The implementation process of financial statement audit

Performing a financial statement audit plays an important role in verifying data to serve the decision-making process of administrators in production and business or to serve those who need to use it. So what is a financial statement audit, and what is the process?

1. What is a financial statement audit?

Financial statement auditing is commonly used in accounting and auditing activities. To clearly understand what financial statement auditing is, we first need to clearly understand what auditing is.

1.1. Audit

Auditing can be understood simply, auditing is the activity of checking and verifying the truthfulness and accuracy of financial reports. Through auditing, we can provide the most accurate information about the financial situation of businesses and organizations…

There are 3 types of audits: State audit; Independent audit; Internal audit. Depending on the subject, assistant in annual audit applies appropriate audit forms to target the purposes of the unit, business and state.

1.2. What is a financial statement audit?

Corporate financial reports are a collection of economic and financial information presented by accountants in the form of tables, providing information about the financial situation, business situation, and cash flows of the enterprise. In Preparation of Financial Statements, information in financial reports needs to be truthful and accurate, so financial statements are audited.

A Guide to Your First Financial Statement Audit

It can be understood that a financial statement audit is the work performed by auditors and audit assistants to collect information and audit evidence to evaluate the audited financial statements. This audit is intended to provide opinions on the truthfulness and reasonableness of financial statements compared to currently applied standards.

Financial reports include:
– Tax finalization declaration (may include many income declarations of companies and individuals)
– Financial reports include:
+ Accounting balance sheet (form B01-DN)
+ Table of economic and business activities results (form B02-DN)
+ Cash flow table (form B03-DN)
+ Explanation table of the company’s financial statements (form B09-DN)

Financial statement auditing serves those who need to use information on the financial statements of businesses and units. In particular, the system of accounting and auditing standards is the measure to evaluate the audit of financial statements.

2. The role of financial statement audit

In fact, financial reports provide important information about the financial situation, business situation and cash flows of a business or unit. The information is used for administrators and entrepreneurs to make decisions in production, business and cooperation activities…

Financial statement auditing plays the role of determining whether financial statement information is truthful and accurate based on the system of accounting and auditing standards. Financial audit helps those who need to use information on the financial statements of businesses and units to make the right and most accurate decisions to limit risks.

In addition, financial statement audits also act as a legal corridor so that businesses and units do not violate accounting regulations or falsify reports to gain illegal profits.

Assistant in annual audit

3. Subjects auditing financial statements

In fact, not all businesses need to have their financial statements audited. However, if you belong to a business or unit that is required to audit financial statements, you needPayment assistance to understand the financial statement audit process.

Pursuant to the provisions of Article 37, Law on Independent Audit dated March 29, 2011 and Article 15 of Decree No. 17/2012/ND-CP dated February 13, 2012 guiding the Law on Independent Audit, the report The finances of the following subjects are required to be audited.

  • Enterprises with foreign investment capital.
  • Credit institutions are established and operate under the Law on Credit Institutions, including foreign bank branches in Vietnam.
  • Financial institutions, insurance enterprises, reinsurance enterprises, insurance brokerage enterprises, branches of foreign non-life insurance enterprises.
  • State-owned enterprises, except state-owned enterprises operating in fields that are state secrets according to regulations.
  • Public companies, issuing organizations and securities trading organizations.
  • Completed project settlement reports of enterprises, organizations implementing important national projects, group A projects using state capital, except for projects in the field of state secrets according to regulations.
  • Enterprises and organizations in which the State holds 20% or more of voting rights at the end of the fiscal year.
  • Auditing firms, branches of foreign auditing firms in Vietnam.
  • Enterprises in which listed organizations, issuing organizations and securities trading organizations hold 20% or more of voting rights at the end of the fiscal year.
  • Annual financial statements of projects funded by ODA capital or concessional loan capital (must be audited by the State Auditor or Independent Auditor as agreed with the sponsor according to Article 26, Circular No. 218/2013/TT-BTC dated December 31, 2013 of the Ministry of Finance).

In case of failure to audit financial statements according to regulations, businesses and units may be fined from 40,000,000 VND to 50,000,000 VND according to Clause 3, Article 53, Decree No. 41/2018/ND -CP dated March 12, 2018 of the Government.

Above is some information about Preparation of Financial Statements and the process of performing financial statement audits. Businesses need Payment assistance to understand clearly to ensure that they carry out full audits according to the correct process to avoid risks for their businesses and units.

In addition, if your business wants to learn about Assistant in annual audit, please contact us immediately for advice:

S4B Vietnam

  • Address: Unit 602A, Tower A, Handi Resco Office Building. 521 Kim Ma Street, Ba Dinh District, Hanoi
  • Tel: + 84 24 3974 4181
  • Email: service@s4b.com.vn

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