UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ NGUYEN THI NHAM IMPROVING ACCOUNTING INFORMATION SYSTEM OF UNIVERSAL VIETNAM STEEL BUILDING COMPANY LIMITED MASTER OF BUSINESS ADMINISTRATION Ho Chi Minh City – Year 2017 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ NGUYEN THI NHAM IMPROVING ACCOUNTING INFORMATION SYSTEM OF UNIVERSAL VIETNAM STEEL BUILDING COMPANY LIMITED MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: PROF. PHAM PHU QUOC Ho Chi Minh City – Year 2017 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com SUPERVISOR’S REPORT ON THE THESIS PROPOSAL SUBMITTED FOR DEGREE OF MASTER of BUSINESS ADMINISTRATION The thesis proposal title: IMPROVING ACCOUNTING INFORMATION SYSTEM OF UNIVERSAL VIETNAM STEEL BUILDINGS COMPANY LIMITED Student Name: Nguyen Thi Nham Supervisor: Dr. Pham Phu Quoc 1. General comments: Remarks on the student’s attitude: …………………………………………………………………………………… …………………………………………………………………… Remarks on the assignment’s academic quality: …………………………………………………………………………………… …………………………………………………………………… 2.
Overall assessment: Meet requirement for submitting Not meet requirement for submitting 3. Other remarks: Did the student follow the report schedule? Yes No Other…………………………. The Turning plagiarism percentage: Supervisor’s signature LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 1 IMPROVING ACCOUNTING INFORMATION SYSTEM OF UNIVERSAL VIETNAM STEEL BUILDING COMPANY LIMITED 1 TABLE OF CONTENT EXECUTIVE SUMMARY PART I – INTRODUCTION 1. Company symptoms PART II – PROBLEM IDENTIFICATION 1.
Content of in-depth interviews 3. Verify the potential problem PART III – CAUSE VALIDATION PART IV – SOLUTION AND ACTION PLAN 1. Action plan PART V – CONCLUSION APPENDIX REFERENCES NGUYEN THI NHAM LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 2 IMPROVING ACCOUNTING INFORMATION SYSTEM OF UNIVERSAL VIETNAM STEEL BUILDING COMPANY LIMITED 2 EXECUTIVE SUMMARY The purpose of this thesis is to assist Universal Vietnam Steel Building Company Limited in identifying and resolving potential problem of accounting department. The initial symptoms of the company’s accounting department come from the record of yearly meeting of Board of Director with accounting department, this documents mentioned following symptoms: (1) Negative cash fund in accounting reports; (2) Duplicate payment in Accounts Payable; (3) Wrong liabilities in liabilities report; (4) Late in payment for supplier; (5) Forgot to pay insurance 4 months for insurance office and (6) Tax penalty.
From the initial symptoms, I apply the process of Problem identification – Solution decision – Organization of action (P-S-O) to identify problems, find solutions and contribute action plan to improve above situation. Fistly, I identify current problems by using necessary accounting theories as a basic to conduct in-depth interview with 5 peoples who are working in Vienam head office. The interview found out two problems in accounting department, there are (1) Poor in managing accounting information and (2) Poor in accounting internal control. From that, I evaluate to find out the potential problem is Poor in managing accounting information which influencing significant to company’s accounting process; Secondly, informing theories to take into account the causes of potential problem, include: (1) lack of clearly accounting procedure; (2) overlapping in accountant position; (3) poor in the leadership of BOD and (4) poor in accountant’s competences.
From these causes, by evaluating current situation in the company, I found out the potential cause is Lack of clearly accounting procedure. Thirdly, I propose possible alternatives and select the most appropriate alternative for solving the problem of the company; Lastly, I plan the effective actions for implementing the selected alternative - organize the procedure of accounting information system. PART I – INTRODUCTION NGUYEN THI NHAM LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 3 IMPROVING ACCOUNTING INFORMATION SYSTEM OF UNIVERSAL VIETNAM STEEL BUILDING COMPANY LIMITED 3 1. Company background Universal Vietnam Steel Buildings Co., Ltd (US Buildings) is a domestic company which manufactures in pre – steel building business in Asia Pacific market.
It was established on August 2016 with the register capital is VND 5,000,000,000, the capital had increased into VND 10,000,000,000 on January 2017. Although US Buildings is not the first pre-steel building company in the Vietnamese market, US Buildings always strive to develop sustainably and together with Vietnam "Towards the future". US Buildings has been and will continue to provide high quality products and perfect after-sales service to bring the highest satisfaction to customers as well as contribute positively to the development of the pre-steel building industry and Vietnam country. Since its founding, US Buildings has grown steadily and continuously, not only in terms of production scale but also sales.
At present, US Buildings holds the positive position in the pre-steel building market in Vietnam. US Buildings 's cumulative sales are over 2.000 tons, and the products have a large market share. From 5 employees in the first day of establishment, up to now the number of employees of the company has reached around 30 peoples working in three countries, there are Vietnam, Thailand and Cambodia. Until December 31th, 2017, the company has 9 completed projects and 5 projects are in process.
The total income from beginning until now is about VND 34,000,000,000 and the profit gained is VND 8,000,000,000. In addition to the business activities, US Buildings always strives to contribute positively into the National budget by completing well the tax payment as well as contributing to promoting the sustainable development of Vietnam’s community and society with many long-term, practical and meaningful activities. Throughout the history of establishment and development, with the continuous efforts of all US Buildings employees, suppliers and partners, US Buildings has achieved great achievements and continuously growing, fulfilling its mission to customers, contributing significantly to the pre-steel building industry and Vietnam society. NGUYEN THI NHAM LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 4 IMPROVING ACCOUNTING INFORMATION SYSTEM OF UNIVERSAL VIETNAM STEEL BUILDING COMPANY LIMITED 4 The mission of the company is to be one of the best organizations in Pre-Engineered Steel Building industry, focus on both product quality and customer’s benefit.
