UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business NGUYEN THI NHAM IMPROVING ACCOUNTING INFORMATION SYSTEM OF UNIVERSAL VIETNAM STEEL BUILDING COMPANY LIMITED MASTER OF BUSINESS ADMINISTRATION Ho Chi Minh City – Year 2017 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business NGUYEN THI NHAM IMPROVING ACCOUNTING INFORMATION SYSTEM OF UNIVERSAL VIETNAM STEEL BUILDING COMPANY LIMITED MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: PROF PHAM PHU QUOC Ho Chi Minh City – Year 2017 SUPERVISOR’S REPORT ON THE THESIS PROPOSAL SUBMITTED FOR DEGREE OF MASTER of BUSINESS ADMINISTRATION The thesis proposal title: IMPROVING ACCOUNTING INFORMATION SYSTEM OF UNIVERSAL VIETNAM STEEL BUILDINGS COMPANY LIMITED Student Name: Nguyen Thi Nham Supervisor: Dr Pham Phu Quoc General comments: Remarks on the student’s attitude: …………………………………………………………………………………… …………………………………………………………………… Remarks on the assignment’s academic quality: …………………………………………………………………………………… …………………………………………………………………… Overall assessment: Meet requirement for submitting Not meet requirement for submitting Other remarks: Did the student follow the report schedule? Yes No Other………………………… The Turning plagiarism percentage: Supervisor’s signature IMPROVING ACCOUNTING INFORMATION SYSTEM OF UNIVERSAL VIETNAM STEEL BUILDING COMPANY LIMITED TABLE OF CONTENT EXECUTIVE SUMMARY PART I – INTRODUCTION Company background Company symptoms PART II – PROBLEM IDENTIFICATION Theoretical basic Content of in-depth interviews Verify the potential problem PART III – CAUSE VALIDATION PART IV – SOLUTION AND ACTION PLAN Solution Action plan PART V – CONCLUSION APPENDIX REFERENCES NGUYEN THI NHAM IMPROVING ACCOUNTING INFORMATION SYSTEM OF UNIVERSAL VIETNAM STEEL BUILDING COMPANY LIMITED EXECUTIVE SUMMARY The purpose of this thesis is to assist Universal Vietnam Steel Building Company Limited in identifying and resolving potential problem of accounting department The initial symptoms of the company’s accounting department come from the record of yearly meeting of Board of Director with accounting department, this documents mentioned following symptoms: (1) Negative cash fund in accounting reports; (2) Duplicate payment in Accounts Payable; (3) Wrong liabilities in liabilities report; (4) Late in payment for supplier; (5) Forgot to pay insurance months for insurance office and (6) Tax penalty From the initial symptoms, I apply the process of Problem identification – Solution decision – Organization of action (P-S-O) to identify problems, find solutions and contribute action plan to improve above situation Fistly, I identify current problems by using necessary accounting theories as a basic to conduct in-depth interview with peoples who are working in Vienam head office The interview found out two problems in accounting department, there are (1) Poor in managing accounting information and (2) Poor in accounting internal control From that, I evaluate to find out the potential problem is Poor in managing accounting information which influencing significant to company’s accounting process; Secondly, informing theories to take into account the causes of potential problem, include: (1) lack of clearly accounting procedure; (2) overlapping in accountant position; (3) poor in the leadership of BOD and (4) poor in accountant’s competences From these causes, by evaluating current situation in the company, I found out the potential cause is Lack of clearly accounting procedure Thirdly, I propose possible alternatives and select the most appropriate alternative for solving the problem of the company; Lastly, I plan the effective actions for implementing the selected alternative - organize the procedure of accounting information system PART I – INTRODUCTION NGUYEN THI NHAM IMPROVING ACCOUNTING INFORMATION SYSTEM OF UNIVERSAL VIETNAM STEEL BUILDING COMPANY LIMITED Company background Universal Vietnam Steel Buildings Co., Ltd (US Buildings) is a domestic company which manufactures in pre – steel building business in Asia Pacific market It was established on August 2016 with the register capital is VND 5,000,000,000, the capital had increased into VND 10,000,000,000 on January 2017 Although US Buildings is not the first pre-steel building company in the Vietnamese market, US Buildings always strive to develop sustainably and together with Vietnam "Towards the future" US Buildings has been and will continue to provide high quality products and perfect after-sales service to bring the highest satisfaction to customers as well as contribute positively to the development of the pre-steel building industry and Vietnam country Since its founding, US Buildings has grown steadily and continuously, not only in terms of production scale but also sales At present, US Buildings holds the positive position in the pre-steel building market in Vietnam US Buildings 's cumulative sales are over 2.000.000 tons, and the products have a large market share From employees in the first day of establishment, up to now the number of employees of the