Audit procedure for selling and general r nadministrative expenses by mazars vietnam r nat abc company

Sellingj andj generalj administrativej expensesj arej thej mostj essentialj thingsj forj manufacturingj companies,j asj wellj asj tradej andj servicej firms,j becausej theyj arej linked

UNIVERSITY OF ECONOMICS AND LAW FACULTY OF ACCOUNTING AND AUDITING

GRADUATION THESIS

AUDIT PROCEDURE FOR SELLING AND GENERAL ADMINISTRATIVE EXPENSES BY MAZARS VIETNAM

AT ABC COMPANY

Lecturer: Ms Mai Thi Phuong Thao

Student: Nguyen Phuong Thao

Student ID: K184050695

Class: K18405CA

Ho Chi Minh City, May 2022

TABLE OF CONTENTS

TABLE OF CONTENTS 2

ACKNOWLEDGEMENT 5

ABBREVIATIONS 6

LIST OF DIAGRAMS AND PICTURES 7

INTRODUCTION 9

MAZARS VIETNAM 11

1 Overview about Mazars 11

1.1 General information and history of formation of Mazars Group 11

1.2 General information and history of formation of Mazars Vietnam 11

1.3 Business model and organization of management apparatus 12

1.3.1 Business model of Mazars 12

1.3.2 Stakeholders’ map of Mazars 13

1.3.3 Organisation structure of Mazars: 14

1.4 Mazars’ Clients 16

1.5 Business lines of Mazars 17

1.5.1 Audit and Assurance Services 17

1.5.2 Accounting and Business Process Outsourcing 18

1.5.3 HR and Payroll 18

1.5.4 Tax 18

1.5.5 Business Start-up Assistance 18

1.5.6 Financial Advisory Services 18

1.5.7 Transfer Pricing in Vietnam 19

1.6 A portfolio of tools and solutions 19

1.7 Financial situation of Mazars 20

2 Organizing audit practice at Mazars 21

2.1 About Mazars Audit Manual (MAM) 21

2.2 Audit process according to MAM 22

2.2.1 Audit planning 22

2.2.2 Audit fieldwork & review 28

2.2.3 Audit reporting 30

2.3 Audit documentations 30

2.4 Audit quality control 31

2.4.1 Culture and global talent policy 31

2.4.2 Overall system of quality management 32

2.4.3 Delivering audit quality 32

CHAPTER 1: THEORETICAL FRAMEWORK ON AUDIT OF SELLING AND GENERAL ADMINISTRATIVE EXPENSES IN FINANCIAL AUDITS BY AUDITING FIRMS 36

1.1 Feature of Selling and General administrative expenses 36

1.1.1 Definition of Selling and General administrative expenses 36

1.1.2 Characteristic of Selling and General administrative expenses 38

1.1.3 Principle accounting of Selling and General administrative expenses 38

1.1.4 Internal control for Selling and General administration expense 46

1.2 Audit objectives in auditing Selling and General administration expenses 48

1.3 Sequence in auditing Selling and G&A expenses in financial audits 49

1.3.1 Audit planning 49

1.3.2 Audit implementation 56

1.3.3 Completing the audit 58

CHAPTER 2: PRACTICE OF AUDITING OF SELLING AND GENERAL ADMINISTRATIVE EXPENSE IN FINANCIAL AUDITS CONDUCTED BY MAZARS VIETNAM 61

2.1 Client of Mazars Co., Ltd and the necessity to audit selling and general administrative expenses in financial audits 61

2.2 Sequence in auditing Selling and General administrative expenses in financial audits conducted by Mazars Co., Ltd 63

2.2.1 Audit planning 63

2.2.2 Audit implementation 70

2.2.3 Completing the audit 81

CHAPTER 3: ASSESSMENTS AND RECOMMENDATIONS TO IMPROVE AUDIT OF SELLING AND GENERAL ADMINISTRATIVE EXPENSES IN FINANCIAL AUDITS CONDUCTED BY MAZARS CO., LTD 85

3.1 Assessment on audit of selling and general administrative expenses 85

3.1.1 Strengths 85

3.1.2 Weakness 86

3.2 Recommendations 88

3.2.1 Principles and requirements for completing the audit of selling and general administrative

expenses 88

3.2.2 Recommendations to the Company 89

CONCLUSION 91

REFERENCES 92

ACKNOWLEDGEMENT

Firstj ofj all,j thej authorj wouldj likej toj expressj myj sincerej thanksj toj thej instructorj ofj thej

Facultyj ofj Accountingj andj Auditing,j Universityj ofj Economicsj andj Law,j Ms.j Maij Thij

Phuongj Thaoj forj herj enthusiasticj helpj duringj thej wholej periodj ofj myj workj inj

accomplishingj thej thesis

Atj thej samej time,j thej authorj wishesj toj expressj herj thanksj toj thej facultyj membersj ofj thej

Facultyj ofj Accountingj -j Auditingj atj thej Universityj ofj Economicsj -j Lawj forj facilitatingj

thej author'sj acquisitionj ofj usefulj informationj whilej inj school.j Itj willj bej anj excellentj

piecej ofj baggagej forj thej authorj asj shej progressesj inj herj profession

Andj thej authorj wantsj toj givej aj thankfulj feelingj toj Mazarsj Vietnamj Co.,j Ltdj forj

providingj herj withj thej chancej toj getj practicalj experiencej andj learnj inj aj professionalj

workingj environment.j Duringj herj workingj timej atj Mazarsj Vietnam,j thej writerj wasj

especiallyj appreciativej ofj thej enthusiasticj supportj ofj coworkersj whoj genuinelyj caredj

aboutj herj andj answeredj herj queries

Thej author'sj comprehensionj ofj thej knowledgej obtainedj fromj thej realj experiencej isj

demonstratedj inj thisj report.j Asj aj result,j itj willj bej difficultj forj thej authorj toj escapej timej

andj knowledgej constraints,j resultingj inj blunders.j Teachers,j brothersj andj sisters,j andj

otherj familyj membersj arej invitedj toj expressj theirj condolencesj andj makej genuinej

contributionsj andj remarksj toj thej author

Finally,j thej authorj wishesj thej Universityj ofj Economicsj andj Lawj professors,j asj wellj asj

thej colleaguesj atj Mazarsj Vietnamj Co.,j Ltd,j goodj healthj andj continuedj success

BOD BoardpofpDirectors CCS Confirmationpcontrolpsheet CTT Clearlypthresholdpmateriality

FS Financialpstatements G&Aj expenses Generalpadministrativepexpenses

PM Performancepmaterility VND VietnampDong

CLIP CorporatepLearningpImprovementpProcess FSs FinancialpStatements

GEB GrouppExecutivepBoard GGC GrouppGovernancepCouncil ISA InternationalpStandardponpAuditing ISQM InternationalpStandardponpQualitypManagement MAM MazarspAuditpManual

QCC QualitypControlpCommittee QM&C QualitypManagementpandpCompliance

LISTj OFj DIAGRAMSj ANDj PICTURES

Figurej 1.1:j Organizationalj chartj andj managementj apparatus 14

Figurej 1.2:j Organizationj chartj ofj thej auditj department 15

Picturej 1.1:j Stakeholders’j mapsj ofj Mazars 13

Picturej 1.2:j Sectorj –j specificj environmentsj ofj Mazars 17

Picturej 1.3:j Turnoverj byj regions 20

Picturej 1.4:j Breakdownj revenuej byj servicesj lines 20

Tablej 2.1:j Mazarsj Groupj policyj inj definingj criteria 26

Tablej 2.2:j Factorsj affectingj performancej materiality 27

Diagramj 1.1:j Sellingj expensesj diagram 42

Diagramj 1.2:j Generalj administrationj diagrams 45

Diagramj 1.3:j Fivej componentsj ofj internalj control 46

Diagramj 1.4:j Summaryj ofj auditj planningj process 50

Diagramj 1.5:j Four-stepj approachj toj designingj testsj ofj controls 55

Tablej 1.1:j Majorj internalj controlj proceduresj forj sellingj andj G&Aj expenses 54

Picturej 2.1:j MAMj Toolsj –j Materialityj 2021j ofj ABCj Company 66

Picturej 2.2:j Determiningj materialityj forj ABCj customers 67

Picturej 2.3:j Auditj programj ofj sellingj andj G&Aj expenses 69

Picturej 2.4:j O20.1j –j Leadsheet 71

Picturej 2.5:j O30j -j Sellingj expensesj –j ARP 72

Picturej 2.6:j O40j -j G&Aj –j ARP 74

Picturej 2.7:j O41.1j –j Sampling 78

Picturej 2.8:j O41j -j G&Aj –j TOD 80

Picturej 2.9:j O51j -j Selling+G&Aj –j Cutoff 80 Picturej 2.10:j Castingj file 82 Picturej 2.11:j Reportj issuancej procedures 84

