Khoá luận: Kiểm toán tiền và tương đương tiền trong báo cáo tài chính tại công ty kiểm toán và định giá Thăng Long T.D.K (tiếng anh). The thesis including 3 main part:Chapter 1: Concept and framework of Audit procedures for Cash and Bank accounts on Financial StatementsChapter 2: Actual Audit procedure for Cash and Bank accounts on Financial Statement at Thang Long – T.D.K Auditing and Valuation company, Ltd.Chapter 3: Proposals for completing the Audit procedures for Cash and Bank accounts on Financial Statement at Thang Long – T.D.K Auditing and Valuation company, Ltd
L ITERATURE
Definition and classification
In the economy, Trade in commodities is the essential activity in the development stage
Historically, trade involved the direct exchange of goods, but as the variety of products and services increased, the need for a standardized medium of exchange became essential This led to the creation of money, which economists define as anything widely accepted as payment for goods, services, or debt repayment (Mishkin, 2016, p 95).
Mishkin (2016) pointed out 3 functions of money:
- Medium of exchange: money is used to make payments
- Unit of account: money is used to measure value in an economy
- Store of value: it is a repository of purchasing power available over time
Money has evolved over time and now primarily exists in three forms: cash on hand, cash in the bank, and cash in transit, each characterized by its method of storage.
Cash on hand refers to the actual cash available within a business, essential for making payments for goods and employee salaries This cash can exist in various forms, including Vietnamese Dong, foreign currencies, or monetary gold As the most liquid form of money, cash on hand allows for immediate payments without the need for conversion.
Cash in bank is the cash deposit in bank aims to reserve for payments or term deposits
Cash in bank can consist of Vietnamese Dong, foreign currencies, or Monetary Gold For enterprises engaged in frequent trade with foreign partners or involved in import/export activities, the transactions and account balances of cash in bank are typically substantial, representing a significant portion of their total cash reserves.
Cash in transit refers to the funds that a company has deposited in a bank or state treasury, yet has not yet received bank statements or credit notes for these transactions This includes both Vietnamese Dong and foreign currencies, highlighting the importance of tracking these amounts to ensure accurate financial reporting.
The classification of cash and bank accounts, as outlined in Circular 200/2014/TT-BTC, reflects their presentation on the Statement of Financial Position for enterprises Each form of currency possesses unique characteristics, necessitating distinct management and internal control systems for cash and bank transactions within each entity This diversity is crucial for auditors to develop effective audit strategies and gather sufficient and appropriate evidence regarding these accounts.
Rules for cash accounting
Cash and bank accounts are essential for enterprises, necessitating a robust accounting system to effectively manage and monitor these assets Compliance with the accounting regulations set forth by the Ministry of Finance is crucial for maintaining accurate financial records.
Firstly, consistency in moneytary unit – Accountants must use unified currency monetary unit for recording all transactions and account balances In Viet Nam,
In accounting, the primary monetary unit is the Vietnamese dong (đ; VND), which is essential for bookkeeping and the preparation of financial statements Transactions involving foreign currencies must be converted to Vietnamese dong based on the applicable exchange rate According to Article 4 of Circular 200/2014/TT-BTC, enterprises that primarily conduct transactions in foreign currencies must adhere to accounting regulations and inform the supervisory tax authority Additionally, the currency used as the monetary unit in accounting must meet specific requirements.
The pricing structure is crucial in sales and service provisions, significantly influencing selling prices and service fees, and is typically employed for posting prices and processing payments Additionally, it plays a vital role in the procurement of goods or services, affecting labor, material, and overall production costs, and is primarily utilized for managing these payments.
Regularly updating accounts is essential for accurately recording transactions related to cash and bank accounts This involves consistently referencing bank statements, receipts, and payment slips, as well as frequently monitoring the petty cash book and maintaining detailed ledgers for each bank account For foreign currency accounts, accountants must track the original currency and perform revaluations at the end of each period based on the prevailing exchange rates.
Characteristics of cash and bank on Financial Statement
Cash and bank accounts are the most liquid assets on a balance sheet, playing a crucial role in assessing a business's solvency through financial ratios like the current and quick ratios This significance may lead entities to intentionally misrepresent their cash and bank balances on financial statements, misleading stakeholders about the company's financial position Such practices are particularly common among businesses aiming for public listing or seeking additional borrowing.
Cash serves as a crucial medium for purchases and is generated from sales, making it a vital mobile asset for businesses Given the high volume of cash and bank transactions throughout the fiscal year, an ineffective internal control system can expose the enterprise to substantial risks, including fraud and errors that can impact financial statements.
Cash and bank accounts are closely linked due to their roles as highly liquid mediums of exchange, impacting essential cycles like purchases, revenue, and payroll Therefore, errors arising from these cycles can significantly affect cash and bank accounts.
Cash and bank accounts are critical components of financial statements that are prone to misrepresentation Due to their susceptibility to material misstatement, it is essential for auditors to exercise heightened scrutiny during the audit process to ensure accuracy and integrity in reporting.
CONCEPT OF AUDIT PROCEDURE FOR CASH AND BANK ACCOUNT
Audit objectives
To provide reasonable assurance about whether the FS as a whole are free from material misstatement, the auditor needs to obtain evidences about the financial statement assertions
ISA 315, paragraph A124 (a)-(b), emphasizes the importance of financial statement assertions, which encompass assertions for classes of transactions, account balances, and related disclosures These assertions must be detailed enough to effectively assess the risks of material misstatement and to inform the design and execution of further audit procedures.
The assertions in audit cash and bank are set out in the table that follows:
A/ Assertions about account balances at the period end:
Existence Recorded cash balances exist at the period end
Completeness Recorded cash balances include the effects of all transactions that have occurred
Recorded cash balances are realisable at amounts stated
Rights and obligations The entity has legal title to all cash balances shown at the period
Presentation Disclosures relating to cash are adequate and in accordance with accounting standards legislation
B/ Assertions about classes of transactions and events for the period under audit:
Occurrence All transactions and events relating to receving or paying cash that have been recorded have been actually occured and pertain to the entity
All recorded transactions and events regarding cash and bank activities have been accurately documented, ensuring the integrity of the data Furthermore, every relevant transaction and event has been comprehensively recorded, affirming the completeness of the financial records.
In accounting, transactions and events must be accurately classified within the appropriate accounts to ensure clarity Additionally, it is crucial that these transactions are recorded in the correct accounting period to maintain accurate financial reporting Furthermore, transactions should be presented in a manner that is either aggregated or disaggregated appropriately, with clear descriptions and relevant disclosures that adhere to the applicable financial reporting framework, ensuring they are understandable for stakeholders.
Resources and documentations for the audit
During the audit process for cash and bank transactions, auditors rely on a variety of resources and documentation to gather appropriate evidence Key materials include operational management records and relevant transaction documentation, which are essential for ensuring a thorough and accurate audit.
