Things to know about Financial Statement Audit, is a basic content that anyone who studies and works as an accountant must understand.

It can be conceptualized that an audit is a process by which the auditor collects and evaluates the evidence related to the financial and accounting information of the enterprise. Then, the auditor gives an opinion on the degree of concordance between the accounting information and the issued accounting and auditing standards.

Depending on the needs and purposes, there are many ways to classify audits. The most typical classification according to audit purposes is divided into 3 types as follows:                     

First, is Financial statement audit                                                                             

Second, is Compliance audit                                                                                     

Third, is Operation audit                                                                                          

Among them, financial statement audit is used the most. The reason is that annual financial statements are required by law, and financial statements are the expression of comprehensive and mandatory accounting information of the entire operation of an enterprise.

To better understand the value of audited financial statements, let's look at the four contents below:

First: What is a financial statement audit?

According to Independent Law 2011, summarizes the definition of financial statement audit as follows:

"Financial statement audit means the one that practicing auditors, auditing firms, branches of foreign auditing firms in Vietnam inspect, give their opinions on the truthfulness and rationality in the key respects of the financial statements of the audited units in accordance with provisions of auditing standards."                     

Second: Who should be audited financial statements?                

According to the Law on Independent Auditing, the following 6 units are required to have their annual financial statements audited:

1. Enterprises with foreign investment;
2. Credit institutions;
3. Financial institutions, insurance enterprises;
4. Public companies, issuers, and securities trading organizations;
5. State-owned enterprises;
6. Auditing firms.

In addition, other businesses and organizations may be required to be audited in accordance with relevant separate laws in the course of their business operations.

Third: What is the purpose of auditing financial statements?

The main purpose of financial statement audit is to increase the confidence of users of financial statements in financial statements through the auditor's opinion on whether the financial statements is prepared and presented in accordance with the framework of accounting and auditing standards.

Depending on the purpose of the user of the audit report, the audit report may be submitted to a state agency; submitted in loan documents, bidding documents; when buying and selling businesses; call for investment capital, or submit to apply for a business project license.

Fourth: What is the deadline for submitting audit reports?

According to Circular No. 200 in 2014, the following regulations:

For state-owned enterprises:

            - The annual financial statements must be submitted within 30 days from the end of the annual accounting period; For parent companies and state-owned corporations, the deadline for submitting reports is 90 days at the latest.

For other types of businesses:

            - Accounting units that are private enterprises and partnerships must submit annual financial statements within 30 days from the end of the annual accounting period; for other accounting units, the time limit for submitting annual financial statements is 90 days at the latest  

We have just introduced you to the four basic things you need to know about auditing financial statements.