The audit of fixed assets will contribute to discovering errors in the determination of historical cost of fixed assets, repair costs, and depreciation expenses.. In conclusion, because
Introduction and purpose of the thesis
Fixed assets represent a company's production capacity and the integration of science and technology in its operations They play a crucial role in driving sustainable growth, enhancing labor productivity, and ultimately reducing costs associated with products and services.
Fixed assets and their depreciation play a crucial role in financial statements, significantly impacting the overall asset composition of a business In manufacturing enterprises, fixed assets typically represent a substantial portion of the balance sheet Consequently, any inaccuracies in reporting fixed assets can have a significant effect on the enterprise's financial statements.
The audit of fixed assets will contribute to discovering errors in the determination of historical cost of fixed assets, repair costs, and depreciation expenses
In conclusion, recognizing the critical need for accurate and transparent reporting of fixed assets in businesses, I have chosen "The Procedure of Auditing Fixed Assets by Mazars Vietnam in Ho Chi Minh City" as the focus of my graduation thesis.
Objectives of the thesis
- Describe the procedure of auditing financial statements in Mazars
- Describe the procedure of auditing fixed assets in client’s company
- Analyze and assess for the audit procedure of fixed assets at Mazars.
Methodology of the thesis
- Collect information of customers audited in Mazars' data
- Discuss and ask the experienced auditors for unknown issues
- Read accounting standards, auditing and other related documents.
Subject and scope of the thesis
- Subject: The procedure of auditing fixed assets in client XYZ
- Scope: XYZ’s financial statements for the year ended 31/12/2020.
INTRODUCTION ABOUT MAZARS VIETNAM CO., LTD
Introduction about Mazars Vietnam Co., Ltd
Company’s name: Mazars Vietnam Co., Ltd
Address: 141 Nguyen Du Street, Ben Thanh Ward, District 1, Ho Chi Minh City Phone: (+84)28 3824 1493
Founded in 1945 by Mr Robert Mazars in Rouen, France, Mazars expanded its operations internationally in the 1990s, initially entering European markets and subsequently extending its presence to Africa, Latin America, the Middle East, and the Asia-Pacific region.
Mr Hervé Hélias is the current President and CEO of Mazars, a global firm with approximately 40,400 skilled professionals dedicated to delivering high-quality and consistent services to clients worldwide.
Mazars Vietnam has been established since 1994 as a member of firm of Mazars’ Global to provide professional accounting and business advisory services to foreign and local organizations
Mazars Vietnam operates through its offices in Hanoi and Ho Chi Minh City
Clients of Mazars are both large and small, vary from startups SMEs to private investor public bodies and major international groups
As of January 2018, Mazars Vietnam insists its ranking in the top 10 audit firms and the leading firm that’s respect to accounting & outsourcing services in Vietnam
1.1.2 Operational principles and core values
The company approach every piece of work with their values They are set in their code of conduct
Bring a unique choice Keep a long- term vision
Their successful global growth is driven by their core values, as they prioritize recruitment and mergers with individuals and firms that align with their vision and objectives.
Organizational structure of company
(Source: Mazars Vietnam – Staff Handbook 2020)
Jean Marc Deschamps – Managing Partner
Nguyen Thi Ngoc Huyen – Partner of Outsourcing Accounting
Jack Nguyen – Partner of Business Development
Nguyen Hai Minh – Partner of Tax & Business Advisory
Bui Xuan Vinh – Partner of Audit & Assurance
Laurent Nguyen – Director of Financial Advisory
1.2.3 Audit and assurance department in HCM office
(Source: Mazars Vietnam – Staff Handbook 2020)
At Mazars, the audit and assurance department operates cohesively, with all team members—partners, managers, seniors, assistants, and interns—working in the same area This collaborative environment fosters open communication, allowing individuals to easily share challenges and insights related to their work.
In fieldwork, the team typically consists of one manager, one to two seniors, two to three assistants, and one to two internees, with staff selection being random and managed by the manager If the job has undergone interim auditing, the same team will remain for the final audit Once the manager selects the staff, they will be notified and added to a monitoring group The senior is responsible for assigning tasks to assistants and internees, and prior to fieldwork, they will distribute task allocations and working papers from the previous year for review Internees are generally tasked with various working papers, including cash, receivables, payables, fixed assets, income and expenses, and equity.
During the internship at Mazars, the internee received valuable guidance on essential soft skills, including document printing, scanning, contract summarization, and confirmation letter preparation This experience not only enhanced the author's professional knowledge but also developed crucial skills such as writing, effective communication, and customer interaction The internship fostered a meticulous working style, emphasizing the importance of documenting lessons learned and maintaining a proactive approach to personal and professional growth.