company has reached around 30 peoples working in three countries, there are Vietnam, Thailand and Cambodia Until December 31th, 2017, the company has completed projects and projects are in process The total income from beginning until now is about VND 34,000,000,000 and the profit gained is VND 8,000,000,000 In addition to the business activities, US Buildings always strives to contribute positively into the National budget by completing well the tax payment as well as contributing to promoting the sustainable development of Vietnam’s community and society with many long-term, practical and meaningful activities Throughout the history of establishment and development, with the continuous efforts of all US Buildings employees, suppliers and partners, US Buildings has achieved great achievements and continuously growing, fulfilling its mission to customers, contributing significantly to the pre-steel building industry and Vietnam society NGUYEN THI NHAM IMPROVING ACCOUNTING INFORMATION SYSTEM OF UNIVERSAL VIETNAM STEEL BUILDING COMPANY LIMITED The mission of the company is to be one of the best organizations in Pre-Engineered Steel Building industry, focus on both product quality and customer’s benefit The priority mission of the company is to provide the most excellent solution for PreEngineered Steel Building products With the slogan “Durable Like Steel”, the company intend to offer customers the most safety and durable steel structure Beside the pre-buildings industry, the company intends to broaden their business in supplying solution for civil construction, interior design and open a plant to manufacture steel structure in Vietnam market Internal structure The internal structure of the company is a functional structure, is showed in the graphic as follow: Director Vice Director Sale Department Engineer Department Purchasing Department Marketing Department Finance Accounting Department Graphic 1: Internal structure in Universal Vietnam Steel Buildings Company The internal structure of US Buildings is fairly simple, because most management functions focus on a business manager This structure is suitable with the company in early stage of development because it is compact The power is focused on leader, therefore, the decisions can be made and implemented immediately Currently, US Buildings is in process of recruiting many other employees and recontribute internal structure with the key are sharing responsibility into the other persons for the long-term development NGUYEN THI NHAM IMPROVING ACCOUNTING INFORMATION SYSTEM OF UNIVERSAL VIETNAM STEEL BUILDING COMPANY LIMITED Company symptoms For one year of operation, US Buildings faced with many difficult problems coming from the external environment such as finding market segment, attracting customers and developing their products Besides, the internal factors also influenced significantly to the operation of the company, there are recruiting suitable employees, making rational decisions in business and managing departments To evaluate the result of company activities through one year of operation, Board of Director organized a yearly meeting with all departments focusing on evaluating business activity, employee’s competence and performance of each department Through the record of meeting, I summarized the important recommends of accounting department as bellow: In previous year, accounting department take a significant role into the development of US Buildings, proven by the positive performances in resolving timely accounting tasks, supporting passionately the other departments and keeping in touch with potential customers, suppliers and government authorities However, the operation of accounting department is unable to avoid mistakes affected negatively to the activity of company, the meeting evaluated and identified the negative symptoms of accounting department need to improve which were summarized as following: (1) Negative cash balance was showed in accounting reports Obviously, the balance of cash account can’t in a negative number on accounting report, however, the financial statement of year 2017 showed a negative cash balance and the cash account in the general ledger has a credit balance The credit or negative balance in the general ledger cash account is caused by (1) recording inexactly cash transactions in the general ledger cash account; (2) the amount received is not recorded while the payment is recorded; (3) the accountants recorded transaction in the accounting books without coinciding with the actual incurred amount due to missing data or loss of receipts and expenses; (4) missing the comparison and controlling in cash balance in period The bellow table shows the different between current cash balance in balance sheet and actual cash balance in internal cash book: Item Balance sheet NGUYEN THI NHAM Cash book/bank record Different (+/-) IMPROVING ACCOUNTING INFORMATION SYSTEM OF UNIVERSAL VIETNAM STEEL BUILDING COMPANY LIMITED Cash on hand - 399.380.976 115.452.000 514.832.976 Cash