BANKING ACADEMY OF VIETNAM FALCUTY OF ACCOUNTING AND AUDITING GRADUATION THESIS Topic: COMPLETING THE AUDIT RISK ASSESSMENT PROCESS IN FINANCIAL STATEMENT AUDITING BY MOORE AISC AUDITING AND INFORMATION SERVICES CO., LTD Lecturer : Dr.Nguyen Thi Phuong Thao Student : Bui Thi Phuong Thao Class : K24CLC-KTA Course : 2021 – 2025 Student ID : 24A4022556 Ha Noi, day month year 2025 i COMMITMENT I hereby affirm that the thesis entitled “Completing the Audit Risk Assessment Process in the Audit of Financial Statements Conducted by Moore AISC Auditing and Information Services Co., Ltd” is the result of my independent research under the guidance of Dr. Nguyen Thi Phuong Thao. All data and results used in this thesis are entitled objective and truthful, with no instances of plagiarism, the content has not been used or published in any other research previously. Futhermore, all referenced information is properly cited in the References section.
Therefore, I take full responsibility for any shortcomings or misconduct found in this graduation thesis. Ha Noi, day month year 2025 Sudent ii ACKNOWLEDGEMENTS First of all, I would like to express my sincere thanks and deep gratitude to the Board of Directors and all the teachers of the Banking Academy, especially the lecturers of the Faculty of Accounting - Auditing who have devoted themselves to teaching, training, imparting knowledge and always creating favorable conditions for me during the four years of studying and practicing at the school. In particular, I would like to thank lecturer Dr. Nguyen Thi Phuong Thao, who has always accompanied me and wholeheartedly guided me throughout the process of writing my Graduation Thesis so that I can complete this research topic in the best way.
I would like to send her my deep thanks and wish her good work. Along with that, I would like to thank the Board of Directors and all the staff at Moore AISC Auditing and Informatics Services Co. for creating conditions for me to be able to intern at the company, especially the Department Heads, Deputy Department Heads and staff of the Auditing Department who enthusiastically helped, advised and created favorable conditions for me to be able to complete my graduation internship in the best way. However, due to the lack of practical experience and limitations in knowledge and time, in the process of doing the thesis, there were inevitably mistakes that I myself had not seen.
I look forward to receiving comments from teachers and the company so that I can complete the thesis as well as myself better. Once again, I would like to wish all of colleagues working at Moore AISC Auditing and Information Services Co. Success in your careers and lives. I sencerely thank you! iii TABLE OF CONTENTS COMMITMENT .ii LIST OF ABBRIVIATIONS.
v LIST OF TABLES AND DIAGRAMS. URGENCY OF THE TOPIC. RESEARCH OBJECT, SCOPE OF RESEARCH. 4 CHAPTER 1: THEORETICAL BASIS OF RISK ASSESSMENT IN FINANCIAL STATEMENT AUDIT.
GENERAL OVERVIEW OF FINANCIAL STATEMENT AUDIT. Concept of Financial Statement Audit. Objectives of Financial Statement Audit. Financial Statement Audit Process .2 GENERAL OVERVIEW OF AUDIT RISK IN FINANCIAL STATEMENT AUDIT.1 Basis concept of audit risk.2 Role of audit risk assessment.
Elements of audit risk. Relationship between audit risk components. AUDIT RISK ASSESSMENT PROCESS IN FINANCIAL STATEMENT AUDIT .1 Audit risk assessment in the Audit planning stage .2 AUDIT RISK ASSESSMENT IN THE AUDIT IMPLEMENTATION STAGE .3 Audit risk assessment in the Audit completion and reporting stage. 25 iv CHAPTER 2: CURRENT STATEMENT OF AUDIT RISK ASSESSMENT PROCESS BY MOORE AISC COMPANY LIMITED.
GENERAL OVERVIEW OF MOORE AISC COMPANY LIMITED. Formation and development process of Moore AISC LLC. Production and business characteristics of Moore AISC LLC. Organizational structure of Moore AISC LLC.
General Financial Statement Audit process performed by Moore AISC LLC. CURRENT STATEMENT OF AUDIT RISK ASSESSMENT PROCESS PERFORMED BY MOORE AISC LLC. General audit risk assessment process of Moore AISC LLC. Actual audit risk assessment process at ABC company performed by Moore AISC LLC.
COMMENTS ON AUDIT RISK ASSESSMENT PROCESS AT MOORE AISC LLC. Limitation and causes. 59 CHAPTER 3: SOLUTIONS AND RECOMMENDATIONS FOR IMPROVING THE AUDIT RISK ASSESSMENT PROCESS IN AUDITING FINANCIAL STATEMENT AT MOORE AISC COMPANY LIMITED. FUTURE DEVELOPMENT ORIENTATION OF THE COMPANY.
THE NECESSITY OF IMPROVING THE AUDIT RISK ASSESSMENT PROCESS IN AUDITING FINANCIAL STATEMENTS. Originating from the market and customers. From the perspective of Moore AISC Company Limited. For state agencies.
For Moore AISC LLC. 73 v LIST OF ABBRIVIATIONS AISC Moore AISC Auditing and Information Services Limited Company Co., Ltd Limited Company FS Financial Statement ISA International Standards on Auditing JCS Joint Stock Company LLC Limited Liability Company VACPA Vietnam Association of Certified Public Accountants VSA Vietnam Standards on Auditing vi LIST OF TABLES AND DIAGRAMS Diagram 2.1: Organizational chart of the company's management apparatus .2: Organize of Audit Department.3 : Audit cycle diagram according to the sample audit program .1: Audit risk factor .2: Working paper A520 – Understanding about customer .3: Working paper A810B – Inherent Risk Assessment .4: Working paper A510-1 - Preliminary analysis of FS – Balance Sheet .5: Working paper A510-2 - Preliminary analysis of P/L. Urgency of the topic In the context of an increasingly developed and deeply integrated market economy, financial statements (FS) play an important role in providing reliable economic and financial information to investors, management agencies and stakeholders. FS not only reflect the financial situation of enterprises but also serve as a basis for investors to make decisions, help credit institutions assess credit risks, and support management agencies in monitoring and regulating the market.