At Mazars, interns participate in comprehensive training sessions covering tax knowledge, including VAT, PIT, CIT, and FCT, as well as insurance and Vietnamese legal regulations Notably, the company dedicates one week specifically to training interns on audit procedures These training sessions are conducted at the company's office and are available both in person and online.
Services
Mazars had a wide range of services to meet the customers’ need It consists of:
- Accounting and Business Process Outsourcing:
• Accounting and preparation of financial statements
• Payroll outsourcing and statutory insurance contribution outsourcing
• Advice on investment and administrative procedures
• Assistance in recruitment and human resource management
• Assistance with various other administrative procedures post licensing
Audit policies in Mazars
Mazars ensures its integrity and independence by requiring all employees to strictly adhere to the Mazars Code of Conduct (CCOI - Mazars' Code of Conduct for Objectivity and Independence)
The CCOI was established based on the International Ethics Standards Board for Accountants (IESBA).
THE PROCEDURE OF AUDITING FIXED ASSETS
The procedure of auditing financial statements in Mazars
The Mazars Audit Manual (MAM), published in December 2012, outlines the group's audit guidelines based on the International Standards on Auditing (ISAs) from the IAASB It provides auditors with specific instructions for each stage of the audit process, including pre-planning, planning, execution, and completion Mazars employs a consistent audit procedure across all countries in the group, adhering to the Audit Risk Approach, which encompasses risk assessment, risk response, and reporting prior to issuing an audit opinion.
According to MAM and internal training materials (Mazars University), this phase consists of three main steps:
(1) Procedure to accept new customers or maintain old customers;
(2) Understanding of the audited firm and its operating environment;
(3) Identification, risk assessment and audit planning
Some papers to prepare for this phase include:
- Questionnaire for acceptance/ Continuance of the engagement - A&C checklist
- List of checklists related to related parties, fraud checklist, going concern checklist,
- Questionnaire to assess of risk at material misstatement at financial statements level, assess of inherent risk, assess of internal control risk
Step Content Person in charge
Procedure to accept new customers or maintain old customers
- Concerned about fraud, money laundering activities, audit fees, company budget (in terms of staff resources and time),
- Answering these above items through A&C checklist
Understanding of the audited firm and its operating environment
- Create a customer code on Auditsoft if the customer is accepted the new contract
- Fill out the necessary information and set up plan for customer
- Undertake an inquiry into business-related information through a meeting with the client (firm structure, accounting system, …) -> focus on internal control system
- Collect data and documents related to legal issues of the company (investment registration certificate, enterprise
Manager and senior registration certificate, …) if audit for the first time Preliminary analytical procedures
- Compulsory procedure performed with all client audited at Mazars
- Analyze financial statements of this year and previous year -> understand the nature of business, determine the existence of unusual transactions, identify potential risk
Identification, risk assessment and audit planning
- Identification risk and assessment, establishes materiality, make an audit plan
- Review and approve Manager and partner Table 2.1 Main steps in audit planning
Identifying and assessing risks in accordance with the regulated MAM involves evaluating material misstatement risks at the overall financial statement level, as well as at the item, process, and assertion levels This process utilizes a Yes/No questionnaire, accompanied by the auditor's explanations for each response While the risk assessment questionnaire is standardized for all clients, the depth of the assessment varies based on the size of the audited entity The outcomes of this risk assessment directly influence the audit procedures developed during the implementation phase, and it is essential for senior auditors to complete this work prior to the interim audit, with updates made throughout the implementation process until the final audit is conducted.
At Mazars, the Overall Materiality (OM) of financial statements is established using a specific percentage derived from key criteria, including profit before tax, total revenue, total assets, total equity, and EBITDA (earnings before interest, taxes, depreciation, and amortization).
Specially, the OM of the financial statements is determined as follows:
(Source: MAM Tool Materiality template 2020)
Performance materiality (PM) is typically set between 50% and 80% of the overall materiality (OM) level However, auditors, as per MAM guidelines, do not rely solely on a mathematical formula for calculating PM; instead, they apply professional judgment considering factors like business understanding and the reliability of the internal control system Additionally, the clearly trivial threshold (CTT) is generally established at 2%.
- 3% of the OM level and should not exceed 5% of OM Materiality is identified in planning during the interim audit and recalculated at the final audit
Based on the Interim Financial Statements provided by the client, senior management will estimate the annual Income Statement data and assess materiality while considering risk factors and potential data bias Consequently, items with values exceeding the established thresholds will be highlighted for further analysis.