in bank 2.725.438.406 2.540.435.020 - 185.003.386 Table – Different of cash balance in balance sheet and cash book/bank record (VND) Above table showed the weakness of accounting department in recording and following accounting data Both items cash on hand and cash in bank recorded inexactly in general ledger leads to data inaccuracies in balance sheet (2) Double payment for one invoice of supplier In year 2017, the accounting department occurred one case of double payment In details, on July 10th, 2017, the company paid for Tan Co Joint Stock Company with amount VND23,000,000 for Invoice No.0000181 issued on July 3th, 2017 However, on November 23th, 2017, Tan Co JSC continued to request of payment for invoice above, accounting department paid again and leads to double pay for invoice No.0000181 of Tan Co JSC Some days after secondly paid date, US Buildings accountant checked liabilities and detected that the company paid twice for Tan Co JSC This situation is caused by (1) unchecking of accountant when paying for supplier of payment accountant; (2) poor in control payment information of accounting department From above case, we can see that US Buildings is ineffective in managing liabilities results in loss of company fund Currently, accounting department just focus on payment liabilities based on requires of other departments and manage liabilities sporadically and disjointed, therefore, the balance of liabilities is inexactly (3) Wrong liabilities in liabilities report At December 31th,2017, some suppliers include Phan Long Ltd., Vina-Japan Ltd., Hong Phuc Ltd., Tan Co Ltd., Thep Ba Vina Ltd., sent the the comparison of liabilities to US Buildings and required to provide liabilities balance However, the current number of liabilities balance of each supplier in company reports is different with the number NGUYEN THI NHAM IMPROVING ACCOUNTING INFORMATION SYSTEM OF UNIVERSAL VIETNAM STEEL BUILDING COMPANY LIMITED which was given by suppliers The different of supplier liabilities was showed as following: Suppliers Supplier’s data Phan Long Ltd 46,845,000 US Buildings’s data Different (+/-) 23,040,000 23.805.000 Vina- Japan Ltd 1,350,744,803 1.252.753.487 97.991.316 Hong Phuc Ltd 26,400,000 26.400.000 Tan Co Ltd 57,420,000 78,463,473 Thep Ba Vina Ltd 88,532,292 22,528,594 21.043.473 66.003.698 Total liability of 1.569.942.095 1.376.785.554 suppliers Total liability on 193.156.541 2.389.469.844 x balance sheet Proportion (%) 65.70% Table – Different of liabilities in US Buidings’s data and supplier data (VND) From above table, we can see that only suppliers accounted for 65.70% total liability of the company, and these supplier’s liabilities were unfollowed leads to inexactly balance of liabilities in US Buildings’s data The different between company data and supplier data for above suppliers is VND193,156,541, in which the company data recorded liabilities for those suppliers is VND1,376,785,554, however, following the supplier’s data, this item currently is VND1,569,942,095 This situation affected negatively to the operation of the company because it related to payment If the liabilities balance is inexactly, the payment for supplier will be lower/higher than the actual payment If paying higher, it results in loss of company money, in which if paying lower, it leads to disputing with suppliers To improve this situation accounting department NGUYEN THI NHAM 43 IMPROVING ACCOUNTING INFORMATION SYSTEM OF UNIVERSAL VIETNAM STEEL BUILDING COMPANY LIMITED 43 Interviewee: This issue belongs to accounting department, you can ask them for the answer Interviewer: Which of potential problem in accounting department you think affecting greatly to the business? Interviewee: I also think that the potential problem of accounting department is lacking of the clearly payment procedure It affects greatly to our department’s work because of late in paying money, lengthen the time of waiting and preparing document Interviewer: Which causes of above potential problem you think? Interviewee: I think the main causes of above potential problem come from the leadership The director and chief accountant should realise that the procedure is important and they need to have the instantly method to resolve above problem Interviewer: Can you give some solutions in order to improve the current accounting system? Interviewee: Contribute an optimal procedure for accounting department is the top priority Interviewer: Thank you for joining into my interview Interviewee: Not at all Transcript Interviewer: Hello, I’m Nham, currently I have a research to study the existing problem in accounting department of Universal Vietnam Steel Buildings company limited, and from that, propose the solutions to improve it Can you help me? Interviewee: Yes I can Interviewer: Can you introduce yourself? Name, age, position? Interviewee: Yes My name is Truong, I’m 26 years old, I work in purchasing department Interviewer: Thank you, Can you give me some problem which you face when you work in (/with) accounting