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WAREHOUSE OF ENTERPRISE MANAGEMENT KNOWLEDGE

Specialized content, carefully edited, compiled and updated by the Expertis Committee

Auditing knowledge for directors

  • Banks provide information to tax authorities: Do businesses need to worry?
  • Transfer pricing: Vietnamese enterprises are careful to collect tax arrears
  • Some new points Decree 102/2021/ND-CP on administrative sanctions in the field of accounting and auditing
  • How do tax regulations affect the presentation of financial statements?
  • What information do investors want to read from financial statements?
  • What is the difference between Compliance Audit and Internal Audit?
  • Why compliance audit? What benefits do businesses get from this?
  • Accounting for expenses incurred due to the impact of the Covid 19 epidemic
  • Converting financial statements from VAS to IFRS: detailed steps
  • Why apply IFRS in Vietnam and why should businesses care about IFRS?
  • Difference between VAS and IAS/IFRS
  • Where can I find the easiest and most accurate IFRS standards to download?
  • IFRS history: the process of formation, recognition and development
  • What is IFRS? What is the importance of IFRS today?
  • What are the benefits of auditing financial statements for businesses?
  • When did the audit start?
  • Auditing financial statements: what businesses need to know
  • Places to submit audited financial statements at the end of the year
  • Things to know about audit contracts
  • What is a financial statement and what is inside it?
  • Applying to convert financial statements from VAS to IFRS in Vietnam
  • Tax authorities and the fight against profiteering from value added tax (VAT)
  • Guidelines for the mechanism of prior agreement on tax calculation method (APA)
  • Affiliate transactions (transfer pricing) – Part 3: Classification of associated transactions and the principle that the substance determines the form
  • Internal audit helps relieve accounting pressure
  • Notes to the Board of Directors when preparing the Financial Statements
  • How artificial intelligence is changing the global economy
  • The importance of auditors
  • Vietnam economic forecast 2021
  • Financial planning for business
  • Witnessing inventory - Auditing method out of documents
  • COVID-19: Programs to assist businesses in responding to pandemic
  • Is financial reporting for tax purposes only?
  • How to optimize efficiency from using Annual Financial Statement Auditing Services
  • COVID-19: How do leaders maintain business continuity
  • Small and medium enterprises (SMEs) and continuity of activity during COVID-19
  • Business subjects often forget to audit their financial statements
  • Inventory of assets at the end of the fiscal year, the things that businesses should note
  • Use digital signature (electronic signature) to sign audit reports, why not?
  • COVID-19: Several solutions to improve cash flow management efficiency
  • Sample internal audit regulations applicable to firms
  • Reasonable and valid expenses are deductible when the enterprise makes tax finalization
  • Building processes, problems from letting go of management
  • Tax policy: a constant worry of foreign investors
  • Auditing Financial Statements: Enterprises "must" or "should" audit?
  • The role of audit compliance with the accounting financial system
  • Conclusion of audit contract: The time required to perform

Legal provisions on auditing

  • Decree 102/2021/ND-CP on penalties for administrative violations in the fields of taxation, invoices, accounting and auditing
  • Sanctions for administrative violations on accounting and auditing
  • Decree 84/2016 / ND-CP on auditing for units with public interest
  • Independent auditing law
  • Decree 165 / 2018 / ND-CP on electronic transactions in financial activities
  • Decree 41/2018/ND-CP on penalties for administrative violations in the field of accounting and auditing
  • Regulations on Consolidation of legal documents and how to use Consolidated documents