When designing audit procedures, emphasis will be placed on high-risk areas, particularly those with a PM or lower threshold Key components such as revenue, inventory, purchases, and payables are prioritized by senior auditors during customer audits.
This stage includes two important steps:
(2) Perform audit procedures (test of controls, substantive test)
Before conducting a customer audit, the audit team must thoroughly research the customer, review the audit plan, and analyze previous year's working papers related to the current performance A "kick-off meeting" is then held to ensure that team members understand the issues highlighted by management and to discuss necessary audit procedures and considerations All relevant issues are documented in a file called the "Audit Team Planning Meeting," which is distributed to all team members prior to the kick-off day.
Two to three weeks prior to fieldwork, the senior auditor will send a "requirement checklist" to the client, detailing all necessary documents for the audit process This checklist, prepared by team members and reviewed by the senior, is sent via email to the client It is updated daily to provide real-time tracking of which documents have been collected.
This phase consists of two main steps:
(2) Supporting by working papers and preparing to present an audit opinion
All collected documents must be systematically archived within the customer audit file, which consists of two primary types: the Permanent Archive File (PAF) and the Current Audit File (CAF).
- PAF includes documents that the auditor can use within a few years, for example loan agreement, lease agreement, business license, investment certificate
- CAF includes related papers and documents to the audit of the current year, for example, the audit program, audit plan, walk-through documents
When presenting working papers, the auditor must perform working paper reference Reference principles are as follows:
- Left reference: data is taken from which working papers
- Right reference: which working papers are the data included
During the fieldwork, all adjustment entries and auditors' findings will be compiled and discussed with the chief accountant Senior staff and managers will review the working papers to aid in forming an opinion at this stage.
Working papers will initially be reviewed by senior team members, who will provide feedback Team members are responsible for addressing the review notes and submitting the final version to the senior before the end of fieldwork This final version will be uploaded to the server for manager review Following the manager's feedback, team members will make necessary revisions to the working papers and gather additional documentation if required.
The senior manager will prepare a draft report, which is the responsibility of the designated manager Following the review of this draft, an official audit report will be compiled and submitted to the partner The release date of the public audit report will be determined according to the contract between Mazars and the client.
Compare between IAS and VAS about tangible and intangible fixed assets
IAS 16 and VAS 03 are the same in the provisions of the two recognition standards as follow:
- Future economic benefits will surely be obtained
- The historical cost of the item can be measured reliability
An item that qualifies for recognition as a fixed asset shall be measured as its cost IAS 16 and VAS 03 state that the cost of fixed assets comprises:
- Purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates
- Any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management
Depreciation amount is the cost of an asset less its residual value
In financial statements, the company must present the following on each type of property, plant and equipment:
- Method of determination of the historical cost of the tangible fixed assets
- Method of depreciation, the useful life or depreciation rate
- The historical cost, accumulated depreciation and residual value at the beginning of the year and at the end of the period
Recognition - No specific value of fixed assets is required
- According paragraph 8, items such as spare parts, stand-by equipment and servicing equipment are recognized when they meet the
- Have specific value for fixed assets
- In addition to 2 standards like IAS 16, VAS 03 also has two more standards as follow:
+ Their useful life is estimated at more than 1 year definition of fixed assets Otherwise, they are classified as inventory
To qualify as fixed assets under current regulations, items must meet specific value criteria According to Circular 45/2013/TT-BTC, an asset must have a minimum value of VND 30,000,000 to be recognized as a fixed asset.
The initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located are also calculated as historical cost
These costs are not recognized as historical cost
According paragraph 29, an entity should choose “the cost model” or
“the revaluation model” as its accounting policy and shall apply that policy to an entire class of fixed assets
- Only apply “the cost model”
- “The revaluation mode” is not permitted unless specifically approved by the Government
- According paragraph 39, after revaluation, if an asset’s carrying amount is increased, the increase shall be recognized in other income and accumulated in equity under revaluation surplus account
However, the increase shall be recognized in profit or loss to the extent that it reverses a revaluation decrease of the same asset
Not mentioned preciously recognized in profit or loss
- According paragraph 40, if there is a decrease due to revaluation, it is recognized in profit or loss
However, the decrease should be recognized in other income to the extent of any credit balance existing in the revaluation surplus in respect of that asset
Presentation - The standard provides detailed requirements for representation if the entity apply “revaluation model”
• The effective date of the revaluation
• Whether an independent value was involved
• For each revalued class of PPE, the carrying amount that would have been recognized had the assets been carried under the cost model
• The revaluation surplus, indicating the change for the period and any restrictions on the distribution of the balance to shareholders
- VAS 03 does not allow to apply
“revaluation model” so these information does not need to be presented in financial statements
- In addition, VAS 03 requires enterprise must presentation information about:
• The residual value of tangible fixed assets temporarily not in use
• The historical cost of fully-depreciated tangible fixed assets which are still in use
Table 2.3 Compare between IAS 16 and VAS 03
- IAS 38 and VAS 04 states that an item is intangible fixed asset if it meets:
+ The definition of an intangible asset
+ The recognition criteria In which, there are two criteria are the same between IAS 38 and VAS 04
➢ Future economic benefits will surely be obtained
➢ The historical cost of the item can be measured reliability
- An intangible fixed asset shall be measured initially at historical cost
Historical cost of intangible fixed assets includes:
- Purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates
- Any directly attributable cost of preparing the asset for its intended use
• Acquisition as part of a business combination
- Follow to IAS 38 and VAS 04, if an intangible asset is acquired in a business combination, the cost of that asset is its fair value at the acquisition date
- Intangible asset is acquired in a business combination and not satisfied criteria of recognize intangible fixed asset shall be recognized as goodwill at the acquisition date
In IAS 38 and VAS 04, internally generated goodwill shall not be recognized as an asset
- Research phase: no intangible asset arising from research phase shall be recognized Expenditure on this phase shall be recognized as an expense
- Development phase: an intangible asset arising from development shall be recognized if it meets all criteria below:
+ The technical feasibility of completing the intangible assets so that it will be available for use or sale
+ its intention to complete the intangible asset and use or sell it
+ its ability to use or sell the intangible asset
+ The intangible asset will generate probable future economic benefits
+ The availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset
+ its ability to measure reliability the expenditure attributable to the intangible asset during its development
• Internally generated brands, mastheads, publishing titles, customer lists and items similar in substance
These items shall not be recognized as intangible assets in both IAS 38 and VAS 04
Depreciation amount is the cost of an asset less its residual value
In both 2 standards, residual value equal 0, unless:
- There is a commitment by a third party to purchase the asset at the end of its useful life
- There is an active market at the end of the asset’s useful life and residual value can be determined by reference to that market
In financial statements, the company must present the following on each type of intangible assets, distinguishing between internally generated intangible assets and other intangible assets
- Method of determination of the historical cost of the intangible fixed assets
- Method of depreciation, the useful life or depreciation rate
- The historical cost, accumulated depreciation and residual value at the beginning of the year and at the end of the period
- No specific value of fixed assets is required
- Have specific value for fixed assets
- In addition to 2 standards like IAS 38, VAS 04 also has two more standards as follow:
+ Their useful life is estimated at more than 1 year
To qualify as fixed assets under current regulations, items must meet specific value criteria, as outlined in Circular 45/2013/TT-BTC This regulation stipulates that assets must have a minimum value of VND 30,000,000 or more.
Development phase Intangible fixed assets arising from this phase must satisfy 6 criteria as above
- Meet all criteria for use duration and value prescribed for intangible fixed assets
According paragraph 72, an entity should choose “the cost model” or “the revaluation model” as its accounting policy and shall apply that policy to an entire class of fixed assets
- Only apply “the cost model”
Costs incurred after initial recognition must be recognized as production and business expenses for the period However, if they meet both of the following conditions, they can be classified as historical costs of intangible fixed assets.
+ These costs can help intangible fixed assets generate more future economic benefits than the original operation evaluation;
+ These costs are appraised in a certain way and associated with a specific intangible asset
Presentation - Presentation information related to the revaluation of fixed assets if the entity will apply this model
• The effective date of the revaluation
• The carrying amount of revalued assets
• The carrying amount that would have been recognized had the assets been carried under the cost model
• The revaluation surplus, indicating the change for the period and any restrictions on the distribution of the balance to shareholders
- VAS 04 does not allow to apply “revaluation model” so these information does not need to be presented in financial statements
- In addition, VAS 04 must disclose information about:
Intangible fixed assets are typically depreciated over a period of 20 years due to several key factors that influence their useful life These factors include the expected economic benefits derived from the asset, legal or contractual limitations, technological advancements, and market conditions Additionally, the nature of the intangible asset, such as patents, trademarks, or copyrights, plays a crucial role in determining its longevity and relevance Proper assessment of these elements ensures accurate financial reporting and compliance with accounting standards.
