Chapter 1 to introduce about TV Audit and Consulting Company limited Chapter 2 Theoretical basis for receivables and Revenue auditing in auditing financial statements Chapter3 Receivables and Revenue audit process status at TV Audit And Consulting Company Limited Evidence of actual auditing at ABC Company Since then chapter 4 Proposing a solution for completing the audit process of receivables and Revenue at TV Audit And Consulting Company Limited

Contents

LIST OF IMAGES x

LIST OF DIAGRAMS xi

LIST OF TABLES xii

REFERENCES xiii

PART 1: INTRODUCTION 1

CHAPTER 1: INTRODUCTION ABOUT TV AUDIT AND CONSULTING COMPANY LIMITED 3

1.1 Introduction about TV Audit and Consulting Company limited 3

1.2 History and development of TV Audit and Consulting Company limited 3

1.3 Principles, objectives, operating directions of TV Audit and Consulting Company limited 3

1.3.1 Principles of operation of the company 3

1.3.2 TV's corporate goals 4

1.3.3 The direction of TV company 4

1.4 The services the company provides 4

1.4.1 Auditing service 4

1.4.2 Accounting services 5

1.4.3 Consulting service 5

1.5 Management organizational characteristics of the Company 6

1.5.1 Management apparatus diagram of the company 6

1.5.2 Functions and duties of each department 6

1.6 Organization of accounting at the company 7

1.6.1 Accounting apparatus structure of the company 7

1.6.2 Accounting bookkeeping form 7

1.6.3 Accounting method that the company use 8

1.6.4 Accounting standards 8

1.6.5 Accounting policies applied at the company 9

1.6.6 Advantages, disadvantages and direction of development 9

1.7 Auditing process at TV company 10

1.7.1 Prepare the audit 12

1.7.2 Conduct audits 16

CHAPTER 2 THEORETICAL BASIS OF THE AUDITING PROCESS ON REVENUE AND CUSTOMERS RECEIVABLES 20

2.1 General revenue issues 20

2.1.1 Concept 20

2.1.2 Characteristics of Revenue 20

2.1.3 Revenue recognition principles 21

2.1.4 Audit Objectives of Revenue 22

2.1.5 Revenue accounting principles 22

2.1.6 Common risks in revenue audit 23

2.2 General problems about customer receivables 24

2.2.1 Concept 24

2.2.2 Characteristics and position of the receivable on the financial statements 24

2.2.3 Receivable accounting principles 24

2.2.4 Audit Objectives of receivable 26

2.3 Internal control with revenue and customer receivables 26

2.4 The process of auditing revenue and receivable items 29

2.4.1 Researching and evaluating the internal control system 29

2.4.2 Perform basic tests 32

CHAPTER 3 AUDIT PROCESS ON SALES AND LIABILITIES ITEMS OF TV AUDIT AND CONSULTING COMPANY LIMITED AT CK&A CONSULTANCY INTERNATIONAL (VIETNAM) CO., LTD 39

3.1 General introduction about customers 39

3.1.1 The company's information 39

3.1.2 Accounting standards and accounting system 39

3.2 Audit preparation period for CK&A Consultancy International (VietNam)

Co.,LTD 45

3.2.1 Customer acceptance review 45

3.2.2 Understanding customers and operating environments 47

3.2.3 Understanding and evaluating the internal control system 47

3.2.4 Preliminary analysis of financial statements 48

3.2.5 Establish materiality 50

3.3 Company ABC audit implementation phase 51

3.3.1 Design and conduct control tests 51

3.3.2 Basic testing 53

3.3.2.2 Test details 55

3.4 Company ABC audit completion phase 58

CHAPTER 4 PROPOSING A SOLUTION FOR COMPLETING THE AUDIT PROCESS OF Receivable And Revenue AT TV AUDIT AND CONSULTING COMPANY LIMITED 60

