Auditing selling and administrative expenses in financial statements by uhy auditing and consulting company limited

BANKING ACADEMY OF VIETNAM FACULTY OF ACCOUNTING AND AUDITING------ GRADUATION THESIS TOPIC : AUDITING SELLING AND ADMINISTRATIVE EXPENSES IN FINANCIAL STATEMENTS BY UHY AUDITING

Rationale for the study

In the context of significant global economic fluctuations affecting economies worldwide, including Vietnam, domestic enterprises must improve operational capabilities and transparency to survive and thrive As large and small businesses, both domestic and international, continue to grow, the auditing sector increasingly holds a crucial role Auditing services build trust among those interested in a company's financial information, aiding them in making economic decisions and contributing to the guidance of accounting practices and enhancing management quality through consulting and system control improvements Independent auditing has become not just an economic management tool but an essential component of the national economic management system Independent auditing has established its significant role in the market economy, helping detect and prevent wastage, attract foreign investment, and ensure transparent financial reporting, thus supporting the economic and financial management tasks of the State and business operations

Financial statement auditing is one of the highest-demand auditing services Given the critical requirements for the auditing sector's development in an integrating context, enhancing the quality of financial statement auditing services is a top priority Business financial statements are highly valued because they provide a clear reflection of a company’s business activities For most companies, achieving profit is a primary goal, which also serves as a crucial criterion for investors making economic decisions Increasing a company's profits involves not only boosting revenue but also managing costs effectively Operating costs are a significant expense that directly impacts business outcomes, attracting the attention of investors, government managers, and lenders Consequently, auditing operating expenses is an integral part of financial statement auditing Auditors place a strong emphasis on this area, continually refining their auditing programs to meet market requirements and enhance quality, thus providing accurate and reliable information Moreover, since these costs are often susceptible to errors and fraud, necessitating adjustments by businesses to align results with desired objectives, auditing these costs is inherently complex, and audit risks

Dao Thu Huong 2 K23CLC-KTA must be minimized Therefore, auditing firms continuously strive to improve the quality of their auditing processes

Recognizing the importance and sensitivity of the expense category, prone to fraud and errors, is the reason I chose "Auditing selling and administrative expenses in financial statements by UHY Auditing and Consulting Company Limited" as my graduation thesis topic.

Literature review

Currently, research topics in the field of auditing also have a large number, especially studies related to auditing selling and administrative expenses in auditing financial statements In any case, it shows that an audit of selling and administrative expenses is an important factor that has a significant impact on the audit results of an audit

During my research, I have referenced articles at Banking Academy and National Economics University in the period of 2019 - 2022 These studies reflected on the content and highlighted the ongoing issues within the audit process of selling and administrative expenses in the financial statements of audited companies, and also proposed necessary measures to improve the auditing process for these expenses category to further enhance its effectiveness

With the research paper of author Đỗ Khánh Ly (2021): "Hoàn thiện Quy trình kiểm toán chi phí hoạt động trong kiểm toán BCTC do công ty TNHH Kiểm toán Tư vấn độc lập IAC - Chi nhánh Hà Nội thực hiện" In general, there were advantages and a detailed research process on the audit item However, the article does not provide an overview of research to promote the strengths and overcome the weaknesses of previous studies In addition, the article also gave development orientations and solutions to the company's outstanding limitations and detailed recommendations to stakeholders

For the article "Hoàn thiện qui trình kiểm toán chi phí hoạt động trong kiểm toán báo cáo tài chính ngân hàng thương mại do Công ty TNHH Ernst & Young Việt Nam thực hiện" by author Lê Ngọc Linh (2022), the author also detailed the audit processes

Dao Thu Huong 3 K23CLC-KTA for selling and administrative expenses at the unit Moreover, the author reflected on the current situation, weaknesses, and provided solutions to address the lingering issues in Ernst & Young Vietnam Limited’s audit processes, such as developing audit programs for each category separately, enhancing the quality of auditing technology software, and perfecting analysis and detailed examination procedures The solutions proposed by the author were appropriate for the current situation of the unit, aiming to improve the audit process of Operating Costs in particular, and the auditing of financial statements in general, for the company in the future

A research paper by Phạm Việt Hoàn (2022), National Economics University:

"Audit of selling expenses in financial statement, performed by KPMG Vietnam Limited" has specifically and scientifically raised the basic theoretical basis surrounding the process of auditing selling expenses at KPMG Vietnam Co., Ltd The author has proposed solutions to complete the item audit process at the unit, however, he has not provided conditions for implementing solutions for stakeholders and has not made recommendations to complete the process from the training institution and auditors

Selling and administrative expenses are categories that constitute a significant proportion and play an extremely important role in financial statements Building on the strengths and addressing the weaknesses of previous research, this thesis will systematize the theoretical basis on auditing "selling and administrative expenses" and study the practical application of audit procedures and processes performed by UHY Auditing and Consulting Company Limited.

Objective of the research

The topic is researched in order to achieve the following specific objectives:

Firstly, systematize and clarify the basic theoretical issues about the audit process of selling and administrative expense items in the audit of financial statements conducted by independent auditors

Dao Thu Huong 4 K23CLC-KTA

Secondly, describe and analyze the current status of the audit process of selling and administrative expenses items in the Audited Financial Statements conducted by UHY Auditing and Consulting Company Limited and assess the current situation

Third, using the theoretical background and the current state of the audit processes at UHY Auditing and Consulting Co., Ltd to propose remedial solutions aimed at improving the audit processes of operational expenses in financial statement audits for UHY Auditing and Consulting Co., Ltd.

Object and scope of the research

The object of study: the process of auditing items of selling and administrative expenses in the audit of financial statements in which the subject is independent auditors

Scope of research: Audit process of selling and administrative expenses in auditing financial statements conducted by UHY Auditing and Consulting Company Limited., Study period: From 02/01/2023 to 31/03/2023;

Location: UHY Auditing and Consulting Company Limited, Clients company Scope of research content: The topic focuses on the audit of selling and administrative expenses by UHY Auditing and Consulting Company Limited in independent auditing of financial statements in general and at ABC Client Company in particular

Research data on the topic are primary data through direct participation observation and practice; and secondary data collected and extracted from the system software, working papers kept in the audit records of UHY Auditing and Consulting Company Limited and the client's audit report for the period 2022-2023

Research question

Questions posed and addressed in the content to achieve research objectives:

- On what basis is the actual audit process of selling and administrative expenses of the company based?

- What is the status of the audit process for items conducted by UHY Auditing and Consulting Company based on empirical evidence at a specific client company?

- What are the advantages and limitations of the item audit process and the causes of these limitations?

