Accounting internship report at Thuy Ta Joint Stock Company

Báo cáo thực tập kế toán tại CTCTP Thủy Tạ (Accounting internship report at Thuy Ta Joint Stock Company)

NATIONAL ECONOMICS UNIVERSITY

SCHOOL OF ADVANCED EDUCATIONAL PROGRAM

ACCOUNTING INTERNSHIP REPORTAT THUY TA JOINT STOCK COMPANY

Supervisor:Assoc Prof Phan Trung Kien

Hanoi, September 2023

CHAPTER 1: OVERVIEW OF THUY TA JOINT STOCK COMPANY 2

1.1 History of the establishment and development of Thuy Ta Joint StockCompany 2

1.1.1 General information about the company 2

1.1.2 Establishment, development, and achievements 2

1.2 Features of business operations of Thuy Ta Joint Stock Company 5

1.2.1 Functions and Duties of Thuy Ta Joint Stock Company 5

1.2.2 Main business operating activities 6

1.2.3 Analysis of the financial position and business result of Thuy Ta 7

1.3 1.3 Organizational structure of Thuy Ta Joint Stock Company 14

1.3.1 Organizational structure 14

1.3.2 Functions and responsibilities 15

CHAPTER 2: CHARACTERISTICS OF ACCOUNTING ORGANIZATIONAND ACCOUNTING SYSTEM AT THUY TA JSC 17

2.1 Characteristics of accounting organization at Thuy Ta Joint Stock Company 17

2.1.1 Organizational structure of the accounting department 17

2.1.2 Functions and responsibilities of each position in the accountingdepartment 17

2.2 Characteristics of accounting systems at Thuy Ta Joint Stock Company.202.2.1 Accounting policies 20

2.3.1 Accounting for payroll cycle 34

2.3.2 2.3.2 Accounting for cash and cash equivalents 41

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CHAPTER 3: ASSESSMENT OF THE ACCOUNTING ORGANIZATION

AND ACCOUNTING SYSTEM AT THUY TA JSC 46

3.1 Assessment of the accounting system and structure at Thuy Ta Joint StockCompany 46

LIST OF ABBREVIATIONS

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LIST OF TABLES

Table 1.1 Balance Sheet 8

Table 1.2 Income Statement 9

Table 1.3 Profitability ratios 10

Table 1.4 Liquidity ratios 11

Table 1.5 Efficiency ratios 12

Table 1.6 Solvency ratios 13

Table 2.1: Accounting vouchers for payroll and personnel 25

Table 2.2: Accounting vouchers for inventory and warehouse 25

Table 2.3: Accounting vouchers for sales 26

Table 2.4: Accounting vouchers for cash and cash equivalents 26

Table 2.5: Accounting vouchers for fixed assets 26

Table 2.6: List of accounts used by Thuy Ta JSC 29

Table 2.7 Percentage of payroll deductions 36

Table 2.8 Timesheet of Thuy Ta JSC 37

Table 2.9 Lists of accounts for Cash & Cash equivalents 42

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LIST OF FIGURES

Figure 1.1: Thuy Ta Joint Stock Company’s Organizational Structure 14

Figure 2.1: Organizational Structure of Thuy Ta’s Accounting Organization 17

Figure 2.2: The process of rotating accounting vouchers 27

Figure 2.3 The process of recording accounting books in the General journal .31Figure 2.4 The process of entering data into MISA accounting software 32

Figure 2.5 Payroll cycle 34

Figure 2.6: Process of circulating payroll accounting documents 39

Figure 2.7 Process for bookkeeping salaries and payroll deductions 40

Figure 2.8 Relationship of General Cash to Other Cash Accounts 41

Figure 2.9: Accounting documents rotation for cash receipts 43

Figure 2.10: Accounting documents rotation for cash payments 44

Figure 2.11 Accounting process for bookkeeping cash and cash equivalents 45

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In the current era of technological advancement, accompanied by rapidchanges in the economic and social landscape, understanding and effectivelyutilizing the functions of the accounting system and establishing an appropriateaccounting organization play a crucial role in enabling businesses to operateefficiently in both management and financial aspects An efficient accountingsystem not only saves time but also expedites the processing and analysis offinancial information Consequently, managers can make timely, rational, cost-effective financial and non-financial decisions related to production, businessoperations, investments, and financial matters concerning the company.

