1 BANKING ACADEMY FACULTY OF ACCOUNTING & AUDITING BACHELOR THESIS TOPIC: IMPROVING THE AUDIT PROCESS OF GENERAL AND ADMINISTRATIVE EXPENSES IN THE FINANCIAL STATEMENT AUDIT CONDUCTED BY BDO AUDIT SERVICES COMPANY LIMITED Student’s name : Le Dinh Quang Speciality : Accounting – Auditing Class : K24CLC-KTA Student’s ID : 24A4020048 Supervisor : Dr. Nguyen Tien Dat Ha Noi - April 2025 1 BANKING ACADEMY FACULTY OF ACCOUNTING & AUDITING BACHELOR THESIS TOPIC: IMPROVING THE AUDIT PROCESS OF GENERAL AND ADMINISTRATIVE EXPENSES IN THE FINANCIAL STATEMENT AUDIT CONDUCTED BY BDO AUDIT SERVICES COMPANY LIMITED Student’s name : Le Dinh Quang Speciality : Accounting – Auditing Class : K24CLC-KTA Student’s ID : 24A4020048 Supervisor : Dr. Nguyen Tien Dat Ha Noi - April 2025 I STATUTORY DECLARATION I hereby affirm that all content presented in this thesis is the result of my own independent research. All figures, data, as well as the analysis, evaluations, and conclusions provided in this paper are truthful, objective, and reasonable, based on actual observations, surveys, and my internship experience at BDO Audit Services Company Limited.
I take full responsibility for the accuracy and authenticity of the information contained herein. Ha Noi, 14 April 2025 Signature Quang Le Dinh Quang II ACKNOWLEDGEMENT Throughout my studies at Banking Academy, I have always deeply appreciated and been sincerely grateful for the dedicated guidance and teaching of the lecturers. I would like to express my heartfelt thanks to all the lecturers at the Academy, especially those in the Faculty of Accounting and Auditing, who have continuously created favorable conditions for my learning and development. In particular, I would like to extend my deepest gratitude to Dr.
Nguyen Tien Dat, who has enthusiastically provided detailed guidance, answered all of my questions, and offered valuable advice throughout the process of completing this graduation thesis. I also wish to sincerely thank BDO Audit Services Company Limited for giving me the opportunity to intern and gain practical experience at the firm. My special thanks go to the seniors and fellow interns at Audit Department 1 for their generous support, instruction, and willingness to share valuable knowledge during my internship. Once again, I sincerely thank all the lecturers, seniors, and friends who have supported and encouraged me throughout the course of my academic journey and during the completion of this thesis.
Ha Noi, 14 April 2025 Signature Quang Le Dinh Quang III TABLE OF CONTENTS STATUTORY DECLARATION. II LIST OF FIGURES, CHARTS, TABLES. VI LIST OF ABBREVIATION. The urgency of the topic.
Research subject and scope. Struture of the Thesis. 6 CHAPTER I: THEORETICAL BASIS FOR AUDITING GENERAL AND ADMINISTRATIVE EXPENSES IN FINANCIAL STATEMENT AUDITS CONDUCTED BY INDEPENDENT AUDITORS. Overview of General and Administrative Expenses in Financial Statements.
Definition and Nature of General and Administrative Expenses. Characteristics of General and Administrative Expenses on the Financial Statements. Recognition and Accounting of General and Adminstrative expenses. Common misstatements related to the G&A expenses item.
Role and objectives of auditing General and Administrative expenses in Financial Statement Audits performed by BDO Audit Services Company Limited. Audit basis for General and Administrative expenses at BDO Audit Services Company Limited. BDO’s Three-stage approach to auditing General and Administrative expenses. Audit planning stage for G&A Expenses.
Implementing the audit. Completing the audit. 28 CONCLUSION OF CHAPTER 1. 30 IV CHAPTER 2: CURRENT AUDIT PROCEDURES FOR GENERAL AND ADMINISTRATIVE EXPENSES IN FINANCIAL STATEMENT AUDITS CONDUCTED BY BDO AUDIT SERVICES COMPANY LIMITED.