- From the above advantages and disadvantages, what solutions are needed to promote strengths and overcome limitations to help the company's item audit process be more complete?

- In order to complete the audit process in auditing financial statements, what solutions should be offered?

Research methodology

The topic is researched based on the following main methods:

The methodological approach of dialectical materialism, moving from theory to practice and using practice to test theory This involves researching theoretical issues by referring to textbooks, reference books, journals, theses, and dissertations related to the topic of auditing the expenses of selling and general administrative expenses at audit firms

Document analysis method, sampling method, estimating the likelihood of errors, synthetic research, and comparing documents with actual practices Secondary data collection on the current status is conducted through the method of researching documents, books of audited clients, and documents that have been audited and archived at UHY Auditing and Consulting Co., Ltd.

Structure of the thesis

In addition to the Introduction, Conclusion, and categories, the content of the thesis consists of 3 chapters:

Chapter 1: Theoretical basis for auditing selling and administrative expenses in financial statements by UHY Auditing and Consulting Company Limited

Chapter 2 : Current status of auditing selling and administrative expenses in financial statements by UHY Auditing and Consulting Company Limited

Chapter 3: Recommendations for improving the audit of selling and administrative expenses in financial audits conducted by UHY Auditing and Consulting Company Limited

With limited knowledge, my essay will inevitably be flawed I look forward to receiving guidance and suggestions from teachers to make my bachelor thesis more complete

THEORETICAL BASIS FOR AUDITING SELLING AND

Content and characteristics of selling and administrative expenses

1.1.1 Definition and nature of selling and administrative expenses

In a modern economic environment, companies carry out production and business activities to produce goods and provide services, to meet market demand and achieve profitability objectives Companies need to convert the value of products and services into revenue through sales, which is the final step in the production and business chain, this is the process of transforming capital from product form, goods to monetary form or capital in payment In this process, companies incur costs that reduce economic profit, including outlays, asset depreciation, or the creation of liabilities, which include selling and administrative expenses These costs, known as operating expenses, are indirect not directly related to the production process but are crucial in determining profit and corporate income tax in financial statements

Selling expenses are actual costs incurred during the process of selling products, goods, and providing services, including costs of bidding, product introduction, advertising, sales commissions, warranty expenses of goods, preservation, packaging, transportation costs, etc Selling expenses in commercial enterprises include:

- Employee costs: Reflect the payments for sales staff, packaging, transportation, and preservation of goods, including wages, meal allowances during shifts, labor wages, and deductions for social insurance, health insurance, union fees, and unemployment insurance

- Material and packaging costs: Reflect the costs of materials and packaging used for maintaining, consuming products, goods, services, such as costs of packaging materials, fuel for preservation, loading, transporting goods during consumption, materials for repair and maintenance of fixed assets used in the sales department

- Tools and equipment costs: Reflect costs for tools and equipment used in the consumption process of goods, such as measuring tools, computing devices, work tools

- Depreciation of fixed assets: Reflects depreciation costs of fixed assets at the preservation and sales departments like warehouses, stores, loading areas, transportation vehicles, measuring and testing equipment

- Warranty costs: Used to reflect warranty costs of goods Repair and warranty costs for construction works are reflected in Account 627 "General Production Costs" and not in this account

- Outsourced service costs: Reflects costs of outsourced services used for sales such as costs of outsourcing repairs of fixed assets directly serving the sales process, warehouse rental, loading and unloading transportation costs of goods for sale, commission payments to sales agents, and export consignment units

- Other monetary costs: Reflects other monetary costs incurred in the sales process beyond the costs mentioned above such as hospitality costs at the sales department, product introduction, advertising, customer conference costs

Administrative expenses are general management costs of an enterprise, including employee wages in management departments, office materials, labor tools, provisions for doubtful debts, outsourced services, etc Administrative costs in commercial enterprises include:

- Management staff costs: Reflect payments to enterprise management officers and staff, such as salaries, allowances, social insurance, health insurance, union fees, and unemployment insurance of the management board and management staff in departments

- Management materials costs: Reflect costs of materials used for business management activities, like office supplies, and materials used for repairing fixed assets, tools, and equipment (with or without VAT included)

- Office supplies cost: Reflect costs of office tools and equipment used for management activities (with or without VAT included)

- Depreciation of fixed assets: Reflects depreciation costs of fixed assets used generally by the enterprise, such as office buildings, warehouses, transportation vehicles, machines, and office equipment

- Taxes, fees, and duties: Reflect costs related to taxes, land rent, etc., and other fees and duties

- Provision costs: Reflect provisions for doubtful debts and payable provisions included in the business production costs of the enterprise

- Outsourced service costs: Reflects costs of outsourced services serving the management activities; costs incurred and used for technical documentation, patents, etc (not qualifying as fixed assets) are allocated gradually into administrative costs; fixed asset rental costs, payments to subcontractors

- Other monetary costs: Reflects other general management costs of the enterprise beyond the costs mentioned above, such as conference costs, hospitality, travel expenses, and expenses for female labor

1.1.2 Accounting for selling and administrative expenses a Selling expenses

Account 641 is used to track detailed types of costs These costs include labor costs, materials, packaging, tools, and equipment, as well as depreciation of fixed assets Additionally, costs for services purchased from outside and other types of costs are also recorded Depending on specific management requirements of each industry and enterprise, Account 641 can be expanded to include other types of costs At the end of the accounting period, selling costs are transferred to Account 911 to calculate and determine the business results of the enterprise

- For employee selling costs: Based on Payroll, Timekeeping Sheet, Payment Voucher / Payment Order

- Depreciation of fixed assets: Based on the Depreciation Schedule of assets

- Outsourced service costs: Based on VAT invoices, Special invoices

- Material and packaging costs: Based on Warehouse Entry Slip, Warehouse Exit Slip, Material and Tool Allocation Table

- Monetary costs: Based on Payment Slip, Bank Debit Note

Table 1 1 - Structure and content reflection of account 641 - Selling expenses

- Costs related to the process of selling products, goods, and providing services incurred during the period.

- Amounts recorded reducing selling costs during the period;

-Transferring selling costs into account 911 "Determining business results" to calculate business results during the period.