4.1 Comments 60

4.1.1 General comments about the company 60

4.1.2 Comment on the audit process of Accounts receivable and revenue items in financial statement 62

4.2 Recommendation 63

LIST OF IMAGES

Image 3.1 Unaudited income statement for 2019 56

Image 3.2 Audited income statement for 2018 56

Image 3.3 Procedure for comparing the balance of this year to the

previous year

57

Image 3.5 Comparing the balance this year to the previous year of the

LIST OF DIAGRAMS

Diagram1.1 Management apparatus diagram of the company 6

Diagram1.2 Auditing process of financial statements of the branch of the

company

11

Diagram 2.1 511 account accounting diagrams 12

Diagram 2.2 113 account accounting diagrams 15

LIST OF TABLES

Table 2.1 Questionnaire about the internal control system for

receivables

29

Table 3.1 Matters to consider for contract risk assessment 45

Table 3.3 Report on business results of company ABC 50

Table 3.4 Assessment of ABC company materiality 53

Table 3.5 Questionnaire of the control test interview at ABC Company 54

REFERENCES

[1] Tài liệu “Những Chuẩn m c nguyên tắc chỉ ạo kiểm toán quốc tế”,1992

[2] Giáo trình “ Kiểm toán tài chính”, 2006 – GS.TS Nguyễn Quang Quynh – TS

Ngô Trí Tuệ - Trường Đại học Kinh tế quốc dân

[3] Giáo trình “Kiểm toán tài chính”, 2012 – Trường Đại học Kinh tế thành phố Hồ Chí Minh

[4] Chuẩn m c kiểm toán Việt Nam ban hành theo Quyết ịnh số 219/2000/QĐBTC ngày 29/12/2000 của Bộ trưởng Bộ Tài chính

[5] The Financial Statement of ABC Company

PART 1: INTRODUCTION

1 Reason for researching

Due to the development of the economy, the number of customers who come to auditing companies is increasingly diversified with different purposes: audit before equitization, audit before dissolution, bankruptcy, wax import makes the number of users of auditor’s financial reports greatly increased Audit reports have far-reaching effects on socio-economic life To issue an auditor's financial report, the auditor must perform an audit of many different cycles and items In which, the receivables and Revenue often arise in large volume, affecting many items on the financial Statement Revenue and receivables have a great influence on the financial statements, it determines the profit / loss of a business Receivables are often overlooked, causing money to be lost to businesses Therefore, a careful examination of accounts receivable

is very important

Recognizing the importance of receivables and Revenue items in the audit

process, during the internship, I decided to choose the topic: “Completing the process

of auditing the receivable items and Revenue at TV Audit and Consulting Company

limited” for implementation and reporting during this final internship

2 Research objectives

- Researching about the Audit process of receivables and Revenue items of TV Audit and Consulting Company limited, evaluate the advantages and disadvantages, and contribute ideas to improvement and develop this process

- Finding out how TV Audit and Consulting Company limited performs an audit

of receivables and Revenue for clients

- From the theoretical and practical knowledge learned, analyze the positives and unavoidable limitations of the receivables and Revenue audit process

- Proposing some solutions to improve the process of auditing receivables and Revenue

3 research subjects

My research object is the theoretical and actual receivables and Revenue audit process that is being applied at TV Audit and Consulting Company limited

4 Research scope

- Space: Receivable and revenue

- Time: Financial Statement of 2019

5 Research Methods

- Interview method: The interviewee is the auditor at TV Audit and Consulting Company limited The contents of the interview are questions related to auditing financial statements in general and in detail, in detail about the methods of collecting audit evidence

- Document research methods: Collect information on books, textbooks, dissertations, Internet, audit journals

- Observation method: Going to the company, observing the working process, the process of performing a real audit of the auditors at the company

- Part 2: RESEARCH CONTENT AND RESULTS

This section consists of 4 chapters

+ Chapter1: Introduction About TV Audit And Consulting Company Limited + Chapter2: Theoretical basis for receivables and Revenue auditing in auditing financial statements

+ Chapter 3: Receivables and Revenue audit process status at TV Audit And Consulting Company Limited

+Chapter 4: Proposing a solution for completing the audit process of receivables and Revenue at TV Audit And Consulting Company Limited

- Part 3: CONCLUSIONS AND RECOMMENDATIONS

Summarize and evaluate the points of the study that have been done and not yet done against the set objectives

CHAPTER 1: INTRODUCTION ABOUT TV AUDIT AND CONSULTING

COMPANY LIMITED

1.1 Introduction about TV Audit and Consulting Company limited

Company’s name: TV AUDIT AND CONSULTING COMPANY LIMITED

Abbreviation name: TV – AICA Auditing & consulting Co.,Ltd

1.2 History and development of TV Audit and Consulting Company limited

TV Audit and Consulting Company limited was established on October 09, 2009,

according to the Business Registration Certificate No 0312196929 issued by the Department of Planning and Investment of Ho Chi Minh City with the main field of activity is implementing accounting, auditing and valuation services

