UNIVERSITY OF ECONOMICS AND LAW FACULTY OF ACCOUNTING AND AUDITING BACHELOR THESIS AUDIT PROCEDURES FOR FIXED ASSETS BY DELOITTE AT ABC AND XYZ COMPANY Lecturer: MA. Truong Thi Hanh Dung Student: Dinh Thi Nhu Thuan Student ID: K174050623 Class: K17405CA Ho Chi Minh City, 5th May 2021 i ACKNOWLWDGEMENTS During the period of implement thesis, I received a plenty of enthusiastic help and support that guide and encourage me to overcome all difficulties and finish this hard but meaningful time. Firstly, I would like to express thanks to the teacher of Faculty Accounting and Auditing of University of Economics and Law and Deloitte Limited Company creating favorable conditions for me to take my thesis. Secondly, sincerely thank to Ms.
Truong Thi Hanh Dung, my supervisor who gave me useful guidance and advice that help me to finish my thesis successfully. Furthermore, I would like to thank auditing department of Deloitte Limited Company, often shared my feelings and gave me timely advice during the thesis. In short, I really thank to all people helping me to finish this graduate thesis. Thank you very much! Student Dinh Thi Nhu Thuan ii CONTENTS ACKNOWLWDGEMENTS .ii LIST OF THE TABLES AND FIGURES.
iv OVERVIEW CHAPTER. Research scope and limitations. 2 CHAPTER 1: INTRODUCTION TO DELOITTE VIETNAM .1 Introduction to Deloitte Vietnam.2 Organizational Structure of Deloitte Vietnam HCM Brach. 6 CHAPTER 2: GENERAL AUDIT PROCEDURES AT DELOITTE VIETNAM AND AUDIT PROCEDURES FOR FIXED ASSETS AT ABC COMPANY AND XYZ COMPANY .1 General audit procedures for financial statements at Deloitte Vietnam .2 General fixed asset process.3 Audit procedures for fixed asset by Deloitte at ABC and XYZ Company .1 General information about ABC and XYZ Company .3 Audit risk assessment .4 Finish the audit.
40 CHAPTER 3: COMMENTS AND RECOMMENDATIONS .1 Comment on the audit procedures for fixed assets at Deloitte Vietnam .2 Solutions to completeness the fixed assets procedure in auditing financial statement 43 3.3 The strengths and weaknesses of the graduation thesis. 47 iv LIST OF THE TABLES AND FIGURES Tables: Content Table 1: Describe the duties of the audit engagement Table 2: Depreciation period of ABC Company Table 3: Depreciation period of XYZ Company Figures: Content Figure 1: Information about Deloitte Vietnam Figure 2: Branch of Deloitte Vietnam in Ho Chi Minh City Figure 3: History and Development of Deloitte Vietnam Figure 4: Organizational structure of Deloitte Vietnam (HCM) Figure 5: Organizational structure of Audit and Assurance Department Figure 6: Audit procedure for FSs at Deloitte Vietnam Figure 7: Fixed assets procedure Figure 8: General ledger about the fixed assets of ABC Figure 9: Journal listing about fixed assets of XYZ Company Figure 10: Leadsheet of ABC Company Figure 11: Leadsheet of XYZ Company Figure 12: Movement of fixed assets of ABC Figure 13: Movements of fixed assets at XYZ Company for tangible assets Figure 14: Movement of fixed assets of XYZ for intangible assets Figure 15: Testing deduction CIP of XYZ Company Figure 16: Sampling of ABC Company Figure 17: Sampling of XYZ Company Figure 18: Detail samples of ABC v Figure 19: Detail samples of XYZ Figure 20: Recalculate of Depreciation Figure 21: SAP depreciation expenses of XYZ Company Figure 22: Allocate period depreciation of ABC Figure 23: Allocate period depreciation of XYZ Figure 24: Reconciliation to depreciation expense of ABC Figure 25: Reconciliation to depreciation expense of XYZ 1 OVERVIEW CHAPTER 1. Research rationales Fixed assets play an indispensable role in the operations of any companies, which enable producing of the goods and services that generate income for enterprises. Therefore, those non-current assets would account for the majority proportion of total assets on the statement of financial position of most companies, especially those manufacturing ones.
