Question 1

Describe your audit planning process for a new manufacturing client in Vietnam. How do you assess material risks?

Accepted Answer

Apply ISA 300 (Planning an Audit) and ISA 315 (Identifying and Assessing Risks of Material Misstatement). Process includes: (1) Understanding business environment and industry; (2) Setting materiality thresholds per VAS 320 (typically 0.5-1% of revenue or 5-10% of pre-tax profit); (3) Assessing internal controls; (4) Building a risk matrix; (5) Allocating resources and scheduling. Strong answers must mention: industry-specific risks for Vietnamese manufacturers (inventory, raw material costs, seasonal labor), reference to Circular 200/2014/TT-BTC on accounting regime, understanding of Enterprise Law 2020 and current CIT regulations. Senior candidates should specify how to build a Risk Assessment Memorandum.

Question 2

When conducting an audit under Vietnamese Standards on Auditing (VSA) and ISA, how do you handle differences between the two sets of standards? Give a specific example.

Accepted Answer

VSA is issued by the Ministry of Finance and broadly converges with ISA, but key differences include: (1) VSA 700 on audit reports requires additional sections for the practicing auditor's name and CPA certificate number; (2) VSA 610 is more restrictive than ISA 610 on using internal audit work; (3) VSA audit reports must explicitly state which Vietnamese accounting standards (VAS/Circular 200) were applied. Strong candidates will cite real examples, such as auditing FDI companies requiring parallel reports under VSA (for Vietnamese tax authorities) and IFRS (for foreign parent companies). Should mention the role of the Vietnam Association of Certified Public Accountants (VACPA) in issuing practice guidance.

Question 3

During an audit, you discover signs of revenue fraud at a company listed on HOSE. What steps do you take under ISA 240 and the State Securities Commission (SSC) regulations?

Accepted Answer

Per ISA 240: (1) Reassess fraud risk and modify audit procedures; (2) Communicate with Management and Those Charged with Governance (BOD/Audit Committee); (3) Consider legal counsel; (4) Assess impact on audit opinion. Per SSC regulations (Circular 155/2015/TT-BTC on disclosure): the auditor has a duty to report to the SSC if Management fails to act. May need to issue a disclaimer or adverse opinion. Excellent candidates distinguish: employee fraud vs. management override. Should mention reporting thresholds to SSC, tension between audit confidentiality and public interest obligations, and legal consequences under Decree 156/2020/ND-CP on securities violation penalties.

Question 4

Explain the difference between statistical and non-statistical sampling in auditing. When do you choose each method and how do you determine appropriate sample size?

Accepted Answer

Per ISA 530 (Audit Sampling): Statistical sampling (MUS - Monetary Unit Sampling, random sampling) allows quantification of sampling risk and extrapolation of results. Non-statistical sampling relies on professional judgment. Sample size depends on: (1) Desired detection risk; (2) Materiality threshold; (3) Expected error; (4) Population variability. MUS formula: n = BV × RF / TM (BV = book value, RF = reliability factor, TM = tolerable misstatement). Senior candidates should know MUS is particularly effective for populations with large, unevenly distributed values (typical in Vietnamese audits: accounts receivable, inventory). Mention use of audit software (IDEA, ACL/Galvanize) for random sampling in the context of Vietnamese companies undergoing digitalization.

Question 5

Describe how to draft an effective management letter after an audit. How do you ensure findings are presented persuasively and actioned by Management?

Accepted Answer

Effective management letter structure: (1) Internal control weaknesses classified by severity (material weakness, significant deficiency, other deficiency); (2) Risk description in business language (not purely technical); (3) Practical and implementable recommendations; (4) Management response; (5) Implementation timeline. Reference ISA 265 (Communicating Deficiencies in Internal Control) and Circular 200/2014/TT-BTC on accounting system requirements. Strong candidates understand how to balance professionalism with client relationship building - particularly important in Vietnamese business culture. Mention classifying findings by estimated financial impact and probability to help Management prioritize remediation.

Question 6

The company you are auditing shows signs of going concern doubt: three consecutive years of losses, current ratio below 0.5, and debt maturing within 6 months. How do you assess and address this situation?

Accepted Answer

Per ISA 570 (Going Concern): (1) Assess financial and non-financial warning signs; (2) Request Management's going concern assessment (typically 12 months from report date); (3) Review company's remediation plan (debt restructuring, asset sales, capital injection); (4) Test reasonableness of going concern assumption; (5) Based on conclusion: emphasis of matter paragraph if adequately disclosed, or adverse/disclaimer opinion if not. Cross-reference VAS 21 (Presentation of Financial Statements). In the Vietnamese context post-COVID-19 and amid real estate market difficulties (2023-2024), many businesses face this issue. Senior candidates should know: common debt restructuring measures in Vietnam (Circular 02/2023/TT-NHNN on debt restructuring), disclosure obligations for listed companies under Decree 155/2020/ND-CP.

Question 7

While auditing a group with a parent company in Singapore, you discover numerous undisclosed related-party transactions not included in financial statement disclosures. What is your approach?

Accepted Answer

Per ISA 550 (Related Parties) and VAS 26 (Related Party Disclosures): (1) Verify completeness of related-party list (cross-reference with company charter, stock exchange disclosures, business registration records); (2) Assess whether transactions are arm's length; (3) Check transfer pricing - particularly important under Decree 132/2020/ND-CP; (4) Assess associated fraud risk (ISA 240); (5) Request additional disclosures or financial statement adjustments; (6) Consider impact on audit opinion if not corrected. This is a high-risk area particularly in the Vietnamese context: many FDI groups use intra-group transactions to shift profits overseas (transfer pricing). Candidates should know: disclosure thresholds under VAS 26, transfer pricing documentation obligations under Decree 132/2020/ND-CP (applying to related-party transactions where related ownership ≥ 30% or related revenue/costs ≥ VND 10 billion/year).

Question 8

In your view, what are the main differences between working at a Big 4 and a local audit firm in Vietnam? Which skills from a Big 4 environment are transferable to a local firm and vice versa?

Accepted Answer

Key differences: (1) Methodology - Big 4 use proprietary audit methodology (PwC Aura, Deloitte Aptio, KPMG eAudit, EY Canvas) vs. local firms typically using traditional VSA-based approaches; (2) Clients - Big 4 primarily serve FDI companies, large listed companies, major SOEs; local firms serve SMEs and smaller SOEs; (3) Team size and specialization; (4) Training - Big 4 offer international programs (ACCA, CPA Australia) vs. local firms focusing on Vietnamese CPA; (5) Compensation and benefits; (6) Work pressure and culture. This question assesses candidates' self-awareness and career strategic thinking. Candidates moving from Big 4 to local firms should emphasize: adapting international methodology, client management skills, and international standards knowledge. Candidates from local firms should highlight: deep knowledge of Vietnamese regulations, relationships with tax authorities and State Audit.