This is my pleasure to present my internship report entitled “The activities of auditing and consulting office of Richard Kabbouche.” I have conducted my internship program in Richard Kabbouche office for auditing and consulting (Sin El Fil, Saloumi, Emille Edde Street, Karam Centre, and 4th Floor).
I believe that knowledge and experience I gathered during the internship period will be helpful in my future professional life. I will be grateful to you if you accept the report. I will be available for defense on this report at any time.
Your support in this regard will be highly appreciated.
ACKNOWLEDGEMENT for the internship report
This report has been prepared for the internship that has been done in Richard Kabbouche Office For Auditing and Consulting in order to study the practical aspect of the course and implementation of the theory in the real field with the purpose of fulfilling the requirements of the course of BBS (Bachelor of Banking Studies).
The aim of this internship is to be familiar to the practical aspect and uses of theoretical knowledge and clarifying the career goals, so I have successfully completed the internship and compiled this report as the summary and the conclusion that have drawn from the internship experience.
I would like to express my sincere gratitude to our internship coordinator Mme. Eliane Abi Azar who have given her valuable time and given me chance to learn something despite having her busy schedule and Prof. Tony Gebaily for his great guidelines for internship. I am also thankful to Mr. Richard Kabbouche and other staff member for their co-operative support, and also presenting with an opportunity for me to have a practical experience in this organization.
SECTION I: STUDY AND FIRM BACKGROUND
1. Study background
As a part of my BBA Program, the six month internship program gave me the opportunity to have a practical knowledge on auditing procedure. The assignment how a chartered accountancy firm performs an audit and also to gain a knowledge and practical experience on how audit work is performed in corporations, companies and nonprofit making organizations.
This study gave me an opportunity to observe and perform real world knowledge about the audit procedure, which is followed by the chartered accountancy firm. In the internship period I could relate the theoretical knowledge of auditing to practical exposure.
1.2. Objectives of the study
• To have an overall idea about the audit procedures
• To gain practical knowledge and experience on how we perform an audit and how audit work is performed in corporations, companies and non-profit making organizations.
• Develop and improve business skills in communication, technology, quantitative reasoning, and teamwork.
• Observe and participate in business operations and decision-making.
1.3. Scope of STUDY
This report is titled “Audit Procedures of Richard Kabbouche Office” is an outcome of BBA internship program. This report contains the details of the audit practice followed by the office. I have divided this report into five sections.
1. First section contains a clean picture of the office and study background.
2. Section two will provide the details of the overall audit procedures of the office and a detailed description of the functions shadowed and tasks performed during the internship.
3. In section three, I have made a comparison between the workplace and the class courses.
4. Section four contains the problems that I have identified and some recommendations to minimize such problems.
5. In section five, I have drawn an overall conclusion.
2. Organization’s profile
2.1. Firm’s Profile:
Name of the audit firm: Richard Kabbouche for auditing and consulting
Year of establishment: 2000
Address of the firm: Sin El Fil, Saloumi, Emile Eddeh Street
Karam Centre, 4th floor
Email: [email protected]
Founded in year 2000, RK For auditing and consulting started with 4 partners. At present the partnership comprises 1 owner Richard Khalil Kabbouche.
The firm has one office with 2 different Divisions to manage its day to day activities. The divisions are:
I had the chance to work in both divisions.
2.3. Some of the services offered
• Assistance in maintenance of necessary books of accounts of the company
• Transactions management
• Supervision on accounting transactions
• Accountancy and management
• Payroll reports
2.4. Organizational chart
An organizational chart (often called organization chart, org chart, organigram, or organogram) is a diagram that shows the structure of an organization and the relationships and relative ranks of its parts and positions/jobs. The term is also used for similar diagrams, for example ones showing the different elements of a field of knowledge or a group of languages. This is the office’s org chart:
SECTION II: OFFICE PROCEDURES
1. Small literature on Audit
An audit is an objective examination and evaluation of the financial statements of an organization to make sure that the records are a fair and accurate representation of the transactions they claim to represent.
1.2. Difference between auditing and accounting
Several differences exist between an accounting and an audit. One important difference is that the audit checks the accounting process to determine its validity. Another difference: accounting is a daily process, whereas an audit is usually conducted annually or quarterly.
1.3. Type of audit
a. Operational Audit
b. Compliance Audit
c. Audit of Financial Statements
d. Internal Audit
e. Interim Audit
f. Performance Audit
g. Governmental Audit
1.4. Some of the differences between internal and external auditors
• Internal auditors are company employees, while external auditors work for an outside audit firm.
• Internal auditors are hired by the company, while external auditors are appointed by a shareholder vote.
• Internal auditors do not have to be CPAs, while a CPA must direct the activities of the external auditors.