TV Audit and Consulting Company limited is established by a team of auditors and

financial experts who have worked at big auditing firms, finance companies, securities companies, and investment organizations in Vietnam Knowledge of Vietnamese laws, deep understanding of finance and production and business activities in many fields are the company's advantages With the motto of "Not only bringing information but also consulting and supporting solutions", the company wishes to become an independent audit organization, a reliable business consultant of the business and other related

1.3 Principles, objectives, operating directions of TV Audit and Consulting Company limited

1.3.1 Principles of operation of the company

The company complies with the principle of "independence, objectivity,

middle, and confidentiality of customers' data"

In accordance with business practices and the Law of Vietnam

Employees do not self-improve knowledge - skills - foreign languages,

legal documents will be dismissed and fired

Employees must put professional ethics first

1.3.2 TV's corporate goals

Expand the market of business activities related to accounting, auditing

and tax consulting, financial consulting, management consulting Maximize the

satisfaction of customers' needs for service quality and perfect the corporate

governance system to promote all potentials to create more outstanding value

TV helps customers and their legal defenders to provide them with the information that is true and necessary for the organization to run the business

1.3.3 The direction of TV company

In the trend of global integration, opening up many opportunities but also

challenges in fierce competition, that is why the company always seeks to come

up with new solutions to increase the power of businesses and increase

competitive power in the market

Enhance training for technicians and professional staff, to better respond

to job requirements Expand the customer market not only in Ho Chi Minh City

and neighboring provinces

1.4 The services the company provides

1.4.1 Auditing service

This is the company's main field of activity Every year the company will

carry out preliminary audits and final audits according to the agreed schedule

with customers Auditing services include:

- Auditing annual financial statements for all types of businesses such as

joint ventures, limited liability companies

- Auditing of legal financial statements according to the agreement for

specific management requirements to review, report annually, 6 months and

quarterly

- Auditing of tax purpose reports and tax finalization

- Auditing construction costs and perfecting investment value

- Compliance audit

- Review information on financial statements

- Check information on the basis of pre-agreed procedures

- Performing corporate audit functions that are capable of merger and

liquidation

1.4.2 Accounting services

TV regularly support businesses to improve their accounting systems In

the company, the accounting and auditing work is done independently,

separately, ensuring professional rules Accounting services are performed on a

regular basis and continuously to help businesses detect and promptly correct

errors, prevent violations and frauds within enterprises, contributing to good

management capital use and cost management Accounting services include:

- Register accounting regime

- Advice on issues related to the application of financial and accounting

regimes according to Vietnamese regulations

- Advice on issues related to the application of financial and accounting

regimes according to Vietnamese regulations

- Providing accounting services for small companies such as making

bookkeeping, financial statements, and managing accounting books

- Organize and set up accounting systems for businesses

-Provide and guide the use of accounting software

- Provide documents on Vietnamese accounting standards, auditing

standards and relevant international standards

1.4.3 Consulting service

Vietnam's tax policy is still in the process of reform and completion Therefore, there are many changes in policies that require operating businesses to regularly update and apply tax changes to their business activities This makes some businesses feel confused and difficult in practice With the company's regular and intensive tax advisory services, we can help our customers be protected from the sudden increase in tax costs The company specializes in providing the following tax service

Registration and tax declaration for businesses

- Make a declaration of Value Added Tax, Corporate Income Tax,

Personal Income Tax (all domestic and foreign subjects)

- Support for tax finalization

- Consulting tax strategy

- Provide tax information and related issues

This is also an area of activity that the company believes will bring

strategic changes in the sustainable development process to customers Services

provided:

- Consult the establishment of foreign invested companies, joint ventures,

associates, joint stock companies, limited liability companies

- Consulting establishment of representative office, labor contract

1.5 Management organizational characteristics of the Company

1.5.1 Management apparatus diagram of the company

Diagram 1.1: Management apparatus diagram of the company-(Source:

Human resource department)

