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Mid-Term Internship Report: Foreign Trade University Faculty of Accounting and Auditing
Mid-Term Internship Report: Foreign Trade University Faculty of Accounting and Auditing
TABLE OF CONTENT
PREFACE........................................................................................................1
CHAPTER 1: NEXIA STT Ltd.Co...............................................................2
1. Overview about Nexia STT Ltd.Co................................................................2
1.1. Historical development of Nexia STT Ltd.Co..........................................2
1.2. Types of services provided by Nexia STT Ltd.Co....................................3
1.4. Auditing department structure in Hanoi Branch.......................................5
1.5. Assessment of business’s performance.....................................................5
2. Elementary theory on audit of sales and accounts receivable.......................6
2.1. Sales..........................................................................................................7
2.2. Accounts receivale....................................................................................8
2.3. Audit objective for sales and account receivables.....................................9
CHAPTER 2: THE PRACTICE OF AUDIT PROCEDURE FOR SALES
AND ACCOUNTS RECEIVABLE IN NEXIA STT Ltd.Co....................12
1. Performing initial audit planning................................................................12
1.1. Understanding the client’s business and industry...................................12
1.2. Understanding internal control of sales and collection cycle..................13
2. Audit planning for auditing sales and accounts receivable from customers
conducted by NEXIA STT..................................................................................17
2.1. General financial statement analysis.......................................................17
2.2. Materiality assessment for sales and receivables....................................18
3. Audit procedure for sales conducted by NEXIA STT..................................18
3.1. General procedure...................................................................................18
3.1.1. Consistency of accounting methods.................................................18
3.1.2. Table of aggregate data...................................................................18
3.2. Test of control.........................................................................................20
3.3. Analytical procedures.............................................................................20
3.4. Test of details of balances.......................................................................21
3.4.1. Analyze revenue for each services...................................................21
3.4.2. Comparison revenue in accounting book to revenue in VAT report 23
3.4.3. Audit sample on revenue recognition...............................................24
3.4.4. Cut-off test.......................................................................................24
4. Audit program for account receivables from customers.............................24
4.1. General procedures.................................................................................24
4.1.1. Consistency of accounting methods.................................................24
4.1.2. The aggregate data table.................................................................25
4.2. Analytical procedures.............................................................................25
4.3. Test of detailed balances.........................................................................26
4.3.1. Sending confirmation.......................................................................26
4.3.2. Reviewing the provision for bad/doubtful debts...............................26
4.3.3. Examining the transaction and account balances that using foreign
currencies......................................................................................................26
4.3.4. Reviewing account receivable ledger and examining extraordinary
items 26
CHAPTER 3: SOLUTION TO IMPROVE AUDIT PROCEDURE FOR
SALES AND ACCOUNTS RECEIVABLE BY NEXIA STT...................27
1. Comments on audit procedure for sales and accounts receivable from
customers inducted by NEXIA STT....................................................................27
1.1. Positives in the audit procedure for sales and accounts receivable from
customers conducted by NEXIA STT...............................................................27
1.2. Limitations in the audit procedure for sales and accounts receivable from
customers conducted by NEXIA STT...............................................................28
2. Some solution for improving audit procedure for sales and accounts
receivable conducted by NEXIA STT.................................................................29
2.1. Analytical procedures.............................................................................29
2.2. Performance materiality..........................................................................29
2.3. Existence of accounts receivable............................................................30
2.4. Sales cut-off test.....................................................................................31
2.5. Test of control.........................................................................................31
2.6. Comfirmation letter.................................................................................31
CONCLUSION..............................................................................................32
REFERENCES..............................................................................................33
TABLE FIGURES
A revenue and collections cycle represents the business activities associated with
providing goods, services to customers and collecting their payments. The revenue
cycle processes should emphasize quick turnover of customer payment to ensure a
strong cash flow, but managers should also separate duties to deter any chance of
internal fraud and theft in revenue cycle.
The sales and accounts receivable from customers begins at the initial purchase and
continues through billing and payment receipt for every transaction. Since this is the
core of revenue bookings, it is needed to be suaccurate at all times. Auditing the
records from sales and collections regularly will ensure to identify any procedural
problems or potential errors right away.
Being aware of the above problems, during the internship, I selected the topic: "The
process of auditing sales revenue and receivables from customers" by the process of
auditing sales revenue and debt Customer collection performed by Nexia STT
company "as a report of their graduation internship
Due to limited practical experience, the report could not avoid errors, so I would
like to receive comments and suggestions from teachers and accountants, auditors
of Nexia STT Ltd.Co so this report really makes sense in theory and practice.
1
CHAPTER 1: NEXIA STT Ltd.Co
Nexia STT focuses on providing value-added services which aim to create a strong
competitive advantage for our clients in a rapidly changing market place. In this
endeavor, we are greatly assisted by our access to the international business
practices and knowledge database of Nexia International and by our ability to
leverage off the international professional expertise, resourc es and strength of
Nexia’s international network.
Nexia STT operates through its offices in Hanoi, Ho Chi Minh City and Hai Phong
and is committed to serving clients throughout Vietnam and all over the region.
2005 STT was approved to be a correspondent firm then full Vietnam member
firm of RSM International
2009 STT then mergered with Mazars & Guerard and changed its business
name to Mazars STT Vietnam
2012 STT splited from Mazars and joined a new international network named
2
Ecovis International. The firm name was changed to Ecovis STT Vietnam
2014 STT resigned from Ecovis International network and join Nexia
International network. Nexia International is one of TOP9 global
accounting network in providing audit, tax and advisory services. The
FIRM name was changed accordingly to Nexia STT.
NEXIA always regards the staff as the most valuable asset of the company. NEXIA
undertakes to create great working conditions for all staff and maximum supports
for their pursuits of higher education and career development.
3
HCMC Office Hanoi Office
Nguyen Thi Ngoc Uyen Le Quang Phi Nguyen Thanh Trung Nguyen Viet Nga
Tax and Advisory Partner Tax and Advisory Partner Managing Partner Audit Partner
Administrative Tax & Business Outsourcing Audit Tax & Administrative Outsourcing Audit
Division Division Division Division Business Division Division Division
(accounting -HCM Advisory (accounting Hanoi
service) Division services)
4
1.4. Auditing department structure in Hanoi Branch
Nguyen Thi Ha
(Senior 1)
5
-In which: Interest 23 203,060,694 223,548,549 461,695,828
expense
8 Selling expenses 24 - - -
9 General and 25 9,927,789,805 14,115,043,418 17,075,599,032
administration expenses
10 Operating profit 30 925,840,622 1,358,680,662 1,765,969,316
11 Other income 31 27,322,133 12,200,001 2,644,268
12 Other expenses 32 216,756,093 324,361,393 476,297,088
13 Profit from other 40 (189,433,960) (312,161,392) (473,652,820)
activities
14 Profit before tax 50 736,406,662 1,046,519,270 1,292,316,496
15 Current CIT expenses 51 182,299,696 282,276,132 353,640,584
16 Deferred corporate tax 52 - - -
17 Profit after tax 60 554,106,966 764,243,138 938,675,912
6
The audit objectives for sales and receivable relate to obtaining sufficient,
appropriate evidence about each significant assertion for the applicable transaction
and balances. The main objectives would apply to most merchandising entities
(Leung et al, 2011).
2.1. Sales
2.1.1. Definition
According to VAS 14, turnover means the total value of economic benefits gained
by an enterprise in an accounting period, which arises from the enterprise’s normal
production and business operations, contributing to increasing the owner’s capital.
Amounts collected on behalf of third parties such as sales taxes, goods and services
taxes and value added taxes are not economic benefits which flow to the entity and
do not result in increases in equity. Therefore, they are excluded from revenue.
Similarly, in an agency relationship, the gross inflows of economic benefits include
amounts collected on behalf of the principal and which do not result in increases in
equity of the entity. The amounts collected on behalf of the principal are not
revenue. Instead, revenue is the amount of commission.
2.1.2 Characteristic
Sales of goods and services is fundamental basis to evaluate size and performance
of the company. Therefore, accounting sales may cause many frauds due to
following reasons:
In many cases, determining the right time and amount to record requires
judgement.
Sales link to profit or loss. Thus, the discrepancies in sales lead to profit and
loss being presented dishonestly and unreasonably.
In many companies, sales used to evaluate the results and performances so it
may be over exaggerated higher than reality.
Sales also link to VAT input so it may be declared lower than reality.
7
2.1.3. Recognition of the transaction
Sale turnover shall be recognized if it simultaneously meets the following five
conditions:
The enterprise has transferred the majority of risks and benefits associated
with the right to own the products or goods to the buyer.
The enterprise no longer holds the right to manage the goods as the goods
owner, or the right to control the goods.
Turnover has been determined with relative certainty.
The enterprise has gained or will gain economic benefits from the good sale
transaction.
It is possible to determine the costs related to the goods sale transaction.
Turnover from service provision transactions shall be recognized when the results
of these transactions are determined in a reliable way. Where a service provision
transaction relates to many periods, turnover shall be recognized in each period
according to the results of the work volume finished on the date of making of such
period's accounting balance sheet. The result of a service provision transaction shall
be determined only when it satisfies all the four conditions below:
2.2.1. Definition
Accounts receivable is the balance of money due to a firm for goods or services
delivered or used but not yet paid for by customers. Said another way, account
8
receivable are amounts of money owed by customers to another entity for goods or
services delivered or used on credit but not yet paid for by clients.
Accounts receivable refers to the outstanding invoices a company has or the money
clients owe the company. The phrase refers to accounts a business has a right to
receive because it has delivered a product or service. Accounts receivable, or
receivables represent a line of credit extended by a company and normally have
terms that require payments due within a relatively short time period, ranging from
a few days to a fiscal or calendar year.
2.2.2. Characteristics
• Sales and account receivable has strong link with each other because they
both araise from sales cycle. Moreover, setting a provision depends on measurement
of BOD so it is hard to test.
• Most income of the enterprise links to account receivable which easily cause
frauds.
9
Audit Objectives Related to sales Related to account
receivables
I. Transaction objectives
1. Occurrence Sales recorded in the accounts Recorded accounts
represent the goods shipped to receivable resulted from
customers during the period sales to customers
2. Completeness All goods shipped to All accounts receivable
customers during the period from customers during the
are recorded period are recorded
3. Accuracy All sale transactions are All accounts receivable are
accurately recorded recorded with exact
amounts
4. Cut-off All invoices have been All accounts receivable
recorded in the right period have been recorded in the
right period
5. Classification All sales are recorded in the All accounts receivable are
correct accounts. recorded in the correct
accounts.
II. Balances objectives
1. Existence Accounts receivable
represents amounts owed
by customers at the end of
accounting period
11
material impacts on the financial statements, thereby identifying the risks of
material misstatement due to fraud or error.
Below is the information for one company which I choose for illustration:
Tax regulations: The company is subjected to 20% CIT rate, 10% VAT input
and 0% VAT output (Comply with the Circular 219/2013/TT-BTC),PIT (Local
and expatriate – compliance with Circular 111/2013/TT-BTC of MOF, other
applicable taxes: No
Besides observing the ABC business functions, the auditors need to collect some
documents to be filed as evidences in the working paper files such as:
Investment proposal
Business registration certificate
Previous years financial statements
12
Business contracts, labor contracts, etc.
General ledger
Auditors will conduct test of detail for each item. In order to assist auditors in
planning detailed audit procedures, NEXIA has a template audit program based on
VACPA audit program that includes the most basic procedures commonly used in
audit firm.
Below is the narrative description about Sales and receivable of ABC System:
Documentation
Incharge
Step Flow & Recording Description
person
tools
1 Customer Sale staff Application Customers filled the
acceptance form, Sale application form for using
system software service via internet (in ABC
reference System software) then sale is
contract automatically recorded in
system. Or they can send via
email/submit directly and sale
13
will be recorded after
activation: Sale staff sent to
customers the reference
contract (if they need)
2 Service Customer -Customers who were
delivering individuals paid money by
cash on hand and cash at bank
-Customers who were agents
submitted a deposit (usually
via bank)
-Customers who were old
companies could paid in
advance or paid after activating
services of issues invoices.
Customers Email/call After receiving information of
staff of XYZ customers for using services
(via mail/call/directly)
Staff of XYZ activated the
services
3 Invoicing & Sale staff Hard-coppy -If customer was individual
Revenue service contract (who needs invoices) or
recognition or list of using companies: Sale staff of XYZ
services send contract to customer for
signing and obtain them and
send to the accountants
-If customer was agent. Sale
staffs of XYZ aggreagated and
sent the list of using service to
accountants
-There were also some
individuals who đin’t need
invoice, sale staff collected all
and prepared a general contract
for accountant to issue invoice
Accountant Invoice Accountant based on daily
14
signed contracts or monthly list
using service of agent to issue
e-invoice and record revenue in
sale book. Ànd she signed
initial into the contracts which
were made invoice.
4 Reconcilitio Accountant, Monthly file for Every month sale staff
n between Sale Staff reconciling sale summarize total sale contracts
accountant into a file summarizing(all sale
department contracts were agreed by
and sale customers). Sale staff sent to
department accountant the toatal amount of
Sale XYZ and accountant
rechecked
5 Pament Sale staff ABC has some bank accounts
recognition for receiving money from
customers. So if customers
paid via bank, the money was
transferred directly to bank
accounts
If customers paid by cash on
hand, sale department
submitted to cashier.
Accountant Accountant didn’t record
payment seperately
If customers paid via bank,
accountant recorded the total
received daily amount of cash
at bank
If customers paid by cash on
hand, accountant recorded the
total received amount of 1
month in cash book.
15
Sale from XYZ department was controlled well.
Sale from project department:
Sale from domestic customers
ABC has a project department which was responsible for Projects. And sale from
this department was quite important
The project department prepared bids and then went to the biddings to gain the
Project or received orders from customers or finding customers by themselves.
After each completion of the Project, they sent to accountant the acceptance minutes
ABC System signed general contract with foreign companies including internal sale
from ABC Corporation (in Japan) and external sale.
Purchase order
Acceptance minute
Payment
16
2. Audit planning for auditing sales and accounts receivable from customers
conducted by NEXIA STT
Revenue 128,320,538,45
176,828,038,993 4 37.8% 48,507,500,539
17
Risk of material mistatement Medium accuracy and cut off sales.
The number of previous years will be taken on the previous audit report in the
income statement, when listed on the table below if the beginning of the period in
the financial statements of the independent unit deviated from the above. Last year's
audit report, the auditor should check and explain the difference. For pre-audit
numbers, it is taken from the business performance report that the unit has prepared
and provided to the auditor.
Based on ABC System’s Income statement for year , the auditor collect detail
figures (Appendix 1)
18
Figure 4: Reconcile between sale in 2017 and in 2018
However COS of project department was salary for technical staff and this amount
was fixed. But this contract project department arise with different amount every
month.
But sale in Oct was higher sharply more than COS bacause in these months, ABC
received more producing software contracts from ABC JP, Viettel and Dien may
Viet Uc Company and Sale was highest in this month because in this month ABC
received many POs with big amount from ABC JP and other clients of Project
department.
19
3.2. Test of control
The auditors test the controls have set up for the sales cycle to determine how strong
and reliable they are. If they are strong, the auditor can reduce the amount of
transaction testing he must do. Common internal controls over the sales cycle
include numbered sales invoices, purchase order authorization over a certain limit
and authorization over receivables write-offs.
The auditor selects a random sample of transactions and examines the related
purchase orders, invoices and customer statements. If the control being tested is
numbered sales invoices, for example, the auditor ensures that all numbers in a
section are accounted for and that none are missing. If the control is that all
purchase orders are approved by management, the auditor checks for a manager's
signature on each document. If control errors are found, the auditor increases the
amount of transactional testing that will be conducted in the audit.
The working for this test is in appendix 2.
The line chart reveals the profit margin sharply fluctuate through 11 months. It was
influenced by Sale and COS.
In February, profit margin dropped to bottom because the Sales from Project
contracts of the month is lowest while Cos including regular expenses for employee
remain stable.
Likewise, it reached its peak in Oct because of sale from project department and
stable charged expenses
20
3.4. Test of details of balances
Sale from XYZ: made up 39% of total revenue (over 69 billion VND during
2018). Details was as following:
Sale from XYZ department was mainly domain,SSL,VPS, hosting services,
sale (with amount of over 63 billion VND ~ 41% of ABC’s total sale and
appropriate 90% of XYZ’s total sale)
Sale from XYZ contained 2 types: VAT 10% (from supplying international
domain which was bought from GMO Pte, supplying hosting,SSL and shop,
…) and VAT exempt (suppying VN domain which was mainly bought from
VNNIC)
Through understanding the sale cycles, we checked contract between ABC
and ABC’s suppliers (GMO Pte, GMO internet, SSL,VNNIC,…) and noted
that:
21
Contract between ABC and suppliers: GMO Pte, GMO internet, SSL,…
were all normal commmercial contracts. ABC bought domains, SSL, VPS,…
from those suppliers and then resold to ABC’s customers at self-evaluation
prices
Rental sale from GMO Pte (DC and server) just account for 4% total sale of
XYZ
Sale from Project department: made up mainly total sale (~107 billion
VND~61% total sale). Sale from Project was mainly producing software
services for:
Purchase orders from ABC’s branch in Japan – ABC JP (with amount of 55
billion VND made up 31% ABC’s total sale, and 52% Project department’s
total sales)
Purchase orders from other customers (both in domestic and in Japan) gained
nearly 51 billion VND in 12 months with made up 48% Project department’s
total sales.
Sale from XYZ dept increased constantly durong the year from March because of
the promotion program for online registers and prepaid change. The sale in Jan and
Feb drop annually de to the fact that Jan is the lunar year end month and Feb is the
22
first month of lunar new year in Vietnam, XYZ’s customers regularly delay their
online website register till the next months of the new year.
Rental sale from GMO Pte has a constant increase during the year due to the
increase amount of data consumption. The revenue from ABC JP fluctuated in
2018. It depended on orders which ABC JP got fom its customers
Sale from other customers (project department) was instable during the year. It was
higher in Mar, Jul, Oct and Nov based on some big contracts with GMO media,
Toshiba, GMO research, GMO internet, Intec Vietnam,…
If there is any problem, the auditors have to figure out what is reason or in case no
reason relied, the auditors have to mention in the audit opinion.
After examine the ABC’s VAT report, the auditors state that the revenue in the
VAT report: There is a difference in value but the auditors state that it is small, can
ignore (see details working in Appendix 4)
23
3.4.4. Cut-off test
Objectives of this test is to obtain suficient, appropriate audit evidence to ensure
cut-off of Revenue are not materility mistated.
In ABC, the auditors checked the date contract and acceptance minute of all aboved
sale recording on 31/12/2018 from Project department and checked the date of
contract, invoice of sale from XYZ department on 31/12/2018.
After checking 20 last contracts and invoice for each department, the auditors noted
that all sale were recorded in the right period.
24
customer
Provision for (3,165,000,000) (2,165,000,000) (1,000,000,000) 46%
short-term
doubtful debts
25
4.3.3. Examining the transaction and account balances that using foreign
currencies
The auditors will check on the exchange rates the entity use to record, review the
financial gains/losses. ABC resort records revenue using VND, if the customers pay
by foreign currencies, the bank will convert into VND automatically so there will be
no difference in exchange rate.
The working paper for this test is in appendix 5.
1.1. Positives in the audit procedure for sales and accounts receivable from
customers conducted by NEXIA STT
NEXIA processes good procedure of the substantive tests. It helps auditors to obtain
great amount of evidences, and these evidences is highly appropriate than other
evidence obtain from other tests.
26
NEXIA has already established a computer program of CMA audit sampling. This
can save much time for the auditors because they input the source data of audit
sampling, book value, tolerable misstatement and the reliability factors, the program
will automatically do the CMA selection.