INTRODUCTION

1 Rationale p for p the p research

Auditingj isj anj unavoidablej consequencej ofj economicj growth.j Thej globalj

economy,j andj specificallyj thej Vietnamesej economy,j isj quicklyj evolvingj andj expanding,j

withj morej establishedj enterprisesj diversifyingj theirj operations,j businessj lines,j andj

organizationalj structures.j Asj aj result,j itj createsj aj largej numberj ofj dataj withj highj qualityj

criteria,j matchingj thej needsj ofj consumers.j Noj onej canj denyj auditing'sj importantj rolej

andj functionj inj ensuringj thej accuracyj andj validityj ofj financialj accounts,j asj wellj asj

expandingj functionsj suchj asj financialj andj taxj advice

Sellingj andj generalj administrativej expensesj arej thej mostj essentialj thingsj forj

manufacturingj companies,j asj wellj asj tradej andj servicej firms,j becausej theyj arej linkedj toj

severalj crucialj financialj indicators.j Asj aj result,j auditingj sellingj andj generalj

administrativej expensesj isj anj importantj partj ofj completingj aj financialj statementj auditj

forj anyj customer

Understandingj thej importancej ofj auditingj sellingj andj generalj administrativej

expenses,j withj thej researchj andj understandingj ofj practice,j Ij chosej forj myj bachelorj thesisj

thej topic:j “j Audit j procedure j for j selling j and j general j administrative j expenses j by j Mazars j

Vietnam j at j ABC j company j ”

2 Objective j of j the j thesis

Thej purposej ofj thisj studyj isj toj lookj atj thej theoryj ofj auditingj financialj statementsj

inj general,j asj wellj asj auditingj sellingj andj generalj administrativej expensesj inj particular,j

describej thej realityj ofj Mazarsj Co.,j Ltd’sj sellingj andj generalj administrativej expensesj

auditj process,j andj thenj proposej somej solutionsj toj improvej Mazarsj Co.,j Ltd’sj auditj ofj

sellingj andj generalj administrativej expensesj inj auditingj financialj statements

3 Scope j of j the j thesis

Thej scopej ofj thisj thesisj isj performedj atj Mazarsj Co.,j Ltdj andj thej auditj ofj

Companyj ABC

4 Structure j of j the j thesis

Myj thesisj hasj threej chaptersj inj additionj toj thej introductionj andj conclusionj whichj

includes:

CHAPTER j 1: j THEORETICAL j FRAMEWORK j ON j AUDIT j OF j SELLING j AND j GENERAL j ADMINISTRATIVE j EXPENSES j IN j FINANCIAL j AUDITS j BY j AUDITING j FIRMS

CHAPTER j 2: j PRACTICE j OF j AUDITING j OF j SELLING j AND j GENERAL j ADMINISTRATIVE j EXPENSE j IN j FINANCIAL j AUDITS j CONDUCTED j BY j MAZARS j VIETNAM

CHAPTER j 3: j ASSESSMENTS j AND j RECOMMENDATIONS j TO j IMPROVE j AUDIT j OF j SELLING j AND j GENERAL j ADMINISTRATIVE j EXPENSES j IN j FINANCIAL j AUDITS j CONDUCTED j BY j MAZARS j CO., j LTD

MAZARSj VIETNAM

1 Overview j about j Mazars

1.1 General j information j and j history j of j formation j of j Mazars j Group

- Companyj name:j Mazars

- Industry:j Professionalj services

- Founded:j 1945

- Headquarter:j Paris,j France

- Numberj ofj employees:j 42,000j inj 2021

- Website:j mazars.vn

Mazarsj isj aj leadingj internationalj audit,j tax,j andj advisoryj firm,j aspiringj toj buildj thej

economicj foundationsj ofj aj fairj andj prosperousj world.j Operatingj asj aj unitedj partnership,j

Mazarsj worksj asj onej integratedj team,j leveragingj expertise,j scalej andj culturalj

understandingj toj deliverj exceptionalj andj tailoredj servicesj inj auditj andj accounting,j asj

wellj asj tax,j financialj advisory,j consultingj andj legalj services

Foundedj inj Europe,j Mazarsj isj presentj inj overj 90j countriesj andj territories,j withj morej

thanj 44,000j professionals–j overj 28,000j inj ourj integratedj partnershipj andj overj 16,000j viaj

thej Mazarsj Northj Americaj Alliancej –j dedicatedj toj helpingj clientsj makej thej mostj ofj

businessj opportunitiesj andj operatej withj confidence

1.2 General j information j and j history j of j formation j of j Mazars j Vietnam

- Companyj name:j Mazarsj Vietnamj Co.,j Ltd

- Headquarter:j 9thj –j 11thj Floor,j Vietj Dragonj Tower,j 141j Nguyenj Du,j Benj

Thanhj Ward,j Districtj 1,j Hoj Chij Minhj City,j Vietnam

- Phonej number:j 028j 3824j 1493

- Website:j mazars.vnj

- Taxj code:j 0301650530

- Representative:j Jeanj Marcj Christianj Gerardj Deschamps

Mazarsj Vietnamj Co.,j Ltd.j isj aj branchj ofj Mazarsj Global.j Thej companyj wasj

establishedj inj 1994j withj aroundj 160j employees.j Inj 2008,j thej companyj mergedj withj STTj

Auditingj andj Consultingj Partnership,j contributingj toj expandingj Mazars'j presencej andj

competitionj inj thej Vietnamesej market

Mazarsj Vietnamj currentlyj hasj twoj officesj locatedj inj Hoj Chij Minhj Cityj andj Hanoij inj

whichj thej headj officej isj basedj inj thej Hoj Chij Minhj Cityj andj isj alsoj thej officej withj aj

largej numberj ofj employees

Thej currentj headj ofj thej companyj isj Mr.j Jean-Marcj Deschamps,j Frenchj nationality,j

withj morej thanj 35j yearsj ofj experiencej workingj inj thej fieldj ofj auditing

Thej currentj scalej ofj Mazarsj Vietnamj includesj aboutj 200j employeesj fromj differentj

departments,j includingj 5j partners

Overj thej pastj 25j years,j withj thej helpj ofj talented,j enthusiasticj andj experiencedj

professionals,j Mazarsj hasj achievedj aj steadyj growthj ofj 20%j inj annualj revenuej andj

increasedj thej numberj ofj clients.j Asj aj reflectionj ofj itsj continuousj developmentj efforts,j

Mazarsj Vietnamj hasj achievedj manyj notablej achievements:

- Topj 1j Accountingj servicej firmj inj Vietnamj byj VACPA

- Topj 10j Auditingj firmsj inj Vietnamj byj VACPA

- Goldenj Dragonj Awardj –j votedj byj companiesj inj Vietnamj forj thej bestj servicej

qualityj andj socialj contribution

1.3 Business j model j and j organization j of j management j apparatus j

1.3.1 Business j model j of j Mazars

Theyj developj skillsj andj expertisej insidej theirj integratedj partnership

- Attractj andj nurturej talent,j promotej diversity

- Buildj andj encouragej one-teamj spirit,j toj combinej localj presencej andj globalj

expertise

- Promotej engagementj andj sharing

- Promotej innovationj andj entrepreneurshipj inj designingj answers

- Developj aj solution-focused,j client-orientedj attitude,j withj aj differentj

perspective

Theyj planj inj orderj toj protectj thej publicj interestj andj buildj thej foundationsj ofj aj fairerj

world

- Developj aj culturej ofj technicalj expertisej andj quality

- Enforcej worldwidej qualityj standardsj andj codej ofj conduct

- Ensurej qualityj andj independencej managementj andj monitoring

- Thoroughlyj identifyj andj comprehensivelyj managej ourj internalj andj externalj

risks

- Contributej toj thej reshapingj ofj ourj industry

- Providej insightsj andj thoughtj leadership

1.3.2 Stakeholders’ j map j of j Mazars

Mazarsj hasj mappedj itsj stakeholderj ecosystemj inj fivej dimensions.j Maintainingj

regularj dialoguej withj mainj stakeholdersj helpsj shapej theirj strategy.j Thisj regular,j honestj

andj constructivej dialoguej withj theirj mainj stakeholdersj isj maintainedj viaj meetings,j

surveysj andj publications,j asj wellj asj byj participatingj inj workingj groupsj ledj byj

professionalj associations,j andj university-levelj trainingj programsj stakeholderj

expectations

Picture j 1.1: j Stakeholders’ j maps j of j Mazars

Sources: j Group j integrated j transparency j report j 2020 j – j 2021

1.3.3 Organisation j structure j of j Mazars:

Thej headj ofj Mazarsj Vietnamj Co.,j Ltd.j isj Mr.j Jeanj Marcj Deschamps,j Managingj

Partner,j Frenchj nationality.j Thej headj officej isj dividedj intoj mainj businessj divisions,j

including:j auditj services,j taxj servicesj andj outsourcedj services,j andj financialj advisoryj

services.j Thej leaderj ofj eachj departmentj willj bej thej onej toj decidej onj thej strategyj asj wellj

asj thej personnelj organizationj inj hisj department,j ensuringj thej mostj effectivej operation Thej organizationalj structurej andj managementj apparatusj ofj thej companyj accordingj toj

thej Mazarsj Staffj Handbookj arej shownj inj thej followingj diagram:

Figure j 1.1: j Organizational j chart j and j management j apparatus

Sources: j Mazars j Staff j Handbook

Figure j 1.2: j Organization j chart j of j the j audit j department j

Sources: j Mazars j Staff j Handbook

Asj shownj onj thej organizationalj chartj ofj thej auditj departmentj atj Mazarsj Vietnamj

Co.,j Ltd.,j itj canj bej seenj that:

- Managingj Partner:j Asj thej headj ofj Mazarsj Vietnam,j responsiblej forj thej mainj

managementj ofj thej company'sj operationsj inj bothj Hanoij andj Hoj Chij Minhj

Cityj offices,j andj thej onej whoj makesj decisionsj onj businessj strategyj andj

developmentj strategy.j developmentj ofj thej company'sj operationsj inj thej shortj

andj longj term

- Partner:j Aj personj whoj supportsj thej Presidentj inj runningj thej companyj andj

supervisingj employees.j Asj thej facej ofj thej auditj department,j thej partnerj isj

responsiblej forj meeting,j exchangingj asj wellj asj advisingj clientsj aboutj thej

servicesj providedj byj thej companyj asj wellj asj negotiatingj contracts,j reviewingj

documents.j audit,j resolvej problemsj withj customersj andj signj thej auditj reportj

whenj thej auditj isj completed.j Theyj arej responsiblej forj reportingj directlyj toj thej

partnerj onj thej performancej ofj theirj departmentj asj wellj asj ensuringj thatj theirj

departmentj hasj compliedj withj thej requirementsj andj orientationj setj forth

- Auditj Seniorj Manager:j Responsiblej forj thej preparationj andj completionj ofj thej

auditj report,j reviewingj thej auditj files,j andj discussingj withj thej clientj aboutj thej

audit

- Auditj Manager:j Responsiblej forj reviewingj auditj recordsj asj wellj asj workingj

papersj ofj auditj assistants.j Inj addition,j theyj mustj keepj trackj ofj thej detailsj ofj

thej auditj conductedj andj determinej thej necessaryj auditj proceduresj toj bej

performed,j asj wellj asj discussj withj thej clientj aboutj thej audit

- Auditj Senior:j Isj thej managerj asj wellj asj directlyj responsiblej forj leadingj thej

auditj teamj inj thej actualj auditj (fieldwork).j Theyj needj toj preparej thej auditj plan,j

bej directlyj responsiblej forj thej auditj proceduresj performed,j andj preparej thej

preliminaryj auditj reportj forj approvalj byj theirj superiors

- Auditj Assistant:j Thej personj whoj directlyj performsj thej auditj activities,j collectsj

thej necessaryj auditj informationj andj evidencej forj thej job.j Theyj receivej ordersj

directlyj fromj thej auditj teamj leaderj toj carryj outj auditj proceduresj andj assistj thej

auditj teamj leaderj toj ensurej thej completionj ofj thej auditj objectives

1.4 Mazars’ j Clients

Mostj ofj thej customersj arej limitedj liabilityj businesses,j orj subsidiariesj ofj largej

corporationsj inj thej world,j arej customersj ofj Mazarsj group

Thej numberj andj sizej ofj thej company'sj customersj havej steadilyj increasedj overj thej

yearsj andj belongj toj manyj differentj businessj typesj andj fields,j including:j Manufacturing,j

buyingj andj sellingj ofj consumerj goods;j Energyj sector;j Financialj sector;j Healthj care;j

Industry;j Hotelj andj travel;j Non-governmentalj organizations;j Representativej office,j

project;j Realj estate;j Communicationj technology;j Shipping,j logistics.j Somej potentialj

customersj ofj Mazarsj suchj asj ARCHETYPEj Group,j Decathlonj Vietnamj Co.,j Ltd.,j Suporj

Group,j Essilorj Vietnamj Company,j Schneiderj Electricj Vietnamj Company,j Tamj Sonj

Internationalj Companyj Limited,j Essilorj Companyj Vietnam,…

Picture j 1.2: j Sector–specific j environments j of j Mazars

Sources: j Mazars j 2021 j at j a j glance

1.5 Business j lines j of j Mazars

1.5.1 Audit j and j Assurance j Services

Mazasj believesj thatj auditj influencesj thej developmentj ofj thej economy.j Mazarsj worksj

forj thej benefitj ofj society,j focusingj onj auditedj clientj systemsj andj stakeholders,j helpingj

toj buildj sustainable,j stablej businessesj forj thej benefitj ofj thej wholej community

Thisj servicej includesj internalj audit,j auditj ofj consolidatedj financialj statements,j auditj

ofj financialj statementsj byj Vietnamesej Accountingj andj Auditingj Standards,j andj auditj ofj

consolidatedj financialj statementsj inj accordancej withj thej internationalj financialj reportingj

standardsj system.j IFRS),j thej systemj ofj generallyj acceptedj accountingj principlesj inj thej

USj (USj GAAP),j thej systemj ofj generallyj acceptedj accountingj principlesj inj Hongj Kongj

(HKj GAAP),j etc.j Inj addition,j thej companyj alsoj providesj providej consultingj servicesj onj

internalj controlj systemj toj helpj customersj improvej businessj performance

1.5.2 Accounting j and j Business j Process j Outsourcing

Accountingj servicesj atj Mazarsj providej outsourcedj accountingj andj financialj reportingj

servicesj tailoredj toj eachj need.j Thej companyj hasj aj teamj ofj expertsj workingj inj aj diversej

legalj environment,j ensuringj thatj businessesj receivej servicesj thatj arej consistentj withj thej

legalj regulationsj ofj thej hostj country

Specifically,j thej companyj helpsj customersj setj upj anj accountj systemj andj recordj

accountingj books;j preparej financialj statementsj inj accordancej withj Vietnamesej

Accountingj Standardsj andj Internationalj Accountingj Standards;j preparej managementj

reports;j consolidatingj financialj statementsj accordingj toj Vietnamesej orj internationalj

accountingj standards;j taxj finalization;j Costj accountingj andj performancej management,

1.5.3 HR j and j Payroll

Toj supportj effectivej humanj resourcej managementj forj businesses,j Mazarsj providesj

servicesj relatedj toj payroll,j reportingj andj relatedj expertise.j Salaryj managementj forj

foreignj andj Vietnamesej workers,j salaryj managementj forj specializedj projects

1.5.4 Tax

Taxj consultingj servicesj usej expertj knowledgej toj ensurej compliancej withj taxj

policies,j effectivelyj resolvingj problemsj withj taxj authorities.j Taxj consultantsj atj Mazarsj

arej alwaysj equippedj withj thej latestj regulationsj toj ensurej taxj compliancej andj optimizej

taxj records.j Servicesj includej taxj registration,j taxj returnsj forj individuals,j corporatej

incomej tax,j valuej addedj taxj (VAT)j andj contractorj tax,j assistancej inj thej taxj refundj

process

1.5.5 Business j Start-up j Assistance

Withj aj teamj withj extensivej knowledgej andj yearsj ofj experiencej inj licensingj andj

start-upj challenges,j Mazarsj providesj thej followingj services:j Consultingj thej bestj operatingj

modelj forj marketj entryj strategiesj market,j relatedj conditionsj andj restrictions,j taxj

statutoryj requirements;j advicej andj assistancej inj applyingj forj aj licensej toj establishj aj

companyj orj representativej office;j consultingj inj recruitment;j Supportj toj applyj forj workj

permits,j residencej cards,j visas

1.5.6 Financial j Advisory j Services

Mazarsj providesj aj veryj diversej consultingj servicej thatj canj bej suitablej forj manyj typesj

ofj businesses.j Withj anj approachj withj thej corej ofj maximizingj businessj value,j Mazarsj

spendsj timej understandingj thej businessj system,j thej contextj ofj thej businessj goingj

throughj andj providingj thej mostj practicalj advicej toj helpj businessesj makej thej rightj

decisions.j decisions,j therebyj achievingj goals

Financialj advisoryj servicesj atj Mazarsj providej comprehensivej servicej packagesj

relatedj toj thej mergerj andj acquisitionj process,j forj bothj buyersj andj sellers.j Besides,j itj alsoj

providesj aj comprehensivej viewj ofj thej financialj sectorj andj findsj thej optimalj solutionsj toj

helpj businessesj achievej theirj goals.j Inj addition,j financialj advisoryj servicesj alsoj helpj

businessesj overcomej crisisj eventsj suchj asj fraudj investigation,j disputej andj mediation,j

restructuring,j default

1.5.7 Transfer j Pricing j in j Vietnam

Forj transactionsj betweenj affiliatesj ofj multinationalj companies,j thej pricesj ofj tradedj

goodsj andj servicesj needj toj bej converted,j andj anj effectivej transferj pricingj policyj isj veryj

importantj forj thesej groups.j taxj andj riskj managementj strategies,j especiallyj inj thej currentj

economicj environment.j Therefore,j Mazarsj hasj providedj transferj pricingj servicesj toj bej

ablej toj solvej thej abovej problem,j includingj strategicj consultingj andj allj aspectsj relatedj toj

transferj pricing,j dataj filej provision,j taxj audit,j chainj predictionj value.j Transferj pricingj

servicej atj Mazarsj helpsj businessesj optimizej taxj rates,j controlj costsj better,j improvej

businessj cashj flow,j andj minimizej lossesj duej toj transferj pricing

1.6 A j portfolio j of j tools j and j solutions

Thisj vibrantj communityj ofj innovatorsj andj techj expertsj allowedj usj toj developj aj

portfolioj ofj augmentedj servicesj bringingj enhancedj experiencesj andj addedj valuej toj ourj

clientsj asj wellj asj newj skillsj andj capacityj toj theirj teams.j Mazars'sj toolsj andj solutionsj

coverj everythingj fromj cyberj securityj andj dataj analyticsj toj accounting,j payrollj andj

globalj compliancej solutions

Fourj toolsj andj solutions:

