The project final audit report is the result of an independent assessment of all investment costs involved in asset formation, and is not merely a legal procedure. Circular 10/2020/TT-BTCThis is a mandatory basis for approving the final settlement of completed projects, especially for projects using state capital. The report helps to enhance transparency, accurately determine the value of fixed assets, and serves as a basis for depreciation in subsequent years.
In the context of increasingly stringent management of construction investment capital, the project final audit report serves as proof of the investor's accountability regarding the legality and efficiency of capital utilization. According to the Construction Law and its guiding documents, this report helps ensure that costs are accounted for correctly, completely, and in accordance with the approved budget. A thorough understanding of the content and implementation standards is essential for accounting, auditing, and tax professionals in the construction sector.
The concept and core purpose of the project final audit report.
The project final settlement audit report (BKKQTDDA) is the product of an independent audit conducted by a qualified auditing firm as prescribed by law. This document serves to confirm the accuracy and reasonableness of the figures in the Project Completion Final Settlement Report (QTDATH) prepared by the investor, based on Vietnamese accounting standards (VAS) and current legal regulations on capital construction investment.
Legal Definition and Scope of Application
According to Vietnamese Auditing Standard (VSA) No. 1000 – Auditing the final settlement report of completed projects.The project finalization audit report must provide an opinion on whether the project finalization report was prepared on the basis of current accounting standards and regulations, and whether it complies with relevant legal provisions on capital construction investment management.
Projects that are required to have a final audit report include:
- The project utilizes state capital (budgetary capital, state-guaranteed credit capital, development investment capital of state-owned enterprises, etc.) as stipulated in Article 36 of Circular 10/2020/TT-BTC.
- The project does not use state funds but requires independent auditing in accordance with specialized laws or at the request of the owner/donor.
Preparing the Project Management Report and the project audit report is the final step, determining the legal validity of the entire investment process.
The specific purpose of issuing the Project Final Audit Report.
The purpose of a project final audit report goes beyond simply confirming figures. It also serves several other important objectives in financial, investment, and tax management:
- Enhance reliability: Providing reasonable assurance that the investment cost figures are accurate, reasonable, and free from material misstatements gives users (approving agencies, tax authorities) greater confidence in their decision-making.
- Basis for approving final accounts: This is a mandatory document for the Appraisal Council or the competent authority to make a decision on approving the Project Management Plan, officially concluding the project financially.
- Determining asset value: The audited figures in the project's final settlement audit report serve as the ultimate basis for accounting for the value of newly formed fixed assets after investment, directly impacting depreciation calculations and future tax obligations.
Standard Structure and Detailed Content of the Project Final Audit Report
The structure of a project final audit report is specified in detail in Vietnamese Auditing Standard No. 1000, ensuring consistency and transparency of information. A complete project final audit report must include six main parts, from the introduction to the auditor's opinion.
General Information and Introduction to BKKQTDDA
This section provides an overview of the audit, establishing the legal context and the relationships between the parties.
Title and Recipient of the report
The title must be clear, for example: “Audit Report on Final Project Settlement…”. The recipient is usually the agency approving the final settlement (Project Owner, Superior Management Agency) and/or a relevant agency (e.g., Tax Authority). The introduction should also clearly state the project name, the investor, and the date of the project's final audit report.
Introduction to the audit subject
This section introduces the project's Final Settlement Report, including the date of preparation, the total proposed settlement value, and an overview of the project's scope. This is the first step in helping the reader understand the scope of the audit.
Responsibilities of the audited entity and the auditor
This section clearly defines the responsibilities of the Board of Directors (or the Investor) and the responsibilities of the Auditor, as stipulated by VSA regulations.
Responsibilities of the Investor (Board of Directors)
The Board of Directors is responsible for the accuracy and fairness of the Project Settlement Audit Report; for establishing and maintaining an internal control system to ensure that the Project Settlement Audit Report is free from material misstatements due to fraud or error. They are also responsible for the correct application of accounting regulations and compliance with laws on investment and construction. The quality of the project settlement audit report largely depends on the cooperation and accuracy of the documents provided by the investor.
