1. Tính cấp thiết của đề tài nghiên cứu Hiện nay để thích ứng với yêu cầu của nền kinh tế chuyển đổi theo cơ chế thị trường và hội nhập quốc tế, hoạt động kiểm toán độc lập ở nước ta đã hình thành và phát triển nhanh chóng nhằm tăng cường sự minh bạch về tình hình tài chính của bất cứ một cơ quan, tổ chức nào thông qua việc kiểm tra, đánh giá, đưa ra ý kiến kết luận về tính trung thực và hợp lý của các thông tin tài chính của đơn vị đó. Các doanh nghiệp dù hoạt động trong những lĩnh vực khác nhau thì tài sản cố định luôn là khoản mục được lưu tâm do đây là khoản mục chiếm tỷ trọng lớn trên Bảng cân đối kế toán, dễ xảy ra các gian lận và sai sót. Chính vì vậy mà trong các cuộc kiểm toán, kiểm toán khoản mục tài sản cố định luôn được coi trọng và chiếm nhiều thời gian nhất, đòi hỏi những người có nhiều kinh nghiệm thực hiện. Mỗi cuộc kiểm toán là tổng hợp kết quả của nhiều phần hành và nhiều chu kỳ, khoản mục khác nhau. Mỗi phần hành, mỗi kỳ, mỗi khoản mục đều có mối quan hệ mật thiết, bổ sung cho nhau để hoàn thành tốt một cuộc kiểm toán.Khoản mục TSCĐ đóng một vai trò rất quan trọng trong quá trình sản xuất kinh doanh của một doanh nghiệp. Vì vậy việc hạch toán TSCĐ cũng như việc trích lập chi phí khấu hao cần phải được ghi chép đúng đắn và tính toán chính xác. Khoản mục TSCĐ trên bảng cân đối kế toán thường chiếm tỷ trọng lớn nên sai sót đối với khoản mục này thường gây ảnh hưởng trọng yếu đến báo cáo tài chính của doanh nghiệp. Do đó kiểm toán TSCĐ đóng vai trò quan trọng trong kiểm toán báo cáo tài chính.
GENERAL THEORY OF THE FIXED ASSET AUDIT
OVERVIEW OF FIXED ASSETS IN THE ENTERPRISE
1.1.1 The concept of fixed assets
In order to conduct production and business activities, enterprises need to have all the input factors of the production process, including labor materials, labor objects, and labor power Fixed assets are a key part of labor materials, playing an important role in the business activities of enterprises. However, not all labor materials at the unit are fixed assets, but fixed assets only include the main labor materials that satisfy the regulations on value and usage time specified in the asset management regime current main.
The concept of fixed assets: fixed assets in an enterprise are the main labor resources and other assets of great value, participating in many production and business cycles, and their value is gradually and partially transformed into the value of the enterprise The value of products and services produced during the production cycle.
Fixed assets include: tangible fixed assets, intangible fixed assets, finance lease fixed assets, and investment real estate.
According to Circular 45/2013/TT-BTC issued on April 25, 2013 by the Ministry of Finance:
- Tangible fixed assets: are the main labor materials with physical form satisfying the standards of tangible fixed assets, which participate in many business cycles but retain their original physical form, such as buildings, structures, machinery, equipment, means of transport
- Fixed assets Intangibles: are assets that have no physical form, represent an amount of invested value that meets the criteria of an intangible fixed asset, and participate in many business cycles, such as some costs directly related to the land used, expenses for issuance rights, patents, copyrights, etc.
- Financial lease fixed assets: are fixed assets leased by the enterprise from the financial leasing company At the end of the lease term, the lessee has the option to buy back the leased asset or continue the lease under the terms agreed in the financial lease The total rental amount of an asset specified in the finance lease contract must be at least equivalent to the value of that asset at the time of signing the contract.
All leased fixed assets that do not satisfy the above provisions are considered fixed assets under the operating lease.
Standards for recognition of fixed assets
Assets to be recognized as tangible fixed assets must simultaneously satisfy the following four conditions:
-It is probable that future economic benefits will be generated from the use of such assets;
-The historical cost of fixed assets must be determined reliably;
-The estimated usage time is over one year;
-Have a value of 30,000,000 VND (ten million VND) or more.
1.1.2 The role of fixed assets in the enterprise and information about fixed assets in financial statements
1.1.2.1 The role of fixed assets in enterprises
The primary and fundamental characteristics of fixed assets that affect audit work are that fixed assets are frequently of high value, and the process of purchasing and equipping fixed assets in enterprises is frequently small and irregular.Fixed assets often have a long useful life, and the management time of these assets in enterprises is often large In the course of use, the enterprise must depreciate these assets The application of a reasonable depreciation policy greatly affects the truthfulness and reasonableness of information related to fixed assets in the financial statements On the other hand, in the process of using fixed assets that can be upgraded and repaired, that can also affect the information related to fixed assets on the financial statements.
Fixed assets are one of the essential assets of the enterprise and one of the indispensable production materials of the enterprise Any enterprise that conducts its production and business activities also needs fixed assets Thus, it can be said that fixed assets play an extremely important and indispensable role in enterprises.
1.1.2.2 Information about fixed assets in financial statements
In the financial statements of enterprises, there is a lot of information related to fixed assets, including information on historical cost, depreciation value, and expenses related to fixed assets such as depreciation expense in production and business expenses thereby affecting the targets of profit, expenses, and business results, which are summarized and presented in the annual financial statements of the entity.
- Historical cost: is the total cost that the enterprise has to spend to acquire a fixed asset up to the time of putting that asset into the ready-for-use state
- Depreciation: is the systematic allocation of the depreciable value of an asset over its useful life.
- Depreciable value: is the historical cost of the fixed asset recorded in the financial statements, minus (-) the estimated liquidation value of that asset.
- Liquidation value: is the estimated value obtained at the end of the useful life of that asset after deducting estimated disposal costs.
- Remaining value: is the original cost of the fixed asset after deducting the accumulated depreciation of that asset.
1.1.3 Accounting for fixed assets in the business
1.1.3.1 System of accounts, license and accounting books
For professional accounting related to tangible fixed assets, account Cr 211- Tangible fixed assets shall be used.
Reflect current value and fluctuations in tangible fixed assets owned by the enterprise at cost.
The structure of this account is as follows:
The Dr: reflects the historical cost of tangible fixed assets, which increased during the period.
The Cr: reflects the decrease in the cost of tangible fixed assets during the period.
The outstanding balance: reflects the historical cost of existing tangible fixed assets.
Tier 2 accounts of Account 211- Tangible fixed assets include:
Acc 211 3 - Means of transport and transmission
Acc 211 4 - Management equipment and tools
Acc 211 5 - Perennial plants, working animals and products.
Acc 211 8 - Other tangible fixed assets
To account for tangible fixed assets, enterprises often use license:
Report of handing over fixed assets:
Used to record and track the use of fixed assets When there is a change in the delivery and receipt of fixed assets for any reason, it is necessary to establish a meeting for the delivery and receipt of fixed assets This council is responsible for checking and taking over and making a record of handing over fixed assets according to form 01 in the regime, initially recording this record separately for each fixed asset In the event of the delivery and receipt of many fixed assets of the same type at the same time, this table may be made together, but then a copy must be made for each fixed asset to be kept in a separate file. The minutes of delivery and receipt of fixed assets are made into one copy. The transferor and the receiver each keep one copy.
Each fixed asset must have a separate set of documents, including: Minutes of delivery and receipt of fixed assets, copies of technical documents, user manuals and invoices and documents related to the procurement, depreciation, repair and liquidation of fixed assets.
Report of liquidation of fixed assets:
Used to aggregate liquidation costs and recoverable value when the liquidation work is completed The minutes of liquidation are made in two copies, one for accounting and the other for the management department.
Including such as payment documents, purchase and sale invoices, purchase service invoices, freight bills.
- Book of fixed assets: This book is used to register, monitor and closely manage assets in the unit from the time of purchase, put into use until the reduction of fixed assets.
- Books to monitor fixed assets and tools and tools at the place of use: This book is used to record the increase and decrease of fixed assets and tools and tools at each place of use in order to manage the assets and tools that have been granted to them used parts, as a basis for comparison when conducting periodic inventory Books are opened for each asset use division on the basis of original documents on increase and decrease of fixed assets and tools.
- Fixed asset tag: Fixed asset tag is used to track details of each fixed asset of the enterprise, the change in historical cost and annual depreciated value of each fixed asset.
OVERVIEW OF AUDIT OF FIXED ASSETS IN AUDIT OF FINANCIAL STATEMENTS
1.2.1 Necessity and objectivity of the audit of fixed assets in the audit of financial statements
Fixed assets are an important and indispensable part of maintaining the existence and sustainable development of an enterprise Fixed assets often account for a large proportion of the total assets of an enterprise, including items of great value, having a close relationship with, and having a significant influence on other items in the financial statements An error in accounting for this item will sometimes materially affect the truthfulness and fairness of the financial statements Therefore, the fixed asset item has great significance and influences both the auditor's and the customer's side
At the same time, the audit of fixed assets will detect errors and fraud in determining the costs constituting the historical cost of fixed assets, repair costs of fixed assets, and depreciation costs of fixed assets Fixed asset fraud and errors related to fixed assets are often complex and cause material effects on the financial statements because the audit of fixed assets is closely related to other audit cycles When auditing fixed assets, it is found that fixed assets can be directly related to other audit activities such as cash items, payables to sellers, expense items, etc.
Auditing of fixed assets helps enterprises not only to detect errors but also to perfect their accounting systems, which helps them understand and properly comply with accounting principles and standards.
According to Vietnamese Auditing Standard No 200: "The objective of an audit of financial statements is to enable the auditor and the audit firm to express an opinion that the financial statements have been prepared on the basis of current accounting standards and regimes (or accepted), comply with relevant laws, and give a true and fair view in all material respects."
The objective of the financial statement audit is also to help the audited entity clearly see the shortcomings and errors that need to be overcome in order to improve the quality of the entity's financial information.
Consistent with the general purpose of the audit of financial statements,which is to confirm the reliability of the audited financial statements, the specific objective of an audit of fixed assets is to collect sufficient appropriate evidence from which to express an opinion on the reliability of financial information related to fixed assets At the same time, it also provides relevant information and documents as a reference basis when auditing other relevant cycles.
On the basis of the above fixed asset audit purposes, we can determine specific audit objectives for transactions on fixed assets and balances of fixed asset accounts
1.2.2.1 Audit objectives for fixed asset transactions
- Incursion: All transactions of fixed assets recorded in the period are actually incurred; there are no over-recorded transactions.
- Calculation and evaluation: Ensure that fixed asset transactions are determined in accordance with current accounting principles and regimes and are correctly calculated without errors;
- Complete: All transactions of fixed assets arising in the period are fully reflected and monitored in the accounting books;
- Correct: The transactions of fixed assets arising in the period are properly classified according to the provisions of relevant accounting standards and regimes and specific regulations of the enterprise These transactions are accounted for in the correct order and accounting method.
- On time: All fixed asset transactions are recorded in the correct period according to the accrual accounting principle
1.2.2.2 Audit objective for the balance of fixed asset accounts
- Existence: all fixed assets presented by the enterprise in the financial statements are actually existing at the reporting time The data on the reports must match the actual inventory data of the enterprise.
- Rights and obligations: all reported fixed assets must be owned by the enterprise, for financial leased fixed assets must be under the long-term control of the enterprise on the basis of signed lease contracts;
- Evaluation: the balance of fixed asset accounts is assessed in accordance with the provisions of the standard, the accounting regime, and the specific regulations of the enterprise;
In the event that the original value of long-term investments at the end of the period is lower than the market value at the reporting date, provisions must be reasonably determined on appropriate grounds;
- Calculation: the calculation to determine the balance of fixed assets is correct without errors;
- Completeness: all fixed assets at the end of the period are fully presented in the financial statements;
- Correct: the ending fixed assets are fully presented in the financial statements;
- Cumulative: accrual data on the detailed books of fixed assets is properly determined for presentation in the financial statements;
- Reporting: the items related to fixed assets in the financial statements are determined in accordance with the provisions of the accounting standards and regimes and have no errors.
- The internal rules and regulations of the unit related to the procurement, management, use, liquidation, and sale of fixed assets
- The documents are the legal basis for the operations of increase, decrease, purchase, sale, and repair of fixed assets, such as purchase and sale contracts, liquidation of contracts, investment decisions, etc.
- Documents arising related to fixed assets such as purchase invoices, documents related to transportation and installation orders, and correct relevant documents such as payment slips, debt notices, minutes of liquidation and sale of fixed assets.
- General and detailed accounting books of related accounts: detailed book of fixed assets, general ledger, and general ledger of related accounts.
- General and detailed reports of related accounts: such as reports of increase and decrease of fixed assets, repair reports, payment reports, and related financial statements
1.2.4 Internal control and internal control survey of fixed assets in the audit of financial statements
1.2.4.1 Internal control of fixed assets
From the requirements of fixed asset management, the unit needs to build an effective internal control system in order to use fixed assets in the most effective way Fixed assets are an important item on the balance sheet, directly affecting business results through depreciation costs Therefore, good control of fixed assets plays a very important role.
1.2.4.2 Survey of internal control of fixed assets in the audit of financial statements
After learning about the internal control system of the enterprise, the audit firm establishes a control questionnaire to explore the functions and work of the control system to design controlled trials.
- Does the business have a plan and budget estimate for procurement.
- The internal control apparatus regularly controls the detailed recording of fixed assets with the general ledger.
- Does the internal control apparatus perform periodic inventory of fixed assets and compare them with accounting books.
- The difference between the estimated price and the actual price is approved, whether it is approved or not.
- When selling fixed assets, whether or not to set up a liquidation council including regulated members or not.
- Is there a policy to distinguish between the costs of increasing historical costs of fixed assets and inter-year expenses?
Survey method: Investigate through interviews combined with questionnaires.
1.2.5 Common errors in fixed asset audit
- Management of fixed assets is not strict: fixed asset records are incomplete, fixed assets have not yet transferred ownership to the entity but are recorded on the balance sheet, and there is no detailed book or card for each fixed asset.
AUDITING PROCEDURES OF FIXED ASSETS
Audit planning is the first job that auditors must perform in each audit. During this phase, the auditors carry out the following main tasks:
First: Understanding customers and assessing risks
Collecting information about customers: auditor will collect information about customers in order to get a full understanding of the unit's operations and accounting system and internal control systems as well as potential problems, thereby determining the focus of the audit and each part of the audit Specifically, for the fixed asset item, the information to be collected is as follows:
- Collect information about the client's legal obligations: Through understanding the company's charter, regulations of the client company, minutes of meetings of the board of directors and the board of directors and contracts of Company, legal documents and books such as minutes of capital contribution, capital handover, documents related to capital contribution with fixed assets
- Knowledge of business lines: Including general knowledge about the economy, the field of operation of the unit and understanding of specific aspects such as organizational structure, production lines, capital structure Understanding the customer's business activities will help the auditor can determine whether the client has many fixed assets and whether the fixed assets have a material effect on the client's financial statements.
According to Vietnam Auditing Standard No 320: "Materiality is a concept indicating the magnitude (scale) and nature of misstatements (including omissions) of financial information, either singly or in groups, that, in a particular context, would not be accurate or would lead to erroneous conclusions.”
Determination of initial materiality: The auditor makes an initial estimate of materiality (based on percentage of profit, revenue, total assets, etc.) for the entire financial statements Then allocate an initial estimate of materiality to the items in the financial statements Usually, auditing firms have built a level of materiality for each item on the financial statements. Through audit measures, the auditor evaluates the actual error level of the fixed asset and compares it with the acceptable level of error of the fixed asset previously determined and gives an acceptable opinion, except for the exception, or refuses to give an opinion on fixed assets
According to Vietnam Auditing Standard No 400, risk assessment and internal control: "Audit risk (AR) is the risk that the auditor and the auditing company express an opinion that is not appropriate when the audited financial statements contain material misstatements" Audit risk assessment is through the assessment of three components: inherent risk (IR), control risk (CR) and detection risk (DR) based on the relationship reflected in the model:
In which: - AR is Audit risk - CR is control risk
- IR is inherent risk - DR is detection risk Materiality and risk are closely related If the acceptable level of misstatement (or materiality) is assessed to be higher, the audit risk will have to be reduced, and vice versa, the audit risk will be increased the collection of evidence must be expanded During the audit, the auditor wants AR to be as small as possible because it ensures the best audit results.
When assessing audit risk, it is necessary to understand the errors that often occur in each part of the audit practice In the management of fixed assets, possible errors are often related to potential errors, specifically as follows:
Risks related to the historical cost of fixed assets: The historical cost of fixed assets may be misrepresented in reality In the case of increasing fixed assets, the historical cost recorded in the book is usually higher than the actual cost In the case of a reduction of fixed assets, the historical cost is usually recorded lower than the actual cost
Risks related to depreciation of fixed assets: Depreciation of fixed assets may be wrong in calculation and allocation, because the depreciation calculation method of the entity is not consistent with current regulations and is not consistent with the method of profit recovery economic benefits of each fixed asset.
Risks related to the repair and upgrading of fixed assets: many fixed asset repair operations may be misunderstood as essentially upgrading fixed assets and vice versa Therefore, it may lead to errors in not recording an increase in the cost of fixed assets in the case of upgrading fixed assets because the unit accounts for the cost of repairing fixed assets.
Risks of leasing and leasing of fixed assets: many leasing transactions of fixed assets may not be classified in the correct form of lease Operating leases may be classified as financial leases For operating lease assets, the lessor may incorrectly record rental income.
The potential errors listed above may occur in the operating part of fixed assets When assessing risk, the auditor mainly focuses on measures to detect potential errors and minimize this risk From this work, it will help the auditor to design and implement the necessary audit methods to collect sufficient audit evidence.
The analysis is based on comparing the values of the revenue targets on the income statement Commonly used metrics include:
- Compare this period's revenue with the previous period or between periods => See unusual fluctuations and identify areas of concern.
- Compare actual revenue with the auditor's estimate or estimate.
- Compare the client company's revenue with that of other companies. When there are similar characteristics in terms of size, type of business, etc.
The analysis is based on comparing the correlation ratios of different indicators and items on the financial statements For example: Profit-to- revenue ratio, sales-to-revenue discount rate, etc.
In addition, it is possible to analyze the relationship between financial information and non-financial information For example: The relationship between sales volume and revenue, revenue with the number of new items, etc.
Third: Developing an audit plan
THE CURRENT SITUATION OF THE FIXED ASSET AUDIT
GENERAL OVERVIEW OF VIET NAM AUDIT VALUATION AND
2.1.1 The process of formation and development
Vietnam Financial Consulting and Valuation Auditing and Consulting Company Limited (FACOM) is a consulting company specializing in the fields of auditing, valuation, financial and accounting consulting The founders are reputable auditors and appraisers in independent auditing and valuation activities in Vietnam FACOM was established and operated under the Certificate of Business Registration with code 0101937021, first registered on 05/05/2006 and registered for the 5th time on 02/01/2015 by the Department of Planning and Investment issued by the Hanoi Investment Department and with the written approval of practice from the following organizations: Department of Accounting and Auditing Regulations - Ministry of Finance, Vietnam Association of Certified Public Accountants, Price Management Department - Ministry of Finance.
Company Name: VIET NAM AUDIT VALUATION AND FINANCIAL CONSULTING COMPANY LIMITED.
Trading name: VIET NAM AUDIT VALUATION AND FINANCIAL CONSULTING COMPANY LIMITED.
Head office: No 106, Area A12, Dong Xa, Mai Dich Ward, Cau GiayDistrict, Hanoi City, Vietnam
Phone: (+84) 04.22.12.69.10, Email: FACOMomaudit@gmail.com Web: Facom.com
Legal representative: Nghiem Xuan Dung – Director
Main industry: Activities related to accounting, auditing and tax consulting.
Head office: House No 106, Area A12, Dong Xa, Mai Dich Ward, Cau Giay District, Hanoi City, Vietnam.
Transaction office: 3rd floor - No 120 Tran Quoc Hoan - Quan Hoa Ward, District - Cau Giay - Hanoi City.
Website: Facom-audit.com.vn
Scale of capital: FACOM has a charter capital of 2,000,000,000 VND. Scale of labor: including 100 employees In which, the number of employees with university, university and college degrees is 70, 25 and 5, respectively.
Provide the following services to clients: independent audit services; financial and tax consulting services; accounting services; training, career guidance and vocational training services in the field of accounting; pricing service.
+ Develop and organize the implementation of operational plans, effectively exploit and use both human and material resources to serve the company's operations well.
+ Increase income for employees, fulfill obligations to the State budget and create conditions for the company to grow stronger and stronger.
Business lines of the FACOM:
FACOM provides the following services:
+ Auditing services: the content of this activity is audit of financial statements, audit of finalization of completed investment capital.
+ Consulting services include: consulting on handling tax problems, saving tax costs, consulting on tax exemption, reduction, and incentives; Consulting on making reports, tax finalization
+ Accounting services include: opening and recording accounting books, making periodical financial statements, building organizational models of the accounting apparatus, assisting in the conversion of accounting systems and financial statements to suit the needs of customers in accordance with customer requirements.
+ Valuation service: meeting the needs of businesses for purposes such as equitization, merger, dissolution, division, separation of companies
+ Training services include: career guidance, vocational training in the fields of accounting, auditing, and finance.
2.1.2.1 The organizational structure of the management apparatus of
Vietnam Audit Valuation and Financial Consulting Company Limited
Currently, FACOM has an office in Hanoi with a total staff of up to 100 people with 30 people having Certificate of Auditor (CPA) issued by theMinistry of Finance FACOM staff is divided into 03 (three) large groups:Board of Directors; Room and Staff Management.
Diagram 1.1: Organization chart of Vietnam Audit Valuation and Financial
Consulting Company Limited (Source: Report at Vietnam Audit Valuation and Financial Consulting
Company Limited) 2.1.2.2 Duties of departments of Vietnam Audit Valuation and Financial Consulting Company Limited
The Board of Directors consists of 1 General Director and 6 Deputy General Directors
Director: The CEO is responsible for defining the company's long-term business strategies, training and recruitment programs The General Director has full authority to decide on all matters related to the company, and is also the representative of the company before the law and the members' council.
The Deputy Directors are responsible for assisting the Board of Directors in running the company's operations, taking responsibility before the Board of
Directors for assigned and authorized tasks, and promoting the image of the company through transactions with customers and stakeholders.
Board of manager BOD Advisor
Tax and AccountConsulti ing ng
The main block performs the services provided to customers, including 3 rooms:
+ Financial Audit Department: This is the department with the largest number of employees in the company This department provides customers with financial statement audit and internal audit services The financial audit department has a flexible arrangement to suit each audit.
+The construction audit: department provides audit services for capital construction programs and projects This is one of the main services of the company that contributes greatly to its total revenue.
+ Tax and accounting consulting department: This is a department specializing in providing tax, financial, and accounting consulting services.
The support block consists of 3 rooms:
+ Personnel Administration Department: responsible for all administrative work; monitor human resource management in the company; planning, recruiting, assigning and training personnel In addition, the HR department also designs and implements policies on salary, bonus and welfare benefits such as sickness, maternity, etc for employees.
+ Finance and accounting department: responsible for advising the company's leaders in the management and use of capital and asset management; making monthly reports such as debt reports, business result reports, profit reports, etc to ensure accurate and timely data for the company's business decision making.
+ Issuing Department: Responsible for reviewing the audit report before issuing the final audit report, preparing contracts, documents
2.1.3 Services provided by the Company
The Company's services are built on the basis of a team of professional staff with extensive experience and skills both professionally and culturally,with majors in accounting, auditing, tax and capital construction Below are details of some of the services that FACOM is providing:
Auditing of annual financial statements
Auditing of financial statements for tax purposes;
Completed investment capital settlement audit;
Check financial information on the basis of pre-agreed procedures;
Check and review financial statements according to the agreed time.
An audit to confirm the source of capital
Compliance Audit, Operational Audit, Internal Audit.
Valuing enterprises for the following purposes: equitization, purchase and sale, merger, dissolution ;
Valuation of real estate and tangible assets of the business;
Determining the value of non-physical assets: brands, goodwill
Consulting on handling tax problems, saving tax costs;
Tax exemption, reduction, tax incentives, tax refund consulting;
Consulting on making tax reports and finalization;
Personal income tax and international tax services.
Consulting on setting up an internal control system; develop internal control regulations suitable to the business model.
Consulting on equitization of enterprises;
Consulting for enterprises participating in the stock market; ơ
Keeping records and accounting books for businesses;
Consultancy on selection of book form and organization of accounting apparatus;
Consulting to handle problems in accounting operations;
Selection of accountants and chief accountants;
Consulting to prepare financial statements at the request of the parent company;
Consulting for businesses to convert financial statements
Consulting on building an accounting system in line with management requirements (including choosing appropriate accounting software)
Organizing courses on accounting, auditing, and financial management for businesses
Training for the Certificate of Practicing Auditing
Internal audit training, corporate risk management.
2.1.4 General process of auditing financial statements of FACOM
The process of auditing financial statements of FACOM is carried out according to the following diagram: ơ
Diagram 2.2: General process of auditing financial statements of FACOM
2.1.4.1 The work before performing the audit contract
Promote the brand, send an invitation to audit
The company promotes the brand through newspapers, magazines, special magazines, websites, interviews, and articles regularly and continuously at least every 10 days In order to introduce the company to customers, sending an invitation to audit includes the following:
- Invitation letter for audit to corporations and economic groups.
- Audit invitation letter to companies that have not been audited by the company.
- Letter of thanks to the client who was audited last year and invited to this year's audit.
Complete audit work, issue audit report, management letter (if any) Executing the audit plan
Audit planning and audit program designSign a service provision contractSurveys and customer reviews
For traditional customers, at the end of the audit, the company often expresses its desire to continue the audit the following year If accepted, the company's Board of Directors will review the annual report and the events arising during the year to develop appropriate terms in the contract.
For new customers, after receiving the customer's acceptance of the invitation to audit, the company conducts a survey and collects the necessary information including: customer needs for audit services (for purposes of inviting audits, requirements for services provided, reports ), general information about clients (type of business, address, legal documents), management, main business lines ), organizational structure (operational area, organizational structure of personnel, related parties), business situation (main supply items, special products) business operation points, product characteristics, production processes ), accounting system After collecting all the necessary information, the auditors will assess the audit risks If the risk level is acceptable and the audit fee can be agreed, the company will sign an audit contract.
Notice of audit service fee
At the request of the client, before signing the official audit contract, we must send a notice of the audit service fee The audit fee will be calculated based on the actual workload and costs of the Company.
Approaching clients, negotiating and signing audit contracts
The company carries out the following work steps:
- Organize the first meeting with customers;
- Determine the scope of work and specific audit plan;
- Organize and preliminary discussion with customers
- Conduct a preliminary review of your financial statements, accounting records and documents;
- Establishing an audit team and assigning work to each member;
- Discuss the audit plan with the client and introduce the audit team to the client.
The company will conduct a materiality analysis of the identified risks and establish procedures to be followed For each objective, the engagement team determines the level of risk and makes a preliminary decision on whether to conduct a combination of tests of internal control, analytical procedures, and substantive tests for each transaction How to translate and account balances to achieve high efficiency.
THE REALITY OF THE AUDIT OF FIXED ASSET IN FINANCIAL
To clarify more about the fixed asset audit process in the financial statement audit, I would like to get the actual data of the audit of the financial statements for the financial year ended December 31, 2021 of Animal Feed Co., Ltd Farming and Agriculture EH Vietnam.
Understanding about the customer’s business
The auditor must have an understanding of the business situation of EH Vietnam Feed and Agriculture Co., Ltd to have a general understanding of the client's business situation in order to determine the material items or items that need more detailed audits Each business line has a different asset structure, so the auditor needs to have an understanding of that business line to do the job more effectively.
To collect information about the client's business situation, the main auditor combined observing business activities, interviewing management and collecting documents such as establishment license, business registration certificate, the company's charter, financial statements, balance sheet, inspection minutes, tax finalization examination of the current year; minutes of meetings of Shareholders, the Board of Directors and the Board of Directors; important contracts and commitments
Basic information of the customer’s business :
Full name: EH Vietnam Agriculture and Feed Co., Ltd
Total capital at the Company: 57,512,000,000 VND
According to the Certificate of Business Registration of the Company and through interviews with the Board of Directors, the auditor obtains general information about the Company's business activities as follows: The principal business activities of the Company are: office rental, housing and construction investment.
All information about customers of EH Vietnam Feed and Agriculture Co., Ltd is kept in the file "Audit of financial statements of EH Company - 2021" in section A310 - Understanding customers and operating environment.
Analysis and review of the internal control system
An overview of control risk helps the auditor to identify focus areas that have a material influence on the audit Evaluation of the internal control system is an indispensable work in the initial stage of the audit The auditor must have an adequate understanding of the internal control system to plan the audit and to determine the timing, scope, and size of substantive tests
To learn about the client's internal control system, the auditor must learn about the client's control environment, accounting process, etc For the audit of fixed assets, the auditor interviewed the company's accountants about the process of purchasing, managing and using fixed assets, the company's fixed asset accounting method, the authority to approve assets that increased or decreased during the year The auditor considers and compares with the Company's charter on the implementation of regulations related to the purchase, liquidation, sale and sale of fixed assets At the same time, the auditors skimmed the balance sheet, financial statements, detailed book of fixed assets in 2021 of the Company to get an overview of the changes in assets during the year.
The auditor then reviews the design and implementation of key control procedures of the Company and then makes a conclusion.
Initial assessment of the internal control system of EH Vietnam Feed and Agriculture Company: In general, the Company's accounting system is organized relatively scientifically and closely Tasks are clearly assigned and assigned to each individual in the accounting apparatus The management mechanism and control procedures related to the Company's fixed assets are relatively complete and strict, contributing to improving the efficiency of the Company's use of fixed assets, and at the same time allowing the prevention and detection of significant errors Thereby, the auditor assesses control risk for the fixed asset item as average.
WPS 2.1: Understand the fixed asset cycle - A450
VIETNAM AUDIT VALUATION AND FINANCIAL
Customer name: EH Vietnam Agriculture and Feed Co., Ltd
Content: Find out the cycle of Fixed Assets
(1) Identify and understand transactions and events related to fixed assets
(2) Evaluate the design and implementation of key control procedures for fixed assets
(3) Decide determine whether to perform an audit of the internal control system;
(4) Design appropriate and effective substantive testing procedures.
1.Knowing mainly about fixed assets
- The main types of fixed assets of the enterprise:
+ Tangible fixed assets: buildings, structures; devices; transmission means of transport; Other tangible fixed assets.
+ Intangible fixed assets: Land use rights; computer software.
- The proportion of fixed assets in the total assets of the enterprise:
Fixed assets account for 18.16% of the total assets of the enterprise
+ Tangible fixed assets account for 13.8% of the total assets of the enterprise + Fixed assets
- According to the Company's charter, fixed assets that increase due to procurement must have all documents related to such assets: contract, purchase invoice, minutes of installation and commissioning, minutes of acceptance and handover, payment documents … The decrease in assets due to liquidation or sale must have a record, a contract The increase or decrease of assets in the Company must be approved by competent authorities: Director, Chairman of the Board of Directors
2 Understanding of accounting policies applied to fixed assets
- Accounting regime: EH Vietnam Feed and Agriculture Co., Ltd applies the corporate accounting system promulgated under Decision No 200/2014/ TT-BTC dated December 22, 2014 and current regulations of the Ministry of Finance.
- Applicable accounting book form: General journal
- Accounting year: From January 1 to December 31 of a calendar year
- Tangible fixed assets and amortization: Tangible fixed assets are presented at cost less accumulated depreciation The cost of a tangible fixed asset includes the purchase price and all other directly attributable costs of bringing the asset to a ready-for-use condition The historical cost of tangible fixed assets which are self- constructed or self-constructed includes construction costs, actual production costs incurred plus installation and testing costs Expenses incurred after initial recognition of tangible fixed assets are recorded as an increase in cost of the asset if it is probable that future economic benefits will be generated from the use of the asset Expenses incurred that do not satisfy the above conditions must be recorded as production and business expenses in the period Tangible fixed assets are depreciated on a straight-line basis over their estimated useful lives The amortization period is as follows:
Factories and structures 05 – 25 machine and equipment 05 – 16
- Intangible fixed assets and depreciation: computer software is initially stated at purchase and is amortized using the straight-line method over its estimated useful life.
- Construction in progress: Assets under construction for production, rental, administration, or any other purpose are stated at cost This cost includes service costs and related interest expenses in accordance with the company's accounting policies Depreciation for these assets is applied in the same way as for other assets, starting when the asset is ready for use.
3 Description of the cycle "fixed assets and capital construction"
- Time of recording increase of fixed assets:
Accounting is based on the records of assets transferred back -> determining the source of the increase and tracking the recognition, calculation and deduction of depreciation and expenses.
Units have purchasing needs -> send a request to the material planning department. Material planning department based on business situation -> make procurement proposal, consider procurement sources -> submit to director for approval -> supplies department buy fixed assets -> transfer documents to accounting department as a basis accounting
4 Review of the design and implementation of key control procedures
Errors may occur Several key control procedures are in place to prevent and detect possible errors in a timely manner
1 Control objective : Recorded useful assets are real assets used by the
Company in the process of producing goods and services or managing the enterprise.
1.1 Recognized useful assets are not actual assets used by the Company in the production of goods or services or in the management of the enterprise.
Property purchase invoices must be handled by staff Independent of purchasing, receiving, payment
Before payment, staff compare invoices with approved orders and receipt reports, check the mathematical correctness of invoices,
Periodic inventory of fixed assets is carried out and detailed data is compared with details in the detailed book of accounts (in both directions) Other procedures: Decisions on procurement, liquidation, and sale must be approved standards of competent authorities; Records related to fixed assets must be fully archived at the accounting department of the company
Control procedur es are properly designed to achieve control objective s
Control procedu res have been implem ented.
1.2 Finance lease assets are capitalized when they do not meet the criteria for
Company The terms of the lease are discussed with the accounting department, management, and board of directors, compared with the
Control procedur es are properly designed
The compan y has no finance capitalization financial lease recognition standards, and analyzed, evaluated and approved in writing to achieve control objective s lease assets
2 Control objectives : All assets of the enterprise, including assets owned by the enterprise and assets leased to finance leases, must be recorded in the financial statements.
2.1 Business-owned or leased assets that are recognized as an expense such as repairs, equipment rental costs, or are not capitalized or not recognised
Assets must be periodically inventoried
Periodically, compare the detailed book of assets with the ledger and the minutes of asset inventory
All assets are recorded in the general ledger and ledger as soon as they are received and tagged for easy identification
Enterprises have regulations on the detailed classification of fixed assets in accordance with management requirements, and regulations on the order of recording transactions related to fixed assets.
Control procedu res are properly designe d to achieve control objectiv es
Control procedures have been implemented
2.2 The leased fixed assets meet the criteria for
The terms of the lease are discussed with the accounting department,
The Company has no recognition of financial lease fixed assets but are classified and recognized as operating lease expenses. the board of directors, the board of directors, compared with the financial lease recognition standards, analyzed, evaluated and approved in writing. properly designe d to achieve control objectiv es financial leases or operating leases
1.Have control procedures for the fixed asset and capital construction cycle in general been designed in accordance with the control objectives and implemented?
2.Has the effectiveness of key control procedures been checked for this cycle?
Yes [present the inspection on Form C510]
No [perform basic checks at a high level]
Based on the results of the assessment of inherent risk and control risk, the auditors estimate the level of detection risk according to the following matrix:
Auditor's assessment of control risk
Auditor's assessment of potential risks
Through the matrix table, the auditor expects the detection risk to be medium.
RECOMMENDATION FOR IMPROVING THE AUDIT OF
ASSESSMENT OF THE REALITY OF THE FIXED ASSETS AUDIT
3.1.1.1 Assessment of the reality of the Audit process at Vietnam Audit valuation and financial consulting company
FACOM is one of the reputable auditing firms in Vietnam with a team of highly qualified staff who are regularly trained and supplemented with knowledge The company always focuses on and constantly improves audit quality to create more solid trust for traditional and future customers Through the internship process at Auditing, Valuation, and Financial Consulting Co., Ltd., I noticed the following outstanding advantages:
- FACOM Company has effectively applied the sample audit program issued by VACPA under Decision No 1089/QD - VACPA dated October 1st,
2013 of VACPA president Thus, creating favorable conditions for checking and reviewing audit records of all levels of management and contributing to improving the quality of the audit, saving audit time and costs
- During the audit at EH Vietnam Feed and Agriculture Co., Ltd in particular and the financial statement audits in general, FACOM always performs preliminary analysis procedures in order to locate the focus of the audit and identify the key issues, including high-risk items prone to material misstatement affecting the financial statements.
- The assignment of tasks to members of the audit team is done scientifically by the audit team leader, in accordance with the capacity of the members Inexperienced auditors are often assigned to perform simple tasks. Several interrelated parts of the audit are usually performed by the same auditor Examples: Cash and cash equivalents, short-term and long-term financial investments, revenue from financing activities, financial operating expenses or inventories, and the cost of goods sold are usually carried out by one person For traditional customers, the company often assigns auditors who have performed audits from the previous year so that the auditors can easily grasp the company's business activities.
- During the audit, FACOM's auditors followed a relatively strict order according to the company's audit program The auditor flexibly applies methods of collecting evidence, such as checking the books and documents provided by the client, observing the facts, interviewing relevant people, and obtaining third-party certification.
- In addition to using audit methods, auditors with experience and competence often use judgment and experience to express their opinions and evaluations on audited items.
- The detailed working papers of the auditors are presented scientifically, are easy to understand and suitable for the audit objectives of each item Detailed working papers and audit evidence are referenced in accordance with the company's regulations.
- Quality control at FACOm is strictly implemented through 5 steps, so the audit results are always highly effective.
- The audit report and management letter are carefully reviewed by the Board of Directors before being officially released, so the audit quality is always guaranteed.
- The storage of audit evidence is also arranged and stored by the Company in a very reasonable order Therefore, it is convenient to get the opinion of the auditors to make an audit report, and at the same time, it also creates favorable conditions for the inspection and supervision of the audit activities of the Board of Directors of the Company.
3.1.1.2 Assessment of the reality of the fixed asset Audit process in financial statement auditing performed by Vietnam Audit valuation and financial consulting company
Vietnam Valuation Auditing and Financial Consulting Co., Ltd (FACOM) is always aware of the important role of fixed asset audit in auditing financial statements, thereby always supplementing and perfecting the process and methods of auditing fixed assets to improve audit quality.
- Regarding the audit program, FACOM has developed an audit program for the fixed asset item based on the sample audit program issued by VACPA in a very reasonable and logical order The detailed and relatively complete audit program has helped the auditors when conducting audits have more advantages and save audit time.
- Learning about customers' fixed assets and internal control systems is always done by auditors through observation and discussion with customers.
In order to improve the efficiency of customers' understanding of the internal control system, FACOM has designed a question to learn about the internal control system, which is specifically designed for understanding fixed assets.The questionnaire to learn about the internal control system has contributed to
Luận văn tốt nghiệp improving the accuracy and reliability of the auditor when giving an opinion on the client's internal control system for this item, thereby helping the auditor make appropriate audit decisions.
- Learning about the fixed asset cycle and evaluating the internal control system for the client's fixed assets is usually done by the auditor performing the fixed asset management Therefore, auditors can easily grasp the situation of the company's fixed assets so that they can offer the most appropriate and effective audit procedures.
- Based on the designed fixed asset item audit program, the auditor conducts audit procedures that are appropriate and documented in the auditor's working papers The auditor has applied both the compliance audit method and the basic audit method in the audit process with specific audit techniques for each client The examination of the internal control system of the fixed asset item helps the auditor to determine the appropriate basic audit procedures in terms of scope, scale and time of performing the audit procedures The auditor combined data analysis, actual observations, interviews with competent people, and professional measures to make accurate comments on the fixed asset item.
- For traditional customers such as EH Vietnam Feed and Agriculture Co., Ltd., when performing an audit at a client, auditor always carries the audit file of the previous year to use the necessary data and documents For example: Fixed assets have no change compared to the previous audit year, when checking the depreciation in the year for these assets, the auditor only needs to compare with the depreciation spreadsheet made by the auditors of the previous year That way, the auditor saves audit time.
After the auditor finishes auditing the fixed asset item, the auditor usually has a page that concludes the item Simultaneously, the auditor completes working papers, makes references and puts them in the audit files. Therefore, the team leader can easily summarize and make reports and management letters for the entire audit
3.1.2.1 Assessment of the reality of the Audit process at Vietnam Audit valuation and financial consulting company
THE DIRECTION OF DEVELOPMENT AND THE REQUIREMENT OF
3.2.1 The direction of development of Vietnam Audit valuation and financial consulting company limited
Provide the following services to clients: independent audit services; financial and tax consulting services; accounting services; training, career guidance and vocational training services in the field of accounting; Valuation service with best quality, reasonable price.
Develop and organize the implementation of operational plans, effectively exploit and use both human and material resources to serve the company's operations well.
Increase income for employees, fulfill obligations to the State budget and create conditions for the company to grow stronger and stronger.
3.2.2 The necessary of completing the Audit process of fixed assets in Audit of the financial statement performed by FACOM
3.2.2.1 Derived from changes in the financial regime
Over the years, accounting and auditing activities have had reform and development orientations on the basis of approaching and integrating with popular international practices recognized and applied by many countries Up to now, the legal framework on accounting and auditing that has been issued and announced is quite complete and harmonized to a fairly high degree with international practices However, policies on accounting and auditing are still in need of further research and improvement This work cannot be done at once, but takes time, combining theory with practice so that each decision,
Luận văn tốt nghiệp standard circular, etc issued has practical value During that process, there may be changes that force auditing companies and auditors to update their knowledge to facilitate the audit of financial statements in general and of fixed assets in particular.
3.2.2.2 Derived from the requirement of integration
The achievements that audit brings to the economy are very encouraging The evidence is that there are now a series of audit firms that are eligible to conduct audits of financial statements That proves that the market has been somewhat reassured with the quality of customer service of auditing firms in general and Vietnamese auditing firms in particular In another aspect, we find that the size of the auditing firms is still relatively small, the ability to meet the requirements of customers is not high, some companies are still running after profits, not competing with each other healthy by eliminating audit procedures to keep costs to a minimum That easily leads to errors in giving audit opinions, misleading users of financial information and more importantly, causing risks to the audit firm itself Vietnam, we are on the way to comprehensively and deeply integrating with the world economy, participation in many economic cooperation forums in the world and impressive economic development will certainly have a positive impact. Many large-scale foreign companies will come to learn and cooperate with Vietnam In that integration context, new development steps are needed to further improve both width and depth The audit of the cycle in general and the audit of fixed assets in particular also need to be perfected to meet with many types of customers in many different fields.
3.2.2.3 Stemming from the strategic vision and the actual situation of auditing financial statements in general and fixed assets in particular at FACOM.
As a reputable company in the field of auditing with the desire to provide customers with high quality audit services FACOM's operating motto is "Cooperation and development with customers" In order to realize
Luận văn tốt nghiệp that desire, there is no other way but the Company must increasingly improve the efficiency of the audit in order to minimize risks and deliver accurate information to information users In addition, the goal of further diversifying the types of customers also requires the Company to develop audit programs in general and audit programs for fixed assets in particular in a more detailed and specific way to help the auditors easily conduct audits, reduce audit time as well as costs, improve competitiveness in the market.
In recent years, the process of auditing fixed assets at the Company has clearly demonstrated its advantages, affirming its scientificity as well as its high applicability in auditing However, that process also needs to be added more to meet many types of customers and improve the quality of audit services.
In addition, fixed assets are one of the audited objects that are always the top concern in the audit of financial statements Therefore, when performing an audit of fixed assets in particular and auditing of financial statements in general, it must be effective The audit here is not merely to detect errors and weaknesses in order to have an honest and reasonable report, but also to ensure that those findings will contribute to the Company's management in order to customers make timely and accurate decisions and solutions Thereby reinforcing the trust of customers in the audit services provided by the company.
For the above reasons, the completion of the financial statement audit process in general and the audit of fixed assets in particular is an indispensable requirement.
PRINCIPLES AND REQUIREMENTS FOR FINISHING THE AUDIT
3.3.1 Principles of completing the audit process of fixed assets in the audit of financial statements at FACOM
Through studying the process of auditing fixed assets in the audit of financial statements at FACOM, it can be seen that the inspection and review is carried out during the entire implementation phase both the closing and reporting stages During the implementation phase, the team leader's inspection will ensure the management work and control the implementation progress as well as the work quality of the employees and compare with the audit program to ensure the appropriate amounts have been fully executed. Before issuing the official report, the entire audit dossier must go through a serious and close review process between the supervisory board and the board of directors of FACOM.
In order to ensure that the financial statement audit process in general and the fixed asset account audit process in particular are feasible, the solutions given must meet the following principles:
- Must be in line with the management requirements of the state, which is directly under the Ministry of Finance, for current audit activities.
- Must be consistent with the state's current economic management policies and regimes, promulgated accounting and auditing standards, and popular international accounting and auditing practices.
- It must be in line with the strong integration trend, which requires auditing firms to have processes and methods to approach foreign companies.
- Must be compatible with the characteristics of each audit firm and have a positive impact on the quality of the companies' audit services
- Must be clear, easy to understand, easy to check and control.
- Must be economical, efficient, and practical.
In order for the solution to complete the financial statement audit process in general and the item audit process in particular to be meaningful in both theory and practice, the above principles need to be implemented synchronously
In the current renovation period, the management of fixed assets is especially important to the production and business process of the enterprise, so it is required to seriously perform the evaluation after each audit to help the company and its employees recognize strengths and weaknesses to overcome,for the most complete audit results.
SOME SOLUTIONS TO COMPLETE THE AUDIT PROCESS OF FIXED
3.4.1 Solutions to improve the financial statement audit process at Vietnam Audit Valuation and Financial Consulting Co., Ltd
In order to be able to update the information of the old customers and the specific information of the new customers, the audit team should have a short meeting between this year's audit team and the client's management and accounting staff (about 30 minutes) to discuss specific and most concerning issues of customers Although this does not take much time, it will save a significant amount of time during the audit implementation phase, helping the auditors have a complete view of the client's business activities This is very important in the category of
Luận văn tốt nghiệp fixed assets, because fixed assets carry many characteristics of business lines.
- Completing the inspection and evaluation of the internal control system
The company has used a questionnaire that not only provides the auditor with a general understanding and assessment of the client's internal control system, but also helps the auditor design an appropriate audit program However, this questionnaire has disadvantages for all customers, it will not be realistic with the business characteristics of some customers. Therefore, the evaluation of the internal control system relies heavily on the auditor's experience Therefore, for each customer, auditor needs to set up its own questions in accordance with the characteristics of the customer.
In order to improve and improve the analytical process for the items in the financial statements, the auditor needs to apply the analytical process and should incorporate his own professional judgment in analyzing the fluctuations of the financial statements, must clearly identify the cause of the difference and detect unusual events that have occurred The auditor collects general data of the entire industry in which the client operates, compares the client's data with other units in the same industry and the average data of the entire industry.
Along with trend analysis, auditors should use additional ratio analysis procedures Some groups of ratios are often used in auditing financial statements such as: Group of current ratio, group of profitability ratio, group of ratio on financial structure…
After finishing the audit at a client, the Company needs to be more careful in controlling the quality of the audit file The auditors need to complete all working papers and make references in the audit files After the audit file has been reviewed at the group level, it should be promptly reviewed by the Board of Directors in order to improve audit quality and minimize audit risk.
3.4.2 Solutions to improve the fixed asset auditing in the financial statement audit process at Vietnam Audit Valuation and Financial Consulting Co., Ltd
In addition to based on the judgment and professional experience of the auditor, the Company can refer to the following sampling methods:
- Building a random sampling program: Using software, the auditor only needs to enter necessary parameters such as the number of samples to be selected, the sequence of invoices or consecutive vouchers The software will automatically run out the auditor samples that need to be test of detail.
- Systematic sampling: The principle is that from a randomly chosen starting point, the auditor will select parts from each other by a fixed distance. The fixed date interval is calculated by dividing the number of elements of the population by the number of elements of the sample.
- Completing the assessment and inspection of the internal control system for fixed assets:
The auditor should carefully evaluate the system of internal control so that it can be used in reducing detailed test procedures To do so, in addition to using the available questionnaires and interviewing customers, the auditor must consider the differences in the management of fixed assets as well as the
Luận văn tốt nghiệp type of business of each customer, review the books and documents on procedures and internal control policies and procedures of the client's company After that, the auditor should check the completed documents and books to see that the procedures and regimes at the client's company are being applied From there, the auditor can get the most accurate assessment of the customer's internal control system to provide appropriate detailed inspection procedures, saving audit time.
In the process of analyzing the ratio for the fixed asset item, the auditor may use the investment ratio and self-financing ratio for analysis (in addition to the horizontal analysis, which is the comparison of data between this period and the previous period, between accounting unit figures with the auditor's estimate) Investment ratio to evaluate the existing capacity of the enterprise, assess the level of equipment and machinery for production, business and management Then look at the industry's overall rate; this ratio is always less than 1, high or low level depends on each specific business field of the enterprise (for example, for the oil and gas exploration and production industry, this ratio is equal to 0.9 which is reasonable) For the metallurgical industry, this ratio is 0.7, which is reasonable; for the food processing industry, the ratio of 0.1 - 0.3 is reasonable…) Self-financing ratio shows how much equity is used to invest in fixed assets and long-term investments.
If the enterprise has good financial capacity, the owner's equity must be sufficient to invest in fixed assets and long-term investment to operate.However, because fixed assets have a slow capital turnover, too much investment will not be good, causing stagnation of business capital of enterprises.
Investment rate Fixed asset and long-term investment
Fixed asset and long-term investment Auditing fixed asset items, the auditor not only directly audits the balance of this item but also audits other related items such as depreciation of fixed assets, major repair costs of fixed assets Therefore, the auditor can calculate and analyze some of the following ratios: compare the ratio of total depreciation expense of fixed assets with the total cost of fixed assets this year with the previous year, compare the rate of total accumulated depreciation Incorrectly reflecting, comparing the ratio of the total cost of major repair of fixed assets to the total cost of fixed assets this year with the previous year, the auditors will determine if there are deviations in the large repair costs, distinguishing the repair costs Any major repairs are recorded as an increase in the historical cost of fixed assets, which are directly included in the production and business expenses incurred in the period.
- Perform alternative audit procedures to demonstrate the existence of fixed assets owned by customers:
In the event that the auditor cannot witness the inventory of fixed assets as of December 31, the auditor should thoroughly perform the necessary additional audit procedures such as: the auditor directly observes the fixed assets at the time of the audit, interviewing employees At the same time, the auditor needs to save the results after performing additional procedures in the audit file as a basis for making conclusions about the fixed asset item.
- Presentation and storage of working papers of auditors
During the audit, the auditor can work on a computer to get quick and accurate calculations, but the auditor needs to store these results on the
Luận văn tốt nghiệp working paper form in accordance with the Company's regulations and keep it in the audit file.
Fixed assets are special items of great value and have a long useful life. Therefore, the results of the audit of fixed assets are very important because they affect the asset not only within the audit year but also for many years after that, throughout the useful life of the fixed asset To be able to audit accurately, auditors need to have a deep understanding of the nature of fixed assets In today's conditions, science and technology are developing more and more The equipment and machines are more and more modern and are regularly improved and upgraded Therefore, for an auditor, it is not easy to both study, improve expertise, and be able to update and have a thorough and profound understanding of all the characteristics of fixed assets (both tangible and intangible) in different customers and in different fields of production and business
- Using expert opinion to evaluate a certain type of property such as: land, buildings, production equipment and machinery, especially special assets such as works of art, gold and silver, precious stones, precious metals…
- Determine the existing quantity and quality of fixed assets such as mineral ore reserves, underground fuel, remaining useful life of machinery assets…