department? NGUYEN THI NHAM 44 IMPROVING ACCOUNTING INFORMATION SYSTEM OF UNIVERSAL VIETNAM STEEL BUILDING COMPANY LIMITED 44 Interviewee: I faced many problems when working with accounting department Firstly, delaying in liabilities reconcile affected negative to the effective of purchasing department Secondly, the payment of material for supplier not in time, resulting in delay of delivery good, it make the process of project was interrupted Interviewer: Do you feel satisfied or unsatisfied with the competence of company’s accountant? Why? Can you list the strengths and weakness of current accountant? Interviewee: When I work with accountant, in some case, I felt confusing because they required many complicated documents and I must to remake document many times She is work-hard and good expertise on accounting, but she works strictly Interviewer: Do you think the methods of management in accounting department of the manager are suitable or not with the company? Can you list the strengths and weakness of current accounting manager? Interviewee: I don’t have any recommend about accounting manager Through the process of working with them I realized some strengths and weakness as follow: From the strengths, she is energetic and hardworking, She also have a good competence in management and create the sympathy with other department Interviewer: What are your recommends of current accounting procedures in your company? Interviewee: Current accounting procedures have some limitations such as the documentation system is quite complicated, resulting in the overlapping in accounting processing Interviewer: Does your company use software support for accounting process? If not, what tools your company used for accounting process? Interviewee: Accounting department used software recently Interviewer: How is your company using the infrastructure of information technology in accounting works? Interviewee: My company have the good condition in information technology for accounting department Board of Director equipped fully the advanced IT for working All member of the company are satisfied with it NGUYEN THI NHAM 45 IMPROVING ACCOUNTING INFORMATION SYSTEM OF UNIVERSAL VIETNAM STEEL BUILDING COMPANY LIMITED 45 Interviewer: Does your company have the internal controls in accounting department? Can you list some typical examples of internal controls in your company? Interviewee: I don’t know about that I’m working in accounting department Interviewer: Which of potential problem in accounting department you think affecting greatly to the business? Interviewee: The potential problem is complicated in payment procedure It affected greatly to the progress of working in purchasing department Interviewer: Which causes of above potential problem you think? Interviewee: The main causes come from unclearly procedure and instruction It makes the company running in a slowly way Interviewer: Can you give some solutions in order to improve the current accounting system? Interviewee: I think the clearly procedure should be contributed with the reference of other similar organization In addition, I think the accounting department should train accounting procedure for everybody in company It help everybody update and use the procedure in and effective way Interviewer: Thank you for your supports Interviewee: Welcome NGUYEN THI NHAM 46 IMPROVING ACCOUNTING INFORMATION SYSTEM OF UNIVERSAL VIETNAM STEEL BUILDING COMPANY LIMITED 46 Appendix 3: SUMMARY OF INTERVIEW RESULTS Question 1: Can you give me some unsatisfactions which you face when you work in (/with) accounting department? 1)Answer: - As you know, I am Director of the company, the big problem which I face when I work with accounting department is I can not use accounting data for making decision, the accounting data is not exactly, therefore, I only based on my private record to give own decision The scale of my company fairly small until now, therefore, this situation is still acceptable However, if the company develop and become bigger, I think It will be a big problem - The big problem which I faced when I work in accounting department is the policy barriers from Vietnam accounting standard and tax authorities I am confident in my management competence, but I did not well in detail works in accounting major The other problem is the dispute between manager and accountant about using accounting information In some case, the accounting information is inexact, therefore, Director can not use it for their objectives, I feel that Director is unsatisfied with accountant performance - I’m belong to sale department, therefore, I work with accounting department when I need advance for business trip, clearance advance when I finish business trip, and receive salary The big problem I faced when working with accounting department is the procedure of advance and clearance advance unclear and untrained public, therefore, It is difficult for us when I make documents About salary, I received salary without any announment about how my salary