With the goal of comprehending the accounting organization and theaccounting system of the company, thereby identifying strengths andweaknesses, and providing recommendations for improving weaknesses withinthe scope of this accounting internship report, I seek permission to write andanalyze the information I have gathered about Thuy Ta Joint Stock Company.This is a renowned company with years of experience in the restaurant servicessector It can be stated that through the opportunity to intern at Thuy TaCorporation, I gained the chance to apply the theoretical knowledge acquired atuniversity to real-life situations Moreover, the experiences I garnered during myinternship at Thuy Ta Corporation further enriched my valuable knowledge andpractical skills.

I would like to express my gratitude to Associate Professor Phan TrungKien, who guided me throughout this accounting internship, and to Ms Le ThanhThuy, the Chief Accountant of the company, who supported me during myinternship at Thuy Ta Corporation, as well as shared numerous insightfulknowledge and experiences.

This accounting internship report is divided into three sections:

Part 1: Overview of Thuy Ta Joint Stock Company

Part 2: Characteristics of Accounting Organization and AccountingSystem of Thuy Ta Joint Stock Company

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Part 3: Evaluation and proposed improvements for the AccountingOrganization and Accounting System of Thuy Ta Joint Stock Company

International name: THUY TA JOINT STOCK COMPANY

Vietnamese name: CÔNG TY CỔ PHẦN THỦY TẠLegal type: Joint-stock company

Tax code: 0100107268

Head office: No 6 Le Thai To, Hang Trong Ward, Hoan Kiem District, HanoiLegal representative: DINH THI NGOC DIEP

Phone: 0438289347Fax: 0438255265

Website: www.thuyta.com.vn

Email: thuytahn@fpt.vn

Charter capital: 30,000,000,000 VNDEstablishing date: 21/05/1998

Business line: Restaurants and mobile catering servicesNumber of employees: 97 people

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1.1.2 Establishment, development, and achievements

Establishment & Development:

The Thuy Ta Company was established and underwent severaldevelopmental milestones:

In 1954: When the Vietnamese’ capital was liberated, Thuy Ta restaurant

was used as a library for officials, soldiers, and students to read books andnewspapers Through various reorganizations, mergers, and splits from its originsas a specialized establishment serving the affluent during the colonial era, ThuyTa transformed into a facility catering to diverse layers of the capital's laboringpopulation It offered refreshments such as coffee, lemonade, fruit juices,oranges, fruit punch, green bean sweet soup, and more The Thuy Ta refreshmentstore also operated mobile carts along the streets and neighborhoods, catering toofficials, military personnel, residents of the capital, and passing travelers.

In 1967: Thuy Ta came under the management of the Food Services

Department to serve Hanoi.

In 1994: The Thuy Ta refreshment store was rebranded as Thuy Ta

Restaurant The Kinh Hoa specialty restaurant was established at 1 Le Thai ToStreet, attracting an increasing number of patrons The establishment underwentmodernization, introducing innovations like refrigerated chambers, freezers, andItalian ice cream machines, continuously enhancing its contemporary facilities.The Thuy Ta Village-style Restaurant emerged, enriching the architecturalaesthetics, further embellishing the magnificent masterpiece of Hoan Kiem Lake,depicting the vibrant essence of Vietnamese culture Inside the restaurant, guestssavored the essence of Eastern cuisine, where water spinach and banana flowerslices encapsulated the royal artistic tradition Through the hands of skilledartisans, an Italian ice cream cone blossomed into a resplendent flower, and abaked "Hang Nga ripe steed" cake garnered additional adoration from thepatrons Thuy Ta Company consistently embellished the poetic charm of thewater pavilion and augmented the resplendence of Hoan Kiem Lake.

In 1998: Thuy Ta Restaurant marked a significant strategic breakthrough

by entering large-scale industrial food production.

In 1999: A state-of-the-art industrial ice cream production line, with an

annual capacity of one million liters, was established in addition to facilities forproducing candy and preserved fruit, as well as a factory manufacturing purecrystal ice cubes The renowned ice cream brand of Thuy Ta became a familiarlabel among the inhabitants of Hanoi and the northern and central provinces.