- Policies, regulations related to cash management issued by government such as: regulations on bank payments, non-cash payments,
- The regulations made by Board of management about approval responsibilities, authorisations of payments, segregation of duties of treasurers and accountants, cash count, reconciliations,…
- Financial statements: Statement of finacial position, statement of profit or loss, Notes to financial statement, statement of cash flow
- Accounting books: Cash book, petty cash book, general ledger, general journal, detailed ledger,…
- Accounting documents related to cash and bank as: the receipt, payment slips, Credit note, Debit note, Debit advice, Accreditative,
- Other relevant documentations: cash count record, bank statements, bank confirmation, bank contract,…
Frequently misstatements
First, Relating to occurrence and existence assertions:
- The receipts and payment slips do not reflect the actual transactions or events
- Transfer money to the wrong person or recipient who has no economic relationship to the entity
- Misrepresent the amount transferred to the bank, transfer payment
- There is difference between cash fund exist to cash counts record
- Not reconcile the deposit cash balance to the balance in Bank
Second, Relating to accuracy and valuation and allocation assertion:
- At the end of period, the foreign currency balances are not valuated in proper exchange rate accordance with the banks
- The invoice are recordes twice, or paid in cash with amount greater than VND 20 millions
Third, Relating to completeness assertion:
- Inconsistence in recording the transactions relating foreign currency
- Lack of detailed ledger for each Bank accounts
- Not recording fully the bank deposit interest or the interest does not match with the amount presented in bank
- Refect inappropriately the cash in transit
- Refect inappropriately the bank overdraft, deposit cash,
Fifth, Relating to cut – off assertion:
Recorded according to debit advice and accreditative in wrong period
Sixth, Relating to presentation and disclosure assertion:
- There are many petty cash books
- Not monitoring the currency amount of foreign currency account
Misstatements in financial reporting can arise not only from inaccurate assertions but also from inadequate internal control systems For instance, when the treasurer, who has a familial relationship with the Executive Director and Chief Accountant, is allowed to record cash and bank transactions, it compromises the segregation of duties This situation increases the risk of cash being misappropriated for personal use and highlights the importance of having proper approval processes for receipts and payment slips to ensure financial integrity.
FRAMEWORK OF AUDIT PROCEDURE FOR CASH AND BANK
Planning
In accordance with ISA 300, which outlines the planning of an audit of financial statements, auditors are required to organize their approach to ensure the engagement is conducted efficiently and effectively.
Audits are strategically planned to ensure that auditors focus on critical areas, promptly identify and address potential issues, and effectively organize and manage the audit process This planning aids in selecting suitable team members, assigning tasks, and facilitating the direction, supervision, and review of work Additionally, it enhances the coordination of efforts among auditors and experts involved in the audit.
The objective of planning phase is formulating an overall audit strategy which is translated into a detailed audit plan for auditor to follow
In planning phase, auditors perform including these tasks:
A/ Understanding client and its environment:
Before onboarding new clients, audit firms conduct thorough investigations to assess their acceptability For current clients, firms regularly reevaluate relationships to identify any potential reasons for discontinuation Upon accepting clients, audit firms implement procedures for client acceptance and continuance while assessing audit risk through a comprehensive understanding of the client and their environment.
In this task, auditors need to study and obtain documents which have following information:
- Industry, regulatory and other external factors, including the applicable financial reporting framework
- Nature of the entity, including operations, ownership and governance, investments, structure and financing
- Entity's selection and application of accounting policies
- Objectives and strategies and related business risks that might cause material misstatement in the financial statements
- Measurement and review of the entity's financial performance
Auditors must gather essential documentation and information regarding cash and bank transactions from the chief accountant This includes the statement of financial position, trial balance, cash count records, general journal, petty cash details, and the general ledger for account 111.
B/ Preliminary analytical procedures of cash and bank account:
Preliminary analytical procedures during the planning phase are essential for audit risk assessment, enabling auditors to analyze and evaluate the risk of material misstatement in financial statements (FS) and establish a foundational audit strategy By employing horizontal or vertical analysis, auditors can examine various factors such as the operational environment, economic conditions, and industry trends, allowing for an objective assessment of FS and identification of significant changes compared to the previous year Subsequently, auditors assess risks associated with cash and bank transactions, as well as any unusual fluctuations.
To effectively assess the internal control system for cash and bank accounts, auditors must focus on both the design and implementation of these controls This understanding allows them to gauge the level of reliance on the internal control system and to develop an appropriate audit strategy By utilizing professional judgment and implementing procedures to evaluate control risk, auditors can identify potential risks of material misstatements This initial comprehension of internal controls is crucial for assessing audit risk, which in turn helps determine the scope, content, schedule, and necessary audit tests Audit procedures aimed at gaining this understanding are essential for ensuring a thorough and effective audit process.
- Request clients to provide the regulations about internal control system for cash and bank
- Inquire clients’staffs who have understanding about internal control
- Examine whether internal control system is operated as regulations
D/ Preliminary judgment about materiality v Assessing audit risk:
Auditor must perform risk assessment procedures for cash and bank account to have a basic to identify and assess risk of material misstatement on FS and Fianacial management assertions level
Auditor assess audit risk through audit risk model:
AR – “Audit risk is the risk that the auditor expresses an inappropriate audit opinion when the financial statements are materially misstated” (ISA 200: para 13(c))
Inherent risk refers to the likelihood that an assertion regarding a transaction, account balance, or disclosure may be materially misstated, either on its own or when combined with other misstatements, prior to any evaluation of internal controls.
Control risk refers to the possibility that a significant misstatement in financial assertions related to transactions, account balances, or disclosures may go undetected or uncorrected by an entity's internal controls in a timely manner This risk encompasses both individual misstatements and those that, when combined, could be material.
Detection risk (DR) refers to the possibility that an auditor's procedures may fail to identify a material misstatement, whether it is significant on its own or when combined with other misstatements According to ISA 200, this risk underscores the importance of thorough auditing practices to ensure that financial statements are accurate and reliable.
IRxCR refers to the risk of material misstatements in financial statements (FS) Auditors are required to evaluate this risk across all components of the FS, including assertions related to transactions, as well as cash and bank balances.
To effectively identify inherent risks, it is essential to understand the client and their environment, which includes examining relevant controls and conducting thorough inspections of transactions, account balances, and financial statement disclosures This process allows for the assessment of inherent risks to determine if they have a pervasive impact on the overall financial statements and could potentially influence key assertions.
- Assess control risk through understanding of internal control system and consider what controls the auditor intends to test;
To effectively assess detection risk, it is essential to synthesize inherent risk and control risk The level of detection risk, whether high or low, serves as a fundamental basis for auditors to determine the volume of audit tests required and to develop an appropriate audit strategy Additionally, materiality plays a crucial role in this assessment process.
In the ISA 320 (para 2), the definition of materiality is not expressed, but it is discussed in different terms by different financial reporting frameworks the following are generally the case:
- Misstatements are considered to be material if they, individually or in aggregate, could reasonably be expected to influence the economic decisions of users
- Judgements about materiality are made in the light of surrounding circumstances, and are affected by the size and nature of a misstatement or a combination of both
- Judgements about matters that are material to users of financial statements are based on a consideration of the common financial information needs of users as a group
The materiality has both quantity aspect (amount) and quality aspect (nature):
- Quantitative aspects, misstatement is considered to be material when it reached at specified benchmarks that can influence the decisions of intended users
- Qualitative aspects, some misstatements may fall under specified benchmarks, but are still considered material overall due to their nature effects
The materiality level significantly influences an auditor's decisions regarding the quantity of items to test, the specific items to examine, and the associated risk of issuing an incorrect audit opinion.
Determining the materiality is dependent on professional judgment of auditor Auditor establish overall materiality for FS as a whole and performance materiality for overall
To ensure that the likelihood of uncorrected and undetected misstatements surpasses materiality for the overall financial statements is minimized, financial statement (FS) materiality is carefully allocated, particularly for cash and bank accounts Typically, this process begins by applying a specific percentage to a selected benchmark, which serves as the foundation for establishing the overall materiality of the financial statements.