is calculated? In some case, I can not understand why I only receive the lower salary than normal - I think that the problem when I work with them is late in payment procedure I work with them when I request of payment some amount related to outside designers Maybe don’t have specific policy, therefore I see that the payment procedure which is applied different for different periods I’m confused with it - I faced many problems when working with accounting department Firstly, delaying in liabilities reconcile affected negative to the effective of purchasing department Secondly, the payment of material for supplier not in time, resulting in delay of delivery good, it make the process of project was interrupted 2) Summarize - Accounting data is not exact, can not use for making decision - Accountant is not updated timely tax and accounting policy NGUYEN THI NHAM 47 IMPROVING ACCOUNTING INFORMATION SYSTEM OF UNIVERSAL VIETNAM STEEL BUILDING COMPANY LIMITED 47 - Accounting department is late in clearance advance affected to sale department - Payment procedure is inconsistent, lengthening payment time for engineer department - Accounting department is not timely debt comparison and liabilities are unfollowed - Late in payment, it makes delay in delivery good, affect to the progress of project Question 2: Do you feel satisfy or unsatisfy with the competence of company’s accountant? Why? Can you list the strengths and weakness of current accountant? 1) Answer In an honour way, I feel unsatisfy with the competence of current accountant My company recruit one general accountant from the establish date and she have the good background in accounting knowdledge She have good competence in accounting part, however, the way of managing time as well as works of her are not good result in ineffective in work In the early period, my company has many other works need the accountant solving it immediately Therefore, it takes time and the accountant is difficult to focus only on accounting works.About the strengths: She is hardworking and energetic in company work, friendly with around peoples And have a good performance with daily works The weakness: I think she is not good in manage time and works - I admit that currently I manage accounting department in an ineffective way The cause of this problem is come from the overload works which need to resolve everyday and we need to it immediately, therefore we forgot the management of process and record clearly and our company hasn’t enoungh staff work in accounting department I feel myself have strengths in management public issues and budget planning However,I am not good in detail accounting works - I satisfy with her because she is friendly and good communication with every people However, about her career knowledge or her competency, I can not give my own recommend I see that without above limitations, I see it is ok - I think her competence is so so I am unsatisfy when she ask me much documents for payment difficult with previous times Strengths of accountant is social and helpful But the limmitations is too regid in work - When I work with accountant, in some case, I felt confusing because they required many complicated documents and I must to remake document many times She is work-hard and good expertise on accounting, but she works strictly 2) Summarize Satisfactions: NGUYEN THI NHAM 48 IMPROVING ACCOUNTING INFORMATION SYSTEM OF UNIVERSAL VIETNAM STEEL BUILDING COMPANY LIMITED 48 - Good background in accounting - Hardworking and energetic in company work, friendly with around peoples - Good performance with daily works - Strengths in management public issues and budget planning - Good communication with other staffs - Social and helpful - Work-hard and good expertise on accounting Unsatisfactions: - Not good in manage time and works - Manage accounting department in an ineffective way - Recording unclearly - Required cumbersome procedures - Inflexible in work - Work strictly Question 3: Do you think the methods of management in accounting department of the manager are suitable or not with the company? Can you list the strengths and weakness of current accounting manager? 1) Answer - The person who manage accounting department is chief accountant I am unsatisfied with the way of management of chief accountant She has the strengths in communication and resolving problem in company However, she don’t have much specialize knowdledge in accounting part Therefore, every accounting works depend on general accountant - I admit that currently I manage accounting department in an ineffective way The cause of this problem is come from the overload works which need to resolve everyday and we need to it immediately, therefore we forgot the management of process and record clearly and our company hasn’t enoungh staff work in accounting department I feel myself have strengths in management public issues and budget planning However,I am not good in detail accounting works - I’m not in accounting department, therefore I can not recommend