Responsibilities of the Auditor
The auditor is responsible for conducting the audit in accordance with Vietnamese Auditing Standards (VSA), providing an independent opinion, and preparing the final project audit report. The auditor's responsibility is to gather sufficient and appropriate audit evidence to support their opinion, ensuring objectivity and professionalism.
Scope, Basis, and Methods of Auditing
This section explains how the audit was conducted, providing evidence of professionalism and compliance with standards.
- Legal basis: List the important legal documents that apply (e.g., Construction Law, Decree on investment cost management, Circular 10/2020/TT-BTC, documents from the Ministry of Finance and the Ministry of Construction).
- Scope of audit: Clearly define the audit subject (total investment costs, individual cost items, fixed asset value), the project implementation period, and the stakeholders to be audited.
- Audit methodology: Describe the audit techniques used (e.g., sampling, analysis, comparison with legal documents, third-party verification), and clarify the scientific basis of preparing the project final audit report.
Audit results: Comparison of settlement and audit figures
This is the central part of the project final audit report, detailing the findings and adjustments.
- Summary of investment costs: Detailed analysis of audited cost items (Construction costs, equipment costs, project management costs, construction investment consulting costs, other costs).
- Determining asset value: The audit results regarding the value of fixed assets formed after investment serve as the basis for recording in the accounting books.
- Adjustments: Clearly state the items excluded from the final settlement value due to unreasonable or invalid reasons (e.g., expenses exceeding budget limits, incomplete documentation, expenses not directly related to the project).
To further illustrate the audit results, the following is a sample comparison table showing the differences between the proposed settlement figures and the audited figures.
| No. | Expense item | Proposed settlement value (VND) | Acceptable audit value (VND) | Difference/Exclusion Value (VND) | Notes/Reasons for adjustment |
| 1 | Construction Costs | 150,000,000,000 | 148,500,000,000 | (1,500,000,000) | Exceeding the steel material quota based on current unit prices. |
| 2 | Equipment Costs | 45,000,000,000 | 45,000,000,000 | 0 | In accordance with the contract and invoice. |
| 3 | Project Management Costs | 5,500,000,000 | 5,450,000,000 | (50,000,000) | Unreasonable payroll costs due to a lack of attendance records. |
| 4 | Consulting Fees | 1,800,000,000 | 1,800,000,000 | 0 | The contract and acceptance testing are complete. |
| Total | Total investment cost | 202,300,000,000 | 200,750,000,000 | (1,550,000,000) |
This result serves as crucial evidence in the project's final audit report, helping the competent authority determine the extent of errors and the responsibilities of the parties involved.
Auditor's Opinion: Four Main Types of Opinions
The core, concluding part of a project final settlement audit report is the Auditor's Opinion. This opinion reflects the auditor's view on the fairness and reasonableness of the project final settlement report. According to VSA 1000, there are four basic types of opinions:
Unqualified Opinion
This is the best type of opinion, when the auditor concludes that the Project Settlement Report fairly and reasonably reflects, in all material respects, the actual investment costs incurred, in accordance with accounting standards, accounting regulations, and relevant legal provisions. This recognition in the project settlement audit report affirms the quality of project management by the investor.
Qualified Opinion
The auditor concluded that the Project Settlement Audit Report fairly and reasonably reflects the situation, except for some non-material issues that affect the settlement. For example, the lack of some legal documents for a small contract, or a small overspending expense. These exceptions must be clearly stated in the project settlement audit report.
Adverse Opinion
The auditor concluded that the project final settlement report contained material and pervasive errors that seriously affected the integrity and fairness of the entire report. This opinion typically arises when there is serious non-compliance with investment regulations or significant missing legal documentation. Receiving an unqualified opinion will result in the project final settlement audit report not being approved.
Disclaimer of Opinion
The auditor is unable to gather sufficient and appropriate audit evidence to form an opinion. This situation occurs when the scope of the audit is severely limited (e.g., lack of access to records, lack of access to key third parties), preventing the auditor from fulfilling their responsibilities in preparing the final project audit report.