• Residual value of intangible fixed assets temporarily not in use
• Residual value of intangible fixed assets awaiting liquidation
Table 2.4 Compare between IAS 38 and VAS 04
The procedure of auditing fixed assets for client XYZ
2.3.1 Information of client XYZ in fiscal year 2020
- Name: XYZ Vietnam Limited Liability Company
XYZ is a Singaporean enterprise that fully invests in providing high-quality pharmaceutical, medical, and laboratory equipment We specialize in direct imports from our parent company and offer consulting services for laboratory, pharmacy, and clean room projects.
- Accounting policies applied at company XYZ:
Accounting year: from 1 January to 31 December 2020
The company's statements are presented in VND and comply with the regulations of the Vietnamese accounting system
- Accounting method of fixed assets
Historical cost of fixed assets includes the purchase price and the costs directly attributable to the expected operation of the asset
The acquisition, upgrading, and renovation of fixed assets are recorded as increases in the asset's original cost, while maintenance and repair expenses are expensed in the income statement when they occur.
Depreciation depends on a straight-line method Depreciation period is applied according to Circular No 45/2013/TT-BTC of 25/4/2013
Machinery & equipment 5 years 5 years 3-20 years
Office equipment 5 years 5 years 3-10 years
Table 2.5 Useful life of fixed assets in comparison
(Source: Client XYZ and Cir.45)
2.3.2 The procedure of auditing fixed assets in client XYZ
In this phase, there is some main steps:
- Decide OM, PM and CTT
Summary some points were made with client XYZ:
• Number of staff in audit for client XYZ
Nguyen Gia Bao Tram (NGBT) Internee
Table 2.6 Staff member in fieldwork
In summary, the audit team for client XYZ consists of five members, with the manager not participating in the fieldwork directly She only visited the client's company on the final day to address issues with the client Due to confidentiality concerns, the names of the other team members will be abbreviated.
The "Audit Team Plan Meeting" document has been distributed to team members to review last year's issues and strategize on their resolution for the current year An illustrative table accompanies the file, highlighting key features relevant to the discussion Due to the extensive nature of the document, the author has selected specific elements to include in their graduation thesis.
Picture 1 Audit team plan meeting file
• Requirement checklist is prepared by all team members and sent to client XYZ before fieldwork to collect and follow up necessary document
1 General FS as at 31 December 2020 (BS, PL, TB, all General Ledger)
2 General Updated Investment Certificate/Business licences/Business Registration
3 General Update Organizational Chart (if any)
4 General Internal control policies or flowchart/system procedures for the main operating cycles such as sale, purchase, collection, payment and payroll (in any)
5 General BOD meeting minutes in 2020
6 General Employee hand book (if any)
7 General Tax registration (if updated)
8 General IT policy for securities, back up and restoration policy and information flow in the
9 General Budget for the year ending 31 December 2020
11 Cash List of bank account, address, authorized signatures
12 Cash Exchange rate used during the year
13 Advance Advance policy and procedures
14 Advance Provide detail list of personal advance as at 31 December 2020
15 Trade receivables Breakdown of trade receivables balance by customers/by invoices (including original amount) as at 31 December 2020
16 Trade receivables Aging report and an analysis on the collectibility of over due trade receivables
17 Trade receivables Policy for provision for doubtful debt (in any)
18 Trade receivables List of doubtful debts and provision calculated as at 31 December 2020
19 Other receivables Breakdown of other receivables balance as at 31 December 2020
Fixed asset register as at 31 December 2020 (with date of purchase, cost, accumulated depreciation, net book value, useful life, location & supporting document reference number), reconciled to the general ledger
List of all prepayments as at 31 December 2020 (with date of purchase, cost, accumulated amortization, book value, location & supporting document reference number).
• OM, PM and CTT of client XYZ is calculated by senior and presented by below table:
Table 2.7 Materiality for audit client XYZ
2.3.2.2 Performing the procedure (working papers)
For final audit in client XYZ, each section will be conducted as follows:
Section Sub-section TQP NNH NMN NGBT Deadline
Picture 3 Task allocation for final audit in client XYZ
In the final audit, the author will be accountable for cash, fixed assets, equity, other assets, prepaid expenses, and finance-related income and expenses Upon completing these tasks, the author will assist Assistant 1 and Assistant 2 in testing the details of accounts payable and accounts receivable.
