Completing the audit process on revenue from sales and provide services in the audit of financial statements conducted by PNT International Auditing Company Limited

In the process of international economic integration, auditing has become indispensable needs for business activities in order to enhance the effectiveness and efficiency of enterprises, economic organizations. Following the trend of strong development of the independent auditing firm . PNT international auditing company limited was established in order to contribute to meet the increasing demand for domestic audit services. With a team of professional, experienced and skillful professionals in both professional and cultural fields, with a specialization in auditing, accounting, finance, taxation, valuation, law, investment and banking, ... the quality of service of the company increasingly high. Therefore, the internship at PNT International Auditing Limited Company is a good opportunity for auditing students like me so that they can learn valuable practical experience in auditing, about the professional work environment of the company. During the internship at the company, he found that in the indicators on the financial reports, sales and service provision is one of the indicators of important position. This is due to the close relationship between sales and service provision with other indicators such as cost of goods sold, profit before tax, after-tax profit, cash, receivables, taxes and other payments to the state ... These are usually the parameters of fluctuations and the possibility of large violations. Therefore, auditing sales and service provision is one of the most important aspects of any financial reporting audit. The results of the audit of the item of sales and service renderings have a great influence on the overall audit result of the financial statements audit. However, in practice the process of auditing the sales and service revenue items still exist some limitations such as not fully apply new accounting standards, auditors may encounter difficulties. The difficulty in collecting initial information about the audit or application of each job content in the audit program is not yet tight. This may diminish the quality of audits of sales and service items in general auditing companies and PNT International Auditing Company Limited. Recognizing this importance and based on the internship at the company, i chose the thesis topic: "Completing the audit process on revenue from sales and provide services in the audit of financial statements conducted by PNT International Auditing Company Limited .”

ACKNOWLEDGEMENTS This bachelor thesis contained huge amount of work, research and dedication Still, implementation would not have been possible if i did not have a support of many individuals and organizations Therefore, i would like to extend our sincere gratitude to all of them Foremost, I would like to express my sincere gratitude to my instructor Dr To Van Nhat for the continuous support of my research, for his patience, motivation, enthusiasm, and immense knowledge Her guidance has helped me in all the time of research and writing of this thesis Without her superior knowledge and experience, the Bachelor thesis would not like in this quality of outcomes, and thus his support has been essential My sincere thanks also goes to my manager – Mrs Huong, my seniors – Mr Chung, Mr Tung and Mr Hai and staffs working in Financial audited Department of PNT international auditing company limited for offering me the summer internship opportunities in their groups and leading me working on diverse exciting projects Nevertheless, I express my gratitude toward our families and friends for their kind co-operation and encouragement which help me in completion of this Bachelor thesis i TABLE OF CONTENT ii STATUTORY DECLARATION I herewith formally declare that I myself have written the submitted Bachelor Thesis independently I did not use any outside support except for the quoted literature and other sources mentioned at the end of this paper I clearly marked and separately listed all the literature and all other sources which I employed producing this academic work, either literally or in content Hanoi, 28/4/ 2017 Signature iii LIST OF TABLES, LIST OF DIAGRAMS TABLES Table 1.1 The objective of internal control and internal control content Error: Reference source not found Table 1.2 Audit objectives in auditing sales and services provision Error: Reference source not found Table 1.3 General internal control objectives, the internal control process, the controlling survey with sales revenue items and provide the service Error: Reference source not found Table 2.1 Some indicators of business activity of the limited liability company the international audit PNT .Error: Reference source not found Table 2.2 A310 work papers of the auditor Error: Reference source not found Table 2.4 Identify critical values for ABC Corporation .Error: Reference source not found Table 2.5 Sales and services provision audit program Error: Reference source not found Table 2.6 G110 working papers of the audi Error: Reference source not found Table 2.7 G131 working papers of the auditor .Error: Reference source not found Table 2.8 G132 working papers of the auditor .Error: Reference source not found Table 2.9 G133 working papers of the auditor .Error: Reference source not found Table 2.10 G134 working papers of the auditor Error: Reference