Furthermore, annual depreciation and amortization expenses are of paramount importance since they could affect the way accountants figure out net income for the financial period. In addition, depreciation and amortization expenses are considered as carrying a high level of risk, so they are governed strictly by the Ministry of Finance. Due to the significance of fixed assets account and depreciation and amortization expenses to businesses, the topic would be chosen “Audit procedure for fixed assets by Deloitte” for the internship report. Research objectives • Describe general audit procedures at Deloitte Vietnam • Describe fixed asset audit procedures at ABC Company • Analyzing and assessing for the audit procedure for fixed assets at Deloitte Vietnam.
Research subjects • The general audit procedures in Deloitte Vietnam. • The Deloitte’s audit procedure for fixed assets at ABC Company. Research scope and limitations This research focuses on fixed assets procedure, with data extracted mainly from clients’ general ledger and subsidiary ledger in FY 2020. Moreover, as Deloitte has to adhere to the confidentiality agreement with clients about data protection, the data provided 2 below are for illustrative purposes only, which would make this research less realistic to some extent.
Research structure The structure of this procedure is as follows: Overview chapter Chapter 1: General information about Deloitte Limited Company in Vietnam Chapter 2: General audit procedures and audit procedure for fixed assets Chapter 3: Conclusion and recommendations 3 CHAPTER 1: INTRODUCTION TO DELOITTE VIETNAM 1.1 Introduction to Deloitte Vietnam Deloitte Listed Company is the first company operate in consulting and auditing services with 30 years-experience at market in Vietnam, as the member of Deloitte Global. Deloitte Vietnam has more than 1000 employees in both Hanoi and Ho Chi Minh office. The most employees of Deloitte Vietnam can understand clearly in legal as well as business environment in Vietnam, and apprehensive for the strength of Deloitte Asia Pacific. ❖ Headquarters of Deloitte Vietnam The company’s name Deloitte Limited Liability Company was accepted Address 15th Floor, Vinaconex Tower, 34 Lang Ha, Lang Ha Ward, Dong Da District, Hanoi Capital Phone Number 024 7105 0000 Fax Number 024 6288 5678 Email deloittevietnam@deloitte.com Type of business Limited Liability Company with more than two members Legal representative Ms.
Ha Thi Thu Thanh – Chairman of the Board Mr. Pham Van Thinh – General Director Logo Figure 1: Information about Deloitte Vietnam Source: www2.com 4 ❖ Branch of Deloitte Vietnam Branch’s name Branch of Deloitte Limited Liability Vietnam Address 18th Floor, Times Square Tower, 57-69F Dong Khoi Street, Ben Nghe Ward, District 1, Ho Chi Minh City Phone number 028 7101 4555 Fax number 028 3910 0750 Email deloittevietnam@deloitte.com Legal representative Mr. Vo Thai Hoa Figure 2: Branch of Deloitte Vietnam in Ho Chi Minh City Source: www2.com ❖ History and development of Deloitte Vietnam 13 May 1991 April-1994 VACO was etablished 01/11/2007 by Minister of VACO co-operate Deloitte Limited Finannce according to with DeloitteTouche Company Decision of N.o 165 Tohmatsu TC/QĐ/TCCB Figure 3: History and Development of Deloitte Vietnam ❖ Core value Deloitte always aims to provide the best in service to its customers while creating an environment that fosters inclusiveness and mutual support, working together with integrity, passion and together, build positive influences to contribute to the community. Therefore, Deloitte Vietnam has built up core values as the basis for decisions made and actions taken to meet common goals: • Lead the way 5 With our outstanding scale, scope, skills and service, Deloitte not only leads the industry but also reinvests it for the future.