There are some factors might affect choosing appropriate brenchmark, including:
- Items on FS interested by intended users;
- Capital ownership structure of client
Identifying materiality in planning phase aims to determine appropriate audit procedures which easily to detect material misstatement or errors
E/ Audit strategy and audit planning for cash and bank
Audit strategy and audit plan must be designed for each audit, clients and in appropriate way in order to cover all material aspects of the audit
Audit strategy and audit plan must be monitored to update and change if necessary during conducting the audit
The overall audit strategy sets the scope, timing and direction of the audit, and guides the development of the more detailed audit plan (ISA 300: para 7)
“In establishing the overall audit strategy, the auditor shall:
(a) Identify the characteristics of the engagement that define its scope;
(b) Ascertain the reporting objectives of the engagement to plan the timing of the audit and the nature of the communications required;
(c) Consider the factors that, in the auditor’s professional judgment, are significant in directing the engagement team’s efforts;
(d) Consider the results of preliminary engagement activities and, where applicable, whether knowledge gained on other engagements performed by the engagement partner for the entity is relevant; and
(e) Ascertain the nature, timing and extent of resources necessary to perform the engagement” (ISA 300: para.8)
Base on the overall audit strategy, audtior develop an audit plan Audit shall include a description of:
- “The nature, timing and extent of planned risk assessment procedures, as determined under ISA 315.4
- The nature, timing and extent of planned further audit procedures at the assertion level, as determined under ISA 330.5
- Other planned audit procedures that are required to be carried out so that the engagement complies with ISAs “(ISA 300: para.9)
Executive
During the planning phase, procedures to understand internal control often fail to provide adequate evidence of effective operation, necessitating the use of tests of controls The primary objectives of testing the internal control system for cash and bank include assessing the effectiveness of these controls and evaluating control risk levels This evaluation is crucial for estimating the scope of substantive tests and additional procedures Tests of controls typically concentrate on specific key issues related to internal control effectiveness.
A/ Possible tests of controls over cash payments:
- Observe the processing of cash payments and review the entity’s policies to evaluate whether proper segregation of duties is operating
- Review procedures for reconciling supplier statements
- review monthly reconciliation to confirm whether undertaken and independently reviewed
- inspect relevant documentation for evidence of approval by senior personnel
- select a sample of cheque payments and ensure that cheque numbers follow on in sequence
- Review reconciliation, to ensure performed, reviewed and any discrepancies followed up on a timely basis
- Review bank reconciliation for evidence it was done and independently reviewed Reperform a sample of bank reconciliations
- Review reconciliation, to ensure performed, reviewed and any discrepancies followed up on a timely basis
- Review assignment of general ledger account
B/ Possible tests of controls over cash receipts:
- Observe the processing of cash receipts and review the entity's policies to evaluate whether proper segregation of duties is operating
- Examine application controls for electronic cash receipts transfer
- Observe mail opening procedures, including endorsement of cheques
- Observe preparation of cash receipts' records
- Review documentation, reconciliations for evidence of independent check
- Review monthly bank reconciliations to confirm performed and reviewed Reperform a sample of the reconciliations
- Enquire of management about handling of customer statements
- Review entity's procedures for sending out statements
ISA 520 (para 5) states that when using analytical procedures as substantive tests, the auditor must:
- Determine the suitability of particular analytical procedures for given assertions
- Evaluate the reliability of data from which the auditor's expectation of recorded amounts or ratios is developed
- Develop an expectation of recorded amounts or ratios and evaluate whether this is sufficiently precise to identify a misstatement that may cause the financial statements to be materially misstated
- Determine the amount of any difference that is acceptable without further investigation
Analytical procedures are particularly effective for large transaction volumes that exhibit predictable patterns over time The effectiveness of these procedures in identifying material misstatements is determined by the auditor's evaluation, as outlined in ISA 520: para A6.
Analytical procedures can be performed using various techniques from simple comparisons to complex analyses, in which ratio analysis is one of the most useful technique
Auditors conduct financial ratio analysis for cash and bank by examining liquidity ratios, which reflect a company's capacity to meet short-term debt obligations Since cash and bank accounts are the most liquid assets on the financial position statement, the current ratio is a key metric used in this evaluation.
The current ratio assesses a company's ability to meet its short-term debt obligations, with a higher ratio indicating a strong liquidity position However, if the current ratio exceeds 3, it may suggest that the company is not utilizing its capital effectively Additionally, the quick ratio serves as another important measure of liquidity.
The quick ratio, similar to the current ratio, excludes current assets like inventories and prepaid expenses that are not easily convertible to cash, providing a more accurate reflection of liquidity A quick ratio below 1 indicates that the entity cannot use its quick assets to cover short-term debts Additionally, if the quick ratio is lower than the current ratio, it suggests that the entity's current assets are heavily reliant on inventory.
This ratio expresses how quickly the entity can pay its short-term debt, as cash and bank are the most liquid assests
B/ Tests of details v Cash on hand
To obtain evidences about cash on hand, auditors need to perform audit tests for assertions relating cash on hand account as follow:
Assertions Audit objective Audit test
Existence The cash on hand balances recorded is actual exist at the end of the fiscal year
Auditor observes client’s staffs count cash on hand Then, auditor will collect the cash count record which is fully signed by accountant, treasurer and that auditor
Reconciliation: Auditor compare the cash on hand balance recorded in trial balance to the actual amounts
Completeness The cash on hand existing is not recorded
Valuation Cash balances are record at realisable value
Revaluation: Examines whether the foreign currencies is recorded at correct exchange rate
The entity has legal title to all cash balances shown at the period
Verify unbanked cheques, cash receipts have subsequently been paid in and agree to the bank reconciliation by inspection of the relevant documentation
Disclosures for cash on hand are sufficient and complied with accounting standards and law
Read disclosures for cash on hand to determines whether notes relating to cash on hand is sufficient
During observing cash count, auditor should pay attention at some following matters:
- The petty cash books should be written up to date in ink or other permanent form at the time of the count
- All balances must be counted at the same time
- All negotiable securities must be available and counted at the time the cash balances are counted
- At no time should the auditors be left alone with the cash and negotiable securities
- All cash and securities counted must be recorded on working papers subsequently filed on the current audit file v Cash in Bank
To obtain evidences about cash in bank, auditors need to perform audit tests for assertions relating cash in bank account as follow:
Assertions Audit objective Audit test
Existence The cash in bank balances recorded is actual exist at the end of the fiscal year
Obtain standard bank confirmations from each bank which client conducted business with
Completeness The cash in bank balance and related transactions have been recorded fully
Verify balances per the cash book according to the bank reconciliation by inspecting cash book, bank statements and general ledger
Before finalizing the year-end bank reconciliation, it is essential to review the previous reconciliation and verify that all items have been cleared in the last period or appropriately carried over to the year-end reconciliation.
Obtain satisfactory explanations for all items in the cash book for which there are no corresponding entries in the bank statement and vice versa
Inspect the payments have been recorded but bank has not debited yet
Review all bank lodgements where payment has been declined, ensuring they are resolved through resubmission or by taking suitable actions to recover the outstanding amount.
Cut-off Transaction relating to deposit cash have been recorded at right period
Reconcile the transactions occured at year end and next year to bank statement to examines whether they are recorded at wrong period
Before the year-end audit, review outstanding cheques from the bank reconciliation against the cash book and the subsequent bank statements Investigate any significant or unusual transactions that remain unresolved to ensure clarity and accuracy in financial reporting.