source not found Table 2.11 G135 The working papers of the auditor Error: Reference source not found Table 2.12 G137 working papers of the auditor Error: Reference source not found Table 2.13 G136 working papers of the auditor Error: Reference source not found Table 2.14 G120 working papers of the auditor Error: Reference source not found Table 2.15 Minutes of audit Error: Reference source not found DIAGRAMS Diagrams 2.1 : The company's management apparatus Error: Reference source not found Diagram 2.2 Auditing process of PNT International Auditing Company Limited 29 iv INTRODUCTION The urgency of the research topic In the process of international economic integration, auditing has become indispensable needs for business activities in order to enhance the effectiveness and efficiency of enterprises, economic organizations Following the trend of strong development of the independent auditing firm PNT international auditing company limited was established in order to contribute to meet the increasing demand for domestic audit services With a team of professional, experienced and skillful professionals in both professional and cultural fields, with a specialization in auditing, accounting, finance, taxation, valuation, law, investment and banking, the quality of service of the company increasingly high Therefore, the internship at PNT International Auditing Limited Company is a good opportunity for auditing students like me so that they can learn valuable practical experience in auditing, about the professional work environment of the company During the internship at the company, he found that in the indicators on the financial reports, sales and service provision is one of the indicators of important position This is due to the close relationship between sales and service provision with other indicators such as cost of goods sold, profit before tax, after-tax profit, cash, receivables, taxes and other payments to the state These are usually the parameters of fluctuations and the possibility of large violations Therefore, auditing sales and service provision is one of the most important aspects of any financial reporting audit The results of the audit of the item of sales and service renderings have a great influence on the overall audit result of the financial statements audit However, in practice the process of auditing the sales and service revenue items still exist some limitations such as not fully apply new accounting standards, auditors may encounter difficulties The difficulty in collecting initial information about the audit or application of each job content in the audit program is not yet tight This may diminish the quality of audits of sales and service items in general auditing companies and PNT International Auditing Company Limited Recognizing this importance and based on the internship at the company, i chose the thesis topic: "Completing the audit process on revenue from sales and provide services in the audit of financial statements conducted by PNT International Auditing Company Limited ” Research purpose of the topic Topics are researched to achieve the following objectives Firstly, systematize and clarify the basic theories of the process of auditing the sales and service items of the financial statements audited by an independent auditing organization; Secondly, analysis of the status of the process of auditing sales and service items in the audit of financial statements conducted by the PNT International Auditing Company Limited Thereby, the assessment of the current situation, points out advantages, outstanding issues and causes of limitations in the process of auditing the sales and service items in the audit of financial statements by PNT International Auditing Company Limited; Thirdly, proposes some suggestions to improve the process of auditing the item of sales and service provision in the audit of financial statements conducted by PNT International Auditing Company Limited Subject and scope of research of the topic Research subjects of the subject is the process of auditing the sales and service items in the audit of financial statements conducted by independent auditing organizations The research scope of the subject is the process of auditing sales and service revenue as an integral part of the overall audit of the financial statements by PNT International Auditing Company Limited The figures used for the analysis of the situation are taken from the financial statements ended on 31 December 2016 at the audit firm of PNT International Auditing Company Limited Research method of the topic Based on the general methodology of dialectical materialism and historical materialism, the subject is studied away from practical reasoning, taking theoretical examination, researching issues in Relationship with each other In addition, the topic also uses the following specific methods: Methods of analysis, interpretation, presentation Method of synthesis, inductive Comparative method Practical survey method Structure content of the topic In addition to the introduction, conclusion, reference list, the topic structure consists of chapters Chapter 1: Theoretical framework on audit of revenue from sales and provide services in financial audit conducted by PNT International Auditing Company Limited Chapter 2: Practice of audit of revenue from sales and provide services in financial audit conducted by PNT International Auditing Company Limited Chapter 3: Assessments and recommendation to improve audit of revenue from sales and provide services in financial audit conducted by PNT International Auditing Company Limited Due to limitations in knowledge and time, there are inevitably mistakes in this article I would like to receive comments and suggestions from my teachers and my brothers and sisters in the PNT Company to complete the thesis Through this I would like to send my sincere thanks to the instructor Dr To Van Nhat – my supervisor ,help me to complete this graduation thesis I also would like to send my deep thanks to the management of PNT International Auditing Company Limited, departments who have enabled me to practice and take part in the work at your company Thank you sincerely ! Student Le Thi Ngoc Anh CHAPTER THEORETICAL FRAMEWORK ON AUDIT OF REVENUE FROM SALES AND PROVIDE SERVICES IN FINANCIAL AUDIT CONDUCTED BY PNT INTERNATIONAL AUDITING COMPANY LIMITED 1.1 Overview of revenue from sales and provide services Financial statement is a system of reports prepared by the enterprise according to the current accounting standards and regimes If the balance sheet reflects the value of the asset and the source of its assets, the income statement results reflects the business situation of the enterprise in a given period of time In particular, the revenue from sales and provide services an extremely important indicator, affecting many other indicators in the business result and balance sheet of the enterprise In addition, through the analysis of turnover dynamics, the auditor can see the volatility of other relevant financial indicators, which can provide a brief overview of the indicators Auditing financial statements is the process of auditing financial information in the financial statements to ensure that the information is truthfully reported in all material respects However, because the financial information of the business is very wide, the auditor can not cover all this information As a result, the auditor should focus on items that are material and highly probable, so as to provide reasonable assurance as to the financial status of the auditor Revenue from sales and provide services is one of important items, having a significant effect on many other items in the financial statements, so the audit of this item is one work is highly valued in the audit of financial statements 1.1.1 Concept and classification of sales and services provision The financial and accounting system in an enterprise consists of a number of mutually interrelated relationships, which complement one another to create the basis for the other activity to develop, form a closed loop Sales and revenue recognition can be considered as the final stage in the production and business of the business This activity will bring income to businesses, which is a condition for enterprises to decide whether to invest in re-expanding production or not This process begins with an order and ends with the conversion of the goods product into a receivable and finally into money According to Karl Marx's conception, "Revenue is the result of the consumption process, which is the process of realizing the value and use value of goods and goods Through consumption, the product moves from material form to monetary form and ends a cycle of capital mobility " According to Vietnamese Accounting Standard 14 - "Turnover and other incomes" " Turnover means the total value of economic benefits gained by an enterprise in an accounting period, which arise from the enterprise’s normal production and business operations, contributing to increasing the owner’s capital." Revenue includes: sales and services provision, financial revenues and other income Inside: Revenue from the sale of goods and rendering of services is the total amount of money that is earned or will be earned from activities or transactions: Goods sale: Selling products manufactured by the enterprises and bought-in goods; Provision of services: Performing the work agreed upon in the contracts in one or many accounting periods There are also: Trade discount means a reduction of the listed price granted by the selling enterprises to the buyers of large volumes of goods; Reduction of the price of goods sold means a price reduction granted to the buyers due to the goods’ inferior quality, wrong specifications or old-fashioned ; Value of returns of goods sold means the value of the volume of goods sold already determined as consumed, but then returned by the buyers who declined making payment therefor Revenue is presented in the statement of income in accordance with the following: Turnover of sales and service provision (Code 01); Turnover of financial activities (Code 21); Other income (Code 31) 1.1.2 Conditions for recording sales and service provision Revenue is an indicator reflecting the results of enterprises in general and of the process of consuming goods and services in particular, because of the importance of this indicator in the business result report as well as the influence It is up to the indicators that exist on the balance sheet, the recognition of turnover must comply with some of the following provisions According to Vietnamese Accounting Standard No 14 - "Turnover and other incomes": “ Sale turnover shall be recognized if it simultaneously meets the following five: a/ The enterprise has transferred the majority of risks and benefits associated with the right to own the products or goods to the