From 2001 to 2005: Thuy Ta embarked on two projects: the expansion of

the Thuy Ta Ice Cream Plant No 2 in Luong Yen, with a production capacity of300 liters per hour, and the establishment of a food processing and beverageproduction facility in the Pho Noi Industrial Zone, Hung Yen The companycurrently produces up to 50 types of ice cream on a modern Italian productionline Thuy Ta's ice cube and "Crystal" purified water products truly excel inquality, with a daily output of 100 tons according to U.S technology standards.Mooncakes and confectionery products, appreciated for their unique flavors andauthentic Hanoi quality, are trusted and consumed by over 1,200 retailersspanning from Hanoi to the northern and central provinces.

In 2006: Thuy Ta Restaurant underwent a transformation into a

joint-stock company and was renamed Thuy Ta Joint Stock Company.

In 2017: The shares of TTJ, representing Thuy Ta Ice Cream, commenced

trading on the UPCoM system in mid-2017 at a reference price of 31,000VND/share This equated to a market capitalization value of 93 billion dong atthe time of the Initial Public Offering (IPO).

In 2021: Thuy Ta Joint Stock Company filed for deregistration as a

publicly traded company and subsequently delisted from the stock exchange.

Up to now, in 2023: Thuy Ta Joint Stock Company continues to sustain

its core business operations within the restaurant sector.

Over the time frame of more than 69 years of formation and development,Thuy Ta Joint Stock Company has evolved into an entity with high-qualityservice offerings and has achieved numerous accomplishments that inspire pride:

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Thuy Ta has indeed asserted its presence through accolades such as the

"Vietnamese High-Quality Goods" awards for multiple years, the "Golden Star ofVietnam," and the "Strong National Brand."

Through the patriotic movement that has run parallel to the company'sgrowth and development, many employees and executives have been honored

with the "Exemplary Competitor" titles at both the grassroots and city levels.

Director Nguyen Thi Ngoc Diem, acclaimed as an outstanding business leaderfor several years, was bestowed with the Third-Class Labor Medal by thePresident of the country.

For numerous years, the company has been honored with the "ExcellentFlag of Emulation" from the city and recognized with awards ranging from the

Third-Class Labor Medal to the Second-Class and First-Class Labor Medals bythe President of the country The company's Party committee has consistentlybeen acknowledged as a strong and clean Party unit From the first store managerNguyen Duy Toan, to figures like Le Thi Thu, Nguyen Thi Minh Nhuan, anddirectors Nguyen Thi Ngoc Diem and Vu Quoc Hung, these individuals havewholeheartedly and dynamically steered the Thuy Ta ship toward its robust andprosperous state as it stands today.

From the achievements that encompass both breakthroughs inmanagement scale and business efficiency, in 2007, the President of the countrydecided to award the Third-Class Independence Medal This recognition servesas a source of encouragement, motivating the entire staff of Thuy Ta Joint StockCompany to heighten their sense of responsibility Amidst the patriotic emulationmovement, the entire workforce of Thuy Ta Joint Stock Company is and willcontinue to operate with even greater efficiency, making a significantcontribution to the worthy endeavor of constructing Hanoi as the City for Peace,aspired to be a city of a thousand years of civilization.

1.2 Features of business operations of Thuy Ta Joint Stock Company

1.2.1 Functions and Duties of Thuy Ta Joint Stock Company

Through the time frame of 69 years of operating, Thuy Ta carries outmultiple functions and responsibilities It aims at fostering excellence, enrichingexperiences, and serving both customers and the broader community:

Product Quality and Innovation: Thuy Ta's foremost function is to

consistently deliver products of the highest quality and to innovate within itsofferings Whether producing a diverse range of ice cream flavors, craftingtraditional Vietnamese confectionery, or providing refreshing beverages, thecompany ensures that each product reflects its dedication to excellence Throughmodernization, research, and development, Thuy Ta continually pushes theboundaries of taste, texture, and presentation, offering customers novel andmemorable experiences.

Customer Satisfaction: A cornerstone of Thuy Ta's duties is to satisfy the

discerning expectations of its customers By providing top-tier service andproducts that cater to various tastes and preferences, the company strives tocreate lasting bonds with its clientele The goal is not merely to meetexpectations but to exceed them, leaving patrons delighted and fulfilled aftereach interaction.

