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Chapter 1
INTRODUCTION TO
ASSURANCE &
AUDITING SERVICES
Prescribed textbook
AUDITING & ASSURANCE SERVICES IN AUSTRALIA 7TH
(2018)- Grant Gay& Roger Simnett
Chapter 1, 2
KIỂM TOÁN (2017), 7th - Bộ môn Kiểm toán
Chương 1
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• Relevant guidance
ISA/VSA 200 Overall objectives of the independent auditor and the
conduct of an audit in accordance with ISAs
Law on Independent Audit No 67/2011/QH12
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LEARNING OBJECTIVES
Upon completion of this chapter you will
• Understand the nature of assuarance & auditing
services
• Be able to distinguish different types of audits and
auditors.
• Know the development of audit profession.
• Understanding the reasons giving rise to demand for
financial statement audit.
• Understand the professional requirements of auditors
and audit firms and be able to describe internal
structure of an audit firm.
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CONTENT
Definition of Assurance and Auditing
Classification of audit
The develoment of audit profession
The roles of independent audit in the economy
Auditor, Audit firms and Professional bodies
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assurance (3 parties)
+ responsible party/engaging party (VN airline manager)
+practitioner/professional (auditor) (KPMG)
+intended user/engaging party (in some cases) (Vn airline shareholders)
WHAT ARE ASSURANCE SERVICES?
dịch vụ đảm bảo
• Assurance services: a broad range of independent
professional services that improve the quality of information,
or its context, for decision makers. underline subject matter: FS, Interal control (IC)
enhance the degree of confidence in the information
• 2 types: dịch vụ chứng thực
– Attestation services increase the reliability of info
– Other assurance services put info in a form or context that facilitates
decision making. đưa tt vào 1 hình thức or ngữ cách phù hợp để ra qđ
• Attestation services including
– Audit/examination kiểm toán bctc
– Review dịch vụ soát xét (kiểm soát & dò xét)
kiểm tra theo thủ tục đã thỏa thuận
– Agreed-upon procedures
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subject matter: check against the criteria
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Managers received money from the shareholders 8/13/2020
Shareholder need managers to report them how com. use their
money for what
->> That is FS
Auditor: verify the FS -> after that, they will report to the
1. WHAT IS AUDIT? shareholders whether the infor is true or not
dont work for manager, work for shareholders ->>> that why they
call that they are public accountant
Manager and auditor will sign in the contract (hop dong kiem toan)
Entrust resources
duty of auditors: serve the public’s interest
Investors Managers
Required periodic reporting
on use of resources
Verification by independent expert
a demand for auditing
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1. What is Auditing?
Auditing has been defined as:
“A systematic process of objectively obtaining and evaluating
evidence regarding assertions about economic actions and
events to ascertain the degree of correspondence between
cơ sở dữ liệu
those assertions and established criteria and communicating
the results to interested users.” -> provide an assurance rp
A statement of Basis Auditing Concepts (ASOBAC)
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forensic accounting: kế toán điều tra gian lận
(fraud examination)
due deligence: thẩm định chuyên sâu
1. What is Auditing?
evidence that related to
Assertions about
economic actions and
events
Independen obtaining and Degree of Issuance of
t and evaluating correspondence audit report
competent evidence
auditor
Established criteria
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reasonable assurance
2. Audit classification
perfromance audit
Operational audit kiểm toán hđ
AUDITS Compliance audit
Financial statement audit
AUDIT
CLASSIFICATION
Internal auditors
AUDITORS Government auditors state auditor, ministry
auditor
Independent/External
auditors
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forensic accounting: kế toán điều tra gian lận
(fraud examination)
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subject matter: organization structure, internal system, workflow, managerial performance 8/13/2020
criteria (not easy to identify): internal policies, requirements (set up by the entity)
objective:
- evaluate the efficiency, effectiveness, economy of the subject matter given above (3E)
- rp the issues and identify the area for the imporvement
+ effectiveness: make sure that we can achieve the outcome expected
+economy: rp how you acquire the input (materials, office, ..) to the com in a reasonable price, in time, properly
2.1. Types of audits
+ efficiency: avaluate the process to transmit the inputs into the outputs (ex: we operate efficiency if we employ a
standard input to result in a higher output)
performance audit kiểm toán hđ
Operational audit
AUDITS
AUDIT
CLASSIFICATION
Operational audit: value for money audit, performance audit or
efficiency audit. Chủ thể
Operational audit is a more comprehensive activity designed to
analyze organization structure, internal systems, work flow and
managerial performance.
It is usually associated with issues of efficiency, effectiveness and
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2.1. Types of audits
Operational audit
AUDITS
AUDIT
CLASSIFICATION
•A systematic review of part or all of an organization’s activities to
evaluate whether resources are being used effectively and
Chủ thể
efficiently
đánh giá hiệu suất •Assess performance, identify area for improvement, and develop
recommendations
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[Link] of audits
Operational audit
AUDITS Compliance audit
AUDIT
CLASSIFICATION
Determine the extent to which rules, policies, laws, covenants, or
they are criteria
government regulations are followed by the entities being audited
Chủ thể
subject matter: CIT returns, state budget e.g., examination of tax returns of individuals or companies by the
tax authorities
practioner: tax authorities, state budget
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[Link] of audits
Operational audit
AUDITS Compliance audit kiểm toán tuân thủ
Financial statement
audit
AUDIT
CLASSIFICATION
FS give a true and fair
view
FS present fairly
• To obtain reasonable assurance about whether the financial
Chủ
report as a whole is free thể material misstatement,
from fraud: gian lận
whether due to fraud or error, thereby enabling the auditor to error: nhầm lẫn
express an opinion on whether the financial report is prepared,
in all material respects, in accordance with an applicable
financial reporting framework.