- Accounting chart for account 642 :Appendix 1 : Diagram The chart of accounting for selling expenses according to Circular 200/2014/TT-BTC b Administrative expenses

Administrative expenses: Account 642 is established to track detailed types of costs as regulated Depending on the specific management needs of each industry and enterprise, Account 642 can be expanded by adding second-tier accounts to clearly record various types of business management costs At the end of the accounting period, management costs are transferred into Account 911 "Determining business results" on the Debit side to calculate the final business results

- Wage payment table, Social insurance payment table, Wage – social insurance allocation table, labor contracts

- Material – tool allocation table, Goods Delivery Note to reflect costs related to materials, and tools used for management

- Depreciation schedule of fixed assets, and asset disposal records to reflect depreciation costs of fixed assets used for management

-Tax notice, Tax submission table, Tax receipt to reflect costs related to taxes, fees, and duties payable

- Service invoices, Payment vouchers, Debt notes to reflect costs related to outsourced services or other monetary costs

* Structure and content reflection of account 642 – Administrative expense

Table 1 2 - Structure and content reflection of account 642 – Administrative expenses

- Accounting chart for account 642 : Appendix 2 : Diagram The chart of accounting for administrative expenses according to Circular 200/2014/TT-BTC

1.1.3 Common misstatements related to selling and administrative expenses

During the audit of financial statements in general and the audit of operating expenses in particular, auditors may find that enterprises encounter some of the following irregularities:

* Cases where the expenses reported in the financial statements are higher than the actual incurred expenses could be due to reasons such as:

- The enterprise accounted for actual incurred costs without invoices, valid documents, or duplicated invoice entries

- Actual business management costs incurred during the period

- Provisions for doubtful debts, payable provisions (Difference between provisions required this period and unused provisions from previous periods);

- Amounts recorded reducing business management costs;

- Restoring provisions for doubtful debts, and payable provisions;

- Including in the selling and administrative expenses costs that are neither reasonable nor valid Examples include costs prohibited by state regulations from being accounted as business expenses, such as costs of overseas business trips exceeding company guidelines, capital construction investments, fixed asset purchases, and other funding sources, contributions to funds and social organizations, support for employees (except where government regulations consider these as business expenses), charitable expenses, and other costs not related to revenue and taxable income

- Misunderstandings in accounting that cause reported costs in books and reports to be higher than the figures on accounting documents

- Accounting for pre-deducted costs that were not fully spent, such as significant repair costs for fixed assets, and pre-deducted product warranty costs

- Accounting for costs incurred during the year which, due to their nature or magnitude, should be allocated over several production and business periods according to regulations

- Making late accounting entries for cost transactions, for example, certain costs were identified but, due to the receipt of documents after the accounting books were closed, these costs were not accounted for in the correct accounting period (late entry)

* Costs reflected in the books are lower than the actual incurred costs, possibly due to the following reasons:

- Due to lost documentation, the company was unable to obtain the necessary paperwork to validate certain expenses Consequently, these expenses were not included in the period's costs and were left pending in accounts such as advance accounts, accounts receivable, and advances to suppliers

Audit of selling and administrative expenses in an audit of financial

For financial statement audits, the first and most crucial step for auditors is to establish audit objectives and necessary tasks This foundation allows auditors to guide the audit process accurately and effectively, ensuring that all auditing activities are carried out as planned

According to Vietnam Auditing Standard No 200, item 11 specifies: "The overall objective of the auditor and the auditing entity when conducting a financial statement audit:

- To obtain reasonable assurance whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, thereby enabling the auditor to express an opinion on whether the financial statements are prepared, in all material respects, in accordance with the applicable financial reporting framework;

- To prepare an audit report on the financial statements and communicate findings in accordance with the requirements of the Vietnam auditing standards, aligned with the auditor’s findings."

In this process, auditing the cost accounts for selling expenses and administrative expenses requires gathering a sufficient and appropriate amount of audit evidence This helps auditors confirm that these items are accurately presented in the financial statements Additionally, providing information and related documents also supports the referencing and auditing of other parts of the financial statements efficiently

General objectives are broken down into specific objectives for each type of item and activity These objectives are established based on the general objectives and the distinctive nature of each item and action, monitored through the accounting system and internal control system

- Existence: This objective requires auditors to gather sufficient appropriate audit evidence to ensure that all transactions related to CPBH and CPQLDN that have been recorded actually occurred at the entity Accounting documents and related evidence being recognized as legal and valid is a guarantee of the occurrence of these transactions

- Completeness: This objective demands auditors to collect enough appropriate audit evidence to ensure that all transactions related to CPBH and CPQLDN are fully recorded, without omitting any transactions

- Classification: This objective requires auditors to gather sufficient appropriate audit evidence to ensure that all transactions related to CPBH and CPQLDN are appropriately classified, recorded in the correct order, and accounted for using the correct accounting methods

- Valuation and Allocation: This objective requires auditors to collect sufficient appropriate audit evidence to ensure that all transactions related to CPBH and CPQLDN during the period are calculated and recorded at the correct values and to consider whether the cost evaluation by the entity complies with the accounting principles and accounting regimes currently in effect or commonly accepted

- Cut - off: All transactions and costs must actually occur within the period or have occurred in previous periods but according to regulations must be recorded in the current accounting period

- Rights and Obligations: Review compliance with legal regulations as well as those of the entity itself; with this objective, the auditor gathers evidence to prove whether the accounting of these expenses adheres to the regulations

- Financial Statements: Explanatory notes to the financial statements related to the administration expense accounts

- General and subsidiary ledgers: related to the selling and administration expense accounts such as: general ledger and detailed books for Accounts 641, 642, and the related accounts like 111, 112, 152, 153, 214, 331, 334, 338, etc

- Accounting Documents Related to Selling and Administrative Expenses:

+ Documents related to payroll expenses and deductions for sales staff and administrative staff, such as employment contracts, timesheets, product and service completion confirmations, payroll calculations, wage payment records, and social insurance allocation tables

+ Various receipts, payment vouchers, bank debit and credit notices, advance request forms, payment request forms, receipt vouchers, VAT invoices, warehouse entry and exit slips, documents reflecting outsourced service costs

Dao Thu Huong 17 K23CLC-KTA and other monetary costs: purchase invoices, value-added tax invoices, purchase order summaries, etc

+ Documents related to materials, supplies, and equipment used in sales and administrative activities such as warehouse exit slips; allocation tables for materials, tools, and equipment; documents related to fixed assets used in the sales and administration departments like handover minutes, depreciation calculations, and allocation tables

- Policies, Regulations, and Internal Control Provisions for selling and administration expense accounts include: documents specifying standards, plans, and budgets for selling and administration expenses approved by authorized personnel; documents specifying salary, bonus, and allowance payment policies and related deductions for sales and administrative staff; documents specifying consumption standards for materials, supplies used in sales and administrative activities; documents specifying policies and methods for depreciating fixed assets used in sales and administrative activities; warranty policies for products and goods; provisions for doubtful debt reserves; and documents specifying cost standards for outsourced services and other types of expenses

- Other Records and Documents related to the selling and administration expense accounts, such as sales plans, business strategies, etc