• Internal auditors are responsible to management, while external auditors are responsible to the shareholders.
2. Overall office procedures
2.1. Firm’s Goal
The goal of the office in conducting an audit is to express an opinion as to whether the financial statements are prepared and presented fairly in accordance with International Financial Reporting Standards (IFRS).
2.2. Firm’s mission
To conduct audit in a professional manner based on international auditing standards in order to produce quality audit reports and to meet stakeholder’s needs.
2.3. Firm’s vision
Being a more independent, professional and internationally Standing Audit Institution
2.4. Firm’s customers
To become an external auditor, one must hold a CPA license (Certified Public Accountant). This means that the individual has successfully passed the Uniformed CPA Examination and is qualified to do the job. The auditor must have experience in financial analysis, auditing, or business administration to really succeed in this field.
3. Tasks Performed
Our work program defers on the timing and on the month. Each month we have something different to work on. And working at the office since February I had the chance to work on everything with the team like:
1. Financial Declarations
I prepared the financial declaration for more than 15 companies like:
Declaration Time to declare Purpose Description
R10 Quarterly basis Settlement of payroll tax for each quarter of the year
The declaration is presented every 3 months during the legal time limits and cover the payroll of the company as presented to the social security department, The tax is calculated and deducted from every employee salary on a monthly basis.
R3 1/new employee New employees in the company Every employee will be registered at the ministry of finance by preparing the forms R3
R8 Every April employees who work at more than 1 job If an employee earns income from another job a special declaration will also be prepared at the end of April of the year following
R5 Every February Making sure of the R10 declared by the company A yearly declaration of total taxes paid will also be prepared by the end of February of the year following
(R5=Sum of all R10 declared)
R6 Every February All salaries combined A yearly declaration of total salaries paid will also be prepared by the end of February of the year following
(R6= Salaries of all employees)
R7 Every February Employee leaving the company Every employee who left the company will be declared by preparing the form R7
Value Added Tax (VAT) is a general consumption tax imposed on all goods and services consumed within Lebanese territory, whether locally produced or imported, as of 1 February 2002
• Tax Characteristics
? General tax on consumption:
VAT is imposed on all imported and locally produced goods and services with some exemptions.
? Indirect Tax:
The tax is collected by the final consumer
? Imposed on each stage of production and distribution
Giving each subject the right to deduct the tax paid on his purchases
• Tax Rate
11% from 01/01/2018 (was 10%).
• Conditions of registration in the tax
1. Doing a taxable economic activity
2. The business number exceeds the minimum submission (currently 150 million LL)
3. During four consecutive quarters
*Business number = Revenue from sales of goods + Non operation revenue + Revenue from sales exempted from tax with deduction
• Contents of TVA:
To fill the TVA report I have to print out the trial balance of the quarter after doing an accounting balances rebuild on the system and after checking every invoice done by the accountant of the company and being sure that there’s no mistakes in each one of them.
After doing that I can fill these information on the first paper to calculate the sum of TVA that the company have to pay:
– TVA on income
– TVA on purchase
– Tva on expenses
– Fixed assets ( If bought )
– Tva on fixed assets
By filling those numbers on page 1 I can move on page 2 that have a more descripted way to calculate the amount of tax on each of the purchases, expenses and fixed assets.
Then I print out the top 10 customer and suppliers from PIMS 2 Software and check their Finance Registry number and the total amount the he paid or get paid and fill page 3.
Now having to fill the TVA report is kind of an easy job but having to make sure that all invoices done by the accountant is more difficult because you can face a lot of different situations and mistakes.
3. External Audit report
Audit report is the final output of the auditor’s observations it is a written opinion of an auditor regarding an entity’s financial statements. The report is written in a standard format, as mandated by generally accepted auditing standards (GAAS).
• Core values of an auditor
• Who is obliged to submit the report?
– All the corporations that carry out any business, whatever the size of these businesses, as well as the branches of foreign companies residing in Lebanon.
– Corporations companies that declare nothing for a year and have been engaged in business in previous years.
– Companies with a turnover of more than 750,000,000 LL.
• Time to declare:
– Before the first of September of the year following the year of business for money companies.
– Those who follow a special financial year after the approval of the Directorate of Imports submit the report within three months after the expiry of the permit period.
• Basic elements
The report of the accounting expert should include the following basic elements required by the international standards:
c) Opening or introductory paragraph
i) Identification of the financial statements audited;
ii) A statement of the responsibility of the entity’s management and the responsibility of the auditor
d) Scope paragraph (describing the nature of an audit)
i) A reference to the IFRS;
ii) A description of the work the auditor performed;
e) Opinion paragraph containing
i) A reference to the financial reporting framework used to prepare the financial statements
ii) and an expression of opinion on the financial statements;
f) Date of the report;
g) Auditor’s address; and
h) Auditor’s signature.