1.5.2 Functions and duties of each department

Is the operator of the legal representative of the company and is most responsible for all business results in the Company Organize the implementation of decisions of the Members' Council, decide on matters related to the company's daily business operations, organize the implementation of the company's business plans and investment plans, and issue internal management regulations of the company, appointing, dismissing, dismissing managerial positions in the company, except for positions within the authority of the Members' Council, signing contracts on behalf of the Company

Advising and assisting the Board of Directors to perform the following tasks: staff organization, administration, operational planning, asset management and other service tasks, staff resume management, layout advisory assigning officers, employees, advising in promotion, appointment, training and retraining of staff, clerical work, storage and management of seals in accordance with state regulations, distribution of

DIRECTOR

ACCOUNTING DEPARTMENT

ADMINISTRATION

DEPARTMENT

AUDITING DEPARTMENT

documents quarterly equipment, making periodic or irregular reports, drafting general documents of the agency, checking and editing documents drafted by specialized departments before submitting to leaders for approval, organize monthly staff briefings, conferences and trainings at the company, help the General Director build annual plans, quarterly, monthly and weekly work programs Track the progress of implementing the company's work plan and program Conducting company property and real estate management Annually plan and track the repair, replacement, addition

of property, houses

Responsible for the accounting of business activities of the Company Fully and promptly prepare the settlement reports in accordance with regulations Make monthly, quarterly and annual financial plans to timely balance capital to meet business needs Organize the inventory of assets annually Timely reflect the results of asset inventory,

at the same time propose measures to deal with in case of shortage in comparison with accounting books Together with professional departments, they advise the Board of Directors in signing contracts with customers

Seeking, exploiting and negotiating with customers on the provision of audit services, financial and accounting consulting services and other services, organizing the implementation of contracts to provide audit services, consulting, reviewing the audit records of their department in accordance with the Vietnamese Auditing Standards, managing the staff members in the department to ensure the working hours according to the regulations of the Board of Directors, participating in the training, provide professional training for employees and perform other operations as stipulated

in the Regulation on functions and duties of the professional department

1.6 Organization of accounting at the company

1.6.1 Accounting apparatus structure of the company

The company's accounting apparatus is organized according to the centralized model, the arising accounting operations are concentrated in the corporate accounting department The accountant is in charge of calculating costs, issuing invoices, declaring tax finalization, calculating salaries for employees, paying advances to employees on business trips, accounting of revenue and expenditure operations

1.6.2 Accounting bookkeeping form

The company uses the General Journal accounting form

1.6.3 Accounting method that the company use

The basis for preparing financial statements:

- The financial statements are presented under the original cost principle

Cash and cash equivalents

Cash and cash equivalents including cash, bank deposits, cash in transit and term investments with a maturity of no more than 3 months from the date of purchase, easily convertible into an the amount of money is determined and there is not much risk in the conversion

short-Receivables

Receivables are recorded according to invoices and documents

Long-term prepaid expenses

Corporate Income Tax

Corporate income tax during the period includes current income tax and deferred income tax

A corporate tax is tax on the profits of a corporation The taxes are paid on a company's operating earnings, which is revenue minus cost of goods sold (COGS), general and administration (G&A) expenses, selling and marketing, research and development, depreciation, and other operating costs

Deferred income tax is the amount of corporate income tax that will be payable or will be refunded due to the temporary difference between the carrying amount of an asset and the liability for financial reporting purposes and the amounts used for tax purposes Deferred income tax liabilities are recognized for all taxable temporary differences Deferred tax assets are recognized only when there is a certainty that taxable profits will be available in the future for the use of these deductible temporary differences

1.6.4 Accounting standards

- The Company applies the Vietnamese Enterprise Accounting System

- The Director ensures to fully comply with the requirements of the current Vietnamese accounting standards and accounting regimes in preparing financial statements

1.6.5 Accounting policies applied at the company

- Currently the Company is applying Viet Nan accounting system issued together with Circular 200/2014/ TT-BTC issued on 22/12/2014 of the Ministry of Finance The accounting year starts from January 1 and ends on December 31 every year

- The Company's entry form of Journal is the General Journal form done through accounting on excel

- The Company uses uniformly one currency unit, Vietnam Dong, for recording purposes In case of arising transactions related to foreign currencies, foreign currencies will be converted into VND for accounting records

