How many steps are included in the preparation of draft audit reports in Vietnam?
According to current regulations, what are steps included in the preparation of draft audit reports in Vietnam? How specifically do those steps happen?
Pursuant to Article 18 of the Audit procedures of State Audit issued with Decision 02/2020/QD-KTNN, the preparation of draft audit reports includes the following steps:
1. Consolidate audit evidence and results
Heads of auditor teams are responsible for consolidating all appropriate audit evidence and results to prepare audit reports according to regulations of State Audit Office of Vietnam.
In addition, State auditors must systemize and gather all relevant legislative documents to use as legal basis for audit remarks; other necessary documents related to audit sessions.
2. Examine, classify and consolidate audit results
a) Heads of auditor groups must organize examination, review and assessment of legitimacy of audit evidence and results according to State audit standard 1450 – Assessment of risks detected during financial audit, Section 26 State audit standard 1505 – External confirmation for financial audit, Section 31 to Section 47 State audit standard 1500 – Audit evidence in financial audit, Section 80 to Section 84 State audit standard 3000 – Guidelines for operational audit, Section 58 to Section 61 State audit standard 4000 – Guidelines for compliance audit.
b) Classify and consolidate audit evidence and results based on criteria, suitable for each field of audit and conforming to audit contents and forms regulated by State Audit Office of Vietnam.
c) On basis of detected flaws, State auditors shall estimate all flaws according to Section 48 State audit standard 1320 – Determination and utilization of audit materiality in financial audit, Section 20 to Section 22 State audit 1530 – Collection of audit sample in financial audit.
d) Adopt analysis procedures when forming audit remarks according to Section 19 to Section 22 State audit standard 1520 – Analysis procedures in financial audit.
dd) In case of failure to collect all appropriate audit evidence to conclude audit contents and draft audit reports, auditor teams must propose additional audit procedures or provide appropriate audit remarks regarding the audit contents according to State audit standard 1700 – Formation of audit remarks and audit reports in financial audit; State audit standard 1705 – Remarks other than unqualified opinions in financial audit reports; Section 80 to Section 84 State audit standard 3000 – Guidelines for operational audit; Section 58 to Section 61 State audit standard 4000 – Guidelines for compliance audit.
3. Preparation of draft audit reports
On the basis of results of consolidated audit situations and figures, heads of auditor teams shall prepare draft audit reports.
Audit reports must satisfy general requirements under State audit standard system and comply with forms regulated by State Auditor General. Audit reports usually consist of following basic contents:
a) Information on audited entities according to Section 19 State audit standard 1700 – Formation of audit remarks and audit reports in financial audit (including: Name of entities producing audited financial statements and final accounts; audited financial statements and final accounts; concluding date of accounting period or accounting date of each report in case of series of financial statements, etc.).
b) Overview of audit sessions: Basis of audit reports, audit scope, limitations and basis (including audit criteria); conducted audit affairs.
c) Audit assessment and confirmation: Audit finding results; Audit remarks. In which, for financial audit, present: “Responsibilities of State auditor team”, “Responsibilities of audited entities”, basis for formation of audit remarks before audit remarks according to Section 20 to Section 25 of State audit standard 1700 – Formation of audit remarks and audit reports in financial audit; issues to be emphasized and other issue (if any).
d) Conclusions, propositions and other details (if any).
dd) Explanations and schedules (if any).
e) Contents in form of writing: Signatures, seals, date of signing audit reports shall comply with regulations and law.
Preparation of draft audit reports must consider audit objectives and methods of audit sessions to comply with guidelines for preparation of audit reports specified under State audit standard system accordingly, namely: State audit standard 1700 – Formation of audit remarks and audit reports in financial audit; State audit standard 1705 – Remarks other than unqualified opinions in financial audit reports; State audit standard 1706 – “Issues to be emphasized” and “Other issues” parts in financial audit reports; State audit standard 1710 – Comparison information – Corresponding data and financial statement comparison, responsibilities of State auditors related to other information in financial audit; State audit standard 1800 – Note for financial audit prepared according to framework for preparation and presentation of financial statements for special purposes; State audit standard 1805 – Note for separate financial audit and audit of factors, accounts or specific clauses of financial statements; State audit standard 1600 – Notice when auditing corporate financial statements; Section 88 to Section 111 State audit standard 3000 – Guidelines for operational audit; Section 67 to Section 88 of State audit standard 4000 – Guidelines for compliance audit, Guidelines for audit based on risk assessment and determination of audit materiality in each audit fields of State audit.
4. Discuss and collect feedback of members of auditor teams
Heads of auditor teams shall organize discussion among auditor teams to gather feedback of members of auditor teams regarding assessment, confirmation, conclusion and propositions in draft audit reports; consider and acknowledge feedback of members of auditor teams, complete draft audit reports to request chief auditors to approve.
Discussion among auditor teams regarding draft audit reports must be kept record using forms regulated by State Auditor General. In case other opinions differ from conclusion of heads of auditor teams, State auditors shall have the rights to record differing opinions according to Regulations on organization and operation of State auditor teams.
The above is the regulation on the preparation of draft audit reports.
Best Regards!