Preserving Tradition: Beyond business, Thuy Ta embraces the

responsibility of preserving Vietnamese culinary traditions and culture Whetherthrough its traditional confectionery or culturally inspired dishes, the companycontributes to the preservation and promotion of local heritage, offering patrons ataste of tradition that transcends time.

National Pride and Unity: Thuy Ta recognizes its role as a symbol of

national pride and unity By participating in patriotic movements andchampioning Vietnamese values, the company unites its stakeholders in a sharedmission This duty extends beyond commerce, embodying a commitment tocontributing positively to the social fabric.

Employee Development: Nurturing a capable and motivated workforce is

another vital function Thuy Ta provides a conducive environment for employeesto develop their skills, contribute to the company's growth, and enhance theirprofessional and personal lives.

Corporate Social Responsibility: Thuy Ta's duties extend to society

through its corporate social responsibility initiatives The company engages incommunity projects, environmental conservation, and social betterment, aligningits actions with the well-being of the communities it operates within.

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Adapting to Change: Thuy Ta's functions also encompass the ability to

adapt to changing market dynamics and consumer preferences By embracinginnovation and staying abreast of trends, the company ensures its continuedrelevance and resilience.

In summary, Thuy Ta Joint Stock Company's functions and duties convergeto create a comprehensive framework that promotes excellence, customersatisfaction, cultural preservation, and societal betterment From product qualityto customer care, tradition preservation to community engagement, thecompany's multifaceted responsibilities collectively contribute to its enduringsuccess and positive impact.

1.2.2 Main business operating activities

The main business line of Thuy Ta Joint Stock Company is “Restaurantsand mobile catering services”.

In addition, the company also has some other business lines such as:

Producing and trading Thuy Ta branded products

Producing and trading pure water branded Crystal products

Services for trading photo materials

Nowadays, Thuy Ta Joint Stock focuses on distributing its products andservices in Hanoi and other provinces in the North of Vietnam.

1.2.3 Analysis of the financial position and business result of Thuy Ta

Established in 1954, after many years of operation, the company hasdeveloped and expanded in size and created more profits over the time frame.

The tables below show the Balance Sheet and Income Statement of ThuyTa in the last three years:

Table 1.1 Balance Sheet

At the year ended December 31

Unit: 1.000.000 VND

Compared2021 to 2020

Compared2022 to 2021

+ Non-current liabilities 1.858 30% 2.500 45.35% 2.250 20.30% 642 34,55% (250) -10%

ii Owners’ Equity 34.273 84,7% 30.810 84,82% 37.641 77.25% (3.466) -10,11% 6.831 22,17%

Source: Thuy Ta JSC Income Statements

Table 1.2 Income Statement For the year ended December 31

Unit: 1.000.000 VND

Compared 2021 vs2020

Compared 2022 vs2021

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Source: Thuy Ta JSC Income Statements

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At first glance, it was evident that the company faced significantchallenges in the year 2021, as most of the figures indicated a sharpdecline Nevertheless, in 2022, there was a slight improvement Toprovide more specific details, each aspect of financial statements will beanalyzed based on respective financial ratios, which are profitability,liquidity, efficiency, and solvency ratios.

But first, let’s take a look at overview revenue for three years, the companyexperienced a significant decrease in revenue from 2020 to 2021, with revenuedropping from $48,452 to $33,520 This represents a substantial decline ofapproximately 30.8% and showed a remarkable recovery in its revenue,increasing it to $58,083 in 2022 This represents a substantial increase ofapproximately 73.1% from the prior year The significant decline in revenuefrom 2020 to 2021 suggests that the company encountered challenges or adverseconditions during the year 2021 These challenges could include various factorssuch as economic downturns, operational issues, or external disruptions like theCOVID-19 pandemic In contrast, the subsequent recovery in revenue from 2021to 2022 indicates that the company was able to adapt to these challenges andimplement strategies for growth and improvement This recovery might beattributed to factors like effective cost management, strategic business decisions,increased demand, or a combination of these factors.

Now, we'll dissect the elements of the financial statements to facilitate amore straightforward analysis.

Tables 1.3 Profitability ratios

The company's gross profit margin remained relatively stable from 2020 to2021 and then declined in 2022 This could indicate that the company facedchallenges in maintaining the profitability of its core operations, possibly due tofactors such as increased production costs or pricing pressures.