Audit standards

  • Professional ethical standards of accounting and auditing, issued together with Circular 70/2015 / TT-BTC
  • Vietnamese framework on guarantee service contracts, issued together with Circular 69/2015 / TT-BTC
  • Standard No. 4410 on financial information synthesis service, issued together with Circular 68/2015 / TT-BTC
  • Standard No. 4400 on Contracts for Implementation of Pre-Agreed Procedures for Information, issued together with Circular 68/2015 / TT-BTC
  • Standard No. 1000 on audit of settlement reports for completed projects, issued together with Circular 67/2015 / TT-BTC
  • Standard No. 3420 on service contracts to ensure the BC synthesizes TC information according to the convention in the prospectus, issued together with the Circular 66/2015 / TT-BTC
  • Standard No. 3400 on checking future financial information, issued together with Circular 66/2015 / TT-BTC
  • Standard No. 3000 on service contracts to ensure outside service auditing and reviewing TC information in the past, issued together with Circular 66/2015 / TT-BTC
  • Standard No. 2410 on reviewing interim TC information implemented by independent auditor of the unit, issued together with Circular 65/2015 / TT-BTC
  • Standard No. 2400 on reviewing past financial statements, issued together with Circular 65/2015 / TT-BTC
  • Quality control standard No. 1 on quality control enterprises performing auditing, reviewing financial statements, assurance services and other related services, issued together with Circular 214/2012 / TT-BTC
  • Auditing Standard No. 810 on reporting services on summary financial statements, issued together with Circular 214/2012 / TT-BTC
  • Auditing Standard No. 805 on notes when auditing individual financial statements and when auditing specific elements, accounts or items of the financial statements, issued together with Circular 214/2012 / TT-BTC
  • Auditing Standard No. 800 on notes when auditing financial statements is prepared in accordance with the framework of preparing and presenting financial statements for special purposes, issued together with Circular 214/2012 / TT-BTC
  • Auditing Standard No. 720 on other information in documents containing audited financial statements, issued together with Circular 214/2012 / TT-BTC
  • Auditing Standard No. 710 on Comparative Information - Corresponding data and comparative financial statements, issued together with Circular 214/2012 / TT-BTC
  • Auditing Standard No. 530 on audit sampling issued together with Circular 214/2012 / TT-BTC
  • Auditing Standard No. 550 on related parties issued together with Circular 214/2012 / TT-BTC
  • Auditing Standard No. 540 on auditing accounting estimates issued together with Circular 214/2012 / TT-BTC
  • Auditing Standard No. 706 on the paragraph "Matters to emphasize" and "Other issues" in the financial statements of financial statements, issued together with Circular 214/2012 / TT-BTC
  • Auditing Standard No. 520 on analytical procedures issued together with Circular 214/2012 / TT-BTC
  • Auditing Standard No. 510 on the first year audit - Opening balance issued together with Circular No. 214/2012 / TT-BTC
  • Auditing Standard No. 505 on external confirmation issued together with Circular 214/2012 / TT-BTC
  • Auditing Standard No. 501 on audit evidence for special items and events issued together with Circular 214/2012 / TT-BTC
  • Auditing Standard No. 705 on the audit opinion is not a fully accepted opinion, issued together with Circular 214/2012 / TT-BTC
  • Auditing Standard No. 500 on audit evidence attached to Circular 214/2012 / TT-BTC
  • Auditing Standard No. 450 on assessing errors detected during the audit process issued together with Circular 214/2012 / TT-BTC
  • Auditing Standard No. 402 on factors to consider when auditing an entity using external services, issued with Circular 214/2012 / TT-BTC
  • Auditing Standard No. 700 on the formation of audit opinions and audit reports on financial statements, issued together with Circular 214/2012 / TT-BTC
  • Auditing Standard No. 620 on the use of experts' work, issued together with Circular 214/2012 / TT-BTC
  • Auditing Standard No. 610 on the use of work by internal auditors, issued together with Circular 214/2012 / TT-BTC
  • Auditing Standard No. 600 on notes when auditing the Group's financial statements (including the work of member auditors), issued together with Circular 214/2012 / TT-BTC
  • Auditing Standard No. 580 on written explanations, issued together with Circular 214/2012 / TT-BTC
  • Auditing Standard No. 570 on continuous operations, issued together with Circular 214/2012 / TT-BTC
  • Auditing Standard No. 560 on events arising after the balance sheet date, issued together with Circular 214/2012 / TT-BTC
  • Auditing Standard No. 330 on the auditor's handling of assessed risks, issued together with Circular 214/2012 / TT-BTC
  • Auditing Standard No. 320 on materiality in audit planning and implementation, issued together with Circular 214/2012 / TT-BTC
  • Auditing Standard No. 315 on identifying and assessing risks of material misstatement issued together with Circular 214/2012 / TT-BTC
  • Auditing Standard No. 300 on planning to audit financial statements issued together with Circular 214/2012 / TT-BTC
  • Auditing Standard No. 265 Communicating deficiencies in internal control with those charged with governance and management of the entity audited in conjunction with Circular 214/2012 / TT-BTC
  • Auditing Standard No. 260 on communicating issues with management of entities audited, issued together with Circular 214/2012 / TT-BTC
  • Auditing Standard No. 250 on Review of compliance with laws and regulations in auditing financial statements issued together with Circular 214/2012 / TT-BTC
  • Auditing Standard No. 240 on the auditor's responsibilities related to fraud in the auditing of financial statements, issued together with Circular 214/2012 / TT-BTC
  • Auditing Standard No. 230 on audit documents and records issued together with Circular 214/2012 / TT-BTC
  • Auditing Standard No. 220 on quality control auditing financial statements issued together with Circular 214/2012 / TT-BTC
  • Auditing Standard No. 210 on audit contracts issued together with Circular 214/2012 / TT-BTC
  • Auditing Standard No. 200 on the overall goals of auditors and auditors issued together with Circular 214/2012 / TT-BTC

Line of audit updates

  • Data sharing between Social Insurance (SI) and Tax Authority: What are businesses concerned about?
  • Transfer pricing: Vietnamese enterprises are careful to collect tax arrears
  • How do tax regulations affect the presentation of financial statements?
  • What information do investors want to read from financial statements?
  • Accounting for expenses incurred due to the impact of the Covid 19 epidemic
  • Applying to convert financial statements from VAS to IFRS in Vietnam
  • Affiliate transactions (transfer pricing) – Part 3: Classification of associated transactions and the principle that the substance determines the form
  • Home
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  • What is a financial statement and what is inside it?

What is a financial statement and what is inside it?

Category
  • What is financial statement?
  • When does a business prepare financial statements?
  • The details inside the financial statements
  • Contents of financial statements according to Circular 200/2014/TT-BTC
    • Accounting balance sheet
    • Business results
    • Cash flow
    • Explanation of financial statements

An indispensable document for every business at the end of each year is the set of financial statements (financial statements). Because, this is a document with numbers showing the financial position and health of the business. So what is a set of financial statements and what are the important contents?

What is financial statement? #

According to Clause 1, Article 3 of the 2015 Accounting Law

"Financial statement means an economic and financial information system of an accounting unit presented in a form prescribed in accounting standards and accounting regimes."

The set of financial statements usually includes general reports on the owner's assets and business results over each period of the business. In addition, a set of financial statements provides information related to the financial activities of a business such as: assets, liabilities, owner's equity, revenue, profit, cash flow. …

The above regulation shows that the preparation and presentation of financial statements will be in accordance with the provisions of Vietnamese Accounting Standards and the Accounting System. Depending on the size and characteristics of your business, you will choose to apply the appropriate accounting system. The current accounting regimes include the accounting regime for micro-enterprises in Circular 132/2018, small and medium-sized enterprises in Circular 133/2016 and accounting in Circular 200/2014.

For enterprises whose associated parties are parent companies or are subject to Circular 202/2014, in addition to preparing separate financial statements, consolidated financial statements will be prepared.