buyer; b/ The enterprise no longer holds the right to manage the goods as the goods owner, or the right to control the goods; c/ Turnover has been determined with relative certainty; d/ The enterprise has gained or will gain economic benefits from the good sale transaction; e/ It is possible to determine the costs related to the goods sale transaction ” The enterprise must determine the timing of the transfer of most of the risks and benefits associated with the ownership of the goods to the buyer on a case-by-case basis In most cases, the timing of the transfer of the majority of the risks coincides with the time of transfer of the benefits associated with the legal ownership or control of the goods to the buyer Where an enterprise is still exposed to most of the risks associated with the ownership of the goods, the transaction is not considered to be a sale and the revenue is not recognized Enterprises also bear the risk associated with the ownership of the goods in various forms such as: Enterprises are also responsible to ensure the property is operating normally that is not covered by the terms Ordinary warranty; When the payment of sales is uncertain due to the buyer of the goods; When the goods are delivered for installation and installation is an important part of the contract that the business has not completed; When the buyer has the right to cancel the purchase for any reason stated in the sales contract and the business is not sure about the possibility of the goods being returned If an enterprise is exposed to only a part of the risks associated with the ownership of the goods, sales are determined and revenue is recognized Sales revenue is recognized only when it is probable that the enterprise will receive economic benefits from the transaction Where the economic benefits from a sale transaction depend on the uncertainty factor, only the revenue is recognized when the uncertainty factor has been settled If the turnover has been recognized in cases where the money is not yet collected, when determining whether the receivable debt amount is not collected, it must be accounted into the production and business expenses in the period, which shall not be recognized as revenue decrease When determining the receivable amount to be uncertain, the provision for doubtful debts must be set up without any reduction in turnover Bad debts, when actually determined as unsolicited, shall be covered by the reserve for bad debts Revenue and expenses related to the same transaction must be recognized at the same time on a consistent basis Expenses, including costs incurred after the date of delivery (such as warranty and other costs), are usually measured reliably when revenue recognition conditions are met Customer prepaid funds are not recognized as revenue that is recognized as a liability at the time of advance receipt of the The audit process for the construction of scientific item, ensure audit efficiency savings with quality, Lastly , for the clients of the company: There is a spirit of cooperation, enthusiasm in the instalment, provided enough material to be honest and complete in the audit process, best service for audit Accounting work must comply with the accounting standards, the specified text direction of the current state Beside, Implementation of the system of scientific documents, books and full, made in accordance with the principles of internal control systems, Often raising the level, fostered training for staff, accounting staff and receiving according to the suggestions and advice of the audits 3.3 The solution to improve the audit process in sales and services provision items in financial statements conducted by pnt international auditing co.ltd 3.3.1 Improve audit planning phase During the meeting with the client prior to performing the audit should have the full audit group members will participate in audits that client to be able to capture the most noteworthy points clear and specific job content of each Member When the system of internal control of longtime clients, after reviewing audit records of the previous year and collect information about the change of the year, the auditor should perform testing of control back for those changes to ensure reliability To improve efficiency and save costs, the company auditor should plan the audit details for some key items such as sales, inventory, property Or some important processes such as purchase and sales, billing and collecting the money, wages and personnel 3.3.2 Improve audit implementation phase According to the auditing standards no 300 Vietnam-"risk assessment and internal control," the assessment of the entire internal control system in general and the internal control system sales and services provision in particular has always played a very important role and be noticeable in any audit At present, in the process of PNT international auditing co., ltd learn of the auditor regarding the internal control system for collected sales and services and provision items through the material that the customer provided and through the interviews of the individuals concerned So, to achieve the highest efficiency in assessing internal control system the auditor should use the combined questionnaire with the table in the description of the internal control system of the customer Through interviews and observation, the auditor will outline the process of rotation vouchers as well as the 63 responsibility of