1.2.2 In the stage of audit planning

Audit planning is not only the first step but also a crucial foundation for the entire financial statement audit process A well-crafted audit plan helps auditors understand the business and industry, identify potential risks, and determine areas requiring special attention This allows auditors to focus on critical areas, allocate resources efficiently, and ensure that all issues are addressed in a timely manner Careful planning also optimizes the audit process, from selecting a team with the right skills and experience to coordinating tasks and providing close supervision to improve audit quality and effectiveness In this study, the audit plan for selling and administrative expenses is part of the Audit Plan, covering the following content:

1.2.2.1.Understanding the Client and Operational Environment

To enhance audit quality and achieve set objectives, auditors need a deep understanding of the client's business Upon accepting an audit engagement, the audit firm should assign experienced auditors to assess the task's feasibility and estimate the necessary time and costs

- For new clients, auditors should explore why they require auditing and gather data about their business operations and financial status This is especially crucial if the financial statements are widely published, as in the case of listed companies or those with significant liabilities Auditors should use various sources, such as press databases and specialized documents, to collect information If there was a predecessor auditor, the current auditor should seek to gather useful information from them Gathering this information is vital, including understanding the integrity of the management and any conflicts that have occurred

An overview of UHY Auditing and Consulting Company Limited

2.1.1 The history of UHY Auditing and Consulting Company Limited a General Information

- Vietnamese name: Công ty TNHH Kiểm toán và Tư vấn UHY

- English name: UHY Auditing and Consulting Company Limited

- Short name: UHY Co., Ltd

- Company Type: Limited Liability Company with two or more members

Mr Dao Xuan Dung – Chairman of the Members' Council

Mr Nguyen Tu Trung – General Director

- Email: Uhy-info@uhyvietnam.com.vn

- Headquarters address: 5th Floor, Tower B2, Roman Plaza Office Building, To Huu Street, Dai Mo Ward, Nam Tu Liem District, Hanoi City

Dao Thu Huong 33 K23CLC-KTA b Formation and Development Process of UHY:

One of the top audit companies in the world, UHY offers auditing and consulting services via its extensive global network of tightly connected member companies The company operates 330 offices throughout 101 nations UHY member firms provide professional services that adhere to uniform standards in major financial hubs globally

We understand our clients' needs, providing timely advice to help them make sound business decisions

Globally, UHY organizes extensive activities to help clients compete effectively and succeed in business High professionalism, service quality, and innovation have driven the firm's rapid growth and that of its clients for over 30 years UHY has a special competitive advantage, combining the customer service capabilities of its member firms in each country with global resources UHY member firms take pride in blending local business knowledge with international and regional skills

The company's development process since its founding has gone through three stages:

In 2006, the senior leaders of IFC (the capital contribution board) decided to restructure much of IFC to become part of UHY International By June 2007, the firm had relocated its headquarters to 136 Hoang Quoc Viet, Cau Giay, Hanoi This location changed again in October 2012 when the headquarters moved to the 9th floor of the

HL Building at 82 Duy Tan Alley, Cau Giay, Hanoi

In 2007, the State Securities Commission granted UHY permission to audit publicly listed companies and issuers, signaling a new stage of growth for UHY During this time, UHY primarily operated in Northern and Central Vietnam Recognizing opportunities in the South, UHY opened a representative office in Ho Chi Minh City by June 2009 In November 2014, a significant merger occurred, forming UHY ACA through the union of Kreston ACA Vietnam Limited Auditing Company and UHY Auditing and Consulting Services Limited

On August 9, 2017, the firm underwent another transformation, changing its name to UHY Auditing and Consulting Company Limited, thereby officially separating from UHY ACA and commencing operations as an independent entity The company is also known as UHY Auditing and Consulting Company Limited, with the abbreviation UHY Co., LTD

2.1.2 The main business lines of UHY Auditing and Consulting Company Limited

Currently, UHY LTD is among the few auditing firms in Vietnam boasting a large and experienced team of auditors It is one of the companies approved by the State Securities Commission to audit listed companies and issuing organizations in Vietnam, also authorized by the Ministry of Finance to audit public interest entities Although operational for only 18 years, UHY Auditing and Consulting Company Limited has garnered a vast client base across various economic sectors This achievement is attributed to the significant efforts and dedication of the company's management and staff in marketing and client acquisition Guided by the principle of

"Bringing true value to customers with exceptional service," UHY's strategy focuses on quickly understanding and meeting all customer requirements, proactively reaching out, and building relationships with clients

Each year, the company conducts audits for many clients across multiple fields and economic sectors, including projects funded by international organizations like the World Bank (WB) and the Asian Development Bank (ADB) UHY's diverse range of services caters to the ever-changing needs of the market economy

Specifically, some clients that UHY audits include:

- Projects funded by international organizations such as the International Monetary Fund (IMF), Official Development Assistance (ODA);

- Administrative and non-business units and organizations or individuals who require auditing services

UHY offers a wide range of diverse and flexible services to meet the constant demands and changes in the market economy

- Auditing and Assurance Services: UHY offers a variety of auditing and assurance services, including statutory financial statement audits, specific-purpose audits, compliance audits, diagnostic reviews, support for capital market transactions, internal control system assurance, independent evaluation and confirmation of financial and non-financial information, and assurance services related to business continuity or corporate bankruptcy

- Accounting Services: UHY provides a wide range of accounting services, including full-service accounting (performing complete accounting functions for enterprises), temporary senior accounting staff support, specific accounting functions, support for preparing financial statements and management accounting reports, assistance with converting financial statements to international accounting standards or IFRS, advice on building accounting systems, and consulting on specialized accounting software systems, among others

- Consulting Services: UHY's consulting services assist clients in planning and managing tax-related matters, including tax declaration and payment, tax and financial review, support for tax inspections and appeals, VAT refund assistance, taxation for mergers, acquisitions, and listings, regular tax consulting, customs, personal income tax, personal financial investment advisory, and providing accounting and tax expert solutions

- Valuation Services: UHY's valuation services encompass determining the value of equitized enterprises, business, share, and equity valuations, real estate valuation, machinery, equipment, and production line valuations, project investment valuation, asset exploitation rights, intangible asset valuation, brand valuation, and other specialized asset valuations as needed

- Training Services; UHY offers professional ACA and CFAB certificate courses to become ICAEW members, training on International Financial Reporting Standards (IFRS), financial management courses, internal audit training, risk management training, and various other management skills training for businesses

To deliver the best service to clients, UHY is organized into multiple departments based on specialization in each service field and specific customer groups These specialized departments deliver a variety of professional services tailored to a diverse range of clients, ensuring high-quality services that meet the unique needs of domestic businesses, international organizations, foreign direct investment (FDI) enterprises, and multinational corporations