- Fixed asset accounting method: Fixed assets are recorded at cost, amortization and residual value Depreciation of fixed assets by the straight-line method, the time of depreciation of fixed assets is specified in Appendix 01 of Circular 45/2013 / TT-BTC

to determine the time to depreciate for each specific type of fixed asset

- VAT calculation by deduction method

- Monthly accountants make monthly reports, and annually make general reports and tax finalization

- Accounting method applied at the company: General Journal

1.6.6 Advantages, disadvantages and direction of development

1.6.6.1 Advantages

- The company has Young and dynamic accounting team Auditing team is well trained and experienced

- Always get support from partners and customers

- Have a good relationship with the customers

- The company always promotes solidarity, creative labor, dedication of all employees

1.6.6.2 Disadvantages

- The increasingly competitive business market creates pressure in the company's business operations on revenue and profit

1.6.6.3 Direction of development

Because the company has to compete fiercely with other companies doing business in the same industry, so about the limitations of the Company such as quantity, consumption market The company is trying to overcome the best In addition, the Company must constantly improve its advantages to facilitate market expansion to achieve higher profits

Continuing to build and develop a system of branches, to best train the capabilities and skills for the company's accounting and auditing team At the same time, to ensure a stable source of revenue, the Company must expand into new markets and stand firmly in existing markets

1.7 Auditing process at TV company

TV was recently established in the field of auditing, so the majority of the company's audit program is done according to the Model Technical Program of the Vietnam Association of Auditors (with an adjustment in accordance with the nature and characteristics of the Company activities)

(Diagram 1.2 Auditing process of financial statements of the branch of the company)-

Source (Auditing Department of : TV – AICA Auditing & consulting Co.,Ltd)

Checking on the basis of

E600]

liabilitie[E100-Basic check of equity and external accounts[F100- F300]

Basic inspection Income

Statement[G100-G700]

Check out other content[H100-H200]

Re-evaluate the materiality and audit scope[A700] – [A800]

Overall analysis of final financial statements[B420]

Explanatory Letter from the Board of Directors and Management[B440- B450]

Financial Statement and Audit Report [B300]

Management letter and other customer

advice[B200]

Review, approve and release reports[B110]

Quality control audit[B200]

Making an audit contract and selecting

an audit team[A200]

Getting to know customers and their operating

environments[A300]

Getting to know accounting policy and key business

cycle[A400]

Preliminary analysis

of financial statements[A500]

General assessment of internal control system and order risk[A600]

Determine materiality[A700] and the method of

sampling - sample size [A800]

Synthesize the audit plan[A900]

MANAGEMENT OF THE AUDIT

Risk identification, assessment and management

1.7.1 Prepare the audit

Before accepting a client to enter into an audit engagement, the company and the auditor must obtain preliminary information about the field of activity, type of business, form of ownership, technology export, organize the management apparatus and practice activities of the unit From there, evaluate the ability to obtain necessary information about the business situation of the customer to perform the audit

For new customers: The company receives customers' requests via phone, fax or

face-to-face with customers The auditor then proceeds to collect and synthesize the collected customer information to assess the level of contract risk From there, concluding whether to accept the contract

For old customers: Customer information has been saved by TV company in the

annual audit records However, auditors must also pay attention to changing events that affect the customer's financial statements of the year Then also conduct a contract risk assessment and conclude whether to accept customer maintenance If accepting the auditor will send the audit appointment letter to the client and give the initial preliminary agreement on the audit contract

When accepting or maintaining customers, the company leaders directly sign the audit contract On the basis of initial information and preliminary assessment of the complexity of leadership and the client negotiates to come up with an appropriate fee

A contract drafting company from TV's translator Contract was drafted in 4 copies and signed before or on the same audit date The contract has the content to list: audit initiation time, execution time, customer requirements, audit fee price

In addition to the mandatory provisions of an economic contract, the audit contract must also comply with Vietnamese audit standards, namely "Auditing Standard 21"

When accepting or maintaining customers, the company leaders directly sign the audit contract On the basis of initial information and preliminary assessment of the complexity of leadership and the client negotiates to come up with an appropriate fee

TV Company applies paragraph 12 VSA 220: "Audit work must be assigned to professional staff who are trained and have the skills and professional qualifications to meet the actual requirements"

Therefore, after the company signs the contract and clearly defines the workload

to be done, the Board of Directors will assign the main auditor to be in charge of auditing the customer company, the auditor will reassign the work to the team members based on professional qualifications and experience to ensure professional requirements, progress and quality of reporting