Contribute to communities, create opportunities and lead the way to a better and more sustainable world. • Serve with integrity By consistently upholding integrity and ethics in action, Deloitte has won the trust of clients, regulators and the public. • Take care of each other The culture of Deloitte is “We are all this together”, all employees of Deloitte always take care and support each other, prioritizing respect, fairness and development. • Foster inclusion In a multinational working environment like Deloitte, always focuses on "fostering" a diverse culture that is easy to integrate, to attract talented human resources from all over the world.
In addition, a commitment to equality of interests for all employees has opportunities to develop in their careers. • Collaborate for measurable impact Approach the job with a collaborative, collaborative mindset across businesses, geography and skills to deliver a clear, measurable impact. So measuring Deloitte's success is not just by metrics, but by the strength of the relationships that build, the degree of innovation that can be brought about to solve problems. ▪ Services of Deloitte Vietnam • Audit and Assurance: independence audit, provide review services for the FSs • Financial Advisory: corporate finance consulting (verification, sales), valuation, restructuring services, legal investigation consulting and dispute resolution / analysis.
• Risk Advisory: Consulting business strategy and risk, controlling, assessing cyber risks, information systems. 6 • Tax: Corporate tax, indirect tax, tax services related to foreign professionals working in Vietnam, services related to transfer pricing. • Other services related to education training Audit and Assurance is one of the highest proportions in revenue of Deloitte Vietnam.2 Organizational Structure of Deloitte Vietnam HCM Brach Figure 4: Organizational structure of Deloitte Vietnam (HCM) Source: Deloitte Vietnam 7 ▪ Audit and Assurance Department in HCM Partner/Director Senior Manager Manager Senior Audit assistant Internee Figure 5: Organizational structure of Audit and Assurance Department When fieldwork, depend on the characteristics of the engagement, the team will include 1 manager, 1-2 seniors, 1-2 assistants and 1-2 internees. Staff selection is totally random and will be handled by Ms.
Nguyen Thi Binh (Assistant) and Manager of the engagement. If the job has been audited in interim then that group of staff will be kept intact for the final audit. Binh allocates staffs then put in the SAP (Software of Deloitte) and staff easily to search their job allocate on the system. 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. 8 Internees are often assigned to work on some working papers such as cash, other receivables and payables, fixed asset, other income & expense, finance income & expense, others assets, equity, operating expense and so on. Besides that the internees also prepare hard document for each engagement. 9 CHAPTER 2: GENERAL AUDIT PROCEDURES AT DELOITTE VIETNAM AND AUDIT PROCEDURES FOR FIXED ASSETS AT ABC COMPANY AND XYZ COMPANY 2.1 General audit procedures for financial statements at Deloitte Vietnam Deloitte designs an Engagement Management System (EMS) software as the foundation for all Deloitte's financial statements audits worldwide with 4 main parts: 1.
Preliminary Engagement Activities 2. Understand and Plan 3. Perform and Evaluate 4. Conclude Each part of Deloitte Vietnam's audit guidelines has been developed based on the requirements of the International Auditing Standards.
The company's audit process specific steps as follows: 10 Figure 6: Audit procedure for FSs at Deloitte Vietnam Source: EMS of Deloitte Vietnam 11 Step Content Person in charge Preliminary The manager review and assess the audit Partner/ Director/ engagement engagement risk of a new or returning Manager activities customer. After the evaluation is completed, continue to decide whether to accept the contract or not. If you accept to conduct the audit for customers, then prepare a contract with actual terms to minimize risk for the audit. Contact with In this step, the manager learns about the Manager customers customer as well as the results they have achieved; at the same time learn about the goals, strategies and wants of the customers.
Establish an When there is an agreement and agreement Manager and Senior audit between the Firm and the Client, the auditor engagement will set up an audit team to prepare to conduct the audit as planned. Understand Obtain necessary information about clients Engagement team about the Client such as: stakeholders affecting company operations, minutes of important meetings for co-owners, related documents to the company's goals, strategies, operational processes, changes in personnel, techniques, operating processes of the company, application IT environment at the Company, and so on.