Petition and Signatures
The concluding section of the project final audit report includes recommendations (if any) and a signature for confirmation:
- Recommendation: Propose solutions to address existing shortcomings, improve the internal control system, or adjust expense items to better comply with legal regulations.
- Signature and Seal: The audit firm must sign, sign, and include the firm's official seal.
Legal basis and specialized auditing standards
To ensure the authority and reliability of project final audit reports, auditors must rely on a robust legal framework.
Regulations on investment cost management and settlement
The legal documents governing the preparation and auditing of the Project Management Unit Report include:
- Construction Law No. 50/2014/QH13 and guiding documents: General regulations on construction investment management.
- Decree No. 10/2021/ND-CP Regarding the management of construction investment costs.
- Circular No. 10/2020/TT-BTC The Ministry of Finance's regulations on the final settlement of completed projects using state capital are the most important basis for verifying the validity and legality of expenses. This circular clearly specifies the forms, deadlines, and authority for approving project final settlement audit reports.
Only by strictly adhering to these regulations will the project final audit report have the highest legal validity.
Vietnamese Auditing Standards (VSA) 1000
VSA 1000 is a specialized standard that specifies the principles and procedures to be followed when auditing Financial Statements. This standard requires auditors to:
- Conduct a legal review of investment documents (Project approval decision, economic contract, acceptance report).
- Verify the appropriateness of investment costs compared to the approved budget and the standards issued by the state.
- Assess whether the accounting of investment costs complies with current accounting regulations.
Compliance with VSA 1000 is a crucial factor in determining the quality and professionalism of project final audit reports.
Procedure for Conducting Final Project Audit
The QTDATH audit process is a logical, systematic series of steps that ensures auditors gather sufficient evidence. Adherence to this process demonstrates the auditing firm's experience.
Audit Planning Phase
The plan is the backbone of the audit. The auditor needs:
- Risk assessment: Identify key risks that may arise in the Project Management Report (e.g., risks related to land acquisition and compensation costs, risks related to the quality of acceptance documents).
- Determine the level of materiality: Establish accounting (financial) and audit (investment) materiality levels to focus resources on examining large and complex items.
- Develop an audit program: Detailed audit procedures will be applied to each item (construction, equipment, other expenses).
Audit Implementation Phase
This is the audit evidence gathering phase. The auditor will perform the following procedures:
Review the project's legal documents.
Verify the completeness and validity of documents such as: Investment policy decisions, project approval decisions, construction permits, and bidding documents. This is the basis for assessing the legality of the costs.
Check the investment costs for construction and equipment.
Conduct a thorough review of major expense items:
- Construction costs: Compare the actual quantities accepted with the contract and cost estimate. Check if the applied unit prices are appropriate for the time and state regulations. Many errors occur in this process. project final audit report It usually happens at this stage.
- Equipment costs: Examine import documents, purchase invoices, handover records, and determine the accounting value for fixed assets.
Check other expenses and accounts payable.
Review project management costs, consulting fees, contingency costs, etc., ensuring they are accounted for according to established rates or valid contracts. Simultaneously, verify accounts receivable/payable related to the project to ensure the project's final audit report accurately reflects the financial situation.
Project Completion and Release Phase of the Final Audit Report
After completing the evidence gathering:
- Summary of findings: Summarize the errors and deficiencies, classifying them according to their materiality.
- Discussion with the Investor: Discuss the findings to reach a consensus, allowing the investor to provide explanations and make adjustments.
- Prepare and Issue Project Final Audit Report: Draft the formal report and provide the final audit opinion.
Common errors that affect the integrity of project final audit reports.
Project owners often make mistakes that lead to qualified or rejected project audit reports. Understanding these errors helps accounting professionals prevent risks.
Errors regarding the reasonableness of costs.
Unreasonable expenses are expenses incurred that do not directly contribute to the creation of an asset or exceed the permitted limits.
- Exceeding the target: Material and labor costs exceed the state-published norms or the approved budget without reasonable additional explanation/approval.