- Atlas,j globalj auditj platform,j designedj toj providej seamlessj andj integratedj groupj

auditsj fromj anywherej inj thej world;

- Inj control,j anj onlinej platformj thatj givesj clientsj completej oversightj ofj theirj globalj

compliancej activitiesj inj real-time,j allowingj themj toj identifyj andj resolvej problemsj

beforej theyj becomej anj issue;

- Optimize,j aj platformj thatj helpsj clientsj measurej thej effectivenessj andj efficiencyj

ofj theirj business,j throughj benchmarking,j marketj maps,j objectivej targetingj andj

corporatej analysis;

- Signals,j ourj onlinej platformj wherej clientsj canj viewj allj theirj documentsj andj

outstandingj actions,j andj seej atj aj glancej whichj taxj returnsj theyj needj toj submit

1.7 Financial j situation j of j Mazars

Amidj aj worldwidej pandemicj andj withj itsj primaryj focusj onj keepingj itsj peoplej safe,j

Mazarsj hasj shownj remarkablej resilience,j inj managingj toj maintainj thej bulkj ofj itsj

activitiesj andj achievingj aj 7.8%j growth,j mostj ofj itj organic

Picture j 1.3: j Turnover j by j regions

Sources: j Mazar j Group j 2021

Picture j 1.4: j Breakdown j revenue j by j services j lines

Sources: j Mazars j Yearbook

2 j Organizing j audit j practice j at j Mazars

2.1 About j Mazars j Audit j Manual j (MAM)

Thej Mazarsj Group'sj auditj guidelinesj arej preparedj byj Internationalj Auditingj

Standardsj (ISAs).j Ifj hostj countryj regulationsj havej distinctivej featuresj fromj ISAs,j theyj

shouldj bej addedj toj thej designatedj sectionj ofj thej guidancej documentj andj thisj shouldj onlyj

bej donej byj thej managementj responsible.j onj thej riskj ofj thej hostj country

MAMj requiresj that,j beforej acceptingj toj conductj orj continuej thej audit,j thej auditorj

shouldj determine:

- Whetherj thej financialj accountingj standardsj usedj toj preparej thej financialj

statementsj arej reasonable

- Obtainj evidencej fromj unitj managementj confirmingj thatj theyj havej graspedj andj

understoodj theirj responsibilitiesj including:

 Ensurej thatj thej financialj statementsj arej preparedj inj accordancej withj

applicablej financialj reportingj standards,j includingj fairj disclosures

 Ensurej thatj internalj controlj proceduresj arej necessaryj toj ensurej thatj thej

entity'sj financialj statementsj arej freej fromj materialj misstatement,j whetherj

duej toj fraudj orj error

 Willingj toj providej thej auditorj withj sufficientj informationj necessaryj forj thej

preparationj ofj financialj statements,j necessaryj additionalj informationj thatj

managementj needsj toj providej forj auditj purposes,j andj isj notj limitedj inj

termsj ofj accessj toj individuals.j whichj isj consideredj byj thej auditorj toj bej

importantj andj necessaryj inj orderj toj bej ablej toj obtainj sufficientj auditj

evidencej forj auditj purposes

Ifj thej financialj accountingj standardsj beingj appliedj byj thej entityj toj preparej thej

financialj statementsj arej deemedj inappropriatej byj thej auditor,j orj thej above-mentionedj

agreementsj onj responsibilitiesj havej notj receivedj confirmationj fromj management,j thej

auditorj shouldj discussj specificallyj withj unitj managementj aboutj theirj findingsj orj

problemsj arise.j Thej auditorj isj notj authorizedj toj undertakej anj auditj ofj thej entityj unlessj

requiredj byj lawj orj regulationj toj doj so

Ifj managementj imposesj aj limitationj onj thej auditj objectivej inj termsj ofj proposedj auditj

arrangementsj andj thej auditorj believesj thatj thej limitationj wouldj resultj inj thej auditorj

disclaimingj anj opinionj onj thej Financialj statements,j thej auditorj mayj notj acceptj thisj

limitedj agreementj asj anj auditj agreementj unlessj requiredj byj lawj orj regulation

Thej termsj ofj thej auditj agreementj shouldj bej documentedj inj thej agreementj letterj andj

shouldj bej sentj toj thej auditeej forj managementj approvalj andj backj toj thej auditor.j

Accordingj toj MAM,j aj letterj ofj agreementj isj whatj isj requiredj everyj year

Thej auditorj mayj notj changej thej termsj ofj thej auditj agreementj withoutj goodj reason.j Ifj

aj provisionj isj changed,j thej auditorj andj entityj managementj mustj agreej andj agreej onj thej

newj termj ofj thej agreementj throughj aj letterj ofj agreementj orj otherj appropriatej

handwrittenj documents

Ifj thej auditorj doesj notj acceptj thej changesj inj thej termsj ofj thej auditj agreementj andj

doesj notj receivej thej consentj ofj thej entity'sj managementj toj continuej underj thej initialj

auditj agreement,j then:

- Withdrawj fromj anj auditj agreementj whenj possiblej inj compliancej withj lawsj andj

regulations

- Determinej ifj therej isj anyj obligation,j throughj contractj orj otherwise,j toj reportj thej

situationj toj otherj entitiesj suchj asj thosej responsiblej forj managingj thej unit,j ownersj

orj custodians

MAMj representsj threej phasesj ofj anj auditj process:j auditj planning,j auditj fieldworkj &j

reviewj andj auditj reporting

2.2 Audit j process j according j to j MAM

2.2.1 Audit j planning

Thej purposej ofj thisj phasej accordingj toj thej MAMj andj guidingj documentsj isj toj helpj

thej companyj andj thej auditorsj getj aj preliminaryj understandingj ofj thej customer,j assessj

thej risks,j thej amountj ofj workj toj bej done,j considerj thej ethicalj issues.j Whetherj

professionalj orj legalj ethicsj isj warrantedj ifj thej auditj isj acceptedj andj thej conclusionj isj

reachedj toj concludej thej auditj engagementj withj thej client

j Afterj thej auditedj contractj isj signed,j thej auditorj willj determinej thej overallj directionalj

auditj strategyj andj developj anj auditj plan.j Basedj onj thej levelj ofj riskj thatj thej auditorj

identifiesj whenj learningj aboutj thej client,j thej riskj assessmentj proceduresj andj subsequentj

auditj proceduresj willj bej designedj toj suitj thej actualj situation.j Thej auditj preparationj

processj isj dividedj intoj twoj steps:

Pre-audit j planning

Thej pre-planningj stepj isj thej approachj toj gatheringj informationj aboutj thej customerj toj

learnj aboutj theirj needs,j riskj assessment,j serviceabilityj asj wellj asj otherj issuesj suchj asj

leadj time,j auditj fees,j etc.j Auditsj arej performedj byj seniorj auditorsj (usuallyj management)j

throughj thej completionj ofj aj questionnairej onj auditj agreementsj andj clientj retentionj

procedures.j Basedj onj that,j ifj acceptable,j thej auditorj willj signj anj auditj contractj withj thej

client.j Factorsj thatj auditorsj needj toj considerj are:

- Receivingj customers:j Reviewingj thej integrityj ofj thej Managementj Board,j

managingj thej risksj ofj thej Client'sj Boardj ofj Directorsj asj wellj asj whetherj anyj fraudj

hasj arisen,j reviewingj thej financialj situationj andj servicej quality.j servicesj ofj thej

auditedj entity

- Professionalj capacityj ofj auditors:j Auditingj firmsj needj toj considerj thej

professionalj capacityj ofj auditorsj toj assignj anj auditorj toj eachj appropriatej clientj

basedj onj experience,j abilityj toj complyj withj professionalj standardsj andj ethics.j

professionalj auditorsj participatingj inj thej auditj toj ensurej thej qualityj ofj thej servicesj

provided

Allj thej abovej informationj willj bej aggregatedj andj thej partnerj willj reviewj andj approvej

ifj thej auditj isj suitablej withj thej characteristicsj ofj thej company

Audit j planning

Learnj aboutj thej client'sj businessj environment:j includingj thej businessj sectorj andj

environment,j regulationsj andj financialj reportingj frameworkj appliedj atj thej unit;j

characteristicsj ofj ownershipj structure,j organizationalj structure;j thej entity'sj accountingj

policies;j objectives,j strategiesj andj businessj risks

Learnj aboutj thej entity'sj internalj controlj system:j Notj allj controlj activitiesj relatedj toj

financialj statementsj arej relatedj toj audit,j soj basedj onj hisj expertise,j thej auditorj assessesj

whetherj controlj activitiesj stand.j individuallyj orj collectivelyj withj otherj individualsj

relevantj toj thej audit.j Thej auditorj shouldj understandj eachj elementj ofj thej entity'sj systemj

ofj internalj controlj andj usej professionalj judgmentj toj makej anj judgmentj asj toj whetherj

internalj controlj proceduresj havej beenj effectivelyj designedj andj applied

Riskj assessmentj ofj materialj misstatement:j Thej riskj assessmentj willj bej conductedj onj

twoj differentj levels,j namelyj thej overallj levelj onj thej financialj statementsj andj thej

assertionj level

Determiningj materiality:j Determiningj materialityj requiresj professionalj judgmentj ofj

thej auditor.j Accordingj toj MAM,j therej arej 3j thresholdsj forj thej auditorj inj chargej ofj thej

auditj toj focusj on:j Financialj statementj materiality:j Whenj calculatingj thisj materiality,j aj

percentagej isj usuallyj appliedj toj aj singlej criterionj chosenj asj thej startingj pointj inj

determiningj materialityj ofj financialj statements.j Generallyj speaking.j Factorsj thatj mayj

affectj thej determinationj ofj eligibilityj criteriaj include:

- Needsj andj expectationsj ofj usersj ofj financialj statements

- Elementsj ofj financialj statements

- Itemsj onj thej financialj statementsj thatj usersj arej oftenj interestedj in

- Businessj situationj andj environmentj ofj thej auditedj entity

- Customer'sj capitalj ownershipj structurej andj capitalj raisingj method

- Relativej volatilityj ofj thej definedj criterion

Profitj beforej tax 5j –j 10

- Usuallyj appliedj toj profit-orientedj companies

- Doesj notj applyj ifj thej companyj isj inj aj evenj situationj orj inj aj loss,j exceptj wherej thej

break-lossj occursj everyj year

- Circumstancesj leadingj toj largej variationsj inj

pre-taxj profitj mayj leadj toj thej conclusionj thatj

overallj materialityj forj thej financialj

statementsj couldj bej morej reasonablyj

determinedj usingj normalj pre-taxj earningsj

fromj thej figures.j ongoingj activitiesj basedj onj

pastj results.j Profitj beforej taxj canj alsoj bej

normalizedj ifj specialj itemsj thatj occurj onlyj

duringj thisj periodj arej excludedj (suchj asj

lawsuitj settlements).j Thesej amountsj shouldj

bej identifiedj soj thatj thej auditorj canj performj

aj separatej audit.j Thej auditorj shouldj notej aj

reasonablej reasonj toj normalizej pre-taxj profitj

inj thej auditj file

Totalj assets 0.5j –j 2

- Appliesj toj companiesj withj aj balancej sheetj

thatj includesj aj largej assetj balancej sheet,j

suchj asj investmentj holdingj companies

Totalj revenue 0.5j –j 2

- Appliesj toj companiesj thatj arej breakingj evenj

orj wherej grossj salesj arej likelyj toj providej thej

clearestj indicationj ofj thej levelj ofj economicj

activityj forj thej period

- Appliesj toj aj companyj whosej revenuej isj

determinedj onj thej basisj ofj turnoverj activity,j

suchj asj aj softwarej companyj orj aj companyj

operatingj inj thej telecommunicationsj sector

Totalj equity 1j –j 5

- Appliesj toj companiesj withj aj balancej sheetj

thatj includesj aj largej balancej sheetj butj doesj

notj needj toj bej offsetj againstj liabilities,j orj

companiesj withj aj largej amountj ofj economicj

activityj negligiblej (orj includesj onlyj

repetitivej activitiesj suchj asj collectingj

monthlyj rent)j thatj affectj profitj orj lossj onj thej

incomej statementj suchj asj brokeragej orj rentalj

agencyj realj estate

EBITDA 4j –j 6

- Applicablej toj companiesj inj thej industry,j

manufacturingj withj aj largej balancej ofj

intangiblej fixedj assetsj orj long-termj tangiblej

fixedj assets

- Consideredj ifj therej arej entriesj affectingj thej

financialj statementsj withj aj lowj probabilityj

ofj recurrencej (non-recurringj charges)

- Consideredj forj usej ifj therej isj aj lossj inj thej

financialj yearj whenj applyingj profitj beforej

taxj asj thej criterionj forj thej previousj period

Table j 2.1: j Mazars j Group j policy j in j defining j criteria

Sources: j Mazars j Audit j Manual

Performancej materiality:j Ifj thej auditorj plansj thej auditj solelyj toj detectj materialj

misstatement,j thej auditorj runsj thej riskj thatj thej totalj amountj ofj undetectedj misstatementj

willj causej financialj statementsj thatj containj materialj misstatement.j Therefore,j

performancej materialityj shouldj bej establishedj toj reducej thisj threatj toj anj acceptablej

level.j Performancej materialityj shouldj neverj bej disclosedj toj aj client.j MAMj prescribesj aj

normalj rangej ofj performancej materialityj thatj isj 50%j toj 80%j ofj thej overallj materialityj

andj 40%j toj 70%j ofj thej overallj materialityj applicablej toj thej firstj audit.j customer

Performancej materialityj shouldj neverj exceedj 80%j becausej detectionj riskj isj alwaysj

present.j Aj higherj levelj ofj riskj willj requirej aj lowerj performancej materiality.j Thej MAMj

providesj thej followingj tablej ofj thej keyj factorsj thatj actuallyj influencej thej identifiedj

performancej materiality:

Factors Increasing j PM Decreasing j PM

Understandingj

ofj clients Noj effect

Considerj whetherj thej auditorj hasj

identifiedj anyj specificj factorsj thatj

wouldj leadj thej auditorj toj believej

thatj therej isj aj riskj ofj undetectedj

environmentj throughj thej

literaturej andj doublej testsj ofj

controlsj increasesj materiality

Thej internalj controlj systemj isj

weakj andj lacksj controlj

proceduresj (orj lacksj reliablej

controlj procedures).j Anj increasej

inj thej riskj ofj managementj

overridingj internalj controlj willj

alsoj reducej performancej

materiality

Riskj Identified Noj effect

Thej auditorj willj assessj inherentj

controlj riskj andj anyj significantj

risksj asj partj ofj auditj proceduresj

performedj inj accordancej withj thej

company'sj auditj riskj model.j

Considerj whetherj thej auditorj hasj

identifiedj anyj specificj factorsj thatj

wouldj leadj thej auditorj toj believej

thatj therej isj aj riskj ofj undetectedj

misstatementsj (adjustedj orj not)j

werej recorded,j materialityj wouldj

Basedj onj thej previousj

experiencej workingj withj

clients,j thej auditorj assessesj

thej possibilityj thatj

misstatementsj willj bej

discoveredj inj thej currentj

audit.j Thej fewerj estimatedj

misstatements,j thej higherj thej

performancej materialityj canj

be

Priorj experiencej withj thej clientj

indicatesj thatj thej entityj isj

unwillingj toj acceptj andj adjustj thej

entriesj recommendedj byj thej

auditorj basedj onj thej auditj

Thej absencej orj presencej ofj

onlyj aj fewj low-riskj entriesj

wouldj reducej materiality

Thej presencej ofj aj largej numberj

ofj entriesj orj aj largej numberj ofj

unusualj orj significantj entriesj willj

reducej materiality

Table j 2.2: j Factors j affecting j performance j materiality

Sources: j Mazars j Audit j Manual

Clearlyj trivialj thresholdj (CTT):j Thej CTTj shouldj notj exceedj 5%j ofj thej overallj

materialityj ofj thej financialj statements.j Typically,j thej CTTj willj bej determinedj betweenj 2j

andj 3%j ofj thej overallj materiality.j Ifj thej engagementj teamj determinesj thatj thej CTTj isj outj

ofj range,j thej reasonsj forj thisj decisionj shouldj bej clearlyj demonstratedj andj documentedj

inj thej auditj documentation

Thej decisionj toj usej thej 5%j levelj asj CTTj shouldj bej consideredj withj skepticismj andj

shouldj onlyj bej consideredj inj thej bestj possiblej situationj underj certainj conditionsj butj

shouldj notj bej usedj asj thej defaultj level

2.2.2 Audit j fieldwork j & j review

Opening j balance

Duringj thej firstj yearj audit,j thej auditor'sj objectivej isj toj obtainj auditj evidencej

regardingj thej openingj balancej ofj thej entityj toj determinej thatj therej arej noj materialj

misstatementsj thatj couldj affectj thej currentj year'sj financialj statements.j Inj addition,j itj isj

necessaryj toj determinej whetherj thej entityj hasj consistentlyj appliedj itsj financialj

accountingj policiesj inj thej preparationj ofj thisj year'sj financialj statementsj andj ifj anyj

changesj havej beenj appropriatelyj accountedj forj andj disclosedj fullj yet

Ifj thej priorj period'sj financialj statementsj werej auditedj byj thej predecessorj auditor,j

appropriatej evidencej aboutj thej reliabilityj ofj thej openingj balancesj mayj bej obtainedj

throughj reviewj ofj thej predecessorj auditor'sj archives

Audit j assertions

Thej assertionsj mustj bej accuratelyj identified,j andj thej auditorj shouldj usej thej

assertionsj asj thej basisj forj assessingj thej risksj ofj materialj misstatementj andj basedj onj that,j

inj designingj andj performingj nextj auditj procedures

Forj thej Balancej Sheet,j thej assertionsj arej existence,j completeness,j valuationj andj

allocation,j rightsj andj obligations

Forj thej incomej statement,j thej dataj basesj arej completeness,j accuracy,j timeliness,j andj

classification

Perform j Test j of j control

Atj thisj stage,j thej auditorj willj performj testsj ofj controlsj designedj atj thej strategyj stage.j

Thej activitiesj performedj ofj thej internalj controlj systemj willj bej examinedj toj assessj thej

levelj ofj confidencej inj thej entity'sj internalj controlj system.j Thej auditorj shouldj determine:

- Whetherj thej internalj controlj activitiesj performedj arej appropriatej toj minimizej thej

riskj ofj materialj misstatement

- Isj itj donej correctly?

