Work Attachment Report Internship period: 28 Nov 16 16 Jun 17

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Work Attachment Report

Internship period: 28 Nov 16 – 16 Jun 17

Done by:

TAY YANGJUN JASMIN

J1481027

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Contents Summary ......................................................................................................................................... 3

Background of Host Organisation – CA Practice PAC .................................................................. 4

Internship experience at CA Practice PAC ..................................................................................... 7

Task 1: Money changer audit (Special audit) ............................................................................. 7

Background and objectives ..................................................................................................... 7

Challenges and Actions taken ................................................................................................. 7

Results and Reflection ............................................................................................................ 9

Task 2: Audit of an active trading group of companies (Financial statement audit) ................ 10

Background and objectives ................................................................................................... 10

Challenges and Actions taken ............................................................................................... 10

Results and Reflection .......................................................................................................... 11

Task 3: Audit of an engineering construction company (Financial statement audit) ............... 13

Background and objectives ................................................................................................... 13

Challenges and Actions taken ............................................................................................... 13

Results and Reflection .......................................................................................................... 14

Corporate Social Responsibility (CSR) .................................................................................... 16

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Summary

I was attached to CA Practice PAC from 28 November 2016 to 16 June 2017. I was given the role

of an audit intern and spent most of my time assisting in audit and assurance engagements. I was

also exposed and assigned several corporate taxation and secretarial tasks during my internship.

The key tasks and assignments which I have contributed during my internship period are as follows:

Conducted and completed a financial statement audit engagement of a dormant company

individually.

Assisted and actively contributed as a key team member in the financial statement audit for

a group of companies in the business of engineering and marine equipment over the period

of 1 month.

Assisted and actively contributed as a key team member in the financial statement audit for

an engineering company over the period of 2 weeks.

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Background of Host Organisation – CA Practice PAC

CA Practice PAC is considered as an SME which is in the business of providing audit and

assurance, taxation, compilation, accounting and corporate secretarial services. CA Practice PAC’s

mission is to provide outstanding service to clients with due attention to its three underlying

principles namely, Reliability, Competence and Integrity. The main objectives of CA Practice

PAC are to build on human resource development and focuses on being customer-oriented,

mission focused, value-centred and performance-driven while staying relevant and competent.

There are4 main departments in CA Practice PAC. The 3 departments are audit and assurance,

taxation, accounting and secretarial as shown in the organisational chart below.

CA Practice PAC

Audit & Assurance

Taxation Accounting Secretarial

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I was mainly assigned to the Audit & Assurance Department. However, over the course of my

internship period at CA Practice PAC, I had the opportunity to be exposed to different business

areas such as corporate tax and secretarial matters. In the Audit & Assurance department, the

department not only handles financial statements audits but also special audits such as money

changer audits in the regulation of the rules and regulations specified by the Monetary Authority

of Singapore (MAS) and government related audits.

For the taxation department, the department mainly deals with corporate tax, GST and claiming of

PIC and advisory taxation services. The tax department also handles individual tax, however; it

does not constitute to a huge component of the services provided.

The accounting department mainly provides services for bookkeeping and the preparation of

yearly accounts through the Microsoft Excel and accounting software. Microsoft Excel is used for

bookkeeping for those companies with little transactions during the year while the accounting

software is used for bigger companies with more accounting transactions. The accounting

department also provides the compilation of financial statements (unaudited financial statements)

service to exempt private limited companies, which can opt for exemption from audit and XBRL

filing.

The corporate secretarial department provides services such as incorporation of Singapore

company, preparation of minutes of meetings, submission of annual returns, updating and

maintaining the statutory registers, de-registration of company and provision for a local registered

address.

There is about 20 full-time staff working in CA Practice PAC. I was initially assigned to a fixed

senior and followed my senior for one audit job. During my internship, I had the opportunity to

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embark on several audit assignments with different seniors. Thus, increasing my exposure and

knowledge in the different business sectors and learning from different seniors.