However, in reality, the risk of material misstatements in FS always exists due to many different causes, including fraud, unintentional errors, or issues related to the application of accounting and auditing standards. This places increasing demands on auditing work to ensure the transparency and reliability of financial information. One of the key factors to improve audit quality is to accurately assess risks right from the audit planning stage. Identifying, analyzing and assessing risks not only helps auditors develop effective audit strategies but also supports them in focusing resources on high-risk areas, thereby minimizing the possibility of missing material misstatements.
In particular, in the process of auditing financial statements at AISC, risk assessment plays an important role in determining the appropriate audit scope and method, contributing to improving the quality and effectiveness of the audit. Completing risk assessment during the audit planning stage not only helps improve audit quality but also increases the value of audit services for clients. A rigorous and effective risk assessment system helps auditors not only detect errors in financial statements but also make useful recommendations to help businesses improve their internal control systems and better manage their finances. At the same time, this also contributes to enhancing AISC's reputation in the auditing industry, building trust with clients and stakeholders.
Therefore, this study is necessary to propose solutions to improve the effectiveness of risk assessment in the audit planning stage. Through analyzing the current situation, identifying existing limitations and proposing improvement measures, the study is expected to contribute positively to the audit of financial statements at AISC as well as provide a useful reference for other auditing firms in the 2 industry. Research Overview Many domestic and foreign studies have focused on risk assessment in auditing, especially in the planning stage. Studies by Arens & Loebbecke (1997), Knechel (2013) and Lobo & Zhao (2013) have pointed out the importance of audit risk assessment for audit quality.
These authors have emphasized that identifying and assessing risks from the beginning helps auditors plan appropriately, allocate resources effectively and minimize the possibility of missing material misstatements. Furthermore, these studies also mention the influence of the business environment, internal control system and the level of compliance with accounting standards on audit risk. In Vietnam, some studies by Tran Manh Dung (2018), Nguyen Van Tuyen (2020) have mentioned risk assessment models in financial statement audits. These studies have analyzed traditional risk assessment methods and factors affecting audit risks at Vietnamese enterprises.
Some risk assessment models such as risk matrix models and risk scoring models have been proposed to improve the accuracy of audit risk assessment. However, these studies have not yet gone into the practical application of risk assessment at specific auditing firms such as AISC, especially in the context of the constantly changing auditing environment with the development of technology and increasingly high legal requirements. Furthermore, current studies have not fully addressed the challenges in the practical application of audit risk assessment at auditing firms in Vietnam, nor have they proposed specific solutions to optimize this process in each auditing organization. Therefore, this study will focus on analyzing the current status of risk assessment in the audit planning stage at AISC, thereby proposing complete solutions to improve audit efficiency and quality in the current context.
Research objectives The research aims at the following specific objectives: - Systematize the theoretical basis for risk assessment in the financial statement audit planning stage, including concepts, principles, methods and factors affecting the risk assessment process. 3 - Evaluate the current status of audit risk assessment at AISC, including the methods currently being applied, the existing difficulties and limitations and factors affecting the effectiveness of risk assessment. - Propose solutions to improve risk assessment in the audit planning stage at AISC, including improving auditor capacity, applying technology in risk assessment, improving the internal control system and building a more effective risk assessment process. Research object, scope of research Moore AISC Company Limited Independent member of Moore Global Network Limited - a global network of consulting and auditing from independent companies - headquartered in London.
Moore Global Network Limited is ranked by International Accounting Bulletin as the 12th largest accounting network in the world, the entire auditing process in general and the audit risk assessment process in particular applied at the company are taken from International Auditing Standards (ISA) and Vietnamese Auditing Standards (VSA). After a long period of application, AISC has made adjustments that are more suitable for customers, improvements to the assessment method to adapt to the economic environment and customers in Vietnam. Currently, AISC Vietnam is applying a consistent audit risk assessment process, specifically in each stage of the audit. Recognizing the importance of assessing audit risks in auditing Financial Statements, and having the opportunity to intern at Moore AISC Vietnam Co., I chose the topic "Completing the audit risk assessment process in Financial Statement Auditing by Moore AISC Auditing and Informatics Services Co." to write my graduation thesis.
Research questions The essay aims to answer the questions: “How is risk assessment performed in the audit planning stage at AISC?”; “What are the difficulties and limitations in the audit risk assessment process at AISC?”; “What solutions can be applied to improve risk assessment in the audit planning stage at AISC?” 6. Research methods 4 The research uses a combination of qualitative and quantitative methods to ensure comprehensiveness and objectivity. Specifically: - Qualitative method: Synthesize theories, analyze and evaluate risk assessment models in auditing through research documents, auditing standards and related legal regulations. - Data collection method: Secondary data: Collected from audit reports, internal documents of AISC, related studies, financial statements and current accounting and auditing standards.
Thesis structure In addition to the Introduction, Conclusion, References, etc., my graduation thesis is divided into 3 chapters as follows: Chapter 1: Theoretical basis of risk assessment in Financial Statement Audit This section will introduce theoretical issues of Auditing risks including a general overview of Financial Statement audit, the concept of risk, the relationship between them, Auditing risk assessment model, etc.