- Testj onj samplej sizej toj seej ifj thej internalj controlj systemj isj workingj effectively

Ifj thej internalj controlj systemj isj effectivelyj designed,j implementedj andj operated,j thej

auditorj canj relyj onj thej client'sj internalj controlj systemj asj aj goodj reasonj toj reducej thej

numberj ofj substantivej testingj proceduresj toj bej performed

Perform j substantive j procedures

Performingj substantivej proceduresj willj providej reliablej auditj evidencej ifj properlyj

applied.j Thej auditorj canj evaluatej anj entity'sj financialj informationj byj analyzingj bothj

financialj andj non-financialj data.j Thej auditorj willj thenj makej aj comparisonj withj thej

previousj year,j orj thej auditor'sj budgetj orj expectations,j orj industryj information.j Thej

engagementj teamj willj determinej whetherj substantivej proceduresj willj bej morej effectivej

andj efficientj thanj detailedj testsj toj perform,j andj mayj reducej thej numberj ofj substantivej

proceduresj ifj thej levelj ofj riskj isj decreased

Test j of j details j of j balances

Thej auditorj willj conductj detailedj checksj whenj substantivej proceduresj arej notj

effectivej eitherj alonej orj whenj analysisj isj notj possible.j Thej auditorj willj performj itemj selectionj ofj itemsj forj inspectionj dependingj onj theirj nature.j Thej methodsj ofj elementj

item-by-selectionj thatj thej auditorj appliesj arej asj follows:

Selectingj allj elementsj whenj thej populationj isj composedj ofj aj smallj numberj ofj

elementsj orj elementsj withj largej values,j orj re-implementingj thej computationj basedj onj

thej informationj systemj makesj itj easierj toj check,j andj Costj savings;

Selectingj specificj elementsj ifj thej casej forj thej elementsj isj large,j unusual,j risky,j orj allj

elementsj havej aj higherj valuej thanj materialityj (atj thisj pointj thej auditorj shouldj overallj

grouping);

Selectionj ofj auditj sample:j Thej auditorj willj selectj anj auditj samplej whenj thej

remainingj elementsj inj thej populationj arej stillj higherj thanj thej performancej materialityj

levelj andj cannotj drawj conclusionsj forj thej entirej population.j Thej auditorj canj usej auditj

samplingj (eitherj byj statisticalj orj non-statisticalj methods)j toj drawj conclusionsj forj thej

population,j butj thej auditorj needsj toj controlj thej samplingj processj toj limitj thej riskj ofj

selectingj samplesj andj risksj beyondj sampling

2.2.3 Audit j reporting

Thisj phasej consistsj ofj twoj mainj steps:j (1)j evaluatingj thej evidencej obtainedj andj (2)j

demonstratingj workingj papersj andj preparingj anj auditj opinion

Duringj thisj period,j thej auditorj reviewsj allj detectedj differencesj andj considersj whetherj

adjustmentj entriesj arej necessary.j Then,j thej auditj teamj leaderj willj makej aj listj ofj

adjustmentj entriesj andj sendj themj toj thej superiorj forj reviewj andj sendj toj thej client.j

Beforej releasingj thej officialj auditj report,j thej auditj teamj leaderj willj makej aj draftj andj

sendj itj toj thej superior,j andj sendj itj toj thej clientj toj agreej onj thej adjustedj entries

Inj addition,j whenj realizingj thatj thej customer'sj internalj controlj systemj isj defective,j

thej seniorj auditorj alsoj providesj aj managementj letterj makingj recommendationsj toj

improvej thej internalj controlj systemj ofj thej enterprise

2.3 Audit j documentations

Auditj recordsj recordj thej stepsj ofj thej workj performedj byj thej auditorj andj thej evidencej

collected.j Inj addition,j thej auditj filej isj alsoj thej legalj basisj forj thej auditorj toj drawj

conclusions.j Therefore,j auditj recordsj playj anj importantj role,j asj aj resultj ofj thej entirej

auditj process.j Thatj isj thej mainj reasonj whyj itj isj importantj toj organizej auditj recordsj inj aj

clearj andj easilyj accessiblej manner.j Moreover,j thej presentationj ofj auditj recordsj willj helpj

seniorj auditorsj easilyj monitorj andj evaluatej workj performance

Atj Mazars,j thej presentationj ofj workingj papersj isj veryj flexible,j reasonablej andj

suitablej toj thej naturej ofj eachj unit.j Thej storagej ofj auditj filesj forj customersj includesj 2j

types:

- PAFj (Permanentj Auditj File):j Thisj filej isj usedj toj savej workingj papersj andj

documentsj thatj thej auditorj canj usej withinj aj fewj yearsj suchj as:j Legalj documentsj

ofj thej business,j thej company'sj charter,j meetingj minutesj importantj aspectsj ofj thej

Boardj ofj Directors/Boardj ofj Directorsj ofj thej company,j loanj contracts,j housej

rental,j etc

- CAFj (Currentj Auditj File):j Includesj papersj andj documentsj relatedj toj thej auditj ofj

thej currentj year,j forj examplej auditj program,j auditj plan,j technicalj documentsj

walkthroughj ofj operationalj sections

Whenj presentingj workingj papers,j auditorsj mustj performj referencej operations.j Thej

rulesj ofj referencej arej asj follows:

- Referencej onj thej left:j wherej isj thej dataj obtained,j whatj workingj papersj do

- Referencej onj thej right:j whichj workingj paperj thej dataj isj referredj to

Besides,j theyj havej toj obtainj documentsj relatedj toj theirj workdonej whichj includes:

- Legalj documents:j includingj aj copyj ofj thej company'sj charterj andj aj summaryj ofj

importantj contentsj inj thej charter;j copyj ofj businessj registrationj license,j

establishmentj decision,j businessj registrationj andj adjustmentsj (ifj any),j copiesj ofj

jointj venturej contractsj ifj itj isj aj jointj venturej enterprise,j copiesj ofj meetingj

minutes,j copiesj ofj summarizej withj importantj meetingj minutesj (importancej

accordingj toj thej auditor'sj assessment),j summarizej informationj andj updatej

changesj fromj businessj registrations,j monitorj workingj capitalj andj changesj inj

workingj capitalj throughj throughj businessj registrationj licenses

- Taxj documents:j includingj Annualj Taxj Finalization:j Thej auditorj collectsj annuallyj

fromj thej yearj beforej thej startj ofj thej auditj toj thej currentj auditj yearj (onlyj savesj 3j

auditedj years,j documentsj thatj arej morej thanj 3j yearsj old)j toj aj separatej file),j taxj

inspectionj records,j documentsj relatedj toj factorsj andj specificj characteristicsj ofj

enterprisesj inj taxj calculation

- Personnelj documents:j includingj aj copyj ofj thej collectivej bargainingj agreementj

andj amendmentsj (ifj any),j aj copyj ofj thej representativej employmentj contractj

and/orj aj summaryj ofj thej importantj contentsj ofj thej contract.j ,j savej documentsj onj

thej processj ofj fundj managementj andj salaryj use,j drawj aj descriptivej diagram,j

summarizej thej provisionsj inj thej charter,j minutesj ofj thej meeting

2.4 Audit j quality j control

2.4.1 Culture j and j global j talent j policy

Peoplej joinj Mazarsj toj learn.j Educationj isj thej backbonej ofj Mazars’j talentj andj

leadershipj developmentj strategy,j fundamentallyj embeddedj withinj ourj culture.j Inj aj

knowledge-intensivej industry,j wej veryj muchj relyj onj thej qualityj ofj ourj people.j Learningj

andj developmentj atj allj stagesj ofj thej professionalj journeyj isj whatj isj expectedj fromj aj

responsible,j modernj firm.j Thisj isj whatj wej owej toj ourj people,j clients,j stakeholdersj andj

societyj asj aj whole

- Lessonsj fromj thej pandemic:j imaginingj tomorrow’sj workplace:j Thej Covid-19j

crisisj andj itsj subsequentj lockj downsj havej compelledj allj businessesj toj rethinkj

theirj workj organisationj andj imaginej newj waysj ofj ensuringj theirj peoplej stayj

productivej andj engaged.j Thisj isj why,j inj 2020,j Mazarsj initiatedj aj seriesj ofj

podcastsj underj thej namej “modernj feedback”

- Makingj Mazarsj aj schoolj ofj excellence:j Today,j Mazarsj Universityj –j foundedj

inj 2008j andj CLIP-accreditedj inj 2015j andj 2020j –j offersj accessj toj 21j

internationalj leadershipj andj developmentj programmes,j fromj thej flagshipj thej

Nextj MBA,j toj ourj womenj leadershipj seminar,j toj thej businessj developmentj

acceleratorj orj thej veryj ownj developmentj andj assessmentj centrej LEAD.j

Throughj Mazarsj University,j peoplej canj alsoj benefitj fromj aj globalj partnershipj

withj LinkedInj learning,j makingj e-learningj onj thej goj simple,j asj wellj asj

multiplej innovationj events,j hackathonsj andj digitalj learningj challengesj toj

contributej toj thej firm’sj transformation

2.4.2 Overall j system j of j quality j management

Underj thej jointj oversightj ofj thej GEBj andj GGCj riskj managementj committees,j