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Internship experience at CA Practice PAC

Task 1: Money changer audit (Special audit)

Background and objectives

I was assigned to do a special audit for a money changer business as my very first audit assignment

in the beginning of January. It was considered as a special audit as it was more of compliance audit

to ensure that the money changer business complies with the rules and regulations which are set

by the Monetary Authority of Singapore (MAS).

Although it was rather different from financial statement audit, there were certain elements that

remained the same such as, the need to gain reasonable assurance that the amounts are fairly stated

and free from material misstatement. At the end of the special audit, I was tasked to come up with

an auditors’ report on the statement of transactions and profit or loss for the money changer

business. The timeframe allocated to this special audit was rather tight as the money changer

business had to submit the auditors’ report to MAS by the end of January.

Challenges and Actions taken

Firstly, I was unfamiliar and did not have the technical knowledge on how to go about doing an

audit. I was assigned to this money changer special audit as an individual audit assignment. Thus,

there was no senior that was assigned on the same job which could provide me with some guidance

into doing the audit procedures.

My supervisor had given me a short briefing for me to better understand what were the tests I had

to conduct for the MAS audit and how the MAS audit differs from a normal financial audit.

However, most of the time I had to do independent learning to get the general gist on the

appropriate way to conduct an audit.

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For this audit, I had to familiarise myself with the requirements that a money changer business had

to comply with as per MAS regulations. Thus, I read up on all the existing MAS regulations on

money changing and remittance and the notices on prevention of money-laundering and countering

the financing of terrorism.

After reading up and familiarising myself with the specified requirements, I started with the audit

test of compliance. Under the test of compliance, I had to select samples for sales and purchases.

After selecting the samples, I had to vouch to the client source documents to ensure that proper

records were kept for all transactions in English, customer details were kept for transactions

exceeding S$5,000 and traced the receipt to the daily transactions report provided.

I also conducted the test of transaction for sales and purchases. Under the test of transactions, I

had selected 2 samples per month. For each sample selected, I had to ensure that there were proper

records kept. The transaction listing should include the transaction date, type and amount of

currency exchanged, the exchange rate and the equivalent amount in SGD. In addition, I had

checked against the receipts to ensure that the business contact details of the money changer,

transaction date and amount in foreign currency, exchange rate and an equivalent amount in SGD

were provided.

I also prepared a schedule for the breakdown of currencies for sales and purchases. This was to

check the completeness and accuracy of the transactions occurred during the year. Furthermore,

the schedule prepared for sales and purchases was used to facilitate the preparation of the audited

statement of transactions and profit and loss for submission to MAS.

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Results and Reflection

At the end of the audit testing conducted, I could gain reasonable assurance that the client had

complied and had kept proper records of transactions as per MAS regulations. Additionally, I was

able to come up with the auditors’ report and audited statement of transactions and profit or loss.

I finished up the fieldwork and prepared the draft auditors’ report within 2 weeks for review by

my supervisor and my audit partner. Thus, I was able to meet the tight deadline set for the

submission of auditors’ report to MAS.

This experience allowed me to gain more exposure in the different areas and types of audit. It also

allowed me to gain more experience and knowledge in conducting an audit. I found it rather

challenging as I did not have much guidance or training beforehand. However, I was able to prevail

over the challenge by reading up and familiarising myself with the auditing steps and MAS

regulations.

Through this experience, I also learnt the importance of being an independent learner and being

adaptive to situations as it is likely that I would not have much formal training before I will be

assigned to challenging tasks in the future. Furthermore, time management is also important as in

this case, I had a tight deadline to meet and it was crucial that I finished the audit fieldwork as

soon as possible so that the reviewers could review my work earlier, and if necessary, I would be

able to have sufficient time to make any amendments.

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Task 2: Audit of an active trading group of companies (Financial statement audit)


One of the main highlights of my audit experience at CA Practice was being assigned as an audit

assistant to the financial statement audit for an active trading group of companies (P group). P

group consisted of 3 companies which were in the business of marine equipment, design and

fabricate electrical switchboards and distribution panels.