how the management manners of manager are ok or not But I think the manager of accounting department should enhance the accounting system in order to supporting flexible for other departments - I can not give you my opinion now because I rarely work with Chief accountant I think that her strengths is flexible in solving accounting works and good communication with third parties However, She also have the weakness in execute accounting department, she need find out the method to manage accounting department becoming much effective NGUYEN THI NHAM 49 IMPROVING ACCOUNTING INFORMATION SYSTEM OF UNIVERSAL VIETNAM STEEL BUILDING COMPANY LIMITED 49 - I don’t have any recommend about accounting manager Through the process of working with them I realized some strengths and weakness as follow: From the strengths, she is energetic and hard- working, She also have a good competence in management and create the sympathy with other department 2) Summarize - One person is unsatisfied with the method of management in accounting department Remains are no comment Question 4: What are your recommends of current accounting procedures in your company? 1) Answer - My company is in process of creating accounting procedures, until now the company only have some main procedures in payment, advance and clearance advance, calculating and paying salary All of these procedure are still simple and used in short-term We need time to contribute a completely accounting procedure which is suitable for long-term development - We didn’t have any formal accounting procedure The company did not contribute the procedure for accounting department The problem here is we didn’t have enough time for creacting a completed procedure We also have some informal procedure and it is still simple for short-term using - This question belongs in-depth to accounting works I think It’s not good until now because I feel that all the current procedure is simple and resolve in short-term, accounting should have the strategy to create and train the accounting procedure related to other departments - The current accounting procedure is not good with me I need the fluent process when payment and the payment policy must be clear for all staffs of other departments - Current accounting procedures have some limitations such as the documentation system is quite complicated, resulting in the overlapping in accounting processing 2) Summarize The current accounting procedures are simple, informal and only intend to shortterm, include the temporary procedure such as: payment, advance and clearance, calculating and paying salary The company don’t have formal procedure lead to inconsistent in application Question 5: Does your company use software support for accounting process? If not, what tools your company used for accounting process? NGUYEN THI NHAM 50 IMPROVING ACCOUNTING INFORMATION SYSTEM OF UNIVERSAL VIETNAM STEEL BUILDING COMPANY LIMITED 50 1) Answer - Yes My company use software for accounting record From beginning time in August 2016 to July 2017, my company only use excel tool for recording and reporting From July 2017 until now, my compay start to use MISA software for accounting functions However, until now, I didn’t use any report from this software My accountant need time to adapt with it She hasn’t used any software before - Yes, we used software in recording accounting data.The company transferred from hand – record into software from July 2017 It taken time for study how to use this software and record data from the beginning Until now, in a basic way, accounting department recorded in a relatively complete way the accounting data However, the recording depends on documents only lead to the accounting information is inexactly because of lacking the transactions which have no attached vouchers.We used Misa software, this software is popular and fairly cheap suitable with the company’s budget However, It has some limitations such as unflexible in creating internal reports because this software was contributed with the form of report in pattern The other limitation is some accounting functions like salary, tax can not used because of complexity in recording - I see that accounting department used software support for accounting process - I don’t know about that - Accounting department used software recently 2) Summarize The company applied software in accounting department from July 2017, name of software is Misa Some limitations when using this software are unflexible in creating internal reports because this software was contributed with the form of report in pattern, the other is some accounting functions like salary, tax can not used because of complexity in recording Question 6: How is your company using the infrastructure of information technology in accounting works? 