QM&Cj boardj isj inj chargej ofj protectingj Mazars’j reputationj andj brandj equity,j fulfillingj

ourj brandj promisej andj ensuringj theyj deliverj top-qualityj servicesj whilej meetingj

regulations.j

Qualityj willj bej thej backbonej ofj allj activities,j andj theyj willj protectj ourj brandj throughj

carefullyj monitoredj riskj management.j Qualityj managementj andj riskj managementj arej atj

thej corej ofj One24j strategy

2.4.3 Delivering j audit j quality

Qualityj isj whatj makesj auditj relevant.j Itj isj whatj enablesj itj toj playj itsj essentialj rolej inj

shapingj morej transparentj andj sustainablej economies.j Asj theyj stronglyj believej inj auditj

asj onej ofj thej pillarsj ofj healthierj ecosystems,j morej resilientj businessj environmentsj andj

fairerj societies,j theyj havej madej qualityj thej backbonej ofj allj theyj do.j Yearj afterj year,j theyj

arej dedicatedj toj improvingj thej auditj workj wej performj andj thej qualityj ofj reportingj toj

thosej inj chargej inj governancej andj toj shareholders

Theyj investj timej toj understandj andj participatej inj thej evolutionj ofj qualityj withinj thej

profession,j developj theirj methodology,j reviewj qualityj recommendationsj andj themesj ofj

regulatoryj inspectionsj andj improvej thej skillsj andj knowledgej ofj theirj professionalj staff Theyj arej continuallyj raisingj theirj expectationsj ofj whatj auditj qualityj is,j asj theyj

believej thisj isj somethingj thatj isj constantlyj evolving

Inj 2020,j theyj startedj toj designj aj consistentj implementationj forj aj coherentj qualityj

managementj systemj inj allj partnershipj countries,j inj accordancej withj aj setj ofj newlyj

releasedj standardsj (ISQMj 1,j ISQMj 2j andj ISAj 220).j Theyj aimj forj completionj inj 2022 Theyj fullyj implementedj thej revisedj standardj ISAj 540Rj auditingj accountingj

estimatesj andj relatedj disclosuresj onj 2020j YEj audits.j They’vej alsoj startedj toj adjustj theirj

globalj methodologyj toj beginj implementingj thej revisedj standardsj ISAj 315Rj Identifyingj

andj assessingj thej risksj ofj materialj misstatementj andj ISAj 600Rj groupj audits

Theyj havej beenj committedj toj thisj sincej 2007j andj makej anj annualj declarationj

confirmj theirj continuingj commitment.j Inj linej withj theirj commitments,j theirj qualityj

assurancej frameworkj isj presentedj throughj theirj qualityj assurancej manualj andj riskj

managementj manual,j bothj ofj whichj constitutej thej benchmarkj forj auditj qualityj controlj

forj allj entities.j Thisj frameworkj coversj thej following:

- Responsibilityj andj leadership;

- Independencej andj objectivity;

- Acceptancej andj continuancej ofj engagements;

- Humanj resources;

- Auditj methodologyj andj engagementj performance;

- Planningj andj supervisionj ofj engagements;

- Technicalj consultation;

- Auditj documentation;

- Professionalj confidentialityj andj riskj management;

- Engagementj qualityj monitoringj reviews;

- Qualityj monitoring;j and

- Proceduresj forj dealingj withj andj resolvingj differencesj ofj opinion;j complaints,j

allegationsj andj claims

Eachj memberj entityj hasj putj inj placej thej qualityj assurancej manualj inj itsj ownj countryj

andj editsj itj toj includej countryj specifics.j Thej policiesj andj proceduresj inj theirj qualityj

assurancej manualj arej complementedj byj theirj globalj auditj methodology.j Theirj auditj

softwarej hasj alsoj beenj developedj toj allowj aj structuredj auditj approachj inj accordancej

withj thej mostj recentj auditingj standards

Thesej arej updatedj regularlyj toj includej thej evolutionj ofj internationalj andj nationalj

standardsj andj followingj operationalj suggestionsj byj users

Theirj compliancej withj thej qualityj assurancej manualj isj monitoredj throughj internalj

andj externalj inspections.j

Thej assessmentsj undertakenj byj thej localj andj globalj qualityj monitoringj teamsj havej

beenj designedj inj compliancej withj thej IFACj Qualityj standardj andj guidance.j Mazarsj

entities’j auditj qualityj monitoringj reviewsj havej severalj components:

- Self-assessmentj ofj thej entity’sj auditj methodology,j ethicsj andj qualityj

assurancej system;j internalj monitoringj ofj thej effectivenessj ofj thej internalj

proceduresj andj ofj thej qualityj ofj thej auditj files.j Thisj isj performedj byj eachj

entityj onj anj annualj basisj andj constitutesj thej basisj forj thej completionj ofj thej

self-assessment;

- Mazarsj internationalj inspections:j thesej arej undertakenj byj experiencedj

reviewersj fromj otherj memberj entitiesj withinj thej organisation,j generallyj everyj

threej years,j andj theyj aimj toj takej anj independentj viewj onj thej resultsj ofj thej

self-assessmentsj andj thej internalj monitoringj whilstj helpingj toj spreadj bestj

practices;j and

- Externalj inspections:j entitiesj arej periodicallyj subjectj toj reviewsj byj thej auditj

regulatorsj orj otherj relevantj bodiesj inj theirj jurisdictions.j Resultsj ofj suchj

reviewsj arej communicatedj toj thej globalj Mazarsj QCC

Thej self-assessmentj includesj thej entity’sj compliancej withj thej IFACj standardsj asj

wellj asj reportingj onj thej resultsj ofj itsj internalj andj externalj auditj qualityj monitoringj

reviews.j Thisj canj bej thej basisj forj anj actionj planj relatingj toj allj areasj identifiedj asj

requiringj improvement,j includingj thosej identifiedj throughj anyj Mazarsj internationalj

inspections

Entitiesj arej requiredj toj communicatej internallyj thej resultsj ofj theirj auditj qualityj

monitoringj reviewsj toj theirj executive,j partnersj andj auditj managers.j Thisj communicationj

isj providedj inj sufficientj detailj toj enablej thej necessaryj correctivej measuresj toj takej place,j

bothj forj thej partnerj inj question,j andj atj thej overallj levelj ofj thej entity

Asj aj minimum,j thej resultsj ofj thej auditj qualityj monitoringj reviewsj include:

- Aj descriptionj ofj thej proceduresj appliedj andj ofj thej scopej ofj thej qualityj

monitoringj review;

- Thej resultsj andj conclusionsj ofj thej reviewsj ofj thej entity’sj proceduresj andj auditj

engagements;j and

- Detailedj actionj plans,j wherej required

Entitiesj thatj arej applyingj toj joinj thej Mazarsj organisationj arej subjectj toj anj inspectionj

organisedj byj thej QCC.j Thej reportj settingj outj thej resultsj ofj thej reviewj isj includedj inj thej

admissionj filej submittedj toj thej GEBj andj thej GGCj forj considerationj beforej thej votej atj

thej Generalj Assemblyj ofj Partners.j Thej reportj mayj bej accompaniedj byj anj actionj plan,j

progressj againstj whichj wouldj bej monitoredj byj thej QCC

CHAPTERj 1:j THEORETICALj FRAMEWORKj ONj AUDITj OFj

SELLINGj ANDj GENERALj ADMINISTRATIVEj EXPENSESj INj

FINANCIALj AUDITSj BYj AUDITINGj FIRMS 1.1 Feature j of j Selling j and j General j administrative j expenses

1.1.1 Definition j of j Selling j and j General j administrative j expenses

 Selling j expense

Accordingj toj Circular j No j 200/2014/TT-BTC,j sellingj expensesj arej allj expensesj

incurredj inj sellingj goodsj andj providingj services.j Sellingj expensesj arej brokenj downj intoj

thej followingj specificj expenses:

- Salesj staffj expenses:j arej allj salariesj payablej toj employeesj relatedj toj thej salesj

cycle,j including:j storagej staff,j salesj staff,j productj packaging,j andj productj

packaging.j andj transportationj alongj withj salaryj deductionsj (socialj insurance,j

healthj insurance,j unemploymentj insurance,j laborj contract)

- Materialj packagingj costs:j arej expensesj forj packagingj materialsj toj repair,j packj

andj preservej goodsj andj products,j fixedj assetsj usedj inj sales,j andj fuelj usedj

duringj transportation

- Costj ofj suppliesj andj tools:j isj thej costj ofj tools,j calculatingj andj measuringj

tools,j workingj equipmentj inj thej salej process

- Depreciationj costsj ofj fixedj assets:j toj servej thej processj ofj sellingj goodsj andj

providingj servicesj suchj asj shops,j warehouses,j andj meansj ofj transportation

- Productj warrantyj expenses:j arej expensesj usedj forj warrantyj andj repairj ofj

goodsj andj productsj duringj thej warrantyj periodj (exceptj forj constructionj andj

installationj warrantyj expenses)