Out of the 3 companies which were considered collectively as P group, I had assisted with the

audit fieldwork for 2 companies namely – Company PE and Company PS. Company PE is the

main holding company. Company PS is a wholly owned subsidiary owned by Company PE. The

timeframe for the group audit was about a month due to the sheer volume of transactions each

company had. Furthermore, the entire group had a financial year end of 31 December. Thus, the

audit fieldwork had to be completed as soon as possible in order to meet the reporting deadlines.


This was the first financial statement audit that I was assigned to for an active trading company.

Beforehand, I was assigned to do the financial statement audit for a relatively dormant company.

As such, there were many differences in the audit tests to be done and the volume of transactions.

I was relatively unfamiliar with many sections of the financial statement audit such as PPE and

trade receivables/payables as the other audits I have done and assisted in did not have such sections.

There was a rather steep learning curve I had to overcome quickly in order to contribute to the

team more effectively and efficiently, as P Group was located in Tuas and the client’s employees

do not have the practice of doing overtime.

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For this audit, I was assigned to a senior who patiently guided and gave me explanations for me to

better understand the reason behind the audit testing and how it is important. I had also taken the

initiative to refer to last year’s audit working papers to gain a better understanding and read up on

some of the FRS.

I assisted in the following sections for both Company PE and PS: calculation of materiality &

sampling, test of opening balances, test of closing balances, test of transactions – operating

expenses, test of transactions – other income, test of controls and transactions – purchases, cut off

test for purchases, trade receivables, deposits and prepayments, trade creditors, cash and bank

balances, amount due to director and tax computation.

One of the challenges faced was when I was doing the test of transactions for purchases. As P

Group is a trading company, most of its purchases were bought from overseas suppliers that were

delivered either through air or sea. Thus, the Incoterms which stated the timing of when the risks

and rewards are transferred played a crucial role in determining if the purchases were fairly stated.

I had to read up and understand more on the Incoterms to determine the timing when the risks and

rewards are transferred and the corresponding source document to vouch to. This could be rather

tricky at times when the client does not have sufficient supporting documents or when the supplier

uses delivery services such as DHL.


I had managed to complete the assigned sections of the audit for both Company PS and Company

PE within the timeframe of 1 month. I had also helped in doing up the tax computation to facilitate

the calculation of provision for taxation as one of the last few tasks.

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It was a good experience for me as I learnt how to do up the various sections of a financial

statement audit. After this experience with assisting in a financial statement audit for an active

trading company, I could relate the auditing theories which were taught in class and the real-life

applications of it. One example would be the application of audit assertions. The audit assertions

were crucial in determining the type of evidence to be collected and the type of work done which

would enable the auditor to determine if the balances were fairly stated. Furthermore, the auditor

must also keep in mind the assertions that he wishes to fulfil per audit section in the planning

stages.

I also gained a better understanding of the current tax rules and tax schemes in place through

assisting with the tax computation. I am aware that tax is not my strongest forte. However, I am

glad that I had the opportunity to prepare the tax computation for an active company as it allowed

me to recap my knowledge and apply many of the tax-reducing schemes such as capital allowances

and PIC enhanced deductions to reduce the corporate tax payable. In addition, I was able to better

identify and extract the relevant information for transactions with tax implications such as PPE

expensed off.

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Task 3: Audit of an engineering construction company (Financial statement audit)


One of my last audit assignments I was assigned to was the financial statement audit for Company

S. Company S is in the business of performing engineering activities. It has similarities with a

construction company whereby the job is done in stages and can have many ongoing jobs at the

same time. As such, revenue and purchases were considered as a high-risk area for this company.

The timeframe for this audit was 2 weeks. This is relatively shorter compared to the previous audit

assignment. This was because the audit was only for one company. Even though the audit was for

only one company, the time allocated was 2 weeks due to the large volume of transactions

Company S had and that the company had a financial year end of 31 December.


