Understanding Financial Statement Auditing
Auditing of financial statements means a practice by a practicing auditor, an audit firm to examine and express an opinion on the truthfulness and reasonableness of material aspects of the audited entity's financial statements in accordance with the law. provisions of auditing standards.
The purpose of an audit of financial statements is to achieve one of the following objectives:
- To submit audit reports to state agencies for enterprises on the list of required audits of financial statements.
- Disclosure of financial statements to related parties.
- Publicity and financial transparency among investors.
- Provide reference information for business decisions.
- At the request of the bank.
- For tax settlement purposes, control.
Financial statement audit service is a service of an auditing firm. In which, independent and capable auditors conduct professional activities according to the audit process. From there, give an opinion on the truthfulness and reasonableness of the financial statements based on established standards and norms.
Those are businesses and organizations whose annual financial statements are required by law to be audited. For example, a foreign-invested enterprise.
Enterprises and other organizations use audit services for management purposes.
1. Shareholders, investors, parties to joint ventures, associates, customers and other organizations and individuals with direct interests or related to the audited entity handle the relations of interests and obligations of related parties;
2. The audited unit detects, handles and prevents timely errors and weaknesses in its operations.
3. State agencies manage and administer according to their assigned functions and tasks;
Our ability to audit financial statements
+ Board of Directors, a team of auditors with many years of experience in auditing and consulting for Vietnamese and foreign-invested enterprises in Vietnam, performing audits for thousands of businesses with diverse industries. form.
+ Expertis always supports and advises enthusiastically and understands the business reality of customers. Create the best conditions for customers' convenience..
Expertis provides Financial Statement audit services focusing on service quality and building long-term relationships with Clients.
This allows us to understand all aspects of the business and the environment in which it operates, to ensure that the work is focused on the right nature and time, making it efficient and cost-competitive. best.
+ Accurately perform the work content as agreed in the contract.
+ Prepare reports, send reports as required and on time.
+ Cooperate with customers to find solutions to problems to ensure that the results of the audit report comply with the provisions of the law.
Auditing process Financial statements at Expertis are designed flexibly, in accordance with the specific industry of the business. The audit will be done according to the agreed time, meeting the requirements of the business as much as possible.
Below, Expertis sends you the most basic audit process, with only 3 simple steps to help your business convenient in the cooperation process, helping you to save time and effort for the job. comply with this.
Details of the audit of financial statements performed:
- Actual survey (first time), contract agreement.
- Conduct detailed working plan with the Business Executive Board and the accounting department;
- Assign the audit team to directly work at the business as planned;
- Studying and evaluating the effectiveness and suitability of the internal control system;
- Learn business accounting system;
- Participating in witnessing the unit's inventory of cash, fixed assets, inventory at the time of making audit report;
- Check and compare items on the financial statements such as Cash, Bank deposits, Trade receivables, Inventories, Fixed assets, Trade payables, Short and long-term loans, Capital contributions; Revenue, expenses ...
- Reviewing factors affecting tax liability;
- Discussing with the accountant problems detected and giving necessary advice;
- Send the company's Board of Directors a summary of the issues in the audit process and the draft audit report;
- Agree with the Board of Directors on reported data;
- Release of official audit report.
The value that the financial statement audit service brings
Financial statement audit services Expertis provides
Auditing financial statements according to VAS
IFRS - Corporate - Group Reporting
FAQ - Financial statement audit frequently asked questions
The law stipulates that enterprises and organizations whose annual financial statements must be audited by an audit firm include:
a) Foreign-invested enterprises;
b) Credit institutions established and operating under the Law on Credit Institutions, including foreign bank branches in Vietnam;
c) Financial institutions, insurance enterprises, reinsurance enterprises, insurance brokerage enterprises and foreign non-life insurance enterprises' branches.
d) Public companies, issuing organizations and securities trading organizations.
If your business is one of the above-mentioned types of businesses, you must audit your financial statements every year.
Time before date 01 / 07 / 2015
Pursuant to Clause 6, Article 3 of the Law on Investment dated November 29, 11 and effective on July 2005, 01
Foreign-invested enterprise means an enterprise established by a foreign investor to carry out investment activities in Vietnam or a Vietnamese enterprise where shares purchased, merged or acquired by foreign investors. .
Time from date of 01 / 07 / 2015
Article 3 Investment Law dated 26 month 11 year 2014 takes effect from the date of 01 / 07 / 2015 specified:
“17. Foreign-invested economic organization means an economic organization whose foreign investor is a member or shareholder. ”
Time from date of 01 / 01 / 2021
Article 3 of the Law on Investment dated June 17, 06 taking effect from January 2020, 01 stipulates:
“22. Foreign-invested economic organization means an economic organization in which foreign investors are members or shareholders. ”
Regarding investment conditions, there is a difference between the case where the percentage of foreign investment capital is 51% or more and 50% or less. However, regarding the determination of foreign-invested enterprises, the percentage of foreign capital is not specified, but only "with foreign investors as members/shareholders".