Inspect paying-in slips that uncleared bankings are paid in prior to the year end
Cash balances are record at realisable value
Revaluation: Examines whether the foreign currencies is recorded at correct exchange rate
The entity has legal title to all cash balances shown at the period end
Consider whether there is a legal right of overdrafts against bank balances
Enquiries managements to determine whether the bank account are subject to any restrictions
Communicate to management to identify whether any accounts are secured on the
Disclosures for bank are sufficient and complied with accounting standards and law
Review draft accounts to ensure disclosures for bank are sufficient and complied with accounting standards and law
Completion
After performing test of control and substantive test to obtain sufficient and appropriate evidences about cash and bank, auditors synthesize and record on audit documentation as follow:
- Misstatement has been detected during audit test and assess the level of materiality of those
- Reasons lead to these errors (if any) and adjustments for those
- Audit opinions for errors and deficiency of internal control system for cash and bank
- The issues need to monitor in the next audit period (if any)
- Audit result for audit cash and bank play an important role for auditor to issue audit opion in next time
Chapter 1 has presented the concept and framework of audit procedures for cash and bank accounts on Financial Statements of enterprises Specifically, firstly, it is the literature of cash and bank accounts on Financial Statements; secondly, it is concept of audit procedures for cash and bank accounts on Financial Statements including objectives, basis and typical errors in audit procedures cash and bank accounts; finally, it is the framework of audit procedures for cash and bank accounts on Financial Statements Thereby, those are the basis for comparision and evaluations of the actual audit procedures for cash and bank accounts on Financial Statemens at Thang Long – T.D.K Auditing and Valuation company, Ltd in chapter 2 and giving proposals for completing the audit procedures for cash and bank accounts on Financial Statements in chapter 3
ACTUAL AUDIT PROCEDURES FOR CASH AND BANK ACCOUNTS ON FINANCIAL STATEMENTS AT THANG LONG – T.D.K
AUDITING AND VALUATION COMPANY, LTD
OVERVIEW OF THANG LONG – T.D.K AUDITING AND VALUATION COMPANY, LTD
General information
- Company name: Thang Long – T.D.K Auditing and Valuation Company, Ltd
- Address: KT Floor, 113 policeman apartment, Yen Hoa Ward, Cau Giay District, Ha Noi city
The company was granted a business registration license by Hanoi Authority for Planning and Investment and tax registration No 0104779158 on 29/06/2010 v Vision
- Sustainable development: striving to become the leader in accounting, auditing and tax market
- Prestige: Create the highest trust of customers in service quality and service style;
- Working environment: Building a professional and fair working environment to create conditions for employees to develop professional ethics, professional capacity and practical experience
- Human Resources: develop and improve skills, capacity, passion for accounting and auditing and wholeheartedly serve customers;
- Finance: Try to have a strong finance, creating high income and living standards for all employees v Mission
- For clients: Providing services of outstanding quality, reasonable price, serving their needs and legitimate interests
- For employees: Building a full, scientific, dynamic, professional working environment; create high income conditions and fair development opportunities for all employees v Core value:
Prestige – Intergrity – Professional competence – Enthusiasm – Due care.
History of establishment and development of the company
Thang Long – T.D.K Auditing and Valuation Company, formerly known as Audit and Thang Long – T.D.K Auditing and Consulting Limited, was formed through the merger of Thang Long Audit and Consulting Limited, established in 2003, and T.D.K Auditing and Software Services, founded in 2002 Today, it operates as a professional auditing firm, providing legal audit and consulting services in the finance and accounting sectors in Vietnam.
Established in June 2009, T.D.K recognized the nascent state of public auditing within the Vietnamese economy and the evolving legal framework governing it Committed to contributing to the development of both the economy and the auditing sector, the company focused on attracting skilled professionals in finance and accounting Over 18 years, T.D.K has grown to employ 202 experienced staff, including 25 auditors and 9 national appraisers, and has expanded to 8 branches and 20 representative offices across Vietnam The company operates under principles of independence, objectivity, and confidentiality, aiming not only to verify the accuracy of financial statements but also to enhance internal control and accounting systems, thereby maximizing value for clients.
The company has consistently demonstrated excellence in the industry, achieving recognition as one of the Top 100 enterprises in 11 service lines at the “Top Trade Services Awards” in 2008, 2010, and 2013 From 2012 to 2016, T.D.K ranked among the top 10 Vietnamese audit firms with the highest customer base Currently, the company holds the 6th position in terms of customer volume, ranks 2nd for revenue generated from audit services related to final project reports, and is 13th for total service revenue in Vietnam, according to the Ministry of Finance.
Organizational structure
Figure 1.1: Structure of organizational mangement
Types of service of the company
ü Assurance service ü Accounting service ü Tax consulting service ü Finance consulting service ü Valuation service ü Assests valuation service ü Training service
Finance – Accounting Department Board of Director
The quality control of assurance services process
Figure 1.2: The quality control of assurance services process at T.D.K
The quality control of assurance service process at T.D.K is carried out in 4 steps:
Principal responsibility: Auditor in charge
The audit team, led by the auditor in charge, collaborates with audit associates to follow the established audit plan At the end of each day, the auditor reviews the working papers submitted by each associate, providing feedback on their findings If the evidence gathered is deemed insufficient for forming an audit opinion, the auditor will request additional procedures or an expanded test sample, ensuring that associates are well-prepared for the subsequent phases of the audit process.
Upon completing the audit, the lead auditor reviews the final working papers for each section of the executive summary and prepares a comprehensive report detailing the findings from the audit This report serves as a foundation for discussions with clients to reach consensus on the data and audit opinions.
Audit working papers of audit associates
Principal responsibility: Audit manager who controls and signs the audit report
Audit manager is a national auditor
Audit manager reviews the quality of quality control procedures in order to make an objective assessment of the important judgments and the audit opinion in the audit report
When significant issues impact the audit opinion, the audit manager must engage in client meetings to identify solutions The discussions held during these meetings should be documented, reported, and securely stored in the audit file for future reference.
Principal responsibility: Board of Director
The Board of Directors is responsible for thoroughly reviewing the audit file, ensuring compliance with the audit program, and evaluating service quality based on the scale established by the Audit Quality Control guidelines from the Vietnam Association of Certified Public Accountants They must provide feedback after discussions with the audit manager, the auditor in charge, and clients when necessary, and offer guidance on addressing any issues deemed inappropriate for finalizing the audit files and opinions.
After the audit files are reviewed, the board of directors notes any outstanding issues and returns them to the audit manager The audit manager is then responsible for completing and supplementing the necessary documents as required, in addition to preparing the relevant materials for further discussions with the board of directors.
Step 4: Control before releasing audit reports to clients, saving reports and audit files
After the draft reports are revised and submitted to the board of directors for approval, they are forwarded to the Administration Department for official release Additionally, the finalized audit report is sent to the professional department for documentation and future inspection as needed.
The official audit report is produced in six copies: four for clients and two for the company Prior to distribution, the head of the Administration Department conducts a final review to ensure the accuracy of the approved report.
THE AUDIT PROCESS FOR FINANCIAL STATEMENTS AT THANG
Planning phase
Figure 2.2: Phase 1- Planning (Sources: T.D.K documents)
T.D.K’s clients are categorised into two groups:
Frequent clients of T.D.K are those companies that have undergone audits in previous years At the close of each fiscal year, T.D.K engages in discussions with these clients regarding the draft audit contract, and upon mutual agreement, an engagement letter is signed For clients with long-term audit contracts, T.D.K reviews their operations and addresses any changes or issues related to the audit and fees, leading to discussions for amending or supplementing the existing audit contract footnotes.
Secondly, potential customers and new customers: are customers who have never been
Audit acceptance and assessment risk of audit contract
Engagement letter and choose audit team
An audit risk assessment offer letter serves as a vital introduction to a company's service quality, prestige, and standing in the audit market, fostering trust among clients.