For this audit assignment, I was assigned to most of the balance sheet sections, which were slightly

less risky and complex. I found this experience to be slightly challenging but a good opportunity

to learn nonetheless. It was challenging as I had not been assigned to so many balance sheet

sections before, thus I was rather inexperienced and unfamiliar with some of the sections such as,

dividends.

Another challenge was time management as similarly to the P group audit, the client does not have

the practice of doing over time. Thus, we had to adhere to their working hours which meant that

we had to finish the audit fieldwork at a faster rate. Furthermore, there were a few days whereby

the head accountant was not around for us to ask queries. As a result, I had to do some

reorganisation and planning to prioritise and attempt those sections which I would require

information from the head accountant.

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I had referred to the prior year audit working papers to gain a better understanding and to

familiarise myself with the relevant balance sheet sections. I had also asked my senior for some

guidance on the sections which I was not so familiar. I had also referred to the FRS for guidance

on the recognition criteria. One example would be in determining the cost of PPE to be recognised.

As the company had purchased an office building during the year, the company had incurred costs

such as, stamp duty, property tax and the purchase price of the building. The company had

recognised all of the initial costs relating to the purchase of the building as the cost of the office

building in accordance with FRS 16.


I managed to finish my assigned sections earlier than expected which gave my senior sufficient to

review my work and give me feedback to amend and improve on selected working papers. Through

this audit experience, I gained more insights and knowledge on the different aspects of auditing by

focusing more on the balance sheet items instead. The balance sheet items have a different set of

assertions that need to be fulfilled when doing the audit fieldwork. Furthermore, there is a need to

find out the movement of the balance sheet items during the year and reconcile to the ending

balance as per client’s accounts to better understand the transactions that have taken place during

the year which affects these balances.

I learnt that time management is really crucial when it comes to audit. There are tight deadlines to

be met due to the reporting requirements the company has to adhere to ACRA. Thus, it is essential

that the audit fieldwork can be completed on time or earlier to facilitate the reviewer and

preparation of auditors’ report to meet the reporting requirements.

I also learnt that it is important to be an independent and fast learner in order to be able to survive

in the audit industry. Most of the time, the seniors do not have sufficient time to go through and

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brief of the tasks which would be assigned to juniors. The training given would only be on the job

training which would highly differ depending on the industry that the client company is in and the

teaching style of the senior. Thus, being flexible and adaptable to situations is also a mutually

exclusive attribute to being an independent and fast learner.

Through this work attachment experience, I also had the opportunity to improve my

communication skills. Communication skills are essential when doing audit work as I have to

constantly rely on information from the client and ask queries to get further details. It is also

important to have good communication skills to be able to communicate effectively such that the

client will be willing to cooperate with auditors.

This work attachment experience has allowed me to gain more knowledge and hands on experience

on auditing that would allow me to remain competitive among other competitors. As I chose to go

to an SME company, I had the opportunity to be exposed and learn more technical skills other than

audit and assurance such as, corporate tax and bookkeeping, which will allow me to differentiate

myself from other competitors.

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Corporate Social Responsibility (CSR)

Corporate social responsibility is a company’s initiative to give back to the society based on the

company’s effects on the environment and society. In CA Practice PAC, there is a corporate social

responsibility policy in place. The CSR policy is that every staff will make it a point to donate $1

for every beverage made with drinks obtained from the pantry. The office pantry is well stocked

up with beverages for this purpose. Furthermore, the partners also help to fundraise for its CSR

efforts during the annual company Chinese New Year dinner. All proceeds generated from the

fundraising and donations made during the year will be donated to an old folks home.

I think that the CSR policy currently in place is rather practical and easy for the staff to contribute

actively, without taking too much time and effort. It is sustainable over the long run. However, it

can be difficult to monitor and is heavily reliant on an individual’s honesty as some may not donate

the money after making a beverage.

Work Attachment Report Internship period: 28 Nov 16 16 Jun 17

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