Based on the above provisions, foreign-invested enterprises (or foreign-invested economic organizations) are enterprises with capital-contributing investors being foreign individuals and organizations subject to compulsory audited financial statements.
According to Article 12 of Decree No. 41/2018 / ND-CP stipulating the Penalties for violations against regulations on filing and publishing financial statements as follows:
"Article 12. Penalties for violations of the regulations on submitting and publicizing financial statements
1. A fine of VND 5.000.000 to VND 10.000.000 for one of the following acts:
a) Submitting financial statements to competent state agencies less than 03 months compared to the prescribed time limit;
b) Disclosure of financial statements is slower than the monthly import deadline.
2. A fine of VND 10.000.000 to VND 20.000.000 for one of the following acts:
a) Publicizing incomplete financial statements as prescribed;
b) Submitting financial statements to competent state agencies without attaching audit reports to cases where the law requires auditing financial statements;
c) Submitting financial statements to competent state agencies at a later than the monthly import and export deadline compared with the prescribed time limit;
d) Publicizing financial statements without accompanying audit reports in cases where the law requires auditing financial statements;
dd) Disclosure of financial statements is delayed for a month or more compared to the prescribed deadline.
3. A fine of VND 20.000.000 to VND 30.000.000 for one of the following acts:
a) Publicing untruthful financial statements and figures;
b) Providing and publishing financial statements for use in Vietnam with heterogeneous data in an accounting period.
4. A fine of VND 40.000.000 to VND 50.000.000 for one of the following acts:
a) Failing to submit financial statements to competent state agencies;
b) Failure to publish financial statements as prescribed.
Forcible submission and publicity of audit reports attached to financial statements, for acts of violations specified at Points b and d, Clause 2 of this Article. "
The time limit for performing an audit of financial statements is normally about 10-15 working days from the date of completion of the financial statements as the basis for the audit.
According to regulations, the deadline for submitting audited financial statements is 90 days, so the deadline for completing the audit report must be 90 days before the deadline from December 31 every year.
So, for a year where February has 2 days, the deadline is March 28, and for a year where February has 31 days, the deadline is March 03.
If your business is required to audit financial statements, with the fiscal year ending on December 31, the deadline for signing the audit contract is December 12 of that year. If the fiscal year ends on June 01, the implementation deadline for signing audit contract is May 12 of that year.
This is based on the provisions of Clause 2, Article 9 of the 2011 Law on Independent Audit which clearly states:
The contract to audit the annual financial statements of an enterprise or organization that is required to audit the financial statements must be concluded at least thirty days before the end of the annual accounting period.
Businesses have many practical benefits from early contract signing as follows:
- Reviewing reports before closing year-end data;
- To update the implementation of financial statements in accordance with current regulations;
- To be updated with current regulations and new documents affecting business activities and financial statements of enterprises;
- To guide enterprises to carry out the compulsory inventory at the end of the year according to current regulations;
- Save time completing financial statements from correcting errors;
- Timely detect errors and inappropriate issues when presenting information on financial statements;
- Early completion of financial statements to submit to parties in accordance with current law.
According to the provisions of Clause 2, Article 54 of Decree 41/2018/ND-CP guiding regulations on sanctioning of administrative violations in the field of accounting and independent audit, effective from May 01, 05. , the act of entering into an audit contract late in comparison with regulations will be subject to a maximum fine of 2018 million VND, specifically:
A fine ranging from VND 5.000.000 to VND 10.000.000 shall be imposed on enterprises and organizations that are required to audit annual financial statements and conclude contracts to audit financial statements later than specified period”.
In fact, businesses have not been penalized for this late sign. The consequence is often that the opinion is excluded when issuing the audit report because the time limit for carrying out some procedures has passed and cannot be supplemented.
Each audit firm has a different way of charging service fees, based on different parameters.
However, what businesses using auditing services are most interested in is "the reasonableness of service fees".
“The fee for audit services of financial statements is Unreasonable” usually occurs in 2 cases:
+ Not reasonable in the LOWER direction will reduce the quality of the audit, and the audit objectives may not be achieved.
+ Unreasonably in the HIGHER direction will lead to losses for businesses using the service.
Expertis's service fee is calculated very reasonably based on the professional factors necessary to perform the audit work to achieve the business's objectives and in accordance with the regulations on auditing.
Expertis's financial statement audit service fee is calculated scientifically and very reasonably based on the number of wasted hours of the expert team.