- Expensesj forj servicesj purchasedj fromj outside:j arej expensesj forj purchasingj

outsidej servicesj usedj forj sellingj goodsj andj providingj servicesj suchj asj costsj ofj

rentingj warehouses,j yards,j rentalj properties,j hiringj transportationj andj

commissions.j authorizedj dealer…

- Otherj cashj expenses:j arej cashj expensesj incurredj inj thej salej andj provisionj ofj

servicesj suchj asj advertisingj costs,j salesj pitches,j customerj conferencej costs,j

reception,j etc

Inj addition,j basedj onj businessj activitiesj andj managementj requirementsj ofj eachj

industry,j eachj unitj canj openj aj numberj ofj levelj 2j accountsj underj accountj 641j toj reflectj

detailedj costsj ofj sellingj expenses

 General j and j administrative j expenses

Accordingj toj Circular j No j 200/2014/TT-BTC,j generalj andj administrativej

expensesj arej allj costsj incurredj inj thej operatingj cyclej ofj businessj management,j

administrationj andj somej otherj expensesj thatj arej usedj byj thej wholej unit.j Accordingj toj

currentj regulations,j administrativej expensesj arej detailedj asj follows:

- Managementj staffj expenses:j includingj salaries,j allowancesj payablej toj thej

Boardj ofj Directors,j employeesj ofj differentj departmentsj inj thej enterprisej andj

deductionsj forj socialj insurance,j healthj insurance,j unemploymentj insurance,j

andj specialj allowances

- Costj ofj managementj materials:j actualj valuej ofj exportedj rawj materialsj andj

fuelj toj servej thej managementj ofj thej Boardj ofj Directorsj andj professionalj

departmentsj ofj thej enterprise,j forj repairj andj maintenancej fixedj assetj forj

commonj usej byj enterprises

- Costj ofj officej supplies:j expensesj forj officej suppliesj andj toolsj forj generalj

managementj activitiesj atj thej enterprise

- Depreciationj costsj ofj fixedj assets:j depreciationj ofj fixedj assetsj servingj thej

businessj suchj asj transmissionj vehicles,j offices,j architecturalj treasures,j etc

- Taxes,j feesj andj charges:j taxesj suchj asj licensej tax,j propertyj tax,j etc.,j alongj

withj fees,j ferryj fees,j traffic,j etc

- Provisionj expenses:j thej provisionj forj doubtfulj debtsj andj payablej provisionsj

shallj bej includedj inj productionj andj businessj expenses

- Expensesj forj servicesj purchasedj fromj outside:j expensesj forj purchasingj

externalj servicesj toj servej thej wholej business,j forj example:j water,j electricity,j

fax, ;j expensesj forj rentingj andj renovatingj fixedj assets;j expensesj paidj toj

subcontractors;j inventionj patentsj arej amortizedj graduallyj (notj meetingj thej

criteriaj forj fixedj assets);j purchasej costsj togetherj withj feesj forj thej usej ofj

technicalj documents

- Otherj monetaryj expenses:j otherj expensesj inj cashj otherj thanj thosej mentionedj

abovej suchj asj travelj expenses,j staffj trainingj expenses,j conferencej expensesj

andj otherj expenses,j etc

1.1.2 Characteristic j of j Selling j and j General j administrative j expenses

Fromj thej conceptj andj contentj inj Sectionj 1.1.1,j itj canj bej seenj thatj sellingj andj

administrativej expensesj includej manyj expenses,j thesej costsj arej indirectlyj involvedj inj

productj productionj activities.j Theyj playj anj extremelyj importantj rolej becausej theyj

participatej inj thej consumptionj processj andj thej managementj apparatusj ofj thej business.j

Costsj havej aj closej relationshipj withj thej itemsj inj thej balancej sheet,j soj aj smallj deviationj

inj onej itemj canj affectj anotherj itemj andj vicej versa

Administrativej expensesj andj sellingj expensesj arej twoj itemsj thatj accountj forj aj

largej percentagej ofj anj enterprise'sj productionj andj businessj expenses,j andj arej relatedj toj

profitj targets,j corporatej incomej tax,j moneyj andj businessj expensesj andj somej otherj

indicatorsj onj thej financialj statements.j Onj thej otherj hand,j sellingj expensesj andj generalj

andj administrativej expensesj includej manyj items,j soj checkingj thesej twoj expensesj isj

quitej complicated

1.1.3 Principle j accounting j of j Selling j and j General j administrative j expenses

Inj fact,j whenj sellingj andj administrativej expensesj increase,j thej profitj ofj thej

businessj willj decrease.j Therefore,j thej goalj ofj managingj sellingj andj administrativej

expensesj isj toj minimizej unreasonablej expenses,j makej businessj operationsj morej

efficient,j butj stillj ensurej commercialj civilization

Thej rolej ofj costsj inj businessj isj veryj importantj toj aj business,j soj itj isj alwaysj

importantj toj collectj detailedj aggregatej informationj forj monitoring.j Thej requirementj toj

controlj totalj costsj shouldj bej strictj toj minimizej costs,j therebyj increasingj profits.j

Effectivej totalj costj controlj willj providej completej dataj toj supportj superiorj controlj

operationsj andj makej itj easierj toj makej timely,j urgentj decisions.j Onj thej otherj hand,j thej

controlj ofj specificj expensesj enablesj superiorsj toj trackj eachj element,j eachj detail,j andj atj

thej samej timej trackj eachj transactionj thatj occursj inj orderj toj facilitatej comparisonj

betweenj costsj andj norms,j estimatesj toj evaluatej andj offerj solutionsj toj reducej costsj

appropriately

Accordingj toj Article j 82, j Chapter j II, j Circular j No j 200/2014/TT-BTC:

Firstly,j “expensesj arej amountsj thatj reducej economicj benefits,j recognizedj atj thej

timej whenj thej transactionj occursj orj whenj itj isj relativelyj certainj thatj itj willj arisej inj thej

future,j regardlessj ofj whetherj thej moneyj hasj beenj spentj orj not.j ”j Therefore,j "recognizingj

expensesj evenj whenj thej paymentj maturityj isj notj yetj due,j butj itj isj certainj thatj theyj willj

arisej inj orderj toj ensurej thej principlej ofj prudencej andj preservationj ofj capital.j Thej costj

andj thej revenuej generatedj byj itj mustj bej recognizedj simultaneouslyj underj thej matchingj

principle.j However,j inj somej cases,j thej conformityj principlej mayj conflictj withj thej

prudentialj principlej inj accounting,j thej accountantj mustj basej onj thej naturej andj thej

Accountingj Standardsj toj reflectj thej transactionj honestlyj andj reasonably."

Secondly,j "expensej accountsj havej noj balance.j Atj thej endj ofj thej accountingj

period,j allj expensesj incurredj inj thej periodj mustj bej transferredj toj determinej businessj

results."

Specifically,j thej detailedj accountingj ofj sellingj expensesj andj enterprisej expensej

accountsj atj enterprisesj isj guidedj byj Circular j No j 200/2014/TT-BTC

 Account j 641 j – j Selling j expenses

Thisj isj anj accountj usedj toj recordj expensesj incurredj inj thej processj ofj sellingj

goodsj andj providingj services,j includingj costsj ofj advertising,j sales,j productj introduction,j

salesj commissions,j storagej costs,j packaging,j transportation,j loadingj andj unloading,j

warrantyj costsj forj goodsj andj productsj (exceptj forj constructionj andj installationj

activities),j

Sellingj expensesj withj fullj invoicesj andj documentsj andj properlyj accountedj forj

accordingj toj thej accountingj regimej butj notj asj expensesj forj calculatingj CITj accordingj toj

thej provisionsj ofj thej Taxj Law,j mustj bej adjustedj inj thej finalizationj ofj CITj andj expenses.j

Accountingj feesj mustj notj bej reducedj toj increasej thej payablej CITj amount

Levelj 2j accountsj canj bej openedj underj accountj 641,j reflectingj detailsj suchj as:j

Costj ofj labor,j tools,j supplies,j materials,j packaging,j depreciationj expensej ofj fixedj assets;j

costsj toj purchasej externalj services,j otherj monetaryj costs.j Basedj onj managementj

requirementsj andj businessj naturej ofj eachj industry,j eachj unit,j additionalj levelj 2j accountsj

canj bej openedj underj accountj 641j toj reflectj thej detailedj costsj ofj sellingj expenses.j Atj thej

endj ofj thej period,j sellingj expensesj arej transferredj toj thej Debitj sidej ofj accountj 911j

"Determinationj ofj businessj results"

 Debit j side j : j Costsj incurredj relatingj toj processj ofj sellingj products,j goods,j

renderingj servicesj incurredj inj period

 Credit j side j :

• Itemsj reducedj sellingj expensej inj thej period;

• Transferringj sellingj expensesj toj Drj 911j “Incomej Summary”j toj calculatej

operatingj resultsj inj thej period

Accordingj toj Circular j No j 200/2014/TT-BTC,j Accountj 641j comprisesj 7j accountsj whichj includes:

sub-• Account j 6411 j – j payroll j expenses:j recordingj accountsj payablesj toj salesj

personnel,j packagej personnel,j transportationj andj maintenancej personnelj ofj

products,j goods,j includingj salaries,j intershiftj mealj expenses,j wagesj andj

appropriationj ofj socialj insurance,j medicalj insurancej andj laborj unionj fees,j

unemploymentj insurance

• Account j 6412 j – j Costs j of j materials, j package: j recordingj costsj ofj materialsj andj

packagej deliveredj forj protection,j consumptionj ofj products,j goods,j services,j