A financial statement audit ensures that the information in the financial statements gives a true and fair view, in all material aspects, of the financial situation, the results of operation, and the cash flows of an enterprise.
Financial statements with audit opinions are very meaningful to parties who need to use financial information, relying on audited financial statements to increase information reliability, in order to make decisions such as: investment, lending, business cooperation; and to other parties with interests and obligations according to regulations of law.
In this article, AS Auditing Company shares with the Enterprise 3 things you need to know about Audit of financial statements:
• What is “a financial statement audit”?
• Who performs the financial statement audit work?
• Which enterprises must audit financial statements and Audit services at AS?
WHAT IS A FINANCIAL STATEMENT AUDIT?
Audit of the financial statement is the service performed by auditors and assistant auditors to collect audit evidence about figures and disclosures on the financial statements, with the objective of giving opinions on the trueness and fairness of the financial statements.
BASIC INFORMATION PROVIDED IN THE FINANCIAL STATEMENTS
Seven main contents are shown in the Financial Statements:
1. Assets
2. Liabilities
3. Equity
4. Income and expenses.
5. Profit, loss and division of profit and loss
6. Cash flows.
7. Notes for the above contents.
WHO PERFORMS THE FINANCIAL STATEMENT AUDIT WORK?
Financial statement audit work is performed by an independent audit firm that has no direct relationship with the entity being audited.
An independent audit firm must have enough legal capital of at least 5 billion VND and at least 5 auditors who have obtained certificates of auditing practice, to establish an independent audit firm in Vietnam.
Independent audit firms must be certified by the Ministry of Finance as meeting the conditions of audit service business.
Independent auditors must have an auditor's certificate, register to practice at an audit firm, and obtain Certificates of auditing practice from the Ministry of Finance.
With high legal requirements for audit firms and the importance of information in audited financial statements, for choosing an audit firm, the top factor is selecting a reputation, legal and experienced, audit fee is the second factor.
WHICH ENTERPRISES MUST AUDIT FINANCIAL STATEMENTS?
The legal basis for requiring enterprises to have their financial statements audited is Decree No. 17/2012/ND-CP detailing and guiding the implementation of a number of articles of the Law on Independent Audit issued on March 13, 2012.
Circular No. 40/2020/TT-BTC guiding reporting regulations in the independent accounting and audit sector in Decree No. 174/2016/ND-CP guiding the Accounting Law and Decree No.17/2012/ND-CP guiding the Law of Independent Audit.
According to regulations, enterprises and organizations must be audited financial statements by audit firm include:
- Enterprises with foreign-owned capital;
- Credit institutions which are established and operating under the Law on credit
institutions, including branches of foreign banks in Vietnam; - Financial organizations, insurance companies, reinsurance companies, insurance
brokerage companies, branches of foreign non life insurance companies. - Public companies, securities issuing organizations and securities trading organizations
- Other enterprises and organizations are subjects of compulsory auditing under relevant
provisions of law. - State enterprises, except those operating in the field of state secrets as prescribed by
law, must be audited for the annual financial statements; - Enterprises, organizations implementing the national important projects, group-A
projects using state funds, except for the projects in the field of state secrets as prescribed
by law, must be audited for the settlement report of project completion; - Enterprises and organizations with 20% or more of the voting rights held by state
groups, state corporations in the end of the fiscal year must be audited for annual
financial statements; - Enterprises with 20% or more of the voting rights held by securities listing, issuing and
trading organizations at the end of the fiscal year must be audited for annual financial
statements; - The audit firm, branches of foreign audit firms in Vietnam must be audited for annualfinancial statements
FINANCIAL STATEMENT AUDIT SERVICES AT AS AUDITING COMPANY
With a Board of Directors, auditors, and staff who are experts in specialty, and multiple years of experience in auditing, AS is confident in providing the best independent audit services to customers to help enhance the honesty and reliability of financial information, bringing confidence to investors and regulatory agencies.
Audit services at AS Auditing
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Statutory audit of financial statements;
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Audit of financial statements, financial information for tax purposes, or agreed-upon procedures engagement;
- Audit of items in financial statements: operating expenses, equity, receivables, payables, revenue, and expenses;
- Review of financial information, and financial statements for separation, consolidation, dissolution, restructuring, and acquisition.
Differences of Audit services at AS:
• Always put reputation and service quality first;
• Always pay attention to the benefits of customers;
• Always protect the legal and legitimate rights of customers;
• Always meet investors' short-term and long-term development goals;
• Always research to develop and diversify high-quality services;
• Always train all employees with all necessary skills, experience, and knowledge;
• Always build an audit team with high professional qualifications and knowledge of local laws;
• Always ready to cooperate with professional organizations and state management agencies to provide perfect and optimal solutions for businesses.
