Improving the audit process of cash cash equivalents in financial statements audit performed by deloitte vietnam audit company limited

MINISTRY OF FINANCE ACADEMY OF FINANCE PHẠM MẠNH NINH CLASS: CQ57/22.01CL GRADUATION THESIS TOPIC: “IMPROVING THE AUDIT PROCESS OF CASH & CASH EQUIVALENTS IN FINANCIAL STATEMENTS AUDIT PERFORMED BY DELOITTE VIETNAM AUDIT COMPANY LIMITED” MAJOR: : Auditing CODE: 22 SUPERVISORS: : ASSOC PROF PH.D THINH VAN VINH PH.D DANG THI HUONG TS Dang: HÀ NỘI - 2023 Academy of Finance Graduation thesis DECLARATION I hereby declare that this is my own actual research work and under the guidance of lecturer Assoc Prof Ph.D Thinh Van Vinh and Ph.D Dang Thi Huong The data and results stated in the thesis are honest, objective and have clear origin Hanoi, February 10, 2023 Phạm Mạnh Ninh Author: Pham Manh Ninh i Class: CQ57/22.01CL Academy of Finance Graduation thesis TABLE OF CONTENTS DECLARATION i LIST OF ABBREVIATIONS v LIST OF TABLES, DIAGRAMS vi INTRODUCTION CHAPTER THEORETICAL BACKGROUND OF THE AUDIT PROCESS OF CASH & CASH EQUIVALENTS IN FINANCIAL STATEMENTS AUDIT PERFORMED INDEPENDENT AUDIT .4 1.1 General overview of account cash & cash equivalents 1.1.1 The concept of cash & cash equivalents 1.1.2 The characteristics and risk of account cash & cash equivalents affect the audit of financial statements 1.1.3 Internal control for cash & cash equivalents 1.2 Overview of auditing account cash & cash equivalents in financial statements audit performed independent audit 10 1.2.1 Audit objectives for account cash & cash equivalents 10 1.2.2 Source of audit documents for account cash & cash equivalents .11 1.2.3 Common misstatements in auditing accounts cash & cash equivalents 12 1.3 Audit process of account cash & cash equivalents in financial statements audit performed by independent audit 13 1.3.1 Audit planning .13 1.3.2 Audit implementing .18 1.3.3 Audit completing 26 CONCLUSION FOR CHAPTER 27 Author: Pham Manh Ninh ii Class: CQ57/22.01CL Academy of Finance Graduation thesis CHAPTER 28 THE CURRENT SITUATION OF THE AUDIT PROCESS OF CASH & CASH EQUIVALENTS IN FINANCIAL STATEMENTS AUDIT PERFORMED BY DELOITTE VIETNAM AUDIT CO., LTD 28 2.1 Overview of Deloitte Vietnam Auditing Co., Ltd 28 2.1.1 The formation and development of Deloitte Vietnam Auditing CO., LTD .30 2.1.2 Organizational characteristics of the management apparatus .32 2.1.3 Characteristics of the organization and operation of Deloitte Vietnam Audit Co., Ltd 37 2.1.4 General process of auditing financial statements at Deloitte Vietnam Audit Co., Ltd 41 2.2 The current situation of the audit process of cash & cash equivalents in financial statements audit performed by Deloitte Vietnam Audit Co., Ltd 45 2.2.1 Audit planning .46 2.2.2 Audit implementing .51 2.2.3 Audit completing 53 2.3 Assessing of current situation of the audit process of cash & cash equivalents in financial statements audit performed by Deloitte Vietnam Audit Co., Ltd .55 2.3.1 Achievements 55 2.3.2 Shortcomings .57 2.3.3 Reasons of shortcomings .58 CONCLUSION CHAPTER .59 Author: Pham Manh Ninh iii Class: CQ57/22.01CL Academy of Finance Graduation thesis CHAPTER 60 SOME SOLUTIONS TO IMPROVE THE AUDIT PROCESS OF CASH & CASH EQUIVALENTS IN FINANCIAL STATEMENTS AUDIT PERFORMED BY DELOITTE VIETNAM AUDIT COMPANY LIMITED 60 3.1 Necessity to improve the audit process of cash and cash equivalents in financial statements audit performed by Deloitte Vietnam Audit CO., LTD 60 3.2 Requirements and principles for improving the audit process of cash and cash equivalents in financial statements audit performed by Deloitte Vietnam Audit CO., LTD 61 3.2.1 Requirements .61 3.2.2 Principles .61 3.3 Some solutions to improve the audit process of cash and cash equivalents in financial statements audit performed by Deloitte Vietnam Audit CO., LTD 62 3.3.1 Audit planning .62 3.3.2 Audit implementing .63 3.3.3 Audit completing 64 3.4 Conditions for implementation of solutions 64 3.4.1 On the side of the State agency 64 3.4.2 On the side of the Professional Association 65 3.4.3 On the side of Deloitte Vietnam Audit CO., LTD and Auditors 66 CONCLUSION FOR CHAPTER 67 CONCLUSION .68 LIST OF REFERENCES 69 APPENDIX Author: Pham Manh Ninh iv Class: CQ57/22.01CL Academy of Finance Graduation thesis Author: Pham Manh Ninh v Class: CQ57/22.01CL Academy of Finance Graduation thesis LIST OF ABBREVIATIONS ABBREVIATIONS