General information about BDO Audit Services Company Limited. Process of Formation and Growth. Functions, duties, and business activities. Organizational Structure and Management Framework of BDO in Vietnam.
BDO's Financial Statement Audit Process. Practice of audit of G&A expenses in financial statements audits at MLB Company Limited. Starting the audit. Implementing the audit.
Completing the audit. At the audit planning phase. At the audit implementing phase. At the audit completing phase.
Key limitations identified across the audit phases of G&A Expenses. 64 CONCLUSION OF CHAPTER 2. 65 CHAPTER 3: SOLUTIONS AND RECOMMENDATIONS FOR IMPROVING THE AUDIT PROCESS OF GENERAL AND ADMINISTRATIVE EXPENSES IN FINANCIAL STATEMENT AUDITS PERFORMED BY BDO AUDIT SERVICES COMPANY LIMITED. Development Orientation of BDO Audit Services Co.
in the Future. Principles and Requirements for Improving the Audit Process of Selling and Administrative Expenses at BDO Audit Services Co. Some Solutions to Improve the Audit Process of General & Administrative Expenses in the Financial Statement Audits Conducted by BDO Audit Services Co. Planning Stage of the Audit.
Execution Stage of the Audit. Completion Stage of the Audit. Other Solutions for the Overall Audit Process. Recommendations for Improving the Audit Process of G&A Expenses in Financial Statement Audits Conducted by BDO Audit Services Co.
From the Perspective of the Government and Regulatory Authorities. From the Perspective of the Vietnam Federation of Accountants and Auditors (VAA) and the Vietnam Association of Certified Public Accountants (VACPA). From the Perspective of BDO Audit Services Company Limited. From the Perspective of Auditors.
From the Perspective of Educational Institutions. 78 CONCLUSION OF CHAPTER 3. 82 VI LIST OF FIGURES, CHARTS, TABLES Figure 1. 1: Accounting Diagram for G&A Expense.
2: Objectives of Auditing G&A expenses. 3: Audit process for G&A expenes. 4: Table of materiality ratios based on criteria. 5: Example audit documentation for G&A expenses by BDO.
1: Logo of BDO Audit Services Co. 2: Organizational structure of BDO in Vietnam. 3: Phases of the Financial Statement Audit. 4: APT software interface.
5: Customer information management interface on APT software. 6: Client Retention Form. 7: Know Your Client Form. 8: Assessment of the inherent risks from associated with G&A expenses at MLB Company Limited.
9: Evaluation of control risks form of G&A expenses at MLB Company Limited. 10: Audit Risk Evaluation Matrix. 11: Overall audit programme for G&A expenses. 12: Leadsheet - Working paper T.
13: Year-over-year (YoY) variance analysis - Working paper T. 14: Month-over-Month (MoM) variance analysis - Working paper T. 15: Break-down G&A expense - Working paper T. 16: Sampling Toolkits for checking details of G&A expenses item - Working paper T.
17: Detailed Testing of G&A expenses - Working paper T. 18: Cut-off test for G&A expenses - Working paper T. 19: Disclosure - Working paper T. 1: Monthly G&A Expenses Fluctuation - Working paper T.
1: BDO's Audit Team Allocation for the 2024 Audit of MLB Company Limited's Financial Statements. 2: Audit Timeline Conducted by BDO at MLB Company Limited. 3: Materiality, Performance Materiality and CTT for auditing MLB Company Limited. 49 VIII LIST OF ABBREVIATION Abbreviation Full Meaning AM Acceptance Minutues APT Audit Process Tool AUs Auditors CIT Corporate Income Tax CTT Clearly Trivial Threshold Co., Ltd Company Limited EAT Earnings After Tax EBT Earnings Before Tax FS Financial Statements G&A General and Administrative LS Leadsheet MoM Month over Month VAA Vietnam Federation of Accountants and Auditors VACPA Vietnam Association of Certified Public Accountants VAS Vietnamese Accounting Standards VAT Value Added Tax VSA Vietnamese Standards on Auditing YoY Year over Year 1 INTRODUCTION 1.