After a thorough investigation, Mr. Richard will submit a financial report and state their objective opinion. The scope of the audit and the outcome will be outlined in their report.
What I learned is that his findings can strongly influence the reputation of the company. There can be serious consequences if the conclusions about debts, assets, tax responsibilities, and payments do not match the organization’s own statements.
My job was filling this report on a software named “AUREO”. I filled around a 100 report, 5 per day.
SECTION III: DIFFERENCE BETWEEN WORKLIFE AND UNIVERSITY COURSES
Workplace experience is a valuable way to help me as an undergraduate students take the theories and concepts learned in the classroom and apply them in professional settings. The accomplishment of finishing my degree is always followed by the fear of what I’ll do next, whether it’s travel, take a job or continue schooling. But beyond the obvious changes I noticed in my internship, there are some differences between working in a classroom and working in an office that I might not have anticipated. Here are the biggest differences between being a student learning a specific course and working in an office and actually applying the course:
• No Grades:
At first, this can seem like a huge relief: No grades! In the workplace, there are no grades. But there is no clear way to tell how you’re doing until your quarterly performance review but as an intern I didn’t get one, instead I waited till the internship stopped so that I could get a feedback about my performance.
In college, if I’m not feeling satisfied in my classes, I could easily wait till the semester finish and change my courses but in the work place if a task bothers me I’m stuck doing it each time they ask me to do it. My life consist of work/eat /work more/sleep/do it again until I get to the weekend.
Even in the worst, hardest class I’ve ever taken, I know it will be over in about 15 weeks. With a job, if I find myself in a less-than-ideal situation, there is no summer vacation waiting at the end of the tough road
• Difference between theory and practice:
The lecturers in my university only tell me things I should know, but I’m not entirely sure why it’s so important to understand these things until I uses them in practice. One of the most used courses in my university is “Basic Banking Operations” With Mr. Anthony Yaghi. It helped me a lot.
SECTION IV: PROBLEMS AND SOLUTIONS
As I prepared for my first day on the job I was very excited about doing what I love and gaining the experience I will need to get a full-time job in my field. However, within just a few weeks you begin feeling a little frustrated, here’s some of the internship challenges that I faced and how I solved them:
• Too much work:
It may be the fact that I am given too much work or that I feel inadequate and not trained to do the work assigned.
Solution: kept my long-term career goals clearly in mind to make it all feel worth the effort.
• Afraid to ask questions:
My supervisor gave me a project, but the directions don’t quite make sense to me, or I’m having trouble seeing the bigger picture. I was not sure about A, B and C. I found it a little hard to ask around 5 to 10 questions every day to my supervisor.
Solution: I never assumed anything, as an auditor I learned that I should always check if am not sure. Because eventually my work is to check what others are doing but instead I asked and asked and asked. It’s my right as an intern and it’s their duty as a supervisor. He actually was impressed that I care about doing it right the first time or learning more about the field.
• Keeping up the speed:
Life at the office is fast-paced and changes all the time. If I didn’t keep up, I will get lost. At first sight I think everything is about the fun, but soon enough I noticed that it’s a serious ‘work hard play hard’ mentality. Everybody works all day long (but they do it with a smile). They are the kind of people that are always happy because they truly love what they do.
Solution: Learned to go above and beyond to ensure that I am delivering the best work possible.
• Lack of field-specific knowledge:
As a Banking studies student I had no idea about auditing (only in Mme Maryam Hrayjle course) and only a small knowledge in accounting, so it was very hard at first to gain the skills and the field knowledge from just observation.
Solution: Google was my best teacher. I can search almost anything I am curious of knowing. It is the ocean of knowledge
SECTION V: CONCLUTION
Conclusively, it is better to say that internship at Richard Kabbouche office for auditing and consulting was a good start of my professional experience. The friendly attitude of personnel has convinced me to work with such a dynamic environment, where peace and creativity are the key elements in driving the organization towards its success. The firm has great variety of professionals who have enabled this firm to earn the repute that it is enjoying now days.
Some of the recommendations that I could give to better perform at the office are:
– Before going to the client, supervisor or in charge should give some brief idea about the client’s business to all the members of the audit team.
– Work programs must be properly introduced to the juniors/ new students and must be followed as much as possible in each audit engagement.
I would like to thank the firm Staff and fellow interns especially my Internship supervisor Mr. Richard Kabbouche (General Manager and Owner) and everyone at the office who made these last 2 months of internship, an ultimate learning experience for me. I liked everything about the auditing field.