1) Answer - My company has the stable system of information technology in accounting department We use the modern computer system supporting to accounting works, set up a good internet wifi network for communication between each departments and the other parties The system of electronic device equipted fully to create the comfortable environment for staffs NGUYEN THI NHAM 51 IMPROVING ACCOUNTING INFORMATION SYSTEM OF UNIVERSAL VIETNAM STEEL BUILDING COMPANY LIMITED 51 - Our company used many advanced technology for supporting accounting activities The company is available in purchasing the best electronic device for staffs such as laptop, computer, television used for entertainment, projector used for meeting and high-speed internet network - My company’ Information technology is good, not only in accounting department, but also in the other departments, typical is in sale, we also satisfy with Information technology infrastructure We are equipted by modern computer and necessary electronic devices suitable with our works - Like engineer department, I think the company created good condition of information technology for our work Such as suitable computer, and wifi network When we have the incidents, we have outsource service having highly professional repairing immediately, create the comfortable environment when working - My company have the good condition in information technology for accounting department Board of Director equipped fully the advanced IT for working All member of the company are satisfied with it 2) Summarize In general, the company applied advanced information technology for accounting department such as the modern computer system, good internet wifi network, the system of electronic device include laptop, computer, television used for entertainment, projector used for meeting and high-speed internet network It helps creacting the comfortable environment for accounting works and enhancing the effective of accounting tasks Question 7: Does your company have the internal controls in accounting department? Can you list some typical examples of internal controls in your company? 1) Answer - I want to deploy ISO solution for internal control of all departments of company But we have too much works need to do, therefore, up to now, we don’t have any the measure of internal control - Up to now, the internal control is still not clearly The company didn’t have any methods to monitor accounting activities, the accuracy of accounting information of the company depen only on the competence of accountant Board of Director didn’t have any checking for accounting department Howevers, the company still have some simple informal way to control such as sharing responsible for each accountant, general accountant has the responsibility in recording, preparing documents, in which chief accountant is in charge of reviewing and checking again to avoid frauds and mistakes NGUYEN THI NHAM 52 IMPROVING ACCOUNTING INFORMATION SYSTEM OF UNIVERSAL VIETNAM STEEL BUILDING COMPANY LIMITED - I think accounting department did not have internal control in accounting works As I know when working with them, in some case, they forgot to remind and get document of clearance advance from us when I finish business trip - This issues belong to accounting department, you can ask them for the answer - I don’t know about that I’m working in accounting department 2) Summarize The company didn’t have any method to control internal system Therefore, the accuracy of accounting data majorly depend on the competence of accountant The reviewing and checking are conducted by chief accountant only and it is still so simple and can not avoid the mistakes Question 8: Which of potential problem in accounting department you think affecting greatly to the business? 1) Answer - I think the potential problem in accounting department is poor in managing accounting information It means the accounting information currently is inexactly and can’t use for making decision - I think potential problem in accounting department is unexactly in acounting information Accounting information take a very important role in running the business of the company because from it, we can predict and use information for making decision - I also think that the potential problem of accounting department is unclear accounting procedure I’m difficult when work with them about preparing document - I also think that the potential problem of accounting department is lacking of the clearly payment procedure It affects greatly to our department’s work because of late in paying money, lengthen the time of waiting and preparing document - The potential problem is complicated in payment procedure It affected greatly to the progress of working in purchasing department 2) Summarize - poor in managing accounting information - unexactly in acounting information - unclear accounting procedure - lacking of the clearly payment procedure NGUYEN THI NHAM 52 53 IMPROVING ACCOUNTING INFORMATION SYSTEM OF UNIVERSAL VIETNAM STEEL BUILDING COMPANY LIMITED 53 - complicated in payment procedure Question 9: Which causes of above potential problem you think? 