Auditing of financial statements is a practice in which a practicing auditor or an audit firm expresses an opinion on the truthfulness and reasonableness of the material aspects of the financial statements.
What is financial statement? #
According to Articles 3 and 29, the 2015 Law on Accounting stipulates:
“Article 3. Interpretation of terms
Financial statement is an economic and financial information system of an accounting unit, which is presented according to the form specified in accounting standards and accounting regime.
“Article 29. Financial statements of accounting units
The financial statements of an accounting unit are used to summarize and explain the financial position and operating results of the accounting unit. The financial statements of an accounting unit include:
a) Report on financial situation;
b) Report on operation results;
c) Cash flow statement;
d) Notes to financial statements;
d) Other reports as prescribed by law.”
Accordingly, the financial statements include reports on the position of assets, equity and liabilities as well as the financial position and business results in the period of the enterprise. In other words, financial accounting statements are a means of presenting the profitability and financial status of an enterprise to interested parties (business owners, investors, lenders, tax authorities and other relevant agencies). function, …). audit of financial statements
What is Financial Statement Auditing? #
An audit report is a document prepared by a practicing auditor, auditing firm, or branch of a foreign auditing firm in Vietnam after completing the audit, giving opinions on the financial statements and other matters. Other contents have been audited under the audit contract.
Audited financial statements (Financial statements) means the examination and expression of opinions on the truthfulness and reasonableness of the report by a practicing auditor, an auditing firm, or a branch of a foreign auditing firm in Vietnam. financial statements of the audited entity in accordance with the provisions of auditing standards.
Auditor is a person who is granted a certificate of auditor in accordance with the law or who holds a foreign certificate recognized by the Ministry of Finance and has passed the examination on Vietnamese law.
Practicing auditor means an auditor who has been granted an audit practice registration certificate.
Auditing firm is an enterprise that is fully qualified to provide audit services in accordance with this Law and other relevant laws.
Audited unit is an enterprise or organization that is audited by an audit firm or a branch of a foreign auditing firm in Vietnam under an audit contract.
Contents of the audit report #
In order for the auditor to have a basis for expressing an opinion, the Vietnamese Standards on Auditing require the auditor to obtain reasonable assurance about whether the financial statements, taken as a whole, are material misstatement, whether due to fraud or error. Reasonable assurance is a high level of assurance and is obtained only when the auditor has obtained sufficient appropriate audit evidence to reduce audit risk (the risk posed by the inappropriate opinion when the financial statements are free from material misstatement) to an acceptable low level. audit of financial statements
However, when auditing financial statements, reasonable assurance is not absolute assurance, because inherent limitations of the audit make most of the audit evidence that the audit does not require. The auditor's conclusions and opinions are persuasive rather than affirmative.
Based on the audit results, practicing auditors and auditing firms, branches of foreign auditing firms in Vietnam must give their opinions on the financial statements and other contents audited according to regulations of audit standards.
The audit report on financial statements (financial statements) is prepared in accordance with the provisions of auditing standards and has the following contents:
a) Object of the audit;
b) Responsibilities of the audited units and auditing firms, branches of foreign auditing firms in Vietnam;
c) Scope and basis for the audit;
d) Location and time of making the audit report;
dd) Audited opinion on the audited financial statement;
e) Other contents as prescribed by auditing standards.
Value of audit report #
After finishing the audit of the financial statements (the financial statements), the auditor must issue the audit report. The audit report on the financial statements evaluates the truthfulness and reasonableness of the financial statements, and conforms to the accounting standards and accounting regime promulgated by competent agencies and organizations.
Audit reports are used to:
- Shareholders, investors, parties to joint ventures, associates, customers and other organizations and individuals with direct interests or related to the audited entity handle the relationship of rights and obligations of the parties concerned;
- State agencies manage and operate according to their assigned functions and tasks;
- The audited unit detects, handles and prevents errors and weaknesses in its operations in a timely manner.
Issues related to the audit of financial statements (financial statements) have been summarized and introduced by EXPERTIS to enterprises. In addition to the above, if there are other issues that your business has not yet answered, please contact the EXPERTIS Consulting Department for the earliest support.