The auditing process begins with an assessment of the client's risk level, taking into account factors such as industry, public interest, technology, and the reputation of the Board of Directors Based on the firm's audit risk tolerance, T.D.K decides whether to accept or continue the client relationship and proceed with the audit engagement The audit team, comprising an audit manager, auditors, and audit associates, is selected based on their adherence to professional ethics, including integrity, objectivity, confidentiality, professional behavior, and competence Subsequently, the team gathers information on both internal and external factors impacting the business, such as industry trends, legal considerations, company structure, accounting policies, and strategic objectives This comprehensive understanding helps identify significant events and unusual transactions that may affect the financial statements or pose risks of material misstatement due to fraud or error.
Auditors begin their examination of financial statements by employing preliminary analysis procedures, which include analyzing fluctuations in the Balance Sheet and Statement of Profit or Loss, as well as conducting financial ratio analysis This process helps identify abnormal balances compared to prior years or industry ratios, highlighting transactions that may indicate material misstatements Utilizing a risk-based audit approach, auditors must thoroughly understand the Internal Control framework, which involves two key components: first, studying and evaluating the enterprise-level internal control system, encompassing the design and performance of its five components; and second, assessing internal controls related to key business cycles and the processes for preparing and presenting financial statements based on the collected data.
Figure 2.3: Five components of internal control (Sources: T.D.K documents)
After evaluating the client's internal control system, the company assesses the risk of material misstatements and fraud in financial statements This assessment helps determine overall materiality, performance materiality, tolerable error, and trivial thresholds for account balances and transactions Materiality may be adjusted during the audit process Ultimately, the audit team compiles the gathered documents to evaluate audit risk and develop a tailored audit plan.
Execution
Figure 2.4: Phase 2- Execution (Sources: T.D.K documents)
Substantive test Test of control
Assess detection risk Assess the sufficiency and appropriateness of evidences
During the execution phase of an audit, auditors and audit associates follow the established audit plan by conducting tests of controls and substantive tests Given the volume of transactions within a fiscal year, it is often impractical for auditors to examine every transaction Therefore, based on the materiality determined in the planning phase, auditors select appropriate sampling methods aligned with the audit objectives to effectively conduct their audit.
During the planning phase, auditors assess the client's internal control systems to determine their effectiveness This evaluation is crucial as it significantly influences the scope of the audit work and the extent of substantive testing required.
When auditors have confidence in the efficiency of internal controls, control risk is minimized, leading to a reduced likelihood of material misstatements This allows auditors to limit substantive testing while still obtaining adequate audit evidence Conversely, if auditors question the effectiveness of internal controls, they will concentrate on substantive tests to ensure they gather sufficient and appropriate evidence for a reasonable audit opinion.
During substantive testing, auditors have the authority to request adjustments from accountants upon discovering misstatements If the accountant refuses to make these adjustments and the auditors deem the misstatement material, they will document this in their working papers as evidence for their audit opinions Furthermore, if auditors identify any signs of fraud, they will communicate with the management board to determine the best course of action.
After conducting substantive tests and gathering audit evidence, auditors evaluate the adjusted financial statements to determine detection risk and the adequacy of the evidence collected If the audit risk remains high, they will implement additional procedures to obtain further evidence before forming their audit opinion.
Auditors perform audit procedures to assess subsequent events that occur between the fiscal year-end and the issuance of the auditor's report This evaluation determines whether these events impact the financial statements and whether adjustments are necessary or if disclosures should be included in the footnotes of the financial statements.
Completion
Figure 2.5: Phase 3 – Completion (Sources: T.D.K documents)
After completing the audit of the financial statements and collecting adequate evidence, the auditor manager will engage with the board of directors to address any necessary adjustments, material misstatements, or significant transactions lacking sufficient evidence Subsequently, the auditors will conduct a final analysis of the financial statements to identify unadjusted misstatements and key issues for the intended users, which will be documented in a written representation confirmed by the client's management The auditor manager will then consult with the board to finalize the audit opinion and review the draft audit report with the client prior to issuing the official report.
However, following the the audit report issued, the audit team continued to monitor the subsequent events between the date of auditor’s report and issue of financial statements
Monitor subsequent events after the date of auditor’s report
Communicate with clients Audit opinion and audit report
Overal analysis of adjusted financial statement
Gather audit evidences and communicate with clients
Auditors must gather written representations and consult with the Board of Directors to confirm that no changes have impacted the audit opinion If auditors discover information that could have altered their report, the auditor manager will engage with management and governance to assess whether the financial statements require amendments If amendments are necessary, discussions will occur regarding how management plans to address these issues in the financial statements, potentially leading to the issuance of a new auditor’s report that includes an explanatory paragraph.
AUDIT PROCEDURES FOR CASH AND BANK ACCOUNTS ON
Planning
Audit plan for cash and bank are established by TDK according to audit plan for FS as whole and generalized through this diagram:
Execution
- Auditor works on audit documentation D111 to review applied accounting standard of clients to assure that the entity use consitently accounting standard
Auditors perform account balance reconciliations for cash and bank accounts, ensuring alignment with relevant documentation such as the general journal, general ledger, cash book, and balance sheet They document their findings on working paper D140 and compile the account balances for financial statement disclosure on working paper D120.
Analytical procedures are often performed by auditor who has competence in analysis Auditor performs trend analysis and ratio analysis for cash and bank which shown on working paper D110
Auditor review general ledger of cash and bank accounts to identify abnormal transactions and find causes and perform suitable audit procedures and present on working paper D162
Auditor examines presentation and classification assertion of cash and bank account and presented on working paper D168
A310 – “Understanding clients and its environment”
A710 – “Overall materiality and Performance materiality”'
A910 – “Overall audit strategy and audit plan”
Auditors assess the accuracy of cash on hand by utilizing working paper D132, comparing the cash count recorded on December 31, as verified by the auditor, treasurer, and chief accountant, with the amounts shown in the petty cash book for the same date Any discrepancies are identified and the auditor requests explanations from the accountant The auditor then evaluates the reasonableness of these explanations to reach a conclusion regarding the cash on hand balance.
- For cash in bank: Auditor collects bank confirmations of account balances in December
To reconcile the balances recorded in an entity's accounting books, auditors utilize bank confirmations, which serve as highly reliable evidence due to their independent third-party nature The auditor identifies any discrepancies and draws conclusions regarding the cash in the bank, documenting these findings in working paper D142, while retaining the bank confirmations as supporting evidence.
• Test of valuation of foreign currencies at period end
Under Circular 200/2014/TT-BTC, Article 69, businesses are required to utilize the average real exchange rate from their banking institutions to revalue foreign currency accounts at the end of each reporting period.
Auditor reconcile the real exchange rate searched by auditor to the rate that entity use to revaluate on FS, and record on working paper D167
The test of cut-off assertion is crucial for verifying that transactions are accurately recorded, preventing any manipulation that could inflate the entity's liquidity Auditors select specific samples for testing, which are documented in working paper D166.
Completion
The cash and bank audit is finalized once all procedures are completed Following the execution of audit tests, the auditor prepares working papers and, based on the gathered evidence, provides comments and recommendations regarding the cash and bank accounts, including any necessary adjustments, which are documented in working paper D110.
Auditor in charge review and aggregates the audit results on working paper D100.
ACTUAL AUDIT PROCEDURES FOR CASH AND BANK ACCOUNTS
Planning
A/ Audit acceptance and Audit acceptance and assessment risk of audit contract
The ABC company is a close and frequent customer of T.D.K T.D.K has provided audit service for ABC for 4 years since 2016
Based on prior working papers and this year's audit procedures outlined in working paper A120 (Appendix 1), T.D.K has confirmed that ABC Company possesses the professional capacity to fulfill the contract, allowing the auditor to trust the integrity of the audited client However, it is important to consider significant transactions with stakeholders, including short-term lending and loan collections Consequently, T.D.K assesses the audit acceptance risk as medium and agrees to continue providing audit services to ABC.
