UNIVERSITY OF ECONOMICS AND LAW FACULTY OF ACCOUNTING AND AUDITING ________________________ GRADUATION THESIS THE PROCEDURE OF AUDITING FIXED ASSETS AT MAZARS VIETNAM ADVISOR: MS. TRUONG THI HANH DUNG STUDENT NAME: NGUYEN GIA BAO TRAM STUDENT NUMBER: K174050624 CLASS: K17405CA HO CHI MINH CITY, 5/2021 ACKNOWLEDGEMENT The internship handle requires the sum of work, commitment and challenging work. That accomplishment would not have been conceivable without the back and help of numerous people from my colleagues as well as from Mazars Vietnam. To begin with of all, I would like to truly thank my advisor Ms.
Truong Thi Hanh Dung (University of Economics and Law), for her steady back, tolerance, inspiration and information has made a difference me a lot. I would like to thank the general manager of Mazars for supporting and encouraging me to fulfill my tasks. I would like to extend my sincere thanks to my supervisor, Ms. Ngo Thi Thanh Nga (Mazars), for her participation and helpful comments.
During my internship, it was her support, direction and deeply acknowledged advice that made a difference to me throughout this internship. I appreciate all Mazars supervisors and office staff for their collective engagement, timing and information that have contributed to my development during the internship. Again, I sincerely thank the guidance, support and help of the above individuals during my internship. TABLE OF CONTENT LIST OF CHARTS AND TABLES.
i LIST OF FIGURES. iii OVERVIEW CHAPTER. Introduction and purpose of the thesis. Objectives of the thesis.
Methodology of the thesis. Subject and scope of the thesis .1 CHAPTER 1: INTRODUCTION ABOUT MAZARS VIETNAM CO. Introduction about Mazars Vietnam Co. History and development.
Operational principles and core values. Organizational structure of company. Company organizational chart. Audit and assurance department in HCM office.
Audit policies in Mazars .9 CHAPTER 2: THE PROCEDURE OF AUDITING FIXED ASSETS .10 AT MAZARS VIETNAM FOR CLIENT XYZ. The procedure of auditing financial statements in Mazars .2 Compare between IAS and VAS about tangible and intangible fixed assets .1 Tangible fixed assets.2 Intangible fixed assets. The procedure of auditing fixed assets for client XYZ .1 Information of client XYZ in fiscal year 2020. The procedure of auditing fixed assets in client XYZ .2 Performing the procedure (working papers) .3 Evaluation the result of procedure .45 CHAPTER 3: COMMENTS FOR THE PROCEDURE .46 AND EXPERIENCED AFTER INTERNSHIP .1 Comment for Mazars’ procedure .2 Comment for graduation thesis.2 Experienced after internship .49 i LIST OF CHARTS AND TABLES Chart 1.
Operational principles Chart 1. Mazars Vietnam Chart Chart 1. Audit & Assurance chart Table 2. Main steps in audit planning Table 2.
Identify OM Table 2. Compare between IAS 16 and VAS 03 Table 2. Compare between IAS 38 and VAS 04 Table 2. Useful life of fixed assets in comparison Table 2.
Staff member in fieldwork Table 2. Materiality for audit client XYZ Table 2. List of procedures performed in client XYZ ii LIST OF FIGURES Picture 1. Audit team plan meeting file Picture 2.
Requirement checklist Picture 3. Task allocation for final audit in client XYZ Picture 4. Balance sheet as at 31/12/2020 of client XYZ Picture 5. Fixed assets table as at 31/12/2020 Picture 6.
Reconcile BS/TB with Leadsheet Picture 8. Reconcile BS/TB with FAR Picture 9. Recalculation depreciation of fixed assets Picture 10. Fixed assets increase in 2020 Picture 11.
Reference amount of addition from other WPs Picture 12. Check for the allocation of the depreciation expense Picture 13. Check useful life of fixed assets Picture 14. Note for report iii ABBREVIATIONS MAM: Mazars Audit Manual OM: Overall Materiality PM: Performance Materiality CTT: Clearly Trivial Threshold PAF: Permanent File CAF: Current File TOD: Test Of Detail BS: Balance Sheet GL: General Ledger TB: Trial Balance LS: Leadsheet FAR: Financial Accounting And Reporting COGS: Cost Of Goods Sold 1 OVERVIEW CHAPTER 1.
Introduction and purpose of the thesis Fixed assets reflect the existing production capacity and the application of science and technology to the operation of the company. They are one of the important factors to create sustainable growth, increase labor productivity, thereby reducing costs, lowering costs of products and services. Fixed assets and depreciation of fixed assets are also an important part of the financial statements. Depending on the size and type of business, this item can account for a large or small proportion of the total assets.
Especially for manufacturing enterprises, the fixed assets item on the balance sheet often accounts for a large proportion. Errors in this item can materially affect the financial statements of the enterprise. The audit of fixed assets will contribute to discovering errors in the determination of historical cost of fixed assets, repair costs, and depreciation expenses. In conclusion, because of realizing the urgency and importance in the true and fair presentation of fixed assets of each business, “The procedure of auditing fixed assets item by Mazars Vietnam in Ho Chi Minh City” would be my topic in graduation thesis.
Objectives of the thesis - Describe the procedure of auditing financial statements in Mazars. - Describe the procedure of auditing fixed assets in client’s company. - Analyze and assess for the audit procedure of fixed assets at Mazars. Methodology of the thesis - Collect information of customers audited in Mazars' data.
- Discuss and ask the experienced auditors for unknown issues. - Read accounting standards, auditing and other related documents. Subject and scope of the thesis 2 - Subject: The procedure of auditing fixed assets in client XYZ. - Scope: XYZ’s financial statements for the year ended 31/12/2020.