When does a business prepare financial statements? #

According to Clause 2, Article 29, the 2015 Accounting Law stipulates:

"Financial reporting of the accounting unit is done as follows:

a) The accounting units must make financial statements at the end of the annual accounting period; in cases where it is prescribed by law for the preparation of financial statements according to another accounting period, the accounting units must prepare such accounting periods;

b) The preparation of financial statements must be based on data after closing accounting books. The superior accounting unit must prepare general financial statements or consolidated financial statements based on the financial statements of the accounting units in the same superior accounting unit;

c) The financial statements must be prepared in accordance with the content, method, and presentation consistently between accounting periods; In case the presented financial statements differ between accounting periods, the reason must be clearly stated;

d) Financial statements must be signed by the preparer, chief accountant and the legal representative of the accounting unit. The person signing the financial statement is responsible for the content of the report.”

The details inside the financial statements #

Due to the important nature of financial statements for businesses in particular and tax authorities, state agencies, investors, etc., the set of financial statements is strictly regulated by the state.

According to Clause 1, Article 29, the 2015 Accounting Law stipulates:

"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.”

Based on this regulation, Circulars guiding the accounting regime of micro, medium and small enterprises promulgate the attached detailed financial statement forms. Enterprises shall base themselves on the provisions of the Circular to determine the financial statement form applicable to their enterprises.

Contents of financial statements according to Circular 200/2014/TT-BTC #

In Article 100, Circular 200/2014, the set of financial statements includes the following documents: balance sheet, income statement, cash flow statement and notes to the statement financial statements.

Accounting balance sheet #

Balance sheet is a consolidated financial statement, which generally reflects the total value of existing assets and the source of that asset formation of an enterprise at a certain point in time. The figures on the balance sheet show the entire value of the enterprise's existing assets according to the structure of assets and the structure of capital sources that form those assets. Based on the balance sheet, it is possible to comment and generalize the financial position of the enterprise.

The information presented in the Balance Sheet includes short- and long-term assets, short-term and long-term liabilities and capital sources of the enterprise at a certain point in time.

Business results #

The income statement reflects the position and results of an enterprise's business, including results from its main business and results from its financial and other operating activities.

In other words, the income statement clearly shows the profit/loss results as well as the expenses incurred during a certain period. The objectives of the report include:

  1. Revenues from the sale of goods and the provision of services;
  2. Expenses incurred: cost of goods sold, selling expenses, administrative expenses;
  3. Profit: gross profit, profit before tax and after tax;
  4. Corporate income tax payable.

Cash flow #

The preparation and presentation of the annual statement of cash flows and the interim accounting periods must comply with the provisions of the Accounting Standard "Cash Flow Statements". Enterprises base on the nature of each transaction to present cash flows appropriately. 

This is a report that helps managers and business owners know the cash flows in and out in a specific period, thereby controlling the cash flow. In this report, cash flows are shown in 3 types of activities, including: 

  1. Cash flow due to business activities of the enterprise;
  2. Cash flow from investment activities;
  3. Cash flow from financing activities.

Understanding and properly assessing the role of cash flow statements helps businesses plan and adjust cash flows and make timely business decisions.

Explanation of financial statements #

The notes to the financial statements are an integral part of the corporate financial statements used to describe in a narrative or detailed analysis the information and data presented in the Balance Sheet. accounting, income statement, statement of cash flows as well as other necessary information as required by specific accounting standards.

Through the data provided in the report, businesses will analyze and summarize the information accordance with regulations on presentation of financial statements, but may also present other information if the enterprise deems it necessary for a true and fair presentation of the financial statements.

With detailed information about a set of financial statements above, EXPERTIS hopes to have provided businesses with the necessary information about what financial statements are. For any issues that need further discussion or advice, please contact the EXPETIS Consulting Department for support.

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Updated on September 27, 2021
Applying to convert financial statements from VAS to IFRS in VietnamThings to know about audit contracts

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Category
  • What is financial statement?
  • When does a business prepare financial statements?
  • The details inside the financial statements
  • Contents of financial statements according to Circular 200/2014/TT-BTC
    • Accounting balance sheet
    • Business results
    • Cash flow
    • Explanation of financial statements
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