the person related to that process The audit company often only stop in the comparison of indicators this year compared to previous years but not yet in progress compared with the figures of the business in the same industry and the same scale of business The auditor needs to collect sufficient information relating to the indicators need analysis to be able to assess better the trend of volatility the norm, from which conduct the audit procedures appropriately To avoid the risk of audit can occur because auditors typically select model based on subjective judgements and usually large number of principles, the audit firm should incorporate select according to both methods select non-probability sampling probability, simultaneous use of the software to select the template to avoid omitting critical violations 3.3.3 Improving audit end stage The presentation and archive working papers so that real science is very necessary for an auditor From the awareness of the importance of the working papers presented in the completion of the audit work and the basis to ensure that the evidence collected is highly persuasive, audit firms so interested in the training of the staff working papers records and stores the file of each client in a reasonable manner and science that finding and the reference to the Executive related parts as well as the review of controls are easy, don't take much time 3.4 Conditions make the solution 3.4.1 On the state and professional associations To the State Although the economy of our country's market economy , The State played an important role in the economy and in creating a legal framework for the business Although a category would then also have a separate legal framework by the adjustment law The audit also has a legal framework that is the law on accounting, auditing The Ministry of Finance has issued accounting standards and audit, the National Assembly adopted the law on accounting, the Government issued the decree to guide this legal framework yet song and also many inadequacies The State and the relevant authorities should regularly review the system of legal documents, the accounting standards to find out what the problem is still not fit to any timely additions and adjustments At the same time the authorities need to make good propaganda audit standards as common for enterprises to be audited to avoid disagreements that may occur The professional associations Audit should promote the role of assistance for the drafting of the financial regulation, the legal documents related to the audit activities At the same time, the organization of 64 courses, advanced certification exam qualifications for auditors as well as the assistant auditors need to perform regularly, thereby enhancing the quality of audit 3.4.2 The audit company Audit firm wants to raise the quality of the audit, the audit process is complete notes training, updated knowledge to improve their expertise to audit staff to his staff have sufficient expertise, respect professional ethics, perform the work in accordance with the requirements of the company as well as the law 3.4.3 The audit client Currently, more and more businesses have the need to audit the financial report The audit was, is and will become essential activities for enterprises in the market economy Therefore, to improve the audit process needs help from the enterprises-the object of the audit Business should build yourself an accounting system, internal control system effective operation to prevent the fraud, errors in financial reports On the other hand, enterprises should actively cooperate with auditors, provide full papers, documents, the true explanation when necessary Accounting division of the business need to have expertise, knowledge of current accounting mode and the new enactment 3.4.4 The auditor The auditor is subject to audit activities, who performed the audit and the audit reports given Therefore, to improve the audit process of financial reporting in general and particular sales and services and provision items then try from the auditor is indispensable Auditors need to work out, improve professional expertise in accounting, auditing and has the understanding of the law of Vietnam to be able to make the best possible audit Professional ethics for any important industry but especially for the audit profession then this problem as are demanded by the audit results will affect the decisions of many object using the information A misleading results can charge to immeasurable consequences for business, suppliers, customers, banks, investors Therefore, the knowledge of professional auditors should go together with respect and work ethics 65 THE CONCLUSION Growing economy requires an environment of economic information, financial transparency, clarity, help for the investors, the management of microeconomics as well as macro and other objects can give proper, timely decisions The activity for which the audit is also increasingly developed, satisfying the needs to use the information of the person concerned Following the trend of the time, PNT international auditing limited company has improved efforts, but given contributions to Vietnam's economy Through the codification and clarification of the basic argument about the audit process audit in sales and services and provision items of financial statements by independent audit organizations perform simultaneously analyze the status of the audit process audit