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auditing always provide a reasonable assurance
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2.2. Types of auditors
•Are the employees of the entities being audited
•Conduct financial, internal control, compliance, operational and
forensic audits within their organization Operational audit
•Provide assurance and consulting services to their entities
AUDITS Compliance audit
Financial statement
audit
AUDIT
CLASSIFICATION
Internal auditor
AUDITORS
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2.2. Types of auditors
•Are employed by government agencies
•Tax officers, State Auditors, Government Inspectors, …
Operational audit
AUDITS Compliance audit
Financial statement
audit
AUDIT
CLASSIFICATION
Internal auditor
AUDITORS Government auditor
state audit
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2.2. Types of auditors
• May practice as sole proprietor or as a member of a CPA/audit
firm
Operational audit
• Are not the employees of the entities being audited
• Provide a range of both assurance and non-assurance
AUDITS Compliance services
audit
to their clients
Financial statement audit
AUDIT
CLASSIFICATION
Internal auditor
AUDITORS Government auditor
Independent/External
auditor
work for an audit firm
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3. History and development of audit
profession in the world
Before 1900 From 1900 until now
Objective Detect error and Give an opinion about the
fraud of staff true and fair of accounting
figure
Method The detailed Auditing approach where not
verification of all transactions had to be
every tested- Audit sampling
transaction Accessing the internal
control system
Audited in Informatic
environment
Extent audit approach to risk
based approach
User Owner Stakeholder, Investor, Debtor,
2018
Bank…
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3. The development of audit
profession in Vietnam deloit
• 1991: the first two local audit firms, namely VACO and
AASC were established
• 1999: the first series of 6 VSAs were issued.
• Till 30 May 2005, there are 33 VSAs issued, most of which
were closely adapted from ISAs.
• 2012: Law on Independent Audit No 67/2011/QH12 took
effect.
• 2012: 2005’s VSAs were replaced by a new set of VSAs.
• Until now, MOF has issued a total of 47 new standards on
2018
Auditing and Assurance services.
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International Audit firms - BIG4
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4. The roles of external audit in the economy
Entrust resources
Investors Managers
Required periodic reporting
on use of resources
Verification by independent expert
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4. The roles of external audit in the economy
Information is
likely to be
distorted.
What measures
should be
taken?
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4. The roles of external audit in the economy
• The difficulty in accessing information
resources
• The motivation of informant
RISK • The large volume and complexity of
information
The users directly check the information
MEASURES Strengthen the legal responsibility of the
Board of Directors
Compulsory audited financial statements
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5. Auditors, Audit firms and Professional bodies
a. External auditors
Qualification
Experience
CPA
EXTERNAL AUDITORS
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5. Auditor, Audit firms and Professional bodies
Certified Public Accountant (CPA)
An auditor must meet the following standards (Article 14 - Law on
Independent Audit):
a) Having full capacity for civil acts;
b) Having good professional ethics, sense of responsibility,
integrity, honesty, and objectivity;
c) Having degree of university or higher in finance, banking,
accounting, auditing disciplines or other disciplines as
prescribled by the Ministry of Finance;
d) Having an auditor’s certificate in accordance with
regulations the Ministry of Finance.
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5. Auditor, Audit firms and Professional bodies
Certified Public Accountant
Conditions for the candidates: (Circular No 129/2012/TT-BTC )
- Professionally ethical, honest, upright, and law-abiding;
- Having the Bachelor’s degree or higher in finance, banking, accounting,
audit;
- Having worked in finance or accounting for at least 60 months from the
month of graduation written on the higher education graduation
decision at the time of exam registration; or having worked as an audit
assistant in an audit enterprise for at least 48 months from the month of
graduation written on the higher education graduation decision at the
time of exam registration;
- Completely and correctly submit the exam application and fee as
prescribed.
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5. Auditor, Audit firms and Professional bodies
Certified Public Accountant
Candidates for Audit practitioner certificates must take the tests on 7 subjects:
1. Economic law and the Law on Enterprise;
2. Advanced finance and financial management;
3. Advanced tax and tax administration;
4. Advanced public sector accounting, financial accounting;
5. Advanced audit and assurance services;
6. Advanced financial analysis;
7. C-level qualification in one of the following foreign
languages: English, Russian, French, Chinese, German.
The candidates that pass all 7 subjects, and the total mark
(except of foreign language subjects) is 38 or more, are
considered passed.
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5. Auditor, Audit firms and Professional bodies
b. Audit firms
Partner
Manager
Senior
Staff Assistant
Career Path
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SERVICES PROVIDED BY AUDIT FIRMS
Audit
• Assurrance service
Review
Other assurance services
• Related services Agreed-upon procedures regarding
financial information
Compilation of financial information
• Tax consultance
Tax consultancy/ Tax planning
• Management
consultance Financial consultancy/ Strategy
development
• Others
Education/ Training
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Auditing hunter
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5. Auditor, Audit firm and Professional bodies
Professional Organizations in Vietnam
The Vietnam Association of Certified Public Accountants (VACPA)
established on 15/04/2005 and started to operate from
01/01/2006.
68th member of the Vietnam Union of Science and
Technology Associations (VUSTA)
Member of the Confederation of Asian and Pacific
Accountants (CAPA) since 2010
Member of the International Federation of Accountants
(IFAC) on 11 November 2015.
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5. Auditor, Audit firm and Professional bodies
Professional Organizations in the world
International Federation of Accountants (IFAC) is
the global organization for the accountancy profession
dedicated to serving the public interest by
strengthening the profession and contributing to the
development of strong international economies.
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THANKS FOR
YOUR LISTENING
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