Detailed data on fixed assets in 31/12/2020 provided by client XYZ:
Code ASSETS 31-Dec-20 31-Dec-19 Var %
Picture 4 Balance sheet as at 31/12/2020 of client XYZ
Mã TSCĐ Tên TSCĐ Ngày bắt đầu tính
SD (tháng) Nguyên giá Hao mòn trong kỳ Hao mòn lũy kế Giá trị còn lại Giá trị KH tháng
TS05 Đầu đo PH - Micro PH Probe + nắp đầu đo 01/03/2014 60 30,685,472 30,685,472 0 511,425
TS08 Máy đo quang kế - Photometer, 2I Aerosol, SN: 25404 08/10/2014 60 154,022,575 154,022,575 0 2,567,043
TS09 Máy tạo khí - Generator, Aerosol TDA - 6DLITE, SN: 25457 08/10/2014 60 76,746,562 76,746,562 0 1,279,109
TS10 Máy đếm hạt - Particle count La sair II, SN: 95001431006 08/10/2014 60 187,627,482 187,627,482 0 3,127,125
TS12 Máy đo khí CO2 COA-2016-F CO2/O2 Model G100 23/12/2015 60 34,817,564 6,795,028 34,817,564 0 580,293
TS13 Máy đo nhiệt độ dùng trong phòng TN Thermometer main body 4610 Code MRI-T10 23/12/2015 60 40,535,404 7,910,945 40,535,404 0 675,590
TS14 Thiết bị đo nồng độ khí EBT731 26/02/2016 60 117,928,561 23,585,712 114,268,708 3,659,853 1,965,476
TS15 Thiết bị cảm biến theo dõi nhiệt độ, CO2, độ ẩm Protect UN-2 01/02/2017 60 44,035,243 8,807,052 34,494,287 9,540,956 733,921
SE-00031 Máy quang kế (Aerosol Photometer) Model: 2I- PHOTOMETER,2I AEROSOL SN 30535 01/06/2018 60 196,499,484 39,299,892 101,524,721 94,974,763 3,274,991
SE-00032 Máy quang kế (Aerosol Photometer) Model: 2I- PHOTOMETER,2I AEROSOL 01/06/2018 60 196,499,721 39,299,940 101,524,845 94,974,876 3,274,995
SE-00033 Máy tạo hạt (Aerosol Generator) Model: TDA-6DLITE- GENERATOR, AEROSOL 01/06/2018 60 91,699,176 18,339,840 47,377,920 44,321,256 1,528,320
SE-00034 Máy tạo hạt (Aerosol Generator) Model: TDA-6DLITE- GENERATOR, AEROSOL 01/06/2018 60 91,700,232 18,340,044 47,378,447 44,321,785 1,528,337
The Air Velocity Meter (Model TSI 9545) is designed for precise airflow measurement, with two units recorded under SE-00035 and SE-00036, both dated 01/06/2018 Additionally, the EBT731 Flowhood, a gas concentration measurement device, was noted under SE-00037, also from 01/06/2018, highlighting its capabilities with a serial number EBT731548001 Lastly, the Portable Particle Counter (Model 9310-02) documented under SE-00041 on 31/05/2018, is essential for particle measurement in various environments.
SE-00062 Máy quang kế (Aerosol Photometer, đếm hạt dầu) Model:2i 01/06/2020 60 188,588,831 22,002,029 22,002,029 166,586,802 3,143,147
SE-00063 Máy quang kế (Aerosol Photometer, đếm hạt dầu) Model:2i 01/06/2020 60 188,588,832 22,002,029 22,002,029 166,586,803 3,143,147
SE-00064 Máy tạo hạt (Aerosol Generator phun hạt dầu) Model: 6D 01/06/2020 60 113,626,686 13,256,446 13,256,446 100,370,240 1,893,778
SE-00065 Máy tạo hạt (Aerosol Generator phun hạt dầu) Model: 6D 01/06/2020 60 113,626,686 13,256,446 13,256,446 100,370,240 1,893,778
SE-00070 Máy tạo hạt (Aerosol Generator phun hạt dầu) Model: 6D 01/06/2020 60 113,626,685 13,256,446 13,256,446 100,370,239 1,893,778
SỔ TÀI SẢN CỐ ĐỊNH
Picture 5 Fixed assets table as at 31/12/2020
The procedures for auditing fixed assets are performed according to the following steps (working papers will be presented in the form of pictures)
Assertion for auditing fixed assets:
The audit procedures for fixed assets at client XYZ will include the following procedures:
Check the accounting policy applied to fixed assets is consistent with the previous year and is consistent with the framework of financial statements
- Compare and analyze the increase and decrease of the balance of fixed assets in this year to the previous year
- Compare the depreciation rates of fixed assets this year to the previous year
- Check the historical cost of fixed assets
- Check fixed assets increase transactions during the year
- Check depreciation of fixed assets during the year Table 2.8 List of procedures performed in client XYZ
➢ For the general procedure, author found that:
The accounting policy of the previous year on recording fixed assets and depreciation at client XYZ is consistent with this year
Depreciation and amortization for fixed assets are applied in a straight line method according to Circular 45/2013/TT-BTC
➢ For analytical procedures and TOD, author conducted concurrently and present through working papers
Compare data match or not
If not match, find out the cause, report to senior and contact with customer to check again
Obtain and enter data from
Ensure accuracy, completeness of beginning and ending balance of fixed assets
The author confirmed that the figures were accurate and proceeded to input data into the "Leadsheet," designated as D20 This sheet outlines the beginning and ending balances of fixed assets, reflecting both historical cost and accumulated depreciation Final adjustments will be made to this sheet upon the completion of the fixed assets audit.