in sales and services and provision items of financial statements due to PNT international auditing limited company, i have reviews of reality, pointing out the advantages, the existence of the problem and the cause of the limit in the audit process audit in sales and services and provision items in financial statements due to PNT international auditing limited company In this essay, I have given some reviews as well as recommendations to improve audit work items by audit firm sales and services and provision PNT Vietnam made, but due to the limitations in terms of time and consciousness, the presentation of the children are only suggestive and also very many shortcomings you are looking forward to receive the contributions of the teachers and you audit company in Vietnam to PNT's proposals mean more practices Once again i would like to send my thanks to Dr To Van Nhat the board of directors and the audit firms in Vietnam have dedicated PNT guide i completed this thesis I sincerely thank you! 66 LIST OF REFERENCES Dau Ngoc Chau , Nguyen Viet Loi, “Auditing Financial ”(2010) , Financial Publishing House Dau Ngoc Chau , Nguyen Viet Loi, “Auditing Financial ”(2013) , Financial Publishing House Labor Publishing House, “Vietnam Accounting Standards System”, 2013 Labor Publishing House, “Vietnam Auditing Standards System”, 2014 Legal documents on auditing of Vietnam Sample audit program of VACPA PNT audit ’ document , reports and website 67 APPENDIX Appendix 2.1 Questions related to continue providing audit services PNT INTERNATIONAL AUDITING LIMITED COMPANY Customer name: The end of the accounting period: Content: Old customer acceptance and risk assessment contract People make Reviewer Reviewer Name NTT Date 27/1/2017 I BASIC INFORMATION Name of KH: ABC Corporation The first year audited 2013 FINANCIAL STATEMENTS Number of years AUDITING COMPANY has provided audit services to FINANCIAL REPORTS for this APOC The names andmemories of the main contact person: Trần Thị B – General Director Address: Bach Mai, Hanoi Phone: 043 1234 Fax: 043 1234 abc xyz Email: ABC@gmail.com Website: ABC.com.vn Type DN Listed joint Joint-stock company SOE Ltd Company Other GOV'T type stock co ForeignPrivate FIRMS Company HTX invested partnership ENTERPRISES Financial year: 2016 from the day: 01/01/2016 to date: 31/12/2016 Year established: 2005 Years active: 12 Description of the business activities of COMPANIES and goods, services offered, including independent activities or links -Provided services and construction of cement trade 10 The specific legal provisions relating to the operation of the COMPANIES (if any): 11 The main shareholders, BOD and ANCO BOD: 68 First and last name Nguyen Van A Tran Thi B Nguyen Thanh C Nguyen Phu D Breaking the Stick E Le Count F Bui Trong H Location The Chairman of the Commissioner, General Manager Commissioner-head control Commissioner Deputy General Director Deputy General Director Deputy General Director Notes 12 Full name of the person who represents Trần Thị B the DN: Address: Bach Mai, Hanoi 13 Bank name related businesses: Investment Bank and development of Vietnam (BIDV) Hanoi branch 14 The subdivisions Unit name Location The field of KD Notes 15 Information on investments The company name Location The field of KD Capital 16 Related Parties Parties concerned The relationship The transactions mainly 17 Describe the relationship between DNKiT and KH are set as to how: 18 Check the information related to the DN and the leaders through the media (newspapers, magazines, internet, etc.) 69 The rate of 19 accounting regimes and standards that apply in GOV'T and the presentation of FINANCIAL STATEMENTS Vietnam accounting standards (VASs) and accounting (business) Vietnam Set standards and presentation of FINANCIAL STATEMENTS (IFRSs and IASs) Standard/other accounting mode (specific description): 20 market capitalization value of DN (for listed Company) 21 the audit standards that auditors and DNKiT apply as the basis for the audit opinion Vietnam auditing standards (VSAs) International audit standards (ISAs) Other audit standards (describe): 22 The services and report what is being requested and completed 23 Describe why COMPANIES want to have audited FINANCIAL STATEMENTS and the stakeholders would need to use FINANCIAL STATEMENTS II AUDIT PROCEDURES There Not The events of the current year AUDITING COMPANY fully qualified personnel expertise, experience and the resources necessary to continue to serve Have any doubts arising in the process of work related to the integrity of the ANCO BOD DN? Audit reports on the FINANCIAL STATEMENTS of the previous year had "audit opinion is not full acceptance of comments"? There are signs showing that the repetition of the problem lead to comments such audits this year? Whether the limitation on the scope of audit led to the except/refused to give comments on the AUDITING REPORT this year? There are doubts that arise in the course of work related to the integrity of the ANCO BOD DN? COMPANIES that operate in the legal environment in particular, activities in the field of recession, falling sharply on profit There are problems relating to the non-compliance 70 N/A Notes/description There Not severity of ANCO BOD DN? There are big doubts about the possibility of continuous operation of the DN? Have detrimental issues, litigation, dispute, key risks relating to the operating activities of the ENTERPRISE? DN has many important