Accounts payable auditing in financial audits conducted by kpmg company limited

BANKING ACADEMY FACULTY OF ACCOUNTING - AUDITING GRADUATION THESIS ACCOUNTS PAYABLE AUDITING IN FINANCIAL AUDITS CONDUCTED BY KPMG COMPANY LIMITED Student: Do Thi Nhan Class: K22CLCE Course: 2019-2023 Student ID: 22A4020052 Supervisor: PhD Pham Thi Tuyet Minh Ha Noi, May 2023 Tai ngay!!! Ban co the xoa dong chu nay!!! 17014125824101000000 BANKING ACADEMY FACULTY OF ACCOUNTING - AUDITING GRADUATION THESIS ACCOUNTS PAYABLE AUDITING IN FINANCIAL AUDITS CONDUCTED BY KPMG COMPANY LIMITED Student: Do Thi Nhan Class: K22CLCE Course: 2019-2023 Student ID: 22A4020052 Supervisor: PhD Pham Thi Tuyet Minh Ha Noi, May 2023 Banking Academy Graduation Thesis STATUTORY DECLERATION I hereby confirm that the submitted Bachelor Graduation Thesis was independently written by me This is my own research Except for the literature that I referenced and the other references included at the end of this paper, I did not rely on any outside sources I clearly marked and separately listed all the literature and all other sources which I employed producing this academic work, either literally or in content Hanoi, May 2023 Student Do Thi Nhan i Do Thi Nhan 2023 Banking Academy Graduation Thesis ACKNOWLEDGEMENT In the process of completing this bachelor thesis, I have received a great deal of kindly support, guidance, and encouragement from dedicated lecturers over the course of my four years of study at Banking Academy, as well as helpful advice from mentors and other colleagues during my four-month internship at KPMG Vietnam Limited First of all, I want to express my sincere gratitude to my supervisor, PhD Pham Thi Tuyet Minh, who gave me valuable advice on how to approach the research and assisted me in completing my thesis on time and efficiently She also gives me valuable advice, helpful comments as well as correction to my paper Secondly, I would like to express my gratitude to all lecturers in the Faculty of Accounting and Auditing for their lectures of many courses that help me much in shaping a solid knowledge foundation of accounting and auditing for completing this thesis specifically Last but not least, I would like to thank my friends, my seniors who have supported and encouraged me throughout the completion of this graduation thesis Hanoi, May 2023 Student Do Thi Nhan ii Do Thi Nhan 2023 Banking Academy Graduation Thesis TABLE OF CONTENT STATUTORY DECLERATION .i ACKNOWLEDGEMENT ii TABLE OF CONTENT iii LIST OF ABBREVIATIONS vi LIST OF DIAGRAMS viii LIST OF TABLES ix LIST OF FIGURES x INTRODUCTION 1 Rationale for the study Literature review Objective of the research .4 Object and scope of the research Research method Structure of the thesis CHAPTER 1: THEORETICAL BASIS FOR AUDITING ACCOUNTS PAYABLE IN FINANCIAL STATEMENTS 1.1 Characteristics of account payable of clients affecting financial audits .7 1.1.1 Definition and nature of accounts payable 1.1.2 Accounting for accounts payable 1.1.3 Common misstatement related to accounts payable 13 1.1.4 Internal control over accounts payable 14 1.2 Audit procedures of accounts payable in auditing financial statements 17 1.2.1 Audit objectives of auditing accounts payable in financial audits 17 1.2.2 Planning the audit 18 1.2.3 Implementing the audit 24 iii Do Thi Nhan 2023 Banking Academy 1.2.4 Graduation Thesis Completing the audit 30 CONCLUSION OF CHAPTER 34 CHAPTER 2: CURRENT STATUS OF THE ACCOUNTS PAYABLE AUDITING IN FINANCIAL AUDITS CONDUCTED BY KPMG VIETNAM 35 2.1 Overview of KPMG Company Limited 35 2.1.1 The establishment and growth process 35 2.1.2 Main business areas of KPMG 37 2.1.3 Mechanism of organization structure 39 2.1.4 Audit procedures of financial statements conducted by KPMG 41 2.2 Accounts payable auditing in financial audits conducted by KPMG Company Limited 47 2.2.1 Overview of process of auditing account payable of KPMG 47 2.2.2 Process of auditing account payable for ABC company conducted by KPMG 59 2.3 Assessment of the audit of accounts payable in financial audits conducted by KPMG Limited 79 2.3.1 Advantages 79 2.3.2 Disadvantages 82 CONCLUSION OF CHAPTER 86 CHAPTER 3: RECOMMENDATIONS FOR IMPROVING THE AUDIT OF ACCOUNTS PAYABLE IN FINANCIAL AUDITS CONDUCTED BY KPMG VIETNAM 87 3.1 Oriented development of the company 87 3.2 The requirement for improving the accounts payable auditing procedures 88 3.3 Recommendations for improving the audit of accounts payable in financial audits process conducted by KPMG Limited 90 3.3.1 Planning the audit 90 3.3.2 Implementing the audit 90 3.3.3 Completing the audit 92 iv Do Thi Nhan 2023 Banking Academy Graduation Thesis 3.4 Conditions for implementation of recommendations 92 CONCLUSION OF CHAPTER 94 CONCLUDE 95 REFERENCES 96 APPENDIX 97 v Do Thi Nhan 2023 Banking Academy Graduation Thesis LIST OF ABBREVIATIONS AMPT Audit Misstatement Posting Threshold AFD Accounting and Finance Department AP Accounts payable BOD Board of Director CA Chief Accountant Company Limited Co., Ltd GRN Good receipt note HOM Hand-over minute IAS International Accounting Standard IFAC International Federation of Accountant ISA International Standard on Auditing IT Information Technology JSC Joint Stock Company KAEG KPMG Audit Execution Guide KCw KPMG Clara workflow KPMG KPMG Company Limited M Materiality MIC Manager in-charge MOF Ministry of Finance OM Operating Manager PBC Provided by Client PBTCO Profit before Tax from Continuing Operations PM Performance Materiality PO Purchase Order SIC Senior in-charge TOC Test of Control vi Do Thi Nhan 2023 Banking Academy Graduation Thesis TOD Test of Details VACPA Vietnam Association of Certified Public Accountants VAS Viet Nam Accounting Standard VSA Viet Nam Standard on Auditing vii Do Thi Nhan 2023 Banking Academy Graduation Thesis LIST OF DIAGRAMS Diagram Page Diagram 1.1: Bookkeeping of Accounts payable 12 Diagram 2.1: Audit procedure at KPMG Vietnam 43 Diagram 2.2: Quality control process at KPMG Vietnam Company Limited 46 viii Do Thi Nhan 2023