2.1.3 The organization structure of UHY Auditing and Consulting Company Limited

UHY organizes its management structure in a linear functional style At the top is

Mr Dao Xuan Dung, Chairman of the Members' Council Next in line is Mr Nguyen

Tu Trung, the General Director, followed by the Deputy General Directors, Directors, and Deputy Directors Below them are the functional departments and operational divisions The Executive Board is responsible for directing, formulating strategies, planning business solutions, and restructuring the organization

- Chairman of the Members' Council: Mr Dao Xuan Dung

Occupies the highest role in the company and possesses the authority to make decisions on significant corporate issues

- General Director: Mr Nguyen Tu Trung

Serves as the company's legal representative and oversees all operational aspects of the company He is accountable to the Members' Council and legally responsible for all company activities, promoting the overall development of the company

(Source: The company's human resources administrative department)

Practice of audit selling and administrative expenses in financial audits

Step 1: Understand the Customer's Basic Information

Since ABC is a returning client, auditors can obtain basic information from the

2022 audit file However, they must update this with additional information to reflect any changes in the business environment Through procedures such as interviewing the management board and the chief accountant, auditors determined there were no significant changes from 2022 Below is the preliminary information:

ABC Company was transformed from a factory under Decision 1086/QĐ-HĐTV dated June 27, 2005, by AAA Vietnam Corporation (now AAA Corporation - LLC) It operates under Business Registration Certificate No 0116000505, issued on July 14,

2005, with its latest amendment on December 8, 2017, by Hanoi's Department of Planning and Investment The company's headquarters are located in Long Bien District, Hanoi As of December 31, 2022, ABC employed 333 people (down from 361 in 2021), with a payroll fund of 36,130,000,000 VND in 2022 (compared to 36,372,600,000 VND in 2021)

Step 2: Review Client Acceptance and Sign Engagement letter

ABC Company is a recurring client of UHY, so the first step before auditing at ABC is to assess whether this client should be accepted again This is crucial and demands special attention, as it helps UHY ensure a proper audit and avoid unwanted risks during the audit process The audit department head conducts an evaluation to determine if UHY should proceed with the audit for ABC, using Appendix 4 - WP

1220 - A120 Accepting, maintaining recurring clients, and evaluating contract risks The aim is to ensure UHY has collected sufficient information to decide whether

Dao Thu Huong 46 K23CLC-KTA to continue the audit engagement The information and annual questions are based on the previous year's audit conclusions

After reviewing basic information about ABC, evaluating professional competence, audit contract feasibility, ABC's integrity, and other critical aspects, the key members of the audit team concluded that there is reasonable assurance for client acceptance, and audit operations align with professional standards

ABC has been a recurring audit client of UHY Auditing and Consulting Company Limited After completing the 2022 audit, ABC was satisfied with UHY's services, leading UHY to tender for the 2023 financial statement audit Both sides discussed business operations and any organizational changes After reaching an agreement, both the client and UHY signed the audit contract

Step 3: Identify the Client's Audit Purpose and Formulate the Audit Team

After agreeing to continue the audit contract, the audit supervisor relies on knowledge from previous audits and the unique characteristics of the client to identify the audit purpose, which is to "provide satisfaction to those who use the audit report (the parent company, shareholders, banks, tax authorities), ensuring the reliability and accuracy of the financial information." With this in mind, the audit supervisor concluded that the client's financial statements impact many stakeholders and that the audit would have a moderate scope and complexity

Following this, UHY assigns personnel for the audit The company's management decides on the audit supervisor responsible for conducting the audit The audit supervisor uses the audit contract and previous year's audit files to create the audit schedule and send the "Audit Plan" to ABC

After initial surveys and given the time required to complete the audit, audit costs, and audit team personnel, the audit team includes various members with different responsibilities:

Table 2 1 - Members of audit team

Executive Board member in charge of the overall audit/General oversight

Nguyễn Minh Thắng Auditor Auditor responsible for the audit/Quality control, direction, and supervision

Mai Thùy Dung Auditor Audit Team Leader/Direct supervision

Trần Thanh Loan Audit Assistant Audit team member/Hands-on execution Đỗ Thu Ngân Audit Assistant Audit team member/Hands-on execution Đào Thu Hương Audit Assistant Audit team member/Hands-on execution

- The year-end audit will commence on February 29, 2023, and end on March 2, 2023, at the office of ABC Company The audit is expected to take three working days to complete

Step 4: Assess the Client's Internal Control System

Since ABC is an annual audit client of UHY, auditors use information from the previous year and conduct a preliminary analysis of the current financial statements to determine inherent risk Based on initial assessments, auditors concluded that the internal control system has not changed significantly since last year ABC's business activities include:

- Paper manufacturing and paper product industries,

- Manufacturing and selling wood and paper-processed products,

- Trading chemical supplies (excluding state-banned chemicals),

Using this information, auditors applied additional procedures such as interviews with the management board and chief accountant to verify any changes in the internal control system After conducting these interviews, auditors concluded that the inherent risk for the entire financial statements is medium This conclusion is documented in

Appendix 5 WPs 1410 - A310 "Understanding the Client and Business Environment

Step 5: Preliminary Financial Statement Analysis

Analyzing a client's financial statements allows auditors to understand the client's financial condition in the prior year Furthermore, financial statements can help auditors promptly predict fluctuations in Selling and Administrative Expenses This forward-looking analysis assists auditors in conducting thorough reviews and quickly detecting errors in these expense categories

Based on the information gathered, auditors noted that ABC's Selling and Administrative Expenses are not directly related to the production process at the company These expenses often include regular costs like electricity, water, and transaction fees, as well as non-regular costs like client entertainment, car maintenance, and repairs These costs serve as a basis for calculating profit and corporate income tax liabilities

Table 2 2 - WPs A510 - Preliminary analysis of financial statements

In 2023, revenue from sales and services was 328,629,158,848 VND, a decrease of 24,056,524,894 VND (6.8%) compared to 2021 Along with the drop in revenue, the cost of goods sold also decreased, from 286,216,516,445 VND in 2022 to 284,299,369,702 VND in 2023, a 1% decrease This reduction is mainly due to sales returns impacting revenue deductions, indicating suboptimal sales policies at Company ABC

Similarly, the decrease in revenue also affected Selling and Administrative Expenses

In 2022, these expenses dropped by 6,663,384,069 VND, a 31.25% decrease compared to 2021 The Administrative Expenses in 2023 decreased by 3.85% compared to 2022, aligning with reduced revenues and cost of goods sold due to the company's cost- cutting measures and staff reductions in 2023

Step 6: Determine Materiality and Assess Inherent Risk

Typically, UHY determines materiality based on indicators such as pre-tax profit, revenue, equity, or total assets Depending on the audit, auditors select specific