The accuracy and assertion is highly conducted by NEXIA for the sales and
accounts receivable from customers. The auditors check the balances in subsidiary
ledger and compare with the balances in the trial balances and genaral ledger.
NEXIA auditors have also send 100% confirmation letter to identify the balance of
accounts receivable. They also use CMA audit sampling to check whether sales
transactions are recored accurately with full supporting document.
The cut-off assertion for sales and accounts receivable from customers is conducted
at the same time by using the sales cut-off test.
1.2. Limitations in the audit procedure for sales and accounts receivable from
customers conducted by NEXIA STT
Beside those above positives, the audit procedures for sales and accounts receivable
from customers conducted by NEXIA also have some limitations as below:
The analysis procedure from NEXIA only compares figure between the current
period figures with the previous period. This test can only explain the differences in
figures between those two periods. The auditors can also compare the figure of the
entity with the industry norm to examine the trend of difference.
NEXIA uses the performance materiality for the whole financial statement as the
performance materiality for each item in the financial statement. Tolerable
misstatement is applied for all items, regardless of their size and the importance of
the items; this will make unreasonable results among items. This is not reasonable
because each item from the financial statement can have different audit risk.
27
There are risks in sending confirmation letter. The objective of this substantive test
is collecting the reliable and appropriate evidences. Before conducting an audit to
an entity, NEXIA requires their clients to send closed confirmation themselves. The
risk here is that there are some customers who do not carefully compare the balance
from their companies with the balances written in the confirmation letter. They only
sign the confirmation letter and then send to the audit firm, it can make the
evidences unreliable. There is another risk that only the customers with the smaller
amounts than the written balances will reply to the audit firm. The customers with
the bigger amounts than the written balances will not reply to the audit firm because
if they confirm the written balances, they could have the smaller balances.
The cut-off tests conducted for sales and account receivable can not be done by the
normal way as examining the transaction from 5 days before the ending date and 5
days after the ending date because of the characteristics of the systems and resorts
companies. In the working papers of cut-off test, the NEXIA auditor do not use the
special test for ABC system but they refer to the template of the company and only
present the result of the cut-off test on the working paper
2. Some solution for improving audit procedure for sales and accounts
receivable conducted by NEXIA STT
28
The analysis of NEXIA for the indicators on the financial statement only stops at
the analysis of financial ratios and fluctuations of company during years. The
company should widen the analysis on the industry average for a better analysis.
Nowadays, there is no authorized association to calculate the industry average ratio
in Vietnam. In this case, NEXIA can connect with other audit firms in Vietnam to
collect data from the audited companies and then send to an internal data system
between the audit firms. This way can help the audit firm get a better analysis.
Performance materiality x R
Performance materiality for each item =
Total R
29
Materiality depends on both the importance and risk-related of the items. From the
model we can see that there are five levels: lowest, low, moderate, high and highest,
they will be scored on the 1-5 scale bases respectively. This is coefficient R which
is used to determine performance materiality applied for the item.
31
CONCLUSION
Above report is all my opinion about the topic: “The audit process of sales and
accounts receivable conducted by NEXIA STT Ltd.Co”.
During the internship period, I had chance to understand about NEXIA Company as
well as auditing process of fixed assets. In this report, I had tried to use all my
knowledge and opinion about auditing procedures of fixed assets, from which I
could make some recommendations with the hope that the general auditing process
in NEXIA Company will be improved in the future.
Due to the limited time and my ability, my thesis still has some mistakes and needs
corrections. I hope to receive more feedbacks from teachers that will help me to
broaden my knowledge and complete my thesis.
Lastly, I want to say thank you to my instruction teacher, Ms. Tran Tu Uyen, Board
of Directors and assistant auditors in NEXIA Company, who helped me to
complete my thesis.
32
REFERENCES
33
Month 2017 2018 Diff (Amount - %) COGS 2018 Gross profit Profit margin
Jan 10,412,629,854 9,544,069,431 (868,560,423) -8% 12,020,511,766 (2,476,442,335) -26%
Feb 10,649,950,478 7,098,139,076 (3,551,811,402) -33% 7,536,015,756 (437,876,680) -6%
Mar 12,092,649,852 16,313,840,683 4,221,190,831 35% 11,077,147,488 5,236,693,195 32%
Apr 11,782,986,635 13,127,555,920 1,344,569,285 11% 11,863,493,382 1,264,062,538 10%
May 8,859,105,890 13,340,390,274 4,481,284,384 51% 11,641,243,821 1,699,146,453 13%
Jun 12,713,320,716 13,973,906,747 1,260,586,031 10% 12,036,119,674 1,937,787,073 14%
Jul 9,396,449,885 16,706,627,604 7,310,177,719 78% 15,009,460,829 1,697,166,775 10%
Aug 9,141,932,410 13,137,432,820 3,995,500,410 44% 11,583,417,123 1,554,015,697 12%
Sep 9,410,251,287 14,476,877,738 5,066,626,451 54% 12,280,203,198 2,196,674,540 15%
Oct 9,975,187,572 19,973,479,691 9,998,292,119 100% 14,938,312,910 5,035,166,781 25%
Nov 9,482,749,116 17,979,648,493 8,496,899,377 90% 14,921,002,565 3,058,645,928 17%
Dec 14,403,324,759 21,156,070,516 6,752,745,757 47% 19,506,744,857 1,649,325,659 8%
Total 128,320,538,454 176,828,038,993 48,507,500,539 38% 154,413,673,369 22,414,365,624 15%
Basic of sampling:Sale from XYZ was well controlled as the reconciliation between XYZ department and accountant department was
performed monthly. Thus we choose 3 months out of 11 months to reperform reconciling between total amount
in sale summarised from XYZ department (sale department) and the amount recomcile in general ledger.
Month Total amount from summarizing from XYZ Total amount in GL Diff
Jan 4,283,115,408 4,283,115,408 -
Jun 5,212,023,300 5,212,023,300 -
Sep 5,410,223,062 5,410,223,062 -
Total 14,905,361,770 14,905,361,770 -
Finding:
This year, account receivable balance increased by approximately 6,6 bill (equivalent to 31%) compared to last year.
This growth was mainly contributed by the rise of sale with the amount of 48 bill equivalent to 38%) in this period.
AR for trade receivables for turnover ratio:
Revenue OB Acc.Receivable CB Acc.Receivable Turnover Ratio Time
1 2 3
Year ended 31/12/2017 128,320,538,454 12,962,675,727 21,115,818,156 8 48
Period ended 31/12/2018 176,621,048,993 51,115,818,156 27,661,335,646 7 50
From AR ledger we noted there are 2 AR (Ban Dan an Trung Uong and Sora Seed) in year end 2016 and remain unpaid till the year end of 2018
At the end of this year, these 2 balances were made provision then written off due to their long ages and insuffi cient payment document.
We interviewed Ms.Huong-Accountant. She revealed that the provision and written off was approved by Mr.Tau - General Director orally
but there was lack of documents in accordance with Circular 228 prepared for these transactions. The documents will be provided after fieldwork.
We follow up and update later.
206.99 JPY/VND
Findings:
Accountant recorded the interest for deposits in inappropriate accounts, so we raise adjustment as follows:
DR 1388 (Other receivables) 35,009,100
CR 131 (Trade receivables) 35,009,100
Finding:
AR:
Comparing with the year 2017, the amount advance from customers increased significantly 24 bill (346% of total amount in 2017) due to in 2018 advance from customer of XYZ department
had a remarkable increase (total amount was more than 4 bil) as the remarkable growth of sale from XYZ.
Plus, the significant increase is also due to the promotion that multiple 1.5 times the bulk amount charged to customers XYZ account and other communication programs to promote sale.
Basic of sampling : Advance from customers was assessed at low risk, we choose 4 customers including 3 companies and an individual to check and send còmirmation
N1 This is advance amount for service from XYZ from agent and personal for buy domain.
For buying domain, clients of XYZ have to make an account and pay in advance for the domains as they want to buy
Contract for sale will be made after all domain/services were transferred
N2 We didn't obtain the full list of XYZ customers advanced due to the fact that XYZ department haven't processed
to prepare the final list of advance from customers > > to follow up