Accounting Analysis

ACCOUNTING ANALYSIS:

4. Evaluate the Quality of  Disclosure:

Mobile World Investment Group (MWG) company provide adequate disclosure to assess the firm’s business strategy. MWG has webside provides information for shareholders, the company updated monthly details of the business situation, summarizes the results of business each year and is expected in the coming year. Presented clear and concrete strategic objectives of the company and management's plans for the future. In the annual report of the company shows that the development over the years of what has been achieved during the year. On the other hand the report also analyzes the analyst of strategic, vision and efficient growth. So shareholders easily review and overall assessment.

The footnotes adequate explain the key accounting policies and assumptions and their logic. Example :  Firm’s revenue is recognized when the company has the possibility of obtaining economic benefits and can be identified with certainty. Items invest in subsidiaries in which the Company has control are presented in cost method.

5. Identify Potential Red Flags:

Analysis Red flags point to quesionable poor accounting quality, it is important to do further analysis before reaching final conclusion. Finacial statement of MWG in 2013, 2014, 2015 audited by Ernst $ Young Global Limited, audit opinion was that qualified MWG's financial statements in material respects. MWG established internal control board to operate the controlled assessment of internal operations of the company, internal control system of the company was rated as good. In the views of shareholders still have concern problems:

MWG ESOