Auditing of sales and account receivables cycle in financial statement auditing, by avn vietnam audit company limited in da nang for abc company

DUY TAN UNIVERSITY INTERNATIONAL SCHOOL  - UNDERGRADUATE THESIS AUDITING OF SALES AND ACCOUNT RECEIVABLES CYCLE IN FINANCIAL STATEMENT AUDITING, BY AVN VIETNAM AUDIT COMPANY LIMITED IN DA NANG FOR ABC COMPANY Mentor : Masters Vo Thi Thuy Linh Student : Nguyen Thi Hong Nhung Class : K25 PSU KKT1 Student code: : 25202510246 DA NANG - 2023 ABSTRACT DISCLAIMER ACKNOWLEDGEMENTS LIST OF ABBREVIATIONS LIST OF FIGURES INTRODUCTION .1 CHAPTER 1: LITERATURE REVIEW OF SALES AND ACCOUNT RECEIVABLES CYCLE AUDIT IN FINANCIAL STATEMENTS AUDITING 1.1 GENERAL OVERVIEW OF SALES AND ACCOUNT RECEIVABLES CYCLE 1.1.1 Concept, characteristics and of Sales and Account Receivables Cycle 1.1.1.1 Concept and recognition principles of Sales .5 1.1.1.2 Concepts and recognition principles of Account Receivables .5 1.1.2 Accounting for Sales and Account Receivables Cycle 1.1.2.1 Vouchers 1.1.2.2 Detail accounting 1.1.2.3 General accounting 1.2 AUDITING ISSUES OF SALES AND ACCOUNT RECEIVABLES CYCLE AUDIT IN FINANCIAL STATEMENTS AUDITING 1.2.1 Objective of Sales and Account Receivables Cycle Audit 1.2.1.1 Audit objective of Sales .9 1.2.1.2 Audit objective of Account Receivables 1.2.2 Internal control system in Sales and Account Receivables Cycle Audit 10 1.2.2.1 Internal control system in Sales 10 1.2.2.2 Internal control system in Account Receivables 11 1.2.3 Risk of Sales and Account Receivables Cycle Audit .11 1.3 AUDITING OF SALES AND ACCOUNT RECEIVABLES CYCLE .12 1.3.1 Audit planning 12 1.3.1.1 Prepare for an auditing plan .13 1.3.1.2 Collecting information about the entity being audited .15 1.3.1.3 Perform preliminary analytical procedures 16 1.3.1.4 Preliminary assessment of internal control system .17 1.3.1.5 Assessment of materiality and auditing risks .17 1.3.1.6 Summary of audit planning 19 1.3.2 Audit implementation stage 20 1.3.2.1 Control test 20 1.3.2.2 Basic test 20 1.3.3 Detail check .20 1.3.3.1 Detail check of Sales 20 1.3.3.2 Detail check of Account Receivables 21 1.3.3.3 Check Allowance for doubtful Account Receivables 23 1.3.4 Audit ending 24 CHAPTER 2: METHODOLOGY OF SALES AND ACCOUNT RECEIVABLES CYCLE AUDIT IN FINANCIAL STATEMENTS AUDITING, BY AVN VIETNAM AUDIT COMPANY LIMITED FOR ABC COMPANY 25 2.1 GENERAL OVERVIEW OF BUSINESS OPERATIONS OF THE AVN VIET NAM AUDITING LIMITED COMPANY 25 2.1.1 History and development of the company AVN 25 2.1.2 Organizational structure in company 25 2.1.3 The main types services of company 26 2.1.3.1 Auditing services 26 2.1.3.2 Accounting services 27 2.1.3.3 Tax consulting services 27 2.1.3.4 Finance consulting services 28 2.1.4 Operating principles and target of company 28 2.1.4.1 Operating principles 28 2.1.4.2 Target of operating .28 2.2 THE REALITY OF THE AUDIT OF THE SALES AND COLLECTION CYCLE IN FINANCIAL AUDIT OF AVN VIET NAM AUDITING LIMITED COMPANY OF CUSTOMER ABC 29 2.2.1 Auditing plan 29 2.2.1.1 Considers to accept customer and valuation risk contract 29 2.2.1.2 Audit contract .29 2.2.1.3 Find out customer and operating environment 31 2.2.1.4 Learn the sales cycle, receivables, collection .31 2.2.1.5 Preliminary analysis of financial statement 33 2.2.1.6 General valuation about internal control system of customer .33 2.2.1.7 Identify quantitative of materiality .33 2.2.1.8 Summary the audit planning 33 2.2.2 Auditing implement 34 2.2.2.1 Sales 34 2.2.2.2 Account receivables 37 2.2.3 Audit ending 39 CHAPTER 3: SOLUTIONS TO COMPLETE THE AUDIT OF THE SALE AND COLLECTION CYCLE IN AUDIT OF FINANCIAL STATEMENTS AT AVN VIETNAM AUDIT COMPANY LIMITED 41 3.1 GENERAL ASSESSMENT OF THE AUDITING PROCESS SELLING AND COLLECTION CYCLE PROCESS AT ABC COMPANY BY AVN 41 3.1.1 Advantage 41 3.1.2 Disadvantages 42 3.2 COMPLETE SOLUTION OF SALES AND ACCOUNT RECEIVABLES CYCLE AUDIT IN FINANCIAL STATEMENTS AUDITING PERFORMED BY AVN VIETNAM AUDIT COMPANY LIMITED IMPLEMENTATION 42 3.2.1 Completion of analytical procedure 42 3.2.2 Analytical procedure of sales 43 3.2.3 Analytical procedure of Account receivables 43 CONCLUSION 44 REFERENCES APPENDIX ABSTRACT Today, society is developing more and more, the diversification of operating models as well as arising transactions are increasingly complex, leading to the birth of audit activities, especially independent audits In the business investment strategy, the investor always focuses on the financial situation and the provision for doubtful receivables through both the items Receivables, Sales and Fees on the Statement finance Therefore, the decrease in receivables shows that the cost of bad debts is increasing and taking up capital of the company Stemming from the importance of the audit system in general and the sales cycle audit and receivables in particular, by specific qualitative research methods, I will describe the sales cycle audit process goods and receivables at AVN Viet Nam Auditing Co., Ltd implemented and proposed some solutions to complete this process DISCLAIMER I certify that the attached thesis is my original work No other person's work has been used without due acknowledgement Except where I have I clearly stated that I have used some of the this material, it has not been presented by me for examination in any other course or subject at this or any other institution I understand that the work submitted may be reproduced and/or communicated for the purpose of detecting plagiarism I understand that should this declaration be false I am libel to be penalized under the Duy Tan University regulations ACKNOWLEDGEMENTS During my internship at AVN Viet Nam Auditing Company Limited in Da Nang and pursuing my studies at the Faculty of International Affairs - Duy Tan University, this was a real opportunity to help me broaden my horizons in the field of auditing and accounting First of all, I would like to sincerely thank the dedicated guidance of the teachers, especially the guidance of Master, Lecturer Vo Thi Thuy Linh of the International Faculty - Duy Tan University, and the Department of Auditing of AVN Viet Nam Auditing Company Limited gave me the best conditions to complete the thesis quickly Furthermore, I look forward to receiving your suggestions and guidance so that I can my job well in the future with my inexperience Once again, I would like to thank the teachers of the Department of International Affairs - Duy Tan University, especially the dedicated guidance of Master, Lecturer Vo Thi Thuy Linh, and the Audit Department of Co., Ltd AVN Viet Nam Auditing in Da Nang helped me complete my internship and graduate thesis Best wishes to all of you Best regards! AVN BTC TT VACPA LIST OF ABBREVIATIONS AVN Viet Nam Auditing Co., Ltd Exchequer Circular Vietnam Asociation of Certified Public Accountans LIST OF FIGURES Diagram 1- Accounting for Sales Diagram 1- Accounting for Account Receivables Diagram 2- Organizational structure of AVN Viet Nam Audit at Branch Đa Nang 26 INTRODUCTION Reason for choosing the topic Sales and Account Receivables Cycle is the last stage in an enterprise's production and business cycle, this cycle not only evaluates the effectiveness of the previous cycles but also reflects the effectiveness of the entire export operation process business and financial position of enterprise The result of this stage is done through the important items of nature required on the financial statements, auditors must carefully find these items to give a definite look for financial statements user Therefore, auditing the Sales and Receivables cycle has a very clear meaning, helping the audit department and the enterprise to recognize the weaknesses and errors in the accounting and management work, from which the enterprise can improve and improve production and business efficiency In addition, if done well Auditing the sales cycle and accounts receivable can help the audit department save time and reduce audit costs Realizing the importance of the problem, during my study at the Faculty of International Affairs - Duy Tan University and the internship period at AVN Viet Nam Auditing Co., Ltd in Da Nang, I chose the topic "Auditing Cycle sales and receivables in the Audit of Financial Statements, by AVN Viet Nam Auditing Company Limited in Da Nang for ABC Company” Research objective - Systematize a number of theoretical issues on Sales and Account Receivables Cycle Audit - Learn the current status of Sales and Account Receivables at ABC Company - On the literature review and practical research, compare and evaluate the advantages and disadvantages of Sales and Account Receivables Cycle at ABC Company From there, propose solutions to improve and improve the efficiency of Sales and Account Receivables Cycle at ABC Company Research subject and method Research subject  Research subject System of Sales and Account Receivables Cycle  Specific qualitative research methods - Vouchers research method: refer to Vietnamese accounting standards, auditing standards, audit textbooks, etc., to form the basis for forming a theoretical basis for Sales and Account Receivables Cycle as well as a foundation to learn the actual Sales and Account Receivables Cycle at the unit - Direct interview method: conduct direct interviews with officials and employees at the financial accounting department, sales department, especially those who provide information and data related to the topic The face-to-face interview helps