Client: XYZ Prepared by: Date:
Period Ended: 31-Dec-20 Final Reviewed by: Date: Page 1 of 1
Account Description Workpaper 31-Dec-20 31-Dec-20 31-Dec-19
Reference Draft Dr Cr Final Audited
Data on the accounting books of client XYZ have been calculated, transferred and recorded completely, accurately and appropriately
Analytical procedures and TOD will be shown clearly on the next sheet in WPs This sheet identified as D30 – Recalculation
Perform reconciliation from financial accounting and reporting (FAR),
- Obtain trial balance (TB)/ BS and reconcile with Leadsheet
- Reconcile TB/ BS with FAR
Ensure accuracy, completeness and appropriately of beginning, ending balance and additional/ disposal of fixed assets
The author will compare the historical cost and accumulated depreciation of fixed assets between the Balance Sheet (BS) and the Leadsheet (LS) to ensure consistency in the details presented A detailed illustration table will be provided to support this analysis.
Historical cost Machinery and equipment Office equipment Total
Picture 7 Reconcile BS/TB with Leadsheet (Source: WPs D30 – Recalculation)
The comparison table revealed that the data for BS and Leadsheet aligns perfectly, as indicated by the column labeled "Different," which shows a value of 0 after subtracting the "Per LS" value from the "Total" value.
The author revisited the comparison of the figures for BS/TB and FAR as recorded by the customer on December 31, 2020, with a detailed illustration provided in the table below.
Historical cost Machinery and equipment Office equipment Total
Accumulated depreciation Machinery and equipment Office equipment Total
Picture 8 Reconcile BS/TB with FAR (Source: WPs D30 – Recalculation)
Similar to the first step, at this comparison, author also created the formula in the column
Different = the value in the column per BS / TB - the value in column Total and found that the data was in BS / TB and FAR matched (Different = 0)
The figure of fixed assets are completeness and accuracy
Review the depreciation policy and depreciation expense
- Reperform depreciation calculation to ensure the accuracy of the depreciation
Ensure that the depreciation has been calculated appropriately
Common mistakes when performing the procedure:
✓ Estimated depreciation time was not consistent, inconsistent application of depreciation method
✓ The depreciation rate is not appropriate according to Circular 45
✓ Depreciation incorrectly on the offset account
✓ Time of depreciation is not according to the time of recording fixed assets
In this step, the author reviews the client's fixed assets table to ensure consistency in the depreciation method throughout the period, verifying that the historical cost and accumulated depreciation align with the total figures on the balance sheet Following this analysis, the depreciation amounts for each asset in 2020 are recalculated and compared with the data provided by the client.
Reperform depreciation calculation to ensure the accuracy of the depreciation:
Mã TSCĐ Purchase in 2020 or not End date No months depreciate in 2020 Depr/month Total Depr in 2020 Diff Expense ref
Picture 9 Recalculation depreciation of fixed assets
After recalculating the depreciation value of fixed assets and comparing it with customer data, a discrepancy of 364,631 VND was identified However, since this difference is less than 13,000,000 VND, it will be disregarded, and a remark of "pass as imm" will be noted Consequently, no further procedures or adjustment entries are necessary.
Depreciation policy is applied consistently for all fixed assets items Depreciation expense is calculated accurately
Test and review about additional/ disposal of fixed assets
Perform TODs for additions and disposals (if any)
Ensure that the recognition of increased assets is reasonable
The procedure involves using the Mazars MAM Sampling Tool to determine the required number of samples for testing Once the sample size is calculated, the auditor will examine the General Ledger (GL) for any increased transactions during the specified period These transactions will then be verified against purchase invoices and delivery minutes to ensure they align with the data recorded in the GL and the fixed assets table.
In 2020, customer XYZ experienced a significant increase in fixed assets, amounting to 718,057,720 VND, as indicated by the table of fixed assets and the provided balance sheet data.