The urgency of the topic In the context of strong economic growth and deep global integration, financial statement audits are playing an increasingly important role in ensuring the transparency, accuracy, and reliability of financial information. Stakeholders such as investors, banks, regulatory authorities, and businesses rely heavily on audited financial statements to make critical economic decisions. Among the items subject to audit, General and Administrative Expenses (G&A Expenses) hold particular significance, as they reflect the effectiveness of a company’s management and operations, and directly impact business results and profitability. G&A expenses often include a wide range of costs such as management salaries, office expenses, administrative costs, outsourced services, and more.
Due to their diverse nature and frequent occurrence, this item poses several risks if not properly monitored, recorded, and controlled. Auditing G&A expenses not only helps verify the completeness, accuracy, and legitimacy of these expenses, but also assists in detecting and preventing potential misstatements or fraud. As a result, improving the audit process for G&A expenses is essential to enhance the overall quality and reliability of financial statement audits. During my internship at BDO Audit Services Company Limited (hereinafter called “BDO Audit Services Co., Ltd” or “BDO”), I observed the company’s continuous efforts to innovate and improve its audit procedures in response to the growing demands of the market—particularly in the era of digital transformation and international integration.
As a reputable and rapidly growing audit firm in Vietnam, BDO places great emphasis on audit quality by applying modern technology, international standards, and practical experience to its audit engagements, including the audit of G&A expenses. From this practical experience, I have chosen the topic: "Improving the Audit Process for General and Administrative Expenses in Financial Statement Audits Conducted by BDO Audit Services Company Limited" for my graduation thesis. This 2 topic not only provides theoretical insights but also carries significant practical value, contributing to the enhancement of the audit process at BDO in particular, and to the development of audit service quality in an ever-evolving economic environment. Research overview In the context of growing demand for transparency and reliability in financial reporting, the audit of general and administrative expenses (G&A expenses) has drawn increasing attention from both researchers and practitioners.
As a key component of operating costs, G&A expenses often make up a large portion of total expenses, making their accuracy and completeness essential to ensuring the reliability of financial statements. In recent years, various graduation theses and academic studies have explored this topic from both theoretical and practical angles. These works have helped clarify the foundational concepts of auditing G&A expenses and analyzed the application of audit procedures in different firms. By evaluating current practices, researchers aim to identify limitations and propose practical solutions to enhance audit quality.
Several studies also highlight the need to tailor audit programs to client characteristics, improve audit documentation, and strengthen the use of data analysis tools in auditing G&A expenses. In the graduation thesis by Đào Thu Hương (2024), titled “Auditing Selling and Administrative Expenses in Financial Statements by UHY Auditing and Consulting Company Limited,” the author provided an in-depth analysis of the audit procedures for these expense items at the firm. The study’s strength lies in its clear presentation of the current auditing practices and the practical recommendations proposed. However, the research did not thoroughly compare or evaluate previous studies to highlight the distinct value and contributions of the thesis.
Similarly, in her 2022 graduation thesis titled “Improving the Audit Process of General and Administrative Expenses in Financial Statement Audits Conducted by Ernst & Young Vietnam Ltd.,” Vũ Thị Linh Chi offered a comprehensive and systematic overview of the audit process for administrative expenses at E&Y. The author suggested several practical solutions to existing limitations, such as refining audit programs tailored to each expense type, upgrading audit-support software, and 3 enhancing analytical and substantive procedures. Nevertheless, the thesis did not clearly address the role of stakeholders or educational institutions in effectively applying the proposed solutions. Meanwhile, Nguyễn Duy Anh (2024), in his bachelor thesis “Audit of General and Administrative Expenses in Financial Audits Conducted by BDO Audit Services Company Limited,” submitted to the National Economics University, presented a well-structured theoretical foundation and a practical audit process at BDO.
The research contributed valuable recommendations for improving the audit procedures. However, it lacked specific implementation conditions and did not include actionable suggestions from training institutions or auditors, which are essential to ensure the feasibility and long-term effectiveness of the proposed improvements. Given the aforementioned reasons, I have chosen the topic "Improving The Audit Process of General And Administrative Expenses in The Financial Statement Audit conducted by BDO Audit Servies Company Limited" for my graduation thesis.