MINISTRY OF FINANCE ACADEMY OF FINANCE FACULTY OF ACCOUNTING DAO LAN HUONG GRADUATION THESIS IMPROVING THE PROCESS OF COLLECTING AUDIT EVIDENCE IN THE AUDIT OF FINANCIAL STAEMENTS PERFORMED BY NAM VIE[.]
MINISTRY OF FINANCE ACADEMY OF FINANCE FACULTY OF ACCOUNTING - - DAO LAN HUONG GRADUATION THESIS IMPROVING THE PROCESS OF COLLECTING AUDIT EVIDENCE IN THE AUDIT OF FINANCIAL STAEMENTS PERFORMED BY NAM VIET AUDITING AND ACCOUNTING FINANCIAL CONSULTING SERVICES COMPANY Major : Auditing Class : CQ56/22.CLC.02 Id Student : 18CL73403010181 Mentor : PhD Nguyen Vu Viet M.E Phi Thi Kieu Anh Hanoi, 2022 DECLARATION I hereby declare that this thesis is my own work and effort and that has not been submitted anywhere for any award Where other sources of information have been used, they have been acknowledged. The data and results described in the thesis are derived from the actual situation of the practice company Student Dao Lan Huong i TABLE CONTENT DECLARATION i TABLE CONTENT ii LIST OF FIGURES .vi LIST OF TABLES vii INTRODUCTION CHAPTER BASIC THEORY ON THE PROCESS OF COLLECTION OF AUDIT EVIDENCE IN AUDIT OF FINANCIAL STATEMENTS BY VIETNAM FINANCIAL ACCOUNTING AND AUDITING SERVICES CO., LTD (AASCN) 1.1 GENERAL OVERVIEW OF FINANCIAL STATEMENTS BECAUSE OF COVID AND TECHNIQUES FOR COLLECTING AUDIT EVIDENCE IN AUDIT OF FINANCIAL STATEMENTS .5 1.1.1 Overview of Financial Statements due to the impact of COVID 19.5 1.1.2 Concept and classification of audit evidence 1.1.2.1 Concept .6 1.1.2.2 Classification of audit evidence 1.1.3 Judgment requirements of audit evidence .11 1.1.4 Techniques for gathering audit evidence 14 1.1.5 Some special audit evidence to collect 22 1.2 PROCESS OF COLLECTION BY AUDIT EVIDENCE IN AUDIT OF FINANCIAL STATEMENTS 27 1.2.1 Audit planning stage .27 1.2.2 Audit implementation stage 31 1.2.3 End stage of audit 33 CHAPTER CONCLUSION 35 CHAPTER 36 ii THE STATUS OF THE PROCESS OF COLLECTION BY AUDIT EVIDENCE IN THE AUDIT OF FINANCIAL STATEMENTS IMPLEMENTED BY NAM VIET AUDIT COMPANY 36 2.1 HISTORY OF FOUNDATION AND DEVELOPMENT OF NAM VIETNAM FINANCE, ACCOUNTING AND AUDIT SERVICES CO., LTD – NORTH BRANCH .36 2.1.1 About AASCN North Branch .38 2.1.2 Operational characteristics of AASCN Northern Branch Auditing Company 40 2.1.3 Organizational and management characteristics of AASCN Auditing Company in the North Branch 45 2.1.4 Characteristics of organization of audition group 50 2.1.4.1 Head of Audit (Audit Manager) 50 2.1.4.2 Audit team leader 51 2.1.4.3 Audit assistants .52 2.1.5 Characteristics of organization of audit 52 2.1.5.1 Audit planning stage .53 2.1.5.2 Stage of implementing audit plan 54 2.1.5.3 End stage of audit 57 2.1.6 Organizational characteristics of auditing documents of Nam Viet financial accounting consulting services CO., LTD (AASCN) – Hanoi Branch .57 2.1.6.1 Permanent profile 58 2.1.6.2 Annual audit file 59 2.1.7 Quality control of AASCN - North Branch 64 2.1.7.1 Controlling audit personnel .64 2.1.7.2 Controlling audit process 66 2.1.7.3 Control of audit records .69 iii 2.3 TECHNIQUES FOR COLLECTING AUDIT EVIDENCE IN AUDIT OF FINANCIAL STATEMENTS IMPLEMENTED BY AASCN 74 2.3.1 Audit 74 2.3.1.1 Collecting background information, information on legal obligations 74 2.3.1.2 General assessment of the internal control system 75 2.3.1.3 Data analysis 77 2.3.2 Closing period .84 CONCLUSION CHAPTER 86 CHAPTER 87 SOME RECOMMENDATIONS TO COMPLETE THE COLLECTION AND EVALUATION PROCESS .87 3.1 GENERAL COMMENT 87 3.2 PRINCIPLES AND REQUIREMENTS FOR COMPLETING THE PROCESS OF COLLECTION AND ASSESSMENT OF AUDIT EVIDENCE UNDER THE IMPACT OF COVID 19 89 3.2.1 Perfection Principle .89 3.2.2 Requirements for improvement .89 3.3 SOME RECOMMENDATIONS TO COMPLETE THE PROCESS OF COLLECTION AND ASSESSMENT OF AUDIENCE IN AUDIT OF FINANCIAL STATEMENTS IMPLEMENTED BY NAM VET AUDIT COMPANY 90 3.3.1 Completing the application of evidence collection techniques due to the impact of COVID in the audit planning stage by Nam Viet Auditing Co., Ltd 90 3.3.1.2 Practical lessons learned through practical follow-up applying AASCN evidence-gathering techniques: 96 iv 3.3.1.3 Some general limitations still exist: .97 3.3.2 Some recommendations to improve the technique of collecting audit evidence at AASCN Accounting and Auditing Co., Ltd 98 3.3.2.1 During the planning phase 98 3.3.2.2 During the implementation of the audit plan 100 3.3.2.3 At the end of the audit 106 3.4 CONDITIONS FOR IMPLEMENTATION OF RECOMMENDATIONS TO COMPLETE THE PROCESS OF COLLECTION AND ASSESSMENT OF AUDIT EVIDENCE IN AUDIT OF Financial Statements 107 3.4.1 On the side of functional management agencies and professional associations 107 3.4.2 On the side of the audit client .108 CONCLUSION CHAPTER 109 References 110 v LIST OF FIGURES Figure 2.1 Organizational and management structure of AASCN Company Figure 2.2 Organizational and management structure at AASCN Company – Northern Branch Figure 2.3 Organization chart of the audit team at AASCN North branch Figure 2.4 Audit organization process at AASCN Northern