 Making Audit planning

After being assigned to audit KH company, auditors move to audit planning The audit planning through the synthesis of customer documentation information, the information to be aggregated

- Understanding customers and operating environment: Auditors who perform

financial statements audit must have a full understanding of the business situation in order to evaluate and analyze events, operations and practices of the unit which, according to auditors, has a material effect on the financial statements

- Learn accounting policies: pay attention to the main accounting cycles, learn

about customers

- Preliminary analysis of Financial Statements: Auditors conduct a preliminary

analysis of the fluctuations of the previous year and this year of the Balance Sheet, Report business results and perform calculations and analysis through ratio of payment, coefficient measuring business results, coefficient of profitability

- Designing an audit program

At TV the audit program is detailed projections of the audit procedures to be performed for each item or division, completion time, division of labor among the auditors, informational documents Relevant need to use and collect Detailed audit programs include

- Cash audit program

- Customer receivables audit program

- Program to audit advance payments for sellers

- Deductible Value Added Tax Auditing Program

- Audit program for other receivables

- Inventory audit program Advance payment audit program for employees

- Audit program of prepaid expenses and transfer pending expenses

- Program to audit short-term mortgage, escrow and deposit accounts

- Fixed asset audit program

The working papers correspond to detailed audit programs

- C100 - C500: Internal control system test

- D100 - D800: Basic Property Check

- E100 - E600: Basic check Liabilities

- F100 - F400: Basic check Equity capital and off-balance sheet account

- G100 - G700: Basic inspection Report on business performance

- H100 - H200: Check other contents

a Audit risk assessment

In this step, auditor of TV will conduct interviews with managers and staff in the administrative office to evaluate whether the internal control system is effectively controlled and process financial information reliably and identify fraudulent risks, cheat,…

Audit risk is the risk when the auditor gives an incorrect opinion because there are material errors in the financial statements.This risk includes three factors:

- Inherent risk (IR)

(Table 1.1 Risk matrix) -Source (Auditing Department of : TV – AICA Auditing

& consulting Co.,Ltd)

b Determine materiality

On the basis of the information obtained, TV's auditor will determine the materiality (plan - reality) that is prepared and approved according to the company's policy, thereby determining the sampling method and sample size for the main audit area

There are 2 commonly used methods, the first is to determine the materiality of the item as a percentage of the overall materiality, the ratio is typically 50% to 75% The second method, auditor, will multiply the importance of the population by a coefficient before distributing items The choice of method depends on the auditor's experience with the entity

When determining materiality, auditors mainly use calculation techniques together with judgment of auditors to assess materiality and audit risks The auditor makes an initial estimate of the materiality of the overall financial statements based on the criteria specified as the original number according to TV's scale framework The selected criteria are the original number and corresponding ratios to determine the specified materiality level

Criteria for determining materiality at TV: Normally, auditors select stable criteria over the years, criteria that users of financial statements are interested in, characteristics of production and business activities Specifically:

- For companies that are in the early years of operation, unstable revenue and profit, the criterion is Total Assets

The auditor's assessment of CR

The auditor's

assessment of IR

- Small companies with low profits (possibly because the Director is also the owner who has earned profits through salary, other income ) will choose Revenue or Total Assets

- Companies with stable high profits will choose Profit before tax

- Unstable low-profit outsourcing unit select Total revenue

1.7.2 Conduct audits

The control tests that the auditor at TV Auditing Company Limited often apply include:

- Checking the accounting policy applied consistently with the previous year and

in the applicable financial reporting framework In case of changing accounting policies, does the unit comply with the guidance of Technical Standard No 29

- Make general data tables with comparison with previous years Comparing the data on the general data sheet with the BCDSPS, ledger, detailed book and working papers of the previous year's audit (if any)

Interview the unit's staff to get a glimpse of the basic business cycle as well as the internal control system through checking the synchronization of books, numbering the order of documents and checking accounting system

- There are two aspects that the auditor should consider that have achieved after completing a control test:

• Audit objective: To obtain valid audit evidence on one or more financial statements assertions

• Financial report assertion basis: Existing and ownership, complete, assessed, accurately recorded, presented and disclosed

After completing the audit control procedures, the auditor will conduct a detailed analysis of the key items:

- Make an analysis of the index's volatility over each period (previous period with this period, months in the same period) Pay attention to check in the first and last months of the year Explore and collect explanations for differences

- Calculate item-related ratios, explain unusual fluctuations and assess the risks

of material misstatement due to fraud

 Conducing test of details of balances

Based on and analyzing procedures KTV TV will conduct detailed checks on outliers or unexplained or unreasonable unit differences

- Inspection of professional details: sample checking or checking 100% of samples by procedures such as document checking, calculation

- Detailed balance check: assess the integrity of the account balance by procedures such as physical inspection, verification, calculation, and reconciliation

- Check period: choose samples to check operations at the end of this period and the beginning of the following period to consider the correct period

- Checking items denominated in foreign currencies: Check the basis, time to determine the exchange rate, evaluate the reasonableness and compare with the explanation of the applicable accounting policy

1.7.3 Completing the audit

Based on the work steps performed, Auditor of TV synthesized the audit results Before finishing the audit at the client company office, the team leader meeting the members to discuss and discuss the issues recorded in the working paper at the same time with the client accountant to clarify the remaining issues problems need solving Auditors will summarize the inspection results of problems discovered in the planning stage, problems arising in the audit process, solutions to be handled as well as issues to note when performing the audit in the following year Team leader prepares audit minutes exchanging, meeting and communicating with client management and related people

Then the auditor will conduct an overall analysis of the financial statements for the last time, agree to the adjustment entries with the customer and prepare the financial statements (note: preparing the financial statements is the responsibility of the client accountant, not the auditor's)

The audit team leader synthesizes the records, data and audit evidence updated

on the company's common server for two other auditors to conduct 2 reviews and send management letters to the client company The reviewer must be CPA certified

The auditor is the person who signs the audit report

Auditing Standard 560 requires auditors to perform audit procedures to ensure that material events arising after the balance sheet date are identified and properly reflected in the financial statements Implementation procedures include

- Interview the Board of Directors / Board of Directors of the unit to determine whether there are events that happened after the balance sheet date that could affect the financial statements or not

- Review the latest mid-year financial statements from the end of the annual accounting period (if any) and the general diary from the end of the accounting period

to the audit date to determine the necessary events corrected / or published

After the review procedures are complete and have handled the arising events based on the agreement of the auditor and the client The auditor will prepare and send

a letter of explanation to the General Director / Director of customers to commit responsibility for the truthfulness of the data on the financial statements After the client has signed and explained the audit report, the audit report will be issued including 2 copies in English and Vietnamese, the number of reports depends on the terms of the audit contract as agreed An audit report consists of 3 parts:

- Report of the Board (General) Director

- Independent audit report

- Financial statements include 4 tables under Circular 200 (Balance sheet, Report

on business results, Cash flow statement, Notes to financial statement

CONCLUSION CHAPTER 1

In chapter 1, the author clarified about the internship company

including company information, the company's organizational structure,

from which the reader had an overview of the intern company and better

understood the rules accounting process, accounting policy that the

customer is applying From there, as a premise to clearly analyze the

company's audit process at ABC company

CHAPTER 2 THEORETICAL BASIS OF THE AUDITING PROCESS ON

REVENUE AND CUSTOMERS RECEIVABLES

2.1 General revenue issues

2.1.1 Concept

According to the accounting standard No 14 "Revenue and other income" in the system of Vietnamese accounting standards: "Revenue is the total value of economic benefits that a business has received or will be received in the next period accounting, arising from normal business operations of the enterprise, contributing to an increase in equity Receipts from third parties that are not an economic source of benefits or increase the equity of the business will not be considered as revenue ”

Sales revenue is the total value of economic benefits earned by the enterprise in the accounting period, arising from normal production and business activities of the enterprise, contributing to increasing equity Thus, revenue includes only the total value of the economic benefits that the enterprise has received or will be obtained from the sale of products manufactured by the enterprise or the sale of purchased goods, in order to offset costs and make a profit for the business Sales activities have a great influence on the existence and development of businesses

Revenue of the business includes sales of goods, service provision, financial activities and unusual activities

- In many cases determining the right timing and the amount of money to record sales requires judgment

- Revenue is closely related to the profit and loss results Therefore, revenue discrepancies often lead to ineffective and fair presentation of profit and loss