transactions with related parties? DN has the unusual trading in or near the end of the year? Foreign accounting matters or complex operations easy to dispute that standard, the current accounting regime does not yet have specific guidelines? In the audit process years ago have discovered serious defects in the INTERNAL control system of ENTERPRISES? There are signs that the INTERNAL control system of ENTERPRISES this year have serious flaws affect computers comply with the law, the integrity of the FINANCIAL STATEMENTS? Fees Total costs from KH has occupied a large part of the total sales of AUDITING COMPANY The charge of KH has prevailed in the income of the ANCO BOD members in charge of the audit contract KH charge audit, other overdue service fees paid in a long time Relations with KH AUDITING COMPANY or a member of the audit team, in the range of expertise are involved in any disputes related to KH ANCO BOD members in charge of contract audit and the audit team leader has joined the audit team too consecutive years ANCO BOD members of AUDITING COMPANY or a member of the audit team to have family ties or personal relations, close economic relations with 71 N/A Notes/description There Not N/A Notes/description KH, staff or ANCO BOD of KH AUDITING COMPANY or a member of the audit team are members of the Fund holds stocks of KH Have any of the people below is the current employees or directors of KH: -Member of the audit team (including ANCO BOD members) -ANCO BOD members of DNKiT -former member of ANCO BOD DNKiT -the individual has close relationship or family relationship with the person who stated on ANCO BOD member or members of the audit team are about to become employees of KH Whether the loans or guarantees, unlike with normal business operations, between KH and DNKiT or a member of the Group audit Sample conflict of interests Have any conflicts of interests between KH KH other current with this External service provider audits AUDITING COMPANY have provided other services to KH may affect independence Other There are other factors causing AUDITING COMPANY to consider denying appointed auditor III ASSESS THE RISK LEVEL OF THE CONTRACT High On average Low IV ADDITIONAL NOTES V CONCLUSION Accept customer retention: There Not After acceptance to provide services to audit FINANCIAL STATEMENTS with activity in 2016, between parties to conduct the audit contract Appendix 2.2 Audit contract THE SOCIALIST REPUBLIC OF VIETNAM Independence-freedom-happiness -o0o 72 Number: mnq/HĐKT-HDT Hanoi, 26 January 2017 THE AUDIT CONTRACT (V/v: audited financial statements of the fiscal year ending on 31/12/2016 of ABC Corporation)  The base population the number 33/2005/QH11 on 14/6/2005;  Commercial Law bases the number 36/2005/QH11 on 14/6/2005;  Independent audit pursuant to the law No 67/2011/QH12 on 29/3/2011;  Pursuant to Decree No 17/2012/ND-CP of the Government 13/3/2012 detailing and guiding the implementation of some articles of the law on the independent audit;  Vietnam auditing standards base of 210 of the audit contract; This contract was formed between the parties: PARTY A: ABC CORPORATION ‾ Representative: Ms Tran Thi B ‾ Position: Director General ‾ Based in: Bạch Mai, Hanoi ‾ Phone number: 043 1234 abc ‾ Fax: 043 1234 xyz ‾ Tax code: 0123456789 ‾ Member: abcabc At Investment Bank and development of Vietnam-Hanoi INDUSTRIAL B SIDE: LIMITED LIABILITY COMPANY INTERNATIONAL AUDIT PNT ‾ Representative: Ms Nguyen Thi Thanh Hue ‾ Position: General Director of the Ph ‾ Based in: No B6 Dinh Cong Street ,Hoang Mai district, Hanoi City ‾ Phone: (04) 35 666 390-35 666 391 ‾ Fax: (04) 35 666 381 ‾ Tax code: 0102936447 ‾ Account: 15 17 58 58 In VPBank Bank Hanoi Article 1: the CONTENT of the CONTRACT 73 Party B agrees to give the party A service audit of financial statements ABC Corporation's fiscal year, ending on 31/12/2016, including the balance Sheet, reported results of operations, cash flow reports and A presentation of financial statements for the financial year ending on the same date Audit of Party B is done with the goal of bringing out the audit opinion on the financial statements of the The A Side Article 2: RESPONSIBILITY of party A and PARTY B 2.1 responsibilities of A party: Audit of party B will be made on the basis of the Board of Directors and the management of party A (in the appropriate range) understand and admit responsibility: (a) For the preparation and presentation of financial statements honestly and reasonably, in accordance with the accounting standards accounting regime, Vietnam business and the legal provisions relevant to the establishment and presentation of the financial statements is applied; (b) With respect to internal controls that the Board determines is necessary to ensure the establishment and presentation of the financial statements is no longer critical flaws due to fraud or error; (c) Ensure timely provision for side B: (i) The right of access to all documents and information that the Board of directors found is related to the process of establishment and presentation of the financial statements as accounting, accounting books, documents and other issues; (ii) The additional information that the auditor and audit business requires the Board to provide or to serve the purpose of the audit; (iii) Unlimited access for personnel of A party that auditors and audit businesses identified as needed to collect audit evidence Layout related