B/ Understanding client and its environment
Through studying and filling the information on working paper A310 (Appendix 2) –
“Understanding client and its environment” auditor indicated that:
• Type of ownership: Joint Stock company
Designing and trading software to serve the domestic market and exporting software according to orders and contracts to Japan The company's products are mainly brought to export
• External factors affecting client’s operation:
In 2020, the economy faced volatility due to the Sars-CoV2 pandemic, which resulted in prolonged social isolation and increased demand for online activities Japan managed the pandemic relatively well, leading to a more stable market economy, which helped mitigate the impact on ABC’s unit revenue However, with software exports to Japan constituting 99% of ABC's total revenue, there are significant risks associated with foreign currency exchange rates and potential misassessments at the end of the period.
C/ Preliminary analysis of Financial statement
Auditors conducted analytical procedures on cash and bank accounts in the balance sheet and identified significant fluctuations in financial assets of ABC Company Horizontal analysis revealed abnormal increases, including a 59% rise in cash, a 175% increase in deductible value-added tax, and a 64% increase in undistributed after-tax profit for the period Vertical analysis indicated that cash and bank accounts constituted 87% of total assets, while equity represented 88% of total capital, raising concerns about the existence assertion of cash and bank balances due to this high proportion.
By analyzing customer insights and the operational landscape, along with a preliminary review of ABC's financial statements, the auditor identifies a high risk of material misstatement concerning cash and bank accounts Consequently, the auditor evaluates the detection risk as high to effectively meet the audit objectives.
Auditors assess materiality for clients using various benchmarks, including net revenue, profit after tax, total costs, total owner's equity, or total assets The specific benchmark chosen depends on the unique characteristics and type of the business organization.
When assessing cash and bank accounts, it is essential to consider both overall materiality and the nature of economic activities to accurately determine materiality For detailed guidance, refer to working paper A710, which discusses "Overall Materiality and Performance Materiality."
Portion for accounting overall materiality
Portion for accounting performance materiality (f) 50,0% 50,0%
Portion for accounting trivial threshold (h) 2,0% 2,0%
Sources: Working paper of T.D.K – A710 E/ Audit planning for cash and bank
Based on my observations, the auditor in charge utilizes their professional experience and findings from prior procedures to create an audit plan for cash and bank accounts, as outlined in working paper D130 This plan details specific audit procedures for each cash and bank account, aiming to gather sufficient and appropriate evidence to form a reasonable opinion on the cash and bank balances.
CÔNG TY TNHH KIỂM TOÁN VÀ ĐỊNH GIÁ
Tên khách hàng: Công ty cổ phần ABC
Ngày kết thúc kỳ kế toán: 31/12/2020
Người soát xét 1 NHH 02/02/2021 Người soát xét 2 ĐVC 02/02/2021
Nội dung: CHƯƠNG TRÌNH KIỂM TOÁN - TIỀN VÀ
CÁC KHOẢN TƯƠNG ĐƯƠNG TIỀN
Xử lý cơ sở dẫn liệu
Tham chiếu giấy làm việc
Có thỏa mãn với kết quả không?
Kiểm tra tính nhất quán của chính sách kế toán với năm trước và đảm bảo rằng nó phù hợp với khuôn khổ lập và trình bày báo cáo tài chính (BCTC) đang được áp dụng.
Trường hợp có thay đổi chính sách kế toán đơn vị có tuân thủ theo hướng dẫn của [CMKT số
Thu thập phân loại số dư tiền mặt và tiền gửi ngân hàng và đối chiếu với sổ cái
1 Lập bảng tổng hợp số liệu dựa trên Bảng CĐSPS của kỳ hiện tại và số liệu đã được kiểm toán của kỳ trước
Thu thập danh sách chi tiết về số dư tiền mặt và tiền gửi ngân hàng, bao gồm thông tin như tên ngân hàng, số tài khoản, loại tiền gửi, loại tiền tệ, tài khoản sử dụng và lãi suất Đối chiếu số dư tiền mặt và tiền gửi ngân hàng với sổ cái, sổ chi tiết và giấy làm việc của kiểm toán viên năm trước (nếu có) để xác nhận tính chính xác với bảng tổng hợp số liệu.
Để đảm bảo tính chính xác trong việc xử lý các giao dịch tài chính, việc phỏng vấn nhân viên thường xuyên là cần thiết Điều này giúp xác định xem có bất kỳ giao dịch nào chưa được ghi nhận hoặc các tài khoản ngân hàng chưa được cập nhật hay không.
Thực hiện các thủ tục phân tích
Để thực hiện các thủ tục phân tích hiệu quả, cần so sánh số dư của kỳ hiện tại với số dư cuối kỳ trước và giải thích những biến động bất thường, kết hợp với thông tin từ Báo cáo LCTT Đồng thời, cần soát xét các khoản mục vượt mức trọng yếu hoặc có tính bất thường Cuối cùng, việc phân tích tỷ trọng số dư tiền và các khoản tương đương tiền trên tổng tài sản ngắn hạn, cũng như các tỷ suất tài chính liên quan đến tiền và khả năng thanh toán, là cần thiết để so sánh với các tỷ trọng và tỷ suất của năm trước, nhằm giải thích những biến động xảy ra.
5 Đọc lướt sổ cái để xác định những khoản mục, nghiệp vụ bất thường, tìm hiểu nguyên nhân và thực hiện thủ tục kiểm tra tương ứng (nếu cần)
Thủ tục xác nhận ngân hàng - Thực hiện dưới sự kiểm soát của KTV
Để thực hiện thủ tục xác nhận, cần xác định các tài khoản ngân hàng dựa trên việc xem xét số dư, số lượng giao dịch và các rủi ro gian lận đã được xác định.
Để xác minh số dư tiền gửi ngân hàng tại ngày kết thúc kỳ kế toán, cần thực hiện các bước sau: đầu tiên, lập thư xác nhận và yêu cầu khách hàng ký; sau đó, kiểm tra xem các yêu cầu xác nhận đã được phê duyệt với con dấu và chữ ký của người được ủy quyền hay chưa Tiếp theo, cần xác minh thông tin chi tiết của ngân hàng, địa chỉ và bộ phận phụ trách so với sổ sách kế toán của đơn vị Bên cạnh đó, lưu giữ một bản sao của các yêu cầu xác nhận trong hồ sơ kiểm toán; gửi yêu cầu xác nhận đến các ngân hàng dưới sự kiểm soát của kiểm toán viên; và theo dõi các yêu cầu xác nhận chưa nhận được phản hồi, tìm hiểu nguyên nhân và gửi thư xác nhận lần 2 nếu cần thiết.
Khi nhận được thư xác nhận từ ngân hàng, KTV cần thực hiện các bước sau: ghi lại thông tin vào bảng theo dõi, đối chiếu số dư và thông tin trên thư với sổ sách kế toán của khách hàng, và xác minh các khoản mục khác như thư bảo lãnh, hợp đồng ngoại hối, và tài sản đảm bảo với tài liệu hỗ trợ KTV cũng phải điều tra các ngoại lệ không khớp với sổ cái và thu thập phản hồi đã được chỉnh sửa để xem xét ảnh hưởng đến các khu vực khác trong cuộc kiểm toán Ngoài ra, KTV cần kiểm tra xem có dấu hiệu gian lận hay sai sót nào không và xác nhận nguồn gốc của các phản hồi nhận qua điện tử bằng cách gọi điện cho ngân hàng để xác minh thông tin Cuối cùng, KTV phải xác định xem có tài khoản tiền gửi nào được sử dụng để đảm bảo cho các khoản vay hay không.