Considering the operating profit margin, it took a significant hit in 2021,with the company experiencing negative profitability However, it showed apositive trend in 2022, indicating that the company managed to control operatingexpenses and improve its operational efficiency.

The net profit margin also suffered a substantial decline in 2021, resultingin a negative margin, indicating a loss for the year However, in 2022, there wasa positive rebound in net profitability, suggesting that the company managed toturn things around and generate a profit The negative operating profit marginand net profit margin in 2021 indicate a challenging year, likely due to significantoperating losses However, the company made a remarkable recovery in 2022,turning its operating and net profitability positive.

In terms of ROCE, the company experienced a substantial decline in ROCEfrom 0.88% in 2020 to a negative -13.82% in 2021 This sharp decrease indicatesthat the company's returns were insufficient to cover the capital employed in itsoperations during 2021 Negative ROCE suggests a loss-making year In 2022,the ROCE improved from a negative figure to 0.1% While it remains relativelylow, this improvement suggests that the company was able to generate somepositive returns relative to the capital employed In this case, the negative ROCEin 2021 aligns with the negative net profit margin and indicates that the companywas not generating sufficient returns to cover its capital expenses, resulting in aloss-making year The subsequent improvement in ROCE in 2022 suggests arecovery in the company's ability to generate returns relative to its capitalemployed.

In conclusion, the profitability ratios reveal a mixed performance for thecompany over the three years In 2021, the company faced significant challenges,resulting in negative operating profit margin, net profit margin, and ROCE.However, in 2022, there was a notable improvement in these ratios, indicating arecovery in profitability Despite this recovery, the profitability ratios, especiallythe net profit margin and ROCE, remain relatively low The company's ability toreturn to profitability in 2022 is a positive sign, but it should continue to focus onoperational efficiency, cost management, and revenue growth to achievesustainable profitability in the long term.

Tables 1.4 Liquidity ratios

Current ratio 7,2 8,56 4,05

The current ratio measures the company's ability to meet its short-termobligations with its short-term assets A higher current ratio is generallyconsidered favorable as it indicates stronger liquidity In 2020 and 2021, thecompany had very high current ratios of 7.2 and 8.56, respectively, indicating astrong ability to cover short-term liabilities However, in 2022, the current ratiodropped to 4.05, which is still relatively healthy but lower than the previousyears This reduction may suggest a decrease in short-term liquidity compared tothe earlier periods.

The quick ratio is a more stringent measure of liquidity as it excludesinventory from current assets A higher quick ratio suggests better liquiditywithout relying on selling inventory Like the current ratio, the quick ratioexhibited a similar trend It was 5.87 in 2020 and 7.10 in 2021, indicating strongliquidity However, in 2022, it decreased to 3.37, which is still favorable butrepresents a reduction in liquidity compared to the prior years.

Based on the liquidity ratios, the company showed strong liquidity in 2020and 2021, as both the current and quick ratios were well above 1, indicating arobust ability to cover short-term obligations However, in 2022, both ratiosdecreased, suggesting a slight reduction in liquidity, but the company stillmaintained a relatively healthy liquidity position.

Tables 1.5 Efficiency ratios

Receivables collection period 41.53 days 11.38 days 38.64 days

Inventory holding period 109.32 days 232.60 days 58.14 days

Payables payment period 81.86 days 82.45 days 121.70 daysIn 2020, the company took approximately 41.53 days on average to collectreceivables, indicating reasonable efficiency In 2021, the collection periodsignificantly improved to 11.38 days, suggesting more efficient collections.However, in 2022, the collection period increased again to 38.64 days, indicatinga slowdown in collections compared to the previous year.

Regarding the inventory holding period, this ratio reflects how long thecompany holds inventory before selling it In 2020, the company had an

inventory holding period of 109.32 days, which decreased significantly to 232.60days in 2021, suggesting a more efficient inventory turnover In 2022, theinventory holding period improved further to 58.14 days, indicating fasterinventory turnover and increased efficiency.

Considering the payables period, this ratio assesses the company's durationto settle its obligations to suppliers In both 2020 and 2021, the companymaintained relatively consistent payables payment periods of approximately 82days, indicating stable payment practices Nevertheless, in 2022, the payablespayment period was extended to 121.70 days, suggesting a longer duration takenby the company to settle its payables.