Mã TSCĐ Tên TSCĐ Ngày ghi tăng Ngày bắt đầu tính KH
Nguyên giá Hao mòn trong kỳ Giá trị còn lại Giá trị KH tháng
The article details various aerosol measurement devices, including the Aerosol Photometer and Aerosol Generator models The Aerosol Photometer, specifically models SE-00062 and SE-00063, were both released on June 1, 2020, and are designed for counting oil droplets, with model numbers 188,588,831 and 188,588,832 respectively Additionally, the Aerosol Generator models SE-00064, SE-00065, and SE-00070, also launched on June 1, 2020, are utilized for oil droplet generation, featuring model numbers 113,626,686 and 113,626,685 Each device is essential for precise aerosol measurement and analysis in various applications.
Picture 10 Fixed assets increase in 2020 (Source: WPs D30 – Recalculation)
COMMENTS FOR THE PROCEDURE
Comments
The auditing cycle of fixed assets at client XYZ was thoroughly executed, with all procedures for addressing customer requests being fully implemented, sufficient, reasonable, and accurate The senior auditor effectively oversaw the entire process, ensuring that the responsibilities of each assigned auditor were clearly defined.
Mazars' audit process is meticulously structured to ensure comprehensive coverage of essential information, from client engagement to audit completion Every relevant document is thoroughly and transparently examined, ensuring a seamless workflow The audit procedures are specifically designed to be clear, adaptable, and tailored to meet diverse client needs.
Mazars implements systematic protocols for storing audit information, ensuring that all data is organized and scientifically documented By numbering items and attaching relevant evidence, the process facilitates easy retrieval and serves as a dependable resource for future audits.
Auditors conduct a walkthrough procedure to assess the implementation of control policies in practice Their primary task involves selecting a sample cycle and gathering relevant documents to verify the completeness of approvals This review process for control measures concludes at this stage.
Mazars enhances auditing quality through its robust information system, specifically utilizing the Mazars AuditSoft storage system This innovative tool aids auditors in efficiently tracking data, accessing working papers from prior audits, and assigning tasks to team members, all of which contribute to achieving the audit's objectives.
Every audit stage presents potential drawbacks, stemming from both external objective factors and internal subjective influences from auditors To mitigate risks for future audits, Mazars conducts thorough recognition and re-evaluation processes upon contract completion However, this procedure is not without its own disadvantages.
During the observation and counting of fixed assets in a client company, the author faced several challenges, primarily due to a lack of experience in managing related issues Additionally, the client's unclear understanding of the nature and characteristics of their existing fixed assets led to inefficiencies and wasted time during this phase.
There is no agreement on data release date to conduct the audit in a timely manner This makes it difficult for auditors to review and prepare in advance for fieldwork
The Mazars AuditSoft system restricts intern access, which, while maintaining confidentiality, can lead to inefficiencies and wasted time Interns must rely on assistants or seniors for assistance in gathering information from other departments or for following up on confirmation letters.
This thesis reflects the author's firsthand experiences during her internship at Mazars Vietnam, offering readers a reliable and transparent analysis supported by tables and diagrams collected from the company and its clients The detailed descriptions of each procedural step, accompanied by specific diagrams and working papers, enhance understanding and visualization, ultimately strengthening the persuasiveness of the audit programs conducted at Mazars.
Limited time and experience, along with the absence of prior audits for this client, restrict the author's understanding to the current year's situation Consequently, the lack of comprehensive knowledge about previous years may result in errors and a deficiency in logical reasoning.
The thesis is entirely composed of the author's personal words, making it highly subjective Additionally, the author's limited proficiency in English may hinder the clear expression of their ideas, potentially leading to misunderstandings or confusion for the reader.
Experienced after internship
After completing my internship at Mazars Vietnam, I acquired invaluable lessons and practical knowledge in auditing, gaining insights not only into the procedures but also the potential risks involved Collaborating with colleagues enhanced my understanding of evidence collection and the principles of fixed asset valuation Additionally, discussions during audit team meetings provided a deeper understanding of the risks faced by different enterprises and allowed me to visualize the operations of a business unit.
Actively engaging in the learning process and striving to excel in fundamental tasks are invaluable experiences the author has encountered Unlike a school environment, where guidance is structured, each individual in the workplace has unique responsibilities, making step-by-step instructions impractical Consequently, the author frequently turns to the Internet for additional information, reviews past work documents, and seeks insights from former interns before reaching out to assistants or senior colleagues for help.
Besides, author also realized that not everything will be done according to the plan As a result, flexibility in working is regarded as crucial in the audit sector
After a significant period of working here, the author realized the critical importance of learning English Due to limited proficiency in the language, the author struggled to explain their work style, leading to misunderstandings with their senior This communication barrier resulted in wasted time for both parties during discussions.