3 CHAPTER 1: INTRODUCTION ABOUT MAZARS VIETNAM CO. Introduction about Mazars Vietnam Co., Ltd Company’s name: Mazars Vietnam Co., Ltd Logo: Address: 141 Nguyen Du Street, Ben Thanh Ward, District 1, Ho Chi Minh City Phone: (+84)28 3824 1493 Website: www. History and development Mazars Global Mazars was established in the city of Rouen, France by Mr. Robert Mazars in 1945.
In the 1990s, Mazars began to develop internationally, appearing first in European countries and then in the countries of Africa, Latin America, the Middle East and finally the countries of the Asia-Pacific region. The current President and CEO of Mazars is Mr. Mazars currently has a staff of about 40,400 professional employees ready to provide high quality and consistent service to customers from all over the world. Mazars Vietnam Mazars Vietnam has been established since 1994 as a member of firm of Mazars’ Global to provide professional accounting and business advisory services to foreign and local organizations.
Mazars Vietnam operates through its offices in Hanoi and Ho Chi Minh City. Clients of Mazars are both large and small, vary from startups SMEs to private investor public bodies and major international groups. 4 As of January 2018, Mazars Vietnam insists its ranking in the top 10 audit firms and the leading firm that’s respect to accounting & outsourcing services in Vietnam. Operational principles and core values 1.
Operational principles Act responsibly in public Keep a long- Mazars' Add value term vision principles for clients Bring a unique choice Chart 1. Core values The company approach every piece of work with their values. They are set in their code of conduct. Core values: • Integrity • Responsible • Diversity and respect • Technical excellence • Independence 5 • Stewardship It is through their values that they have successfully grown their organization around the world, pursuing recruitment and mergers with people and firms that share the same values, vision and objectives.
Organizational structure of company 6 1. Company organizational chart Chart 1. Mazars Vietnam Chart (Source: Mazars Vietnam – Staff Handbook 2020) 7 1. Main personnel Jean Marc Deschamps – Managing Partner Nguyen Thi Ngoc Huyen – Partner of Outsourcing Accounting Jack Nguyen – Partner of Business Development Nguyen Hai Minh – Partner of Tax & Business Advisory Bui Xuan Vinh – Partner of Audit & Assurance Laurent Nguyen – Director of Financial Advisory 1.
Audit and assurance department in HCM office Partner Senior Manager Manager Senior Audit assistant Internee Chart 1. Audit & Assurance Chart (Source: Mazars Vietnam – Staff Handbook 2020) At Mazars, audit & assurance department is not analyzed in other smaller department. All auditor including partner, manager, senior, assistant, internee will sit together in the same area. This creates a convenient condition for people to share the problem and job with each other.
8 When fieldwork, depend on the characteristics of the job, the team will include 1 manager, 1-2 seniors, 2-3 assistants and 1-2 internees. Staff selection is totally random and will be handled by a manager. If the job has been audited in interim then that group of staff will be kept intact for the final audit. After the manager chooses staffs, staff booking will be notified to people and they will be added to the group for monitoring easily.
Senior is the person who will directly assign the work to the assistants and internees. Before fieldwork, senior will send task allocation and working papers of prior year for staff to review. Internees are often assigned to work on some working papers such as cash, other receivables and payables, fixed assets, other income & expense, finance income & expense, others assets, equity,. During the internship, internee is guided from basic soft skills such as printing and scanning documents, summarizing contracts, sending confirmation letters, checking documents.
With the guidance of other people in Mazars, the author has been working and learning mechanism not only about professional knowledge but also about valuable and additional work and skills such as writing skill; communication and responses to customers; meticulous attitude and working style (always recording what the author learn and follow). In Mazars, internee also take part in training sessions on knowledge of tax (VAT, PIT, CIT, FCT); insurance and Vietnamese law regulations. Specially, Mazars often save one week training for internee about the procedures of audit. All of the above training sessions are done at the company's office either in person or online.
Services Mazars had a wide range of services to meet the customers’ need. It consists of: - Audit & Assurance - Accounting and Business Process Outsourcing: • Accounting and preparation of financial statements • Accounting reviews • Payroll outsourcing and statutory insurance contribution outsourcing 9 - International and Local Taxation: • Tax advisory • Tax compliance - Business Start-up Assistance: • Advice on investment and administrative procedures • Processing investment licence • Assistance in recruitment and human resource management • Assistance with various other administrative procedures post licensing - Financial Advisory Services: • Due Diligence • Business Planning & Valuation • M&A advisory - IFRS Services • First -time Adoption • IFRS Audit Services - Transfer Pricing Services 1. Audit policies in Mazars Mazars ensures its integrity and independence by requiring all employees to strictly adhere to the Mazars Code of Conduct (CCOI - Mazars' Code of Conduct for Objectivity and Independence). The CCOI was established based on the International Ethics Standards Board for Accountants (IESBA).
10 CHAPTER 2: THE PROCEDURE OF AUDITING FIXED ASSETS AT MAZARS VIETNAM FOR CLIENT XYZ 2. The procedure of auditing financial statements in Mazars The group's audit guidelines are set out in the Mazars Audit Manual (MAM) (published in December 2012). These guidelines are established based on International Standard on Auditing (ISAs) issued by the International Auditing and Assurance Standard Board (IAASB). The MAM contains specific instructions that the auditor should follow during the stages of the planning (including pre-planning, planning), performing and completing the audit.
The general audit procedure that Mazars applies to all countries in the group that comply with the Audit Risk Approach including risk assessment, risk response and reporting before giving an audit opinion. Audit Planning According to MAM and internal training materials (Mazars University), this phase consists of three main steps: (1) Procedure to accept new customers or maintain old customers; (2) Understanding of the audited firm and its operating environment; (3) Identification, risk assessment and audit planning.