Overall, the company demonstrated efficiency improvements in inventorymanagement and receivables collection, which are positive indicators.However, the increase in the payables payment period in 2022 should bemonitored to ensure it does not negatively impact supplier relationships Thecompany should continue to focus on optimizing its working capitalmanagement for sustained efficiency gains.

Tables 1.6 Solvency ratios

Moving to the interest cover ratio, it measures a company's ability to coverits interest expenses with its operating profit A higher interest cover ratioindicates better solvency as it implies a company can easily meet its interestobligations In 2020, the company had a low interest cover of 0.38, suggestinglimited ability to cover interest expenses with operating profit In 2021, the ratioturned negative at -28.4, indicating a severe inability to cover interest expenses.

In 2022, the interest cover improved slightly to 0.09, but it remained relativelylow.

To conclude, the company's solvency ratios raise concerns about its abilityto meet its debt obligations The negative interest cover in 2021 is particularlyalarming, indicating a severe financial challenge The company should carefullymanage its debt levels, improve profitability, and take measures to enhance itssolvency to ensure long-term financial stability.

Taking everything into account, the company's financial health improved insome areas in 2022, but challenges remain It's crucial for the company tomaintain a balanced focus on profitability, liquidity, efficiency, and solvencywhile navigating future opportunities and risks to achieve sustained financialwell-being.

1.3 1.3 Organizational structure of Thuy Ta Joint Stock Company

1.3.1 Organizational structure

Currently, there are 97 employees working for Thuy Ta Joint StockCompany The company operates in the form of centralized decentralization with3 levels of management in the organizational structure This has been thetraditional way of decentralizing administration for many years

Its organizational structure is illustrated in the following diagram:

Figure 1.1: Thuy Ta Joint Stock Company’s Organizational Structure

Source: Human Resources Department

1.3.2 Functions and responsibilities

Chairman of the Board:

The Chairman of the Board of Directors is the person who has full authorityon behalf of the company to decide on issues related to the purposes and interestsof the Company The Chairman of the Board regularly supervises the company'sbusiness operations, internal control activities, and risk management activities.

Control Committee:

This is the agency that supervises the Board of Managers in themanagement and operation of the Company's activities There are 5 non-execution directors in the Control Committee This Committee reviews FinancialStatements every 6 months Furthermore, the Control Committee also examineseach specific issue related to financial operations as it deems necessary or at therequest of the Chairman of the Board The Control Committee reports to theChairman of the Board on the accuracy, truthfulness, and legality of thedocuments, accounting books, financial statements, and the operation of theinternal control system

Board of Managers:

Includes Director and 2 Deputy Directors The director is the person whomanages the daily production and business activities of the company.Furthermore, supporting the Director are 2 Deputy Directors.

Thuy Ta Restaurant Department:

Restaurant departments carry a great responsibility in selling restaurantproducts, creating the main source of income for company, and creating jobs foremployees It includes 5 smaller departments:

o Sales Departmento Tables Departmento Bar Departmento Kitchen Department

o Restaurant Supporting DepartmentFinancial – Accounting Department:

This department is responsible for tasks relating to finance & accounting.Giving advise and assist the Board of Directors in the following areas:

o Financial management, accounting in accordance with accountingstandards and regimes, according to regulations of the Ministry of Finance, theLaw on Accounting, and the current Law on Enterprises.

o Studying policies, state regimes and actual conditions of the Company toadvise the Board of Directors to develop internal financial policies.

o Enterprise cost control.

o Management of capital and assets of the Company.General Administrative Department:

This department has the following functions:

o Human Resources Management:

Handling personnel matters, including recruitment, hiring, training,performance evaluations, and employee relations This department ensurescompliance with labor laws and maintains employee records.

o Facilities and Office Management:

Overseeing the physical workspace, including office layout, maintenance,security, and supplies This department ensures that the office environment isconducive to productivity.

o Communication:

Managing internal and external communication, such as handlingcorrespondence, and phone calls, and maintaining communication channelswithin the organization.

o Administrative Support:

Providing support to various departments and executives, includingscheduling meetings, arranging travel, processing expenses, and performing otheradministrative tasks.

o Policy Implementation:

Enforcing company policies and procedures across all departments toensure consistency and adherence to organizational guidelines.

o Event Coordination:

Planning and coordinating company events, meetings, conferences, andother gatherings.