- Interest expense: Interest expense capitalized after the project has been completed or put into use (according to VAS 16) will be excluded from the final settlement value by the auditor.
- General expenses: The ratio of overhead costs or project management costs was calculated incorrectly compared to the regulations in the Circular guiding the management of construction investment costs.
Errors regarding the validity and legality of the documents.
Validity is a fundamental element for the project's final audit report to be approved.
- The acceptance report is incomplete: Missing phase acceptance reports, final acceptance reports, incomplete construction logs, or discrepancies between completed work volume acceptance documents and payment vouchers.
- Illegal invoices and documents: Using illegal invoices or invoices that are invalid according to tax regulations (lacking signatures, missing mandatory information, etc.) will result in the auditor excluding them from the value of the project's final audit report.
Risks related to the allocation of costs and assets.
Incorrect cost allocation is also a common mistake.
- Allocation of overhead costs: The project has many components or phases, but the allocation of overhead costs (project management, consulting fees) is inconsistent or not based on reasonable criteria (e.g., a percentage of construction costs).
- Confusion between repair and investment: Accounting for major repair costs as investment costs artificially inflates the value of fixed assets. The auditor will make adjustments in the project final audit report.
Benefits of using professional Project Settlement Audit services from MAN – Master Accountant Network
Preparing your own Quality Assurance Report often carries significant risks, particularly regarding legal and regulatory errors. Utilizing professional auditing services not only ensures the Quality Assurance Report is validated but also offers numerous strategic benefits.
Optimizing investment costs effectively.
A quality audit service will help investors review and optimize reasonable investment costs, ensuring that no legitimate costs are overlooked and eliminating invalid costs before submitting to the authorities. This helps investors proactively address any issues before issuing the official project final audit report.
Minimize legal risks and criminal liability.
For projects using state capital, errors in final settlement can lead to administrative or even criminal liability. An independent project final settlement audit report, conducted by a reputable unit such as MAN – Master Accountant Network, is the strongest evidence of the investor's accountability, helping to minimize legal risks.
Improve the quality of the internal control system.
Through detailed recommendations in the project final audit report, MAN provides suggestions for improving document management processes and investment cost control, thereby enhancing the quality of the internal control system for subsequent projects. This is the added value that the project final audit report brings.
| Criteria | Internal Audit (Do it yourself) | Independent Auditors (MAN) |
| Legal | There is no legal basis for approving the QTDATH. | Mandatory requirements for state capital (Circular 10/2020/TT-BTC) constitute the highest legal basis. |
| Objectivity | Being dominated by the Board of Directors makes it easy to overlook mistakes. | Completely independent, ensuring honest and objective opinions. |
| Professionalism | Based on internal experience. | Strict adherence to VSA 1000 and industry regulations ensures a high level of professionalism. |
| Product | Internal report. | The project final audit report bears the signature and legal seal. |
Conclude
The project finalization audit report is a crucial document, marking the legal completion of a construction investment cycle. The report not only confirms the figures but also helps manage risks, increase transparency, and serves as a basis for determining asset value for accounting, depreciation, and tax calculation. If your business is finalizing a completed project, contact MAN – Master Accountant Network for professional advice and support.
We are committed to providing professional project settlement audit services, strictly adhering to VSA 1000 and Circular 10/2020/TT-BTC, helping you optimize costs and avoid legal risks. With extensive practical experience in the construction field, MAN's team will ensure your project settlement audit report is of the highest quality, key to completing settlement documents quickly and accurately. Don't let small mistakes affect your entire investment process; let MAN be your partner!
Service contact information at MAN – Master Accountant Network
- Address: No. 19A, Street 43, Tan Thuan Ward, Ho Chi Minh City
- Mobile/Zalo: 0903 963 163 – 0903 428 622
- Email: man@man.net.vn
Content production by: Mr. Le Hoang Tuyen – Founder & CEO MAN – Master Accountant Network, Vietnamese CPA Auditor with over 30 years of experience in Accounting, Auditing and Financial Consulting.