UHY AUDITING AND CONSULTING COMPANY LIMITED Name Date

Client: ABC COMPANY Preparer Nguyễn Minh Long

Nội dung: Preliminary analysis of financial statements Reviewer 2

1 Gross sales of merchandise and services 330.038.894.098 354.095.418.992 (24.056.524.894) -6,79%

3 Net sales of merchandise and services 328.629.158.848 100,00% 354.072.550.081 100,00% (25.443.391.233) -7,19%

5 Gross profit from sales of merchandise and services 44.329.789.146 13,49% 67.856.033.636 19,16% (23.526.244.490) -34,67%

15 Current Corporate income tax expenses - 0,00% - 0,00% - 0,00%

16 Deferred Corporate income tax expenses - - - 0,00%

INCOME STATEMENT For the year ended 31 December 2023

Items % on net sales % on net sales

Assessment of audit selling and administrative expenses in financial audits

With over 18 years of experience in auditing and consulting, UHY Auditing and Consulting Company Limited has established a broad client network across various sectors in Vietnam UHY's financial statement audit process is robust, built on the standard audit program issued by VACPA It is comprehensive and clear, allowing auditors to make appropriate assessments of the truthfulness and fairness of the audited financial statements Although it follows a standard audit procedure, UHY makes suitable adjustments based on each client's actual situation, which allows for more efficient and effective audits

The company's management structure is efficient, with functional departments providing timely and accurate information for the leadership The leadership has been proactive in client relationships, establishing increasing credibility in the market within the auditing and accounting sectors, and ensuring a strong standing in a competitive economy The deployment of auditors is flexibly managed, with audit teams informed several days in advance to arrange their tasks, understand the clients, and prepare documentation for high-quality outcomes

UHY places significant emphasis on the audit planning process, particularly in researching clients and evaluating business environments, internal control systems, and related risks For established clients, combining information from previous audit files with new data about changes in the current fiscal year helps save time and cost while still providing a comprehensive view of the client For new clients, more extensive information gathering is necessary to ensure that audit plans, files, and programs are accurately established, as well as to predict the necessary staffing for the

Dao Thu Huong 72 K23CLC-KTA audit to achieve the best audit quality before signing the audit contract Additionally, the company has also established comprehensive questions about the internal control system related to selling and administrative expenses

During the implementation phase, the audit team closely coordinates among its members to ensure optimal audit outcomes Experienced audit team leaders often conduct preliminary evaluations of financial reports, identifying key points of attention, guiding team members through the audit process, and saving time and effort while achieving audit objectives Costs related to selling and management are compared with data audited from other divisions such as fixed assets, payroll, and personnel, ensuring tasks are carried out accurately, avoiding redundancy and waste Furthermore, auditors frequently interact with clients during the audit process, facilitating effective coordination and exchange among auditors

At the end of the audit phase for selling and administrative expenses, the auditors compile their adjustments and conclusions This compilation is then forwarded to the team leader for review, consolidation of issues, and audit reporting Additionally, quality reviews of audits in general, and of the selling and administrative expense items in particular, are rigorously conducted by qualified and capable auditors Each work document is carefully and thoroughly reviewed

First, the audit program for the company's financial statement items primarily relies on standard audit program guidelines, which are not specifically designed for each type of client UHY serves a diverse range of clients, including manufacturing, construction, financial institutions, and real estate, each with unique characteristics that require auditors' attention

Second, regarding information collection in the pre-audit phase: The information auditors gather about clients mainly comes from the clients themselves, so it does not ensure the necessary objectivity or completeness of the information For long-time clients, the process of gathering information on items such as Selling and Administrative Expenses is supplementary and not documented on a specific working

Dao Thu Huong 73 K23CLC-KTA paper This contains risks as the procedures are carried out without a recorded basis, making it difficult to thoroughly assess the effectiveness and quality of the procedures Additionally, auditors encounter obstacles when trying to connect with predecessor auditors to provide information for new clients

Regarding the submission of documents to clients, UHY auditors typically send a document request before conducting the audit, making clients responsible for preparing all relevant materials However, in practice, not all audits involve sending this request in advance, or it is sent just before the audit begins, causing clients to struggle with providing necessary documents, leading to audit delays Moreover, some clients may exhibit an uncooperative attitude

Third, concerning the internal control system study for the items of Selling and

Administrative Expenses, auditors typically rely on generalized policy documents and interviews with accountants, using a standard questionnaire designed for all types of businesses, which might not suit specific client types For long-standing clients like ABC, control testing is often skipped unless specific events in the year require it Instead, auditors rely on reviewing previous years' audit files to assess the internal control system This approach can reduce the workload but can also increase audit risks, as auditors might not catch all events in the year related to the internal control system, and reviewing last year's audit files might not offer a comprehensive view

Fourth, some limitations encountered during the audit execution phase include:

Regarding the evaluation of the internal control system: Conducting control surveys can reduce the volume of substantive procedures and audit costs if the client's internal control system is assessed as strong However, when carrying out the audit process for cost items, substantive procedures is typically conducted; while for control testing, auditors have only conducted a preliminary analysis, which is not comprehensive or detailed regarding the issues related to Selling and Administrative Expenses, due to time constraints during the audit

UHY Auditing and Consulting Company Limited's analysis procedures have only compared this year's costs with the previous year's and analyzed the cost structure,

Dao Thu Huong 74 K23CLC-KTA without comparing data from similar-sized businesses in the same industry regarding indicators like average industry costs and average cost-to-revenue ratios, missing out on a comprehensive view of why costs increase or decrease

- The frequent changes and continuous additions to legal documents, sometimes without accompanying detailed guidance, increase difficulties for technicians and accountants in complying accurately and promptly with state regulations Additionally, some legal provisions related to Selling and Administrative Expenses are still lacking in rigor and consistency, posing challenges for businesses in accounting and allocation, leading to potential misunderstandings and violations

- Some clients still use outdated accounting software, making it difficult for auditors during the audit process

- Lack of close cooperation from client units also limits the audit process In some cases, auditors do not receive a cooperative attitude from clients in providing documents when requested or when auditors identify errors and suggest explanations or corrections

Development orientation of UHY Auditing and Consulting Company

Over the past 17 years, UHY Auditing and Consulting Company Limited has progressively established its position and capabilities in the Vietnamese audit market The company focuses on improving its auditing and consulting processes, thereby enhancing service quality and meeting client expectations Alongside expanding its client base nationwide, UHY continuously invests in its human resources, training auditors and staff to keep them updated with the latest knowledge in accounting, auditing, tax, and finance UHY has set the following long-term development strategies:

- Maintain and develop its position as one of the leading audit firms in Vietnam with reliable and high-quality services

- Continuously enhance the quality of its accounting, auditing, and consulting services to exceed client expectations

- Increase the expertise of its staff and apply internationalization policies to meet all client needs

- Expand the range of clients beyond traditional ones to maintain a leading position in the accounting, auditing, and financial services industry in Vietnam

- Strengthen exchanges and cooperation by seeking clients across diverse industries, promoting interaction with other audit groups, both domestic and international This approach provides UHY's clients and staff with opportunities to learn and share knowledge

- Develop new services that align with international and domestic market trends

UHY also faces several challenges in the competitive environment and evolving economy The diversity and complexity of operations, along with the continuous changes in economic policy and increasing quality demands from clients, create an urgent need for UHY to continuously develop while maintaining the quality of its audit services Thanks to a team of highly skilled, experienced, and dedicated leaders, , along with dynamic and creative young staff, UHY is confident in its ability to not only achieve steady growth but also expand its influence and assert its position in the market by providing high-standard auditing services that meet changing economic conditions.

Solutions for completing the audit of selling and administrative expenses in

From the company's development orientations, strengths, and also the challenges and difficulties it faces along its development path, coupled with the actual demands from society requiring high accuracy of information To keep pace with the integration and sustainable development trends of the national economy, achieving future goals set by the Company is essential Therefore, UHY must perfect its financial statement audit process in general and the audit of selling and administrative expenses in particular as a necessity for the Company's survival and development

Audit planning is the initial phase of an audit and plays a critical role in influencing the quality and effectiveness of the audit Auditors should focus on gathering additional information about the industry as well as data from other companies in the same sector as the client to gain a broader perspective on the client’s financial situation This enables the development of an effective audit plan

For long-term clients, auditors should not be complacent only reviewing past files but must update client information through various channels Auditors gather additional information about the external business environment, market information, substitute products, through media channels, to capture factors that indirectly affect the

Dao Thu Huong 77 K23CLC-KTA accounting of Selling and Administrative Expenses , while ensuring the reliability of the information collected

The business's specific nature, sales, and marketing will also significantly affect the audit of this item Audit procedures should be designed for each specific enterprise, particularly for those with unique characteristics

Due to time constraints and audit costs, auditors mainly use information provided by the client, therefore, they cannot ensure that this information is complete and accurate, affecting the auditors' initial assessments and evaluations of the client

To overcome this, auditors should diversify their information sources by seeking expert opinions, news articles, and insights from similar companies in the same sector Even though this might be costly in terms of time and expense, it helps auditors gathering objective, high-quality data, which results in more accurate preliminary assessments and evaluations

*Understanding the Client's Internal Control System:

Auditors need to focus on understanding the client's Internal Control System as it is of utmost importance Understanding and comprehending the Internal Control System allows auditors to make assessments about it and determine the scope of the audit later

Executing control procedures effectively to check whether the client’s internal control systems is appropriately designed and operating efficiently can reduce the need for detailed testing While this task is not mandatory, it is often recommended to save costs, time, and enhance the efficiency and effectiveness of the audit Auditors have three ways to describe the internal control systems during an audit: creating flowcharts, developing questionnaires about the internal control systems, or drafting narrative descriptions of the system

However, at UHY, auditors primarily perform evaluations and descriptions of the Internal Control System through interviewing the Management Board This is also the method most audit firms in Vietnam are using For clients with simple Internal Control Systems, auditors should describe using narrative tables because the table is not too lengthy but can specify and detail the Internal Control System However, for clients

Dao Thu Huong 78 K23CLC-KTA with complex Internal Control Systems, auditors can explore using questionnaires, contacting and interviewing the Management Board and company staff But if the audit timing is not under too much pressure, auditors should perform the description in the form of flowcharts Flowcharts help auditors get an overview of the Internal Control System, analyze and see the changes in the client's Internal Control System over the years of auditing However, building an Internal Control System model takes a lot of time and costs for its development

To ensure in terms of time, costs, and audit quality, auditors should perform the description of the Internal Control System in a way that can combine all three techniques to ensure the client's Internal Control System is described clearly, understandably, and ensures audit risks are at an acceptable level

With technology advancing rapidly, integrating it into all professions is crucial for optimizing time and improving efficiency To accurately assess risks, the company needs to invest in advanced software systems, improving the identification of key factors, risks, and necessary audit evidence for each cost item Risk assessment in auditing requires the expertise and experience of audit staff, which calls for extensive training to enhance capabilities and address existing issues

Additionally, the company should develop comprehensive evaluation standards to eliminate subjectivity in the assebasssment process Although it might be costly in terms of time and expense, establishing a standard system based on practical experience can be highly effective The company needs to formalize these standards through the compilation and issuance of implementation guidelines, ensuring uniformity throughout the organization The initial cost may be low, but the long-term results will be significant, helping audit staff quickly identify and classify risks, thereby selecting efficient audit samples and focusing on error detection, ensuring the quality and effectiveness of the audit process

Before conducting an audit, UHY explored customer internal controls, but this activity wasn't consistently performed or documented Establishing formal documentation that sets mandatory requirements for customer investigation and records the gathered information is necessary

Along with using a general survey template for assessing the internal control system, UHY should develop an audit risk acceptance survey template to gauge the accuracy of client information For clients with strong and effective internal control systems, auditors need to design specific, systematic survey techniques with appropriate audit samples, aiming to minimize risks and costs while maximizing satisfaction For clients with average or weak internal control systems, auditors could identify the system's shortcomings to advise and guide clients on improvement This enhances the internal control system's effectiveness, protects assets, ensures information reliability, and enhances operational efficiency Based on positive changes in the client's internal control system, auditors could use more internal control surveys to reduce the need for substantive procedures in subsequent audits

Analytical procedures in auditing Selling and Administrative Expenses have not been effectively utilized, often focusing on trend analysis rather than ratios UHY can improve this by:

Comparing the company's average expenditures with the industry average to assess business performance

Flexibly using ratios such as gross profit, net profit, and business efficiency to analyze revenue details and detect unusual fluctuations

Applying analytical procedures throughout the audit, including the planning and summarization stages, to improve audit efficiency and accuracy

During the audit of ABC Company, analytical procedures primarily assessed year- over-year changes in Selling and Administrative Expenses , not considering prior years

Dao Thu Huong 80 K23CLC-KTA or industry-wide comparisons This limitation can affect auditors' ability to identify significant fluctuations and explain the reasons behind them