1) Answer - There are many causes resulting in above problem Firstly, My company did not have the clearly procedure, therefore accountant worked in their way and unmeet the requirement of Board of Director Secondly, poor in managing accounting staffs, related to leadership, I admit that I want to delegate the reponsibility for accountant, I want they work in an independent way However, the current accountant is not good in managing time and managing work, therefore, they can not work in time I think I need to change the way of management - I think the potential cause is poor in managing accounting department The Board of Director should be have the target and set up deadline for accounting department to ensure the reports were submit to Board of Director in time - I think the main causes of above potential problem is lacking the human resource in accounting department, the accounting department have one person, she must much work to run business, and don’t have time for preparing and checking the procedure - I think the main causes of above potential problem come from the leadership The director and chief accountant should realise that the procedure is important and they need to have the instantly method to resolve above problem - The main causes come from unclearly procedure and instruction It makes the company running in a slowly way 2) Summarize - The company did not have the clearly procedure - Poor in managing accounting staffs, related to leadership - Poor in managing accounting department - Lacking the human resource in accounting department - Poor in leadership - Unclearly procedure and instruction Question 10: Can you give some solutions in order to improve the current accounting system? NGUYEN THI NHAM 54 IMPROVING ACCOUNTING INFORMATION SYSTEM OF UNIVERSAL VIETNAM STEEL BUILDING COMPANY LIMITED 54 1) Answer - I already think about the solutions to improve above problem First of all, I want to contribute a clearly instruction in accounting works, include the sample of records, the written procedure introduce the way of recording, processing and report accounting information Secondly, I think I need to recruit more accountants to share the accounting functions for them such as tax accountant, payment accountant, salary accountant It will help the process of recording and checking become much effective than now - As potential cause showed, to improve this problem, the Board of Director should contribute the internal accounting reports weekly or daily rely on the weight of works in week The company also designs the suitable internal control to monitor accounting information - The company should recruit more accountants and sharing the responsibility for them to improve this problem Simultaneously, they need built the consistent accounting procedure and train clearly to other departments - Contribute an optimal procedure for accounting department is the top priority - I think the clearly procedure should be contributed with the reference of other similar organization In addition, I think the accounting department should train accounting procedure for everybody in company It help everybody update and use the procedure in and effective way 2) Summarize - Contribute a clearly instruction in accounting works include the sample of records, the written procedure introduce the way of recording, processing and report accounting information - Recruit more accountants to share the accounting functions for them such as tax accountant, payment accountant, salary accountant - Contribute the internal accounting reports weekly or daily rely on the weight of works in week - Designs the suitable internal control to monitor accounting information - Built the consistent accounting procedure and train clearly to other departments - Contribute an optimal procedure for accounting department - The clearly procedure should be contributed with the reference of other similar organization NGUYEN THI NHAM 55 IMPROVING ACCOUNTING INFORMATION SYSTEM OF UNIVERSAL VIETNAM STEEL BUILDING COMPANY LIMITED 55 Appendix – FORMULA OF CALCULATE COEFFICIENT OF VARIATION Mean (𝑥 ) = ∑𝑛 𝑖=1 𝑥𝑖 𝑛 Standard deviation (𝛿 ) = ∑𝑛 𝑖=1(𝑥𝑖 −𝑥) 𝑛 Coefficient of Variation (CV) = 𝛿2 𝑥 In which: i : Sequence number of variables n : The number of attendees x : The value of variables Appendix - RESULT OF SURVEY TO VERIFY POTENTIAL CAUSE Possible causes A Lack of clearly accounting procedure B Overlapping accounting task C Poor in the leadership of BOD D Poor in accountant's competences Attendee's evaluation 5 4 3 3 2 2 2 REFERENCE NGUYEN THI NHAM Mean Standard deviation 10 11 12 5 4.25 0.69 4 3.92 0.74 3 2 2.17 0.47 3 3 2.58 0.41 56 IMPROVING ACCOUNTING INFORMATION SYSTEM OF UNIVERSAL VIETNAM STEEL BUILDING COMPANY LIMITED 56 [1] COSO frame, Accounting Information Systems: Information on Collection, Storage and Processing of Financial and Accounting Data, Accounting Information Systems, retrieved December 7th, 2012 [2] Accounting information system, Steven Bragg, May 7th, 2017 [3] Edward J.Blocher, Kung H.Chen,Thomas W.Lin (1999) Cost Management The Mc Graw – Hill; 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