- In many businesses, revenue is the basis for evaluating results or achievements,

so they are likely to be inflated higher than reality

- The revenue is related to the output value-added tax, so it may be declared in order to avoid it

under-2.1.3 Revenue recognition principles

Sales revenue: according to Vietnamese Accounting Standards 14, sales of goods are recognized when the following 5 conditions are satisfied simultaneously:

- The enterprise transfers most of the risks and benefits associated with the ownership of products and goods to the buyer

- The enterprise no longer holds the same management rights as the product owner or the right to control the product or goods Then the good is no longer an asset of the entity, its value is converted to costs and revenue is recognized

- The revenue can be measured reliably

- The enterprise has received or will gain economic benefits from sales

- Costs related to selling can be determined According to the suitability principle, revenue and costs related to the same transaction must be recognized at the same time

Revenue from service provision: Services are products with no specific physical form,

so the recognition principle has similarities and differences from sales recognition Rendering of services is recognized when the result of service provision can be reliably determined, that is, it satisfies the following 4 conditions:

- The revenue can be measured reliably In the case of a transaction involving many periods, the revenue is recognized in proportion to the work completed in the period

- It is possible to obtain economic benefits from such transactions

- Completed work is identified on the date of making the accounting report This

is the basis for which revenue can be ascertained

- Determine the cost incurred for the transaction and the cost to complete that transaction

- Thus, when recording revenue, it must determine whether the revenue from that sale meets the regulations on revenue recognition and recognition Only when the terms and conditions of revenue recognition are met will sales be recognized

2.1.4 Audit Objectives of Revenue

The item of sales is a very important item because it is the business that occurs most often and contributes to the survival and development of the company In addition, the sales item also contains many risks of fraud and errors Auditing this item must ensure that sales transactions are reasonable and satisfy the revenue recognition conditions according to accounting standards Sales sales audit objectives must meet the following requirements:

- Existence: Revenue is recognized as actually generated and completed in proportion to the amount that the customer has paid or accepted

- Completeness: All arising sales transactions must be fully recorded in the accounting books

- Valuation: Revenue is reflected in the correct amount

- Accurate recording: transactions are calculated and recorded accurately on the amount, number of periods and account number

- Presentation: Revenue is declared and presented fully and correctly

2.1.5 Revenue accounting principles

511 account accounting diagrams

( Diagram 2.1 511 account accounting diagrams)

2.1.6 Common risks in revenue audit

 The revenue reflected on the books is higher than the actual revenue

Enterprises will encounter a number of problems related to revenue recognition when the revenue has not actually arisen but the accountant has recorded it in the books From there, the revenue recorded on the books will be higher than the actual revenue For example the cases below:

- The Enterprise has advanced money to the seller but has not yet delivered the goods

- The enterprise has shipped the goods, but the purchase and sale procedures are not completed and the buying business has not yet accepted the payment

- The data recorded on the books is wrong with the reality, making the revenue increase

 The revenue reflected on the books is lower than the actual revenue

(1)

ACC 152,153,156,211

Deductible VAT

ACC131 ACC 511

- The seller enterprise and the buyer have completed the purchase and sale procedure, but the accounting figures incorrectly record the data, or record the wrong data, making the revenue decrease

- Data are recorded in the wrong period, causing the revenue recorded on books to decrease

2.2 General problems about customer receivables

2.2.1 Concept

In the business process, when enterprises provide goods and products to customers but have not been paid, they will form a receivable debt In addition, receivables are also formed in the case of compensation, temporary loans, advances from sellers, advances, collateral deposits, …

2.2.2 Characteristics and position of the receivable on the financial

statements

Customer receivable is an important item on the balance sheet, as they are closely related to an entity’s business results and the provision for bad debts is often based on estimates of The board of directors is very difficult to check

Users of financial statements often rely on the relationship between assets and liabilities to assess the solvency of the business Therefore, there is always the possibility that the recording unit will increase the customer receivables compared with the reality in order to increase the solvency of the business

Most of the proceeds of the business are related to customer receivables, so fraud

is easy to arise from these accounts

2.2.3 Receivable accounting principles

Using account

- The company uses account 131: Accounts receivable from customers, for accounting

Using Books

- Ledger Account 131

- Details Account book 113

- General account book 131

(Other income for sale)

Cash back to customers

Exchange rate differences

end of term> bookkeeping

Debt offseting

Exchange rate

end of term> bookkeeping