CHARACTERISTICS OF ACCOUNTINGORGANIZATION AND ACCOUNTING SYSTEM

AT THUY TA JSC

2.1 Characteristics of accounting organization at Thuy Ta Joint StockCompany

2.1.1 Organizational structure of the accounting department

Thuy Ta Joint Stock Company is a centralized accounting organization Ithas one Chief Accountant and one General Accountant This style of accountingorganization enables the corporation to concentrate more on managingaccounting operations and hiring accounting employees with specific businessexpertise.

Figure 2.1: Organizational Structure of Thuy Ta’s Accounting Organization

Source: Accounting Department2.1.2 Functions and responsibilities of each position in the accountingdepartment

Chief Accountant:

The chief accountant is accountable to both the Board of Directors (BOD)and the governing entity for the information supplied by the accounting

department They guide, oversee accounting tasks, and review the results carriedout by their subordinates, while also establishing and maintaining theeffectiveness and efficiency of the company’s accounting systems andcompany’s policies They assist the Vice Director of Finance in aligning costallocations with management agreements and collaborating with relevantdepartments on strategies for expense reduction Additionally, they play a role inshaping document flow procedures and maintaining accounting records.

General Accountant:

The general accountant manages financial transactions, records, andreporting for organizations They handle accounts payable and receivable, ensureadherence to accounting standards and regulations, and aid in budgeting andforecasting Tax preparation, financial analysis, and report generation are integralto their role They collaborate with auditors, improve financial processes, andcontribute to informed decision-making, thus promoting overall financial healthand compliance.

Payroll Accountant:

Receiving and keeping all documents related to salary expenses at thecompany, such as labor contracts, salary increase decision, reward decisions,punishment of employees, employee timesheets, daily timesheets for workers, etcBased on the timesheet and related documents such as leave applicationform, salary, and bonus regulations, etc., calculate the exact amount of socialinsurance, health insurance, unemployment insurance, and PCC into expenses,allowances, allowances, etc laws and regulations of the enterprise.

Timely payment to employees, monitor the use of salary funds, providedocuments for management and functional departments, and plan the salary fundfor the next period.

Develop a salary scale to submit to the insurance agency.

Completing the salary documents and documents to ensure that they can beincluded in reasonable expenses when finalizing CIT.

Income and Expenses Accountant:

Income and Expenses Accountants are integral to an organization's financialmanagement, overseeing its revenue and expenditure activities Their functionsencompass various critical tasks They are responsible for accurately recording

all income sources, such as sales, services, and investments, and categorizingthem appropriately On the expenses side, they record and categorize all outgoingfunds, including operating costs, overheads, and other expenditures Theseaccountants ensure compliance with accounting standards and regulations,maintaining transparent and accurate financial records.

Income and Expenses Accountants play a pivotal role in budgeting andforecasting, providing insights into revenue generation and cost trends Theycollaborate with other departments to reconcile financial data, identifydiscrepancies, and prepare financial statements Additionally, they analyzefinancial performance, generating reports that aid in decision-making andstrategy formulation.

Their expertise helps organizations understand their financial health,profitability, and cost-efficiency By providing insights into income generationand expenditure patterns, Income and Expenses Accountants contributesignificantly to informed financial planning and effective resource allocation.

Liabilities Accountant:

Liabilities accountants manage and record an organization's financialobligations Their key functions include accurately tracking and categorizingliabilities such as loans, debts, and payables They ensure compliance withaccounting standards and regulations while maintaining precise records offinancial transactions related to liabilities

Liabilities accountants collaborate with other departments to reconcilebalances, resolve discrepancies, and generate accurate financial statements Theyplay a crucial role in assessing the organization's financial health by analyzingdebt ratios and evaluating repayment schedules

Liabilities accountants may also contribute to budgeting and forecastingprocesses, providing insights into future financial obligations Their expertisehelps the organization manage its liabilities effectively, maintain transparentfinancial reporting, and make informed decisions related to debt management andrepayment strategies.