personnel working together with party B during the audit The Board of Directors and the management of party A (in the appropriate range) are responsible for providing and confirm in writing about the explanation provided in the audit process in the "letter of explanation of the Board of Directors and the Board of Trustees" Vietnam auditing standards require "explanation of the Board of Directors and management" are clearly the responsibility of the Board of Directors of A party in the preparation and presentation of financial statements; Asserting that the influence of individual errors, as well as General errors are not adjusted by the parties B findings, 74 General during the audit for the current period and the prior period-related errors is not critical for the overall financial statements Create conditions for the employees of party B during work at A party Office Full payment of service charge audit for side B as defined in article of this agreement 2.2 responsibility of side B: Party B will perform audit work under the Vietnam accounting standards, laws and relevant regulations This audit standards prescribed party B to comply with standards and the rules of professional ethics, to plan and perform the audit in order to gain reasonable assurance about whether the financial statements review on overall aspects are also critical errors or not In the audit, party B will perform the procedure to collect audit evidence regarding the data and information presented in the financial statements The procedure is performed depending on the assessment of the Auditor, including the assessment of possible risks of errors in financial statements due to fraud or error The audit also includes the assessment of the suitability of the accounting policies that are used and the accounting estimate of the Board of Directors, as well as the overall presentation of the financial statements Party B is responsible for notifying A party about the content and the audit plan, the election of Auditors and assistants have the ability and experience to perform the audit Side B of the audit work done according to the principles of independence, objectivity and confidentiality of data According to that side B was not entitled to disclose to any third party without the consent of A party, except as required by law and related regulations, or in case such information on was the State Agency widely popular or has been party to A disclosure Party B is responsible for requesting A party to confirm the explanation provided for the B side of the audit process According to the audit standards, the Vietnam meet these requirements and the award of the Board of Directors and the management side A on the related issues is one of the basis for side B give its opinion with A party's financial report Due to the inherent constraints of the audit as well as of the internal control, there are unavoidable risks is that auditors may not detect critical errors, although the audit was planned and conducted by the Vietnam auditing standards To assess risk, party B will consider internal control which side of A use in the financial reporting process to design appropriate audit procedures in each case, but does not aim to give comments on the effective properties of internal control of A party, however , party 75 B shall notify party A in writing of any deficiencies in internal control that side B was discovered in the process of auditing the financial report 76 Article 3: AUDIT REPORTS After the end of the audit, party B will give the party A: audit reports was established (five) by Vietnamese, A party holding the (four); side B holds (a) Audit reports will be created in writing, including the content of the provisions of the law of independent audit, audit standard no 700, Vietnam accounting standards and other legal provisions concerned Article 4: SERVICE FEES and PAYMENT METHODS Service fees The total service fees for the services referred to in article is: x 000 (In words: x) Service charge already include 10% VALUE ADDED tax Terms of payment:  Party A will advance to the B 60% service fee as soon as the B side began to perform audit and payment of 40% of the remaining audit fees when Party B released the audit report  Audit fees will be paid by direct bank transfer to the account of side B  Party B will issue the invoice VALUE for A party when providing the service, in accordance with the provisions of the applicable tax law Article 5: TERMS The two sides committed to implement all the terms stated in the contract In the process, if any problems, the two parties must promptly inform each other to find ways to resolve All changes must be reported directly to each of the parties in writing at the address above Any dispute or claim arising in the process of implementation of the contract will be settled by negotiation or by the Civil Code of the Socialist Republic of Vietnam and in court economy due to the two side choices Article 6: VALIDITY and TERM of CONTRACT IMPLEMENTATION  This contract established by the Vietnamese side, release A keep a, B side keep copies of the same value and effect since October have enough signatures, the seals of both parties  This agreement automatically be liquidated after the party A and party B has completed the responsibilities of each party Representative of party A Representation B COMPANY ABC STOOLS LIMITED LIABILITY COMPANY INTERNATIONAL AUDIT PNT Director Deputy General Director 77