Audit of revenues in financial audit conducted by an viet auditing limited company

NATIONAL ECONOMICS UNIVERSITY SCHOOL OF ADVANCED EDUCATIONAL PROGRAM BACHELOR THESIS Major Auditing AUDIT OF REVENUES IN FINANCIAL AUDIT CONDUCTED BY AN VIET AUDITING LIMITED COMPANY NGUYEN THE VINH H[.]

NATIONAL ECONOMICS UNIVERSITY SCHOOL OF ADVANCED EDUCATIONAL PROGRAM BACHELOR THESIS Major: Auditing AUDIT OF REVENUES IN FINANCIAL AUDIT CONDUCTED BY AN VIET AUDITING LIMITED COMPANY NGUYEN THE VINH HANOI - 2020 NATIONAL ECONOMICS UNIVERSITY SCHOOL OF ADVANCED EDUCATIONAL PROGRAM BACHELOR THESIS Audit of Revenues in Financial Audit Conducted by An Viet Auditing Limited Company Student : Nguyen The Vinh Specialty : Auditing Class : Excellent Audit 58B Student’s ID : 11165966 Supervisor : Dr Dinh The Hung HANOI - 2020 ACKNOWLEDGEMENTS I place on record, my sincere thanks to the instructors Dr Dinh The Hung in the School of Accounting and Auditing, National Economics University, for all enthusiastic support and instructions in completing my Bachelor Thesis I would like to express strong gratitude to Anviet Auditing Company Limited for all the support during my internship Especially Mrs Ta Thi Tham and Mr Dang Duy Linh who guide me in fieldworks and share with me a lot of new great things, I take this opportunity to send them my sincere thanks I would also like to thank my parents and friends who helped me a lot in finalizing this project within the limited time frame Sincerely thanks! Nguyen The Vinh TABLE OF CONTENT ACKNOWLEDGEMENTS i ABBREVIATIONS v INTRODUCTION CHAPTER 1: CHARACTERISTICS OF AUDIT OF REVENUES IN FINANCIAL AUDITS CONDUCTED BY ANVIET CPA .3 1.1 Characteristics of revenues of clients affecting financial audits 1.1.1 Features of revenues on financial statements .3 1.1.2 Accounting for revenues 1.1.3 Common misstatements related to revenues 1.1.4 Internal Control for Revenues 1.2 Audit objectives and requirements of auditing revenues in financial audits conducted by An Viet CPA 1.2.1 Audit objectives of auditing revenues .8 1.2.2 Requirements of auditing revenues 1.3 Audit of revenues in financial audits process conducted by An Viet CPA 10 1.3.1 Planning the audit 10 1.3.2 Implementing the audit .17 1.3.3 Completing the audit 23 CHAPTER 2: PRACTICE OF AUDIT OF REVENUES IN FINANCIAL AUDITS CONDUCTED BY AN VIET CPA 24 2.1 Practice of audit of revenues in financial audits conducted by An Viet CPA at ABC Beer JSC 24 2.1.1 Planning the audit .24 2.1.2 Implementing the audit .43 2.1.3 Completing the audit 71 CHAPTER 3: ASSESSMENTS AND RECOMMENDATIONS FOR IMPROVING THE AUDIT OF REVENUES IN FINANCIAL AUDITS CONDUCTED BY AN VIET CPA 73 3.1 Assessments of the audit of revenues in financial audits process conducted by An Viet CPA .73 3.1.1 Strengths .73 3.1.2 Weaknesses and causes .75 3.2 Recommendations for improving the audit of revenues in financial audits process conducted by An Viet CPA 77 CONCLUSION 78 REFERENCES 79 LIST OF FIGURES Figure 1.1 Audit planning order 10 Figure 1.2 Implementation of effective tests of control 19 Figure 2.1 Related parties of ABC Beer Joint Stock Company 27 Figure 2.3 Income Statement Analysis of ABC Beer Joint Stock Company .28 Figure 2.4 Assess materiality at ABC Beer JSC 33 Figure 2.5 The questionnaire explores the internal control system for the revenues at ABC Beer Joint Stock Company 36 Figure 2.6 Revenues Audit Program .37 Figure 2.7 G140 - Revenues Summary 48 Figure 2.10 Determination of factor R 54 Figure 2.11 G142 – Revenues detailed test 58 Figure 2.12 G143 – Revenues cut-off check 60 Figure 2.13 G144 – Trade discount check 64 Figure 2.14 G145 – Trade discount detailed test 66 Figure 2.15 E342 – SCT Estimation 68 Figure 2.16 SUMMARY OF AUDIT RESULTS 71 STATUTORY DECLARATION I herewith formally declare that I myself have written the submitted Bachelor Thesis independently I did not use any outside support except for the quoted literature and other sources mentioned at the end of this paper Hanoi, 2020 Signature, Nguyen The Vinh v ABBREVIATIONS An Viet : An Viet Auditing Limited Company ANVIETCPA : An Viet Auditing Limited Company An Viet Auditing Co., Ltd : An Viet Auditing Limited Company VAS : Vietnamese Accounting Standards VSA: Vietnamese Standards on Audit BOM: Board of Managements vi INTRODUCTION For developed countries like England, France, and the US, the auditing has a long history and strongly developed But in Vietnam, audit is really a young field However, over the 28 years, Vietnamese auditors have made important progress Since 1991, only less than 10 independent auditing companies, in 2018, according to preliminary statistics, the country had over 150 independent auditing companies with a variety of forms of ownership and scale of operation With those advances, the state audit, internal audit are also increasingly improved in terms of organization and qualification Over the past years, auditing has contributed to promoting the business sector to develop, perfect the legal system, and consolidate financial and accounting activities as well as management activities Currently, auditors have become indispensable consultants, friends of every business as well as users of information on financial statements Especially in 2014, the pivotal year with many changed laws (business law, investment, tax policies, etc.) has helped Vietnam significantly improve the business environment and attract investment Particularly in the field of accounting, the Circular 200/2014/TT-BTC has contributed to bringing Vietnamese accountants closer to international financial reporting standards, audit activities will be more and more developed and show more important role in promoting economic development Since its inception, auditing of financial statements has always accounted for a large proportion in auditing activities The demand for auditing Financial statements in reality is more and more diverse Because financial statements are pictures that reflect the result of a company's operations in all aspects and fields of its production and business activities Therefore, all information on the financial statements must ensure truthfulness and reasonableness, which will give credibility to information users At An Viet Auditing Co., Ltd, the audit of financial statements is performed according to each item One of the criteria on the financial statements that has a great influence and plays an important role is revenue This is an item that is prone to errors and frauds in the Financial Statements, and has a spillover effect to related items on the Balance Sheet such as money, trade receivables, taxes and accounts payable to the State, etc if any material misstatements occur Therefore, at An Viet, the audit of ... in financial audits conducted by An Viet CPA CHAPTER CHARACTERISTICS OF AUDIT OF REVENUES IN FINANCIAL AUDITS CONDUCTED BY ANVIET CPA 1.1 Characteristics of revenues of clients affecting financial. .. Completing the audit 23 CHAPTER 2: PRACTICE OF AUDIT OF REVENUES IN FINANCIAL AUDITS CONDUCTED BY AN VIET CPA 24 2.1 Practice of audit of revenues in financial audits conducted by. .. 1.2 Audit objectives and requirements of auditing revenues in financial audits conducted by An Viet CPA 1.2.1 Audit objectives of auditing revenues .8 1.2.2 Requirements of auditing