FULLY WRITEN AFS Audited Financial Statement AS BOD Audit Assertion DRMS Board of Director DTT Deloitte risk management sytem DVN Deloitte Touche Tomatsu CO., LTD FS Deloitte Vietnam CO., LTD IRL Financial Statement PL Information list request PM Statement of Profit & Lost SAD Planing materiality TE Summary of audit difference Tolerate error Author: Pham Manh Ninh vi Class: CQ57/22.01CL Academy of Finance Graduation thesis LIST OF TABLES, DIAGRAMS Table 1.1 Control of cash disbursement .10 Table 1.2 Test of control for cash disbursement 19 Table 1.3 Test of control for cash receipts 20 Table 1.4: Substantive procedures of cash receipts and payments transactions 23 Table 1.5: The substantive procedures for test of details of cash balances 24 Table 2.1 Audit files references 42 Diagram 2.1 Organizational structure of Deloitte Vietnam 32 Author: Pham Manh Ninh vii Class: CQ57/22.01CL Academy of Finance Graduation thesis INTRODUCTION The rationale of the research Globalization, international economic integration, and trade liberalization have been prominent trends of the contemporary world economy Global economic integration brings Vietnam many opportunities but also many challenges To ensure enough competitiveness in the international market, Vietnamese enterprises must make every effort to create prestige, market, improve financial capacity as well as manage organization To so, businesses must gather many factors to create their success, in which a healthy financial statement is an extremely necessary condition The financial statements are audited to confirm the truthfulness, reasonableness, and compliance with the State's regulations, current accounting standards, and regimes The audited information will be the basis, the basis for the macro-management decisions of the state and other sectors in the economy and society Thus, in the current conditions, auditing financial statements have become an indispensable need of many businesses Cash holds play an important position because it is a means of transporting goods in the business The cash item is important item in evaluate liquid assets, which was the first present on Balance Sheet And the cash flow often used to analyze business activities, so this is an item that can be deliberately misrepresented Besides, cash is compact modules, easy to transport, high flexible and liquidity, so the money item is often the object of fraud, embezzlement, take advantage and loss Therefore, cash audit is the way to strengthen the management and provide accurate information about the status of revenue sources as well as the spending of enterprise, thereby improving the efficiency of capital use with money is very necessary Author: Pham Manh Ninh Class: CQ57/22.01CL Academy of Finance Graduation thesis During my internship at Deloitte Vietnam Audit Co., Ltd, I realized the importance of auditing the cash & cash equivalents on the financial statement, so I choose the thesis topic: “Improving the audit process of cash and cash equivalents in financial statements audit performed by Deloitte Vietnam Audit Company Limited” The purpose of the research Firstly, Systematizing the basic theoretical issues of the audit process of cash and cash equivalents in the audit of financial statements performed by independent audit Secondly, describe and assess the current status of the audit process of cash and cash equivalents in auditing financial statement performed by Deloitte Vietnam Audit Co., Ltd Thirdly, proposing solutions to improving the audit process of cash and cash equivalents in auditing financial statement performed by Deloitte Vietnam Audit Co., Ltd Object and scope of the research - The research object: The subject of the research is theory and current status about audit process of cash & cash equivalents in the audit financial statements perform by independent audit - Scope of the study: In this thesis, I will conduct a research about the cash & cash equivalents audit process - one modules while conduct the audit financial statements performed by Deloitte Vietnam, ending without making an audit report but only complete the working paper and audit minutes The audit mentioned in the research was conducted in the end of FY 2022 This thesis was prepared for the first quarter of 2023 The research methodology The thesis was studied by the following methods: Author: Pham Manh Ninh Class: CQ57/22.01CL