branch Figure 2.5 Process of issuing audit report Figure 2.6 The order of participation in reviewing working papers vi LIST OF TABLES Table 2.1: Business performance of Nam Viet Auditing and Financial Consulting Services Co., Ltd - Northern Branch from 2016 to 2018 (Source: Transparency report of the company in 2016, 2017, 2018) Table 2.2: Index of audit records of permanent records Table 2.3: Section of audit records summarizing annual audit records Table 2.4 Summary, conclusion and report paper Table 2.5 Order of arrangement of working papers Table 2.6 ABC Company's Balance Sheet Table 2.7 ABC’S Business performance report Table 2.8 Cash inventory paper template of ABC Company vii INTRODUCTION Auditing activity in the world has a history of more than 100 years, but in Vietnam this activity only appeared in the early 90s Initially, the appearance of independent auditing firms in Vietnam 1991, then state audit in 1994 and in 1997 for internal audit Since its official appearance up to now, auditing activities have developed rapidly Especially with the type of independent audit, auditing firms in Vietnam are gradually improving both in quantity and quality to promptly respond to the development of the economy Enterprises that want to develop well need to improve the quality of management, in which accounting plays an important and decisive role Auditing always goes hand in hand and is a continuation of accounting activities If accountants are responsible for organizing the collection, processing and providing information, then the audit is the confirmation of truthfulness and reasonableness of financial statements, it is important to make recommendations to improve management processes and to serve effectively those who need to use accounting information One of the most important factors for the success of an audit is audit evidence Audit evidence is the basis on which the auditor can express his or her opinion on the truthfulness and reasonableness of the financial statements and the auditor also relies on it to draw audit conclusions If the amount of audit evidence collected is not enough in terms of quality as well as quantity, it will affect the audit conclusion, the risk of ignoring errors and fraud is very large This can have serious impacts on the performance of the client company, as well as those interested in and using the business's financial statements To collect evidence with high reliability, it depends on the capacity and experience of the auditor as well as the technical methods of collecting audit evidence applied throughout the audit process The techniques for collecting audit evidence are the summarization and generalization of audit experiences on the basis of dialectical methods, specific scientific methods, analysis of planning, of probability, and of systematics accounting It is for that reason that the techniques for collecting audit evidence must be constantly improved and perfected to respond to the diversity of information, the increasingly sophisticated level of fraud Recognizing the importance of the problem, as an auditing student in the process of researching and researching documents, I boldly chose the topic: "Audit evidence and techniques for collecting audit evidence." in financial audit” Through the process of researching this topic, it has helped me better understand the methods as well as the importance of collecting audit evidence The main content of the topic consists of three parts as follows: Chapter 1: The basic theory of the process of collecting and evaluating audit evidence in the audit of financial statements issued by Financial Accounting, Auditing and Consulting Services Co., Ltd Nam Viet (AASCN) implements Chapter 2: Status of the process of collecting and evaluating audit evidence in the audit of financial statements by Nam Viet Auditing and Financial Consulting Services Company Limited (AASCN) implementing Chapter 3: Some recommendations to improve the process of collecting and evaluating audit evidence due to the impact of covid 19 in the audit of financial statements by Nam Viet Auditing and Financial Consulting Services Co., Ltd (AASCN) implemented Research objectives - Overall research objective The writer conducts research on the topic with the general objective of: Understanding the role of the financial statement collection technique on the results of the audit of financial statements and perfecting the technique of ... 1: The basic theory of the process of collecting and evaluating audit evidence in the audit of financial statements issued by Financial Accounting, Auditing and Consulting Services Co., Ltd Nam. .. collecting financial statements in auditing financial statements at Nam Viet Auditing and Financial Consulting Services Company Limited (AASCN) - Research scope Nam Viet Auditing and Financial Consulting. .. Nam Viet (AASCN) implements Chapter 2: Status of the process of collecting and evaluating audit evidence in the audit of financial statements by Nam Viet Auditing and Financial Consulting Services