Kiểm tra việc hạch toán các khoản thấu chi, bảo lãnh và tài sản đảm bảo liên quan; xem xét các hạn chế về khả năng sử dụng số dư tiền gửi ngân hàng; đánh giá việc tuân thủ các thỏa thuận liên quan đến khế ước, hạn chế rút tiền và yêu cầu số dư tối thiểu Ghi nhận bất kỳ vi phạm nào, cùng với giải pháp và kế hoạch tương lai của đơn vị Khi phát hiện vi phạm, cần xem xét ảnh hưởng đến đơn vị và xác minh sự cần thiết phải thuyết minh theo khuôn khổ lập và trình bày báo cáo tài chính, đồng thời xác nhận giải trình của Ban Giám đốc với bên cho vay.
Execution
During an interview with the auditor responsible for the audit procedure, it was revealed that he did not conduct tests of control for the internal control of cash and bank accounts This decision was based on the previous audits conducted by T.D.K., which indicated that the internal controls for cash had not changed Consequently, the auditor continues to rely on the prior results of the control tests.
Firstly, Auditor review whether the Accounting policy applied for current year is consistent to previous year and present on working paper D111 (appendix 4)
The auditor reviews working paper D110 to gather detailed account balances for cash on hand and in the bank from the 2020 Balance Trial, alongside the audited amounts from 2019 Subsequently, the auditor reconciles these figures with the cash and bank balances recorded in the general ledger, detailed ledger, and prior year's audit documentation, as outlined in working paper D140, "Detailed Account Balances."
11221 Foreign cash in bank – VCB 7.691.590 10.256.353
11222 Foreign cash in bank – techcombank
Auditor performed analytical procedures for Cash and Bank accounts as follow:
31/12/2020 31/12/2019 Change % Change Cash on hand
The auditor's substantive analytical procedures revealed that ABC's cash on hand increased by 12,262,773 VNĐ (0.86%) from 31/12/2019 to 31/12/2020, indicating a normal fluctuation In contrast, the bank deposit showed significant changes, with Vietnamese cash increasing by 480,600,335 VNĐ (115.43%) and foreign cash rising by 1,301,294,464 VNĐ (108%) during the same period While these changes appear abnormal, further analysis of related documents indicates that ABC experienced high operating profits in 2020, leading the auditor to conclude that there are no unusual changes in cash and bank accounts.
According to the liquidity ratio analysis in working paper D110, ABC Company demonstrates a strong capacity to meet short-term debts, evidenced by a current ratio of 8.0, a quick ratio of 7.98, and a cash ratio of 6.98 The minimal differences between these ratios indicate that ABC's ability to pay short-term debts is less reliant on inventory, with an inventory ratio exceeding 2, suggesting efficient capital utilization The balance sheet reveals that ABC's financial structure is primarily equity-based, with only 12% of total financial resources sourced from debt, and as a software company, it lacks significant non-current assets From 2019 to 2020, ABC's liquidity ratios increased by approximately 21%, driven by substantial growth in cash and bank accounts, reflecting the company's strong revenue performance in 2020.
The auditor reviews the general ledger for cash on hand and bank accounts, selecting samples to test related transactions This process aims to identify any unusual transactions associated with cash and bank accounts, investigate their causes, and verify their occurrence The detailed results of this examination are documented in working paper D162.
CÔNG TY TNHH KIỂM TOÁN VÀ ĐỊNH GIÁ THĂNG LONG – T.D.K
Tên khách hàng: Công ty cổ phần ABC
Ngày kết thúc kỳ kế toán: 31/12/2020
Người soát xét 1 NHH 02/02/2021 Người soát xét 2 ĐVC 02/02/2021
Nội dung: KIỂM TRA ĐỐI ỨNG BẤT THƯỜNG
A Mục tiêu: Đảm bảo các khoản tiền và tương đương tiền là hiện hữu; thuộc quyền sở hữu của DN; được ghi nhận và đánh giá đầy đủ, chính xác, đúng kỳ kế toán; và trình bày trên BCTC phù hợp với khuôn khổ về lập và trình bày BCTC được áp dụng
BCTC đã được kiểm toán năm trước; Sổ chi tiết tài khoản; Báo cáo tài chính
C Thủ tục kiểm toán Đọc lướt sổ cái để xác định các nghiệp vụ bất thường (về nội dung, giá trị, tài khoản đối ứng ) Tìm hiểu nguyên nhân và thực hiện thủ tục kiểm tra tương ứng (nếu cần)
Số dư đầu kỳ: 1.431.736.867 ĐƯ Ps Nợ Ps Có
Số dư đầu kỳ: 1.616.981.855 ĐƯ Ps Nợ Ps Có
Không có đối ứng bất thường
Theo quan điểm của tôi, dựa trên các bằng chứng thu thập từ việc thực hiện các thủ tục đã nêu, các mục tiêu kiểm toán được trình bày ở phần đầu chương trình kiểm toán đã được hoàn thành.
- Test of detailed balance for cash on hand account:
During a cash count inspection at ABC, the auditor collaborated with the chief accountant to verify the existence and accuracy of cash on hand The auditor meticulously recorded the cash count results on the working paper T.D.K – D132.1, titled "Cash Count Record," and obtained signatures from both ABC's treasurer and chief accountant to confirm the findings.
CÔNG TY TNHH KIỂM TOÁN VÀ ĐỊNH GIÁ
Tên khách hàng: Công ty cổ phần ABC
Ngày kết thúc kỳ kế toán: 31/12/2020
Người soát xét 1 NHH 02/02/2021 Người soát xét 2 ĐVC 02/02/2021
Nội dung: PHIẾU CHỨNG KIẾN KIỂM KÊ TIỀN MẶT Địa điểm kiểm kê: Công ty cổ phần ABC
Thời điểm kiểm kê: 15h30 ngày 02 tháng 02 năm 2020 Đại diện doanh nghiệp tham gia kiểm kê: Ông: Vũ H N Kế toán trưởng
Stt Loại tiền Số lượng
Lý do chênh lệch: Chênh lệch do tiền lẻ
Các loại giấy tờ khác được kiểm kê bao gồm (tên, số lượng, số tiền):
Xác nhận số tiền trên thuộc sở hữu của DN: Có
(Thủ quỹ) Đã kí Phạm T L
On February 2, 2021, the auditor conducted a cash count inspection following the year-end, selecting random samples of cash payments and receipts that occurred prior to this date This approach was taken to perform a substantive test for the occurrence assertion of these transactions, focusing specifically on two selected transactions.
Số dư theo sổ quỹ (2) Đến phiếu thu số 71 Ngày 01/02/2021
Và phiếu chi số 409 Ngày 02/02/2021
On January 19, 2020, a cash payment of 1,400,000,000 VNĐ was made for Loan Contract No 01/HĐMT/2021 The auditor confirmed that this borrowing was properly documented, including a one-month interest-free borrowing contract.
19/01/2021 to 19/02/2021 ü meeting record for the borrowing with fully signs of managers ü Receive cash statement ü payment statement PC399
On January 19, 2020, a cash payment of 2,000,000 VNĐ was made as an advance for purchasing a quat tree for the New Year To verify the legitimacy of this transaction, the auditor obtained business advance statements and cash out statement no PC407, which serve as evidence of the transaction's occurrence.