Payable Accountant:

o Manage expenses:

Plan to pay the business's debts on a weekly, monthly, or quarterly basis asappropriate and pay in cash or through the bank The payable accountant is alsothe person who actively contacts and works with partners in case the paymentplan is not guaranteed or cannot be implemented Common operations such asdebt reconciliation, invoice checking, payment proposal review, to ensureaccuracy before making payment.

o Control the operation of the cashier:

The payable accountant will directly check and compare the papers andbooks submitted by the cashier department and ensure the validity andreasonableness of those papers.

o Cash Management:

The payable accountant will cooperate with the treasurer to perform related revenue and expenditure transactions, as well as compare and check theamount of cash remaining in the fund at the end of the day In addition, reportingto the director of all kinds of cash and cash balances when required.

cash-Treasure:

The treasurer holds a critical role within an organization, primarily focusedon managing financial assets and strategies Their key functions encompass cashmanagement, overseeing investments, and ensuring sufficient liquidity foroperational needs

Treasurers handle risk management by evaluating and mitigating financialrisks, often through insurance or derivatives They also play a pivotal role insecuring external funding through loans or bonds and maintaining relationshipswith banks and financial institutions

Additionally, treasurers manage the organization's capital structure andoptimize its financing mix They provide financial analysis and recommendationsto support decision-making and long-term planning

Treasurers often collaborate with other departments to align financialstrategies with broader business goals

In summary, treasurers safeguard financial stability, manage assets, mitigaterisks, and contribute to strategic financial decisions within the organization.

2.2 Characteristics of accounting systems at Thuy Ta Joint Stock Company

2.2.1 Accounting policies

 Thuy Ta Joint Stock Company uses the Vietnamese CorporateAccounting System according to Circular 200/2014/TT-BTC dated December 22,2014, which was issued by the Ministry of Finance to conduct accountingprocedures and prepare financial statements

 The accounting documentation system of Thuy Ta is the General LedgerSystem

 The business operating cycle of Thuy Ta is within 12 months

 The financial year of Thuy Ta is from January 1st to December 31st  The company’s accounting currency is Vietnamese dong (VN)

 The company calculates Value-added Tax (VAT) by applying theDeduction Method.

Several significant accounting policies of Thuy Ta JSC are presentedbelow:

 Cash and cash equivalents

Cash and cash equivalents are highly liquid assets that can be readilyconverted into cash within a short period They include cash on hand, cash inbank, bank deposits, and money in transit.

o Recognition of Cash and Cash Equivalents: This policy outlines when

the company recognizes cash and cash equivalents on its balance sheet.Generally, these assets are recognized when they are available for use and thecompany has control over them.

o Valuation: The policy specifies how cash and cash equivalents are

valued for reporting purposes Cash is typically recorded at its face value, whilecash equivalents, which may include short-term investments, are usually reportedat their fair market value.

o Treatment of Overdrafts: The policy clarifies how overdrafts, which

occur when a company's bank account has a negative balance, are presented inthe financial statements Overdrafts might be classified as a liability rather thanas cash equivalents.

o Bank Reconciliation: The policy may outline procedures for reconciling

the company's cash balances in its accounting records with the actual cash

balances held in bank accounts This ensures that discrepancies are identified andresolved.

o Presentation: This policy dictates how cash and cash equivalents are

presented on the balance sheet and potentially in the cash flow statement Theyare usually classified as separate line items, distinct from other current assets.

o Disclosure: The policy covers the level of detail and the nature of

disclosures related to cash and cash equivalents in the financial statements Thismight include information about restrictions on cash, any significant cash flows,and cash equivalents' maturities.

o Change in Policies: If there are changes in accounting policies related to

cash and cash equivalents, this policy would describe how such changes arecommunicated and their impact on financial statements.

o Consistency: The policy emphasizes the importance of consistency in

applying accounting methods related to cash and cash equivalents from onereporting period to another.

 Loans

This policy outlines the criteria for recognizing loans as liabilities on thebalance sheet, as well as calculating loans by the following equation:

Loans = Cost - Provisions for bad debts

Provisions for bad debts of loans are made based on the expected loss. Receivables

Receivables = Carrying amount – Provisions for bad debts

Receivables represent the total recoverable amounts from its customers orother business entities.

A provision for bad debts is established for receivables outstanding for sixmonths or longer, or for amounts unlikely to be collected by the company by thefiscal year-end, due to circumstances such as insolvency of key customers,bankruptcy, or some financial challenges of customers that made them unable topay their debts.