The priority mission of the company is to provide the most excellent solution for Pre- Engineered Steel Building products. With the slogan “Durable Like Steel”, the company intend to offer customers the most safety and durable steel structure. Beside the pre-buildings industry, the company intends to broaden their business in supplying solution for civil construction, interior design and open a plant to manufacture steel structure in Vietnam market. Internal structure The internal structure of the company is a functional structure, is showed in the graphic as follow: Director Vice Director Engineer Purchasing Finance - Sale Department Marketing Accounting Department Department Department Department Graphic 1: Internal structure in Universal Vietnam Steel Buildings Company The internal structure of US Buildings is fairly simple, because most management functions focus on a business manager.
This structure is suitable with the company in early stage of development because it is compact. The power is focused on leader, therefore, the decisions can be made and implemented immediately. Currently, US Buildings is in process of recruiting many other employees and recontribute internal structure with the key are sharing responsibility into the other persons for the long-term development. NGUYEN THI NHAM LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 5 IMPROVING ACCOUNTING INFORMATION SYSTEM OF UNIVERSAL VIETNAM STEEL BUILDING COMPANY LIMITED 5 2.
Company symptoms For one year of operation, US Buildings faced with many difficult problems coming from the external environment such as finding market segment, attracting customers and developing their products. Besides, the internal factors also influenced significantly to the operation of the company, there are recruiting suitable employees, making rational decisions in business and managing departments. To evaluate the result of company activities through one year of operation, Board of Director organized a yearly meeting with all departments focusing on evaluating business activity, employee’s competence and performance of each department. Through the record of meeting, I summarized the important recommends of accounting department as bellow: In previous year, accounting department take a significant role into the development of US Buildings, proven by the positive performances in resolving timely accounting tasks, supporting passionately the other departments and keeping in touch with potential customers, suppliers and government authorities.
However, the operation of accounting department is unable to avoid mistakes affected negatively to the activity of company, the meeting evaluated and identified the negative symptoms of accounting department need to improve which were summarized as following: (1) Negative cash balance was showed in accounting reports Obviously, the balance of cash account can’t in a negative number on accounting report, however, the financial statement of year 2017 showed a negative cash balance and the cash account in the general ledger has a credit balance. The credit or negative balance in the general ledger cash account is caused by (1) recording inexactly cash transactions in the general ledger cash account; (2) the amount received is not recorded while the payment is recorded; (3) the accountants recorded transaction in the accounting books without coinciding with the actual incurred amount due to missing data or loss of receipts and expenses; (4) missing the comparison and controlling in cash balance in period. The bellow table shows the different between current cash balance in balance sheet and actual cash balance in internal cash book: Item Balance sheet Cash book/bank record Different (+/-) NGUYEN THI NHAM LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 6 IMPROVING ACCOUNTING INFORMATION SYSTEM OF UNIVERSAL VIETNAM STEEL BUILDING COMPANY LIMITED 6 Cash on hand - 399.976 Cash in bank 2.386 Table 1 – Different of cash balance in balance sheet and cash book/bank record (VND) Above table showed the weakness of accounting department in recording and following accounting data. Both items cash on hand and cash in bank recorded inexactly in general ledger leads to data inaccuracies in balance sheet.
(2) Double payment for one invoice of supplier In year 2017, the accounting department occurred one case of double payment. In details, on July 10th, 2017, the company paid for Tan Co Joint Stock Company with amount VND23,000,000 for Invoice No.0000181 issued on July 3th, 2017. However, on November 23th, 2017, Tan Co JSC continued to request of payment for invoice above, accounting department paid again and leads to double pay for invoice No.0000181 of Tan Co JSC. Some days after secondly paid date, US Buildings accountant checked liabilities and detected that the company paid twice for Tan Co JSC.
This situation is caused by (1) unchecking of accountant when paying for supplier of payment accountant; (2) poor in control payment information of accounting department. From above case, we can see that US Buildings is ineffective in managing liabilities results in loss of company fund. Currently, accounting department just focus on payment liabilities based on requires of other departments and manage liabilities sporadically and disjointed, therefore, the balance of liabilities is inexactly. (3) Wrong liabilities in liabilities report At December 31th,2017, some suppliers include Phan Long Ltd., Vina-Japan Ltd., Hong Phuc Ltd., Tan Co Ltd., Thep Ba Vina Ltd., sent the the comparison of liabilities to US Buildings and required to provide liabilities balance.
However, the current number of liabilities balance of each supplier in company reports is different with the number NGUYEN THI NHAM LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 7 IMPROVING ACCOUNTING INFORMATION SYSTEM OF UNIVERSAL VIETNAM STEEL BUILDING COMPANY LIMITED 7 which was given by suppliers. The different of supplier liabilities was showed as following: Suppliers Supplier’s data US Buildings’s data Different (+/-) Phan Long Ltd.000 Vina- Japan Ltd.316 Hong Phuc Ltd.000 Tan Co Ltd.473 Thep Ba Vina Ltd.698 Total liability of 5 1.541 Total liability on 2.844 x balance sheet Proportion (%) 65.70% Table 2 – Different of liabilities in US Buidings’s data and supplier data (VND) From above table, we can see that only 5 suppliers accounted for 65.70% total liability of the company, and these supplier’s liabilities were unfollowed leads to inexactly balance of liabilities in US Buildings’s data. The different between company data and supplier data for 5 above suppliers is VND193,156,541, in which the company data recorded liabilities for those suppliers is VND1,376,785,554, however, following the supplier’s data, this item currently is VND1,569,942,095.