Next auditor then reconcile amount balance on cash book by adjusting debit and credit amount follow cash receipts and cash payments:
- Test of detailed balance for cash in Bank:
In January 2021, the auditor identified that ABC Company maintains bank accounts at Vietcombank – Ba Dinh Branch and Techcombank – NKT Branch Subsequently, the auditor requested bank confirmations from these institutions, which were documented as evidence for the cash balances in the working papers D142.1 and D142.2.
JOINT STOCK COMMERCIAL BANK FOR FOREIGN TRADE OF VIETNAM
521 Kim Ma, Ba Dinh, Ha Noi, Viet Nam
Cables address: Vietcombank – Ba Dinh Branch
XÁC NHẬN SỐ DƯ CUỐI NĂM 2020
Kính gửi: CÔNG TY CỔ PHẦN ABC
Ngân hàng TMCP Ngoại thương Việt Nam xin thông báo số dư trên tài khoản của Quý khách tới thời điểm 31/12/2020 như sau:
Joint Stock commercial Bank for Foreign Trade of Vietnam – Ba Dinh Branch bed to inform you of your account balance in our books at Dec 31th, 2020 as follows:
0611411945431 JPY 0.00 45,972.00 Đề nghị Quý khách đối chiếu số liệu trên và gửi lại cho Ngân hàng TMCP Ngoại thương Việt Nam chậm nhất vào ngày 15/01/2021 theo địa chỉ:
You are kindly requested to reconcile the above mentioned balance(s) and send back to us no later than Jan 15th, 2021 as following address:
Phòng dịch vụ Khách hàng – Tầng 2 – Ngân hàng TMCP Ngoại thương Việt Nam – Chi nhánh Ba Đình – 521 Kim Mã – Ba Đình – Hà Nội
Department of Customer Services - Joint Stock commercial Bank for Foreign Trade of Vietnam – Ba Dinh Branch, 521 Kim Ma, Ba Dinh, Ha Noi
Nếu sau ngày trên Ngân hàng không nhận được bản đối chiếu thì số dư trên mặc nhiên được thừa nhận
After this date, the above mentioned balance(s) is acknowledged
NGÂN HÀNG TMCP NGOẠI THƯƠNG VIỆT NAM
(đã kí và đóng dấu)
CỘNG HOÀ XÃ HỘI CHỦ NGHĨA VIỆT NAM Độc lập – Tự do -Hạnh phúc
V/v: Xác nhận số liệu giao dịch tại ngày kết thúc năm tài chính
Ref: Confirmation of transaction data at the end of fiscal year
Kính gửi/ To: CÔNG TY CỔ PHẦN ABC và/hoặc các Tổ chức/ Cá nhân có liên quan
Customer ABC JOINT STOCK and/or whom it may concern
Ngân hàng Thương mại cổ phần Kỹ Thương Việt Nam – Chi nhánh NKT – NGUYỄN KHÁNH TOÀN xác nhận:
We, Vietnam Technological and Commercial Joint Stock Bank (Techcombank) NKT – NGUYEN KHANH TOAN Branch hereby certify that:
Khách hàng/ Customer: CÔNG TY CỔ PHẦN ABC
Số CMND/HC/TCCCD/GCN ĐKKD: 0107471322 Ngày cấp/: Nơi cấp/: Địa chỉ/ Address: SỐ 24 HOANG QUOC VIET, P DICH VONG, Q.CAU GIAY, TP HA
Có các số liệu giao dịch tại Ngân hàng chúng tôi vào cuối ngày 31/12/2020 như sau:
The transaction at our bank on the end of date 31 Dec 2020 is as follows
Số dư tài khoản thanh toán/ outstanding balance in current accounts(s):
Số tài khoản Account number
Tỷ giá theo VND Exchange rate (in VND)
Số dư quy đổi VND
The outstanding balance converted to VND
Tổng số tiền bằng số quy đổi VND/ Total amount converted to VND 3,164,021,452
Tổng số tiền bằng chữ quy đổi: Ba tỷ, một trăm sáu mươi tư triệu, không trăm hai mươi mốt nghìn, bốn trăm năm mưoi hai đồng
In words: Three billion one hundreded and sixty four million twenty one thousand four hundered and fifty two dong ĐẠI DIỆN TECHCOMBANK For and on behalf of TECHCOMBANK
When receiving bank confirmations, auditor reconciles with amount presented on general ledger and financial statement, bank statement…, which is shown on working paper D142
Refer to working papers D142 “Reconciliation of cash in bank balance”
CÔNG TY TNHH KIỂM TOÁN VÀ ĐỊNH GIÁ
Tên khách hàng: Công ty cổ phần ABC
Ngày kết thúc kỳ kế toán: 31/12/2020
Người soát xét 1 NHH 02/03/2021 Người soát xét 2 ĐVC 02/03/2021
Nội dung: ĐỐI CHIẾU SỐ DƯ TÀI KHOẢN NGÂN HÀNG
A Mục tiêu: Đảm bảo các khoản tiền và tương đương tiền là hiện hữu; thuộc quyền sở hữu của DN; được ghi nhận và đánh giá đầy đủ, chính xác, đúng kỳ kế toán; và trình bày trên BCTC phù hợp với khuôn khổ về lập và trình bày BCTC được áp dụng
- BCTC đã được kiểm toán năm trước
- Sổ chi tiết tài khoản
1 Lập và gửi TXN cho các ngân hàng Tổng hợp kết quả nhận được, đối chiếu với các số dư trên sổ chi tiết Giải thích các khoản chênh lệch (nếu có)
1.1 Lập bảng tổng hợp theo dõi gửi thư xác nhận tiền gửi ngân hàng
Tên đối tượng Số dư 31/12/2020 Hình thức Ngày gửi Tham chiếu
Ngân hàng Vietcombank 220.915.479 Bưu điện 28/01/2021 D142.1
Ngân hàng Techcombank 3.177.961.175 Bưu điện 28/01/2021 D142.2
1.2 Đối chiếu thư xác nhận, sao kê ngân hàng với sổ chi tiết
Completion
Based on the analysis of working papers and supporting evidence, the auditor concludes that the cash and bank accounts are accurately presented in all material respects, with no necessary adjustments identified.
Finally, auditor synthesizes audit results on working paper D100 as below:
THANG LONG – T.D.K AUDITING AND VALUATION COMPANY, LTD
Client: ABC Joint Stock Company
Name: AUDIT RESULTS FOR CASH AND BANK
WP No Description Yes No Not applied
D110 Synthesize account balances and perform substantive analytical procedures ü
D130 Audit planning for cash and bank accounts ü
D140 Detailed cash and bank accounts balances ü
D142 Reconcile bank account balances with bank confirmations ü
D162 Inspect transactions relating cash and bank accounts ü
D166 Test of cut-off assertion ü
D167 Reconcile foreign currency account balances ü
Check presentation and classification of cash and bank accounts on Financial Statement ü
Chapter 2 outlines the audit process for financial statements and cash and bank accounts at Thang Long – T.D.K Auditing and Valuation Company, Ltd It includes a case study of the audit procedures conducted for ABC Company By comparing these procedures with the concepts presented in Chapter 1, the chapter provides insights and recommendations for enhancing the audit processes related to cash and bank accounts in financial statements at Thang Long – T.D.K Auditing and Valuation Company, Ltd.
PROPOSALS FOR COMPLETING THE AUDIT PROCEDURES FOR CASH AND BANK ACCOUNTS ON FINANCIAL STATEMENT AT THANG LONG – T.D.K AUDITING AND VALUATION COMPANY, LTD