Recommendations for improving the audit of selling and administrative

3.3.1 Recommendations for State competent authorities

To improve independent auditing, state and regulatory bodies should enhance the legal framework for auditing activities Accounting and auditing standards in Vietnam are not yet fully developed, leading to inconsistency in applying standards and varying interpretations of compliance To strengthen the quality control of financial statement audits, the state should issue a comprehensive legal framework and associated regulations, ensuring consistency and practicality Moreover, clear rules and penalties for organizational and individual responsibilities are essential

Fair competition among audit companies and auditors should be ensured through a robust legal framework The Ministry of Finance plays a key role in improving audit quality by issuing laws and standards Legal documents should reflect international standards and be adapted to Vietnamese realities To align with international trends and the increasing demands of the integration process, continuous updates to the legal framework are vital

Alongside legal improvements, training programs for accountants and auditors must be enhanced to meet growing demands Partnerships with professional associations and leading international experts can further boost the quality of training for auditors in Vietnam

3.3.2 Recommendations for UHY Auditing and Consulting Company Limited

In the field of auditing, the human factor plays a crucial role in driving development UHY Company needs to build and implement a comprehensive training

Dao Thu Huong 82 K23CLC-KTA strategy to enhance the professional capabilities of its staff, thereby improving competitiveness on the international stage

For UHY, establishing a rigorous, scientific, and efficient control process is essential This requires strict adherence to the predefined audit program while allowing flexibility in applying this program to individual clients to meet audit objectives This approach should also save costs and maintain the company's reputation and service quality

Additionally, continuous updates on economics, finance, and law, along with organizing in-depth training courses, are crucial in helping UHY improve the audit process and enhance the professional skills of its auditors Focusing on improving audit quality and professional skills will allow employees to apply new auditing techniques and advanced information technology effectively, preparing them for changes in the modern business environment

Businesses need to recognize the importance of audits Audited financial statements provide evidence of the accuracy and integrity of information, reflecting the financial status of the business and reinforcing stakeholder confidence, thereby enhancing competitiveness

To enable auditors to carry out their work effectively, clients should offer positive support Some employees in businesses may have a negative attitude toward auditors, complicating document provision and delaying the audit process Clients should cooperate actively with auditors, providing necessary documents and information A lack of support from employees can cause significant delays and increase unnecessary costs

In the context of globalization and constant development, UHY Auditing and

Consulting Company Limited in Vietnam, like other auditing firms operating in the country, faces intense competition To survive and grow in the modern economy, UHY

Vietnam must not only continuously strive but also constantly innovate, create, and apply advanced techniques and technologies to provide excellent services to its customers, thereby enhancing its market reputation

Practical experience at UHY, along with theoretical knowledge, has helped me realize the importance of improving the audit process, especially for Selling and

Administrative Expenses, to enhance both the quality and reputation of the company

The internship has provided me with deeper insights into the profession, extending beyond theory to include practical experience, especially in conducting financial statement audits

Despite my best efforts to complete the thesis, there might still be some errors due to subjective and objective factors during the process I kindly seek feedback and evaluations from the professors

Once again, I would like to sincerely thank the professors from the Auditing

Department at the Faculty of Accounting of the Banking Academy, especially Assoc

Prof Dr Le Van Luyen, my advisor, for his dedicated guidance, and my colleagues at

UHY Auditing and Consulting Company Limited for helping me complete this thesis

1 Ministry of Finance (2012), VSA 500-"Vietnam Standard on Auditing 500", Circular No 214/2012/TT-BTC

2 Ministry of Finance (2014), VAS- "Vietnam Accounting Standards", Circular No.200/2014/TT-BTC

3 Ministry of Finance (2012), VSA 501 - "Vietnam Standard on Auditing 501", Circular No 214/2012/TT-BTC

4 Financial Accounting textbook – Banking Academy of Vietnam – Dan Tri publishing house 2012

5 Do Khanh Ly (2021), “Hoàn thiện Quy trình kiểm toán chi phí hoạt động trong kiểm toán BCTC do công ty TNHH Kiểm toán Tư vấn độc lập IAC

- Chi nhánh Hà Nội thực hiện", Banking Academy of Vietnam

6 Le Ngoc Linh (2022), "Hoàn thiện qui trình kiểm toán chi phí hoạt động trong kiểm toán báo cáo tài chính ngân hàng thương mại do Công ty TNHH Ernst & Young Việt Nam thực hiện", Banking Academy of Vietnam

7 Pham Viet Hoan (2022), "Audit of selling expenses in financial statement, performed by KPMG Vietnam Limited", National Economics University

9 Documents circulated internally by UHY Auditing Consulting Company Limited

APPENDIXES Appendix 1 : Accounting for selling expenses according to

Salary expenses and salary deductions

Provion for warranty for products, goods 352

Amount payable to the export entrustment

Cost of materials and tools

334,338 for warranty cost promotional services, advertising, internal consumption: gifts, organs for customers

Appendix 2 : Diagram.Accounting for administrative expenses according to

Salary expenses and deductions on salaries

High-risks contracts, other payable provison Reversal of provision

Expense for services purchases from outside,

Land rents payable to the state budget

Internal products, goods, services used for administrative purposes

Cost of materials and tools

334,338 for corporate restructuring, high-risk contracts, other payable provisions

Appendix 3 Diagram: Audit process at UHY

Assess and handle audit risks; Select an audit team;

Establish contract terms and customer service requirements

Strategic planning and general planning

Implement audit following audit plan

Provide audit opinions and prepare reports

Prepare and Review Working papers

Learn about the customer's business activities;

Learn about the internal control system;

Initial assessment of audit risk

Assess risks to account balances

Effective internal control system Effective internal control system

TOC and TOD at the basic level

Rotate testing of control activities for mid-level reliability and low-level tests of details

Tests of controls at moderate reliability and low level of test of details

Tests of details at moderate level

Synthesize and exchange audit plans;

Perform inspection of the internal control system and evaluate the inspection results ;

Perform a review of financial statements

Appendix 4 - WP 1220 - A120 Accepting, maintaining recurring clients, and evaluating contract risks

Appendix 5 WPs 1410 - A310 "Understanding the Client and Business Environment

Appendix 6 WP A710 – Identify the level of materiality (planning - implementation)

(Assess students' professional capacity and research ability in the process of writing a thesis Evaluate efforts and work efficiency, students' regular contact with teachers

Agree/disagree for students protected graduation thesis)

Tiêu đề	Auditing Selling and Administrative Expenses in Financial Statements by UHY Auditing and Consulting Company Limited
Tác giả	Dao Thu Huong
Người hướng dẫn	Le Van Luyen, Assoc. Prof. Dr
Trường học	Banking Academy of Vietnam
Chuyên ngành	Accounting and Auditing
Thể loại	Graduation Thesis
Năm xuất bản	2024
Thành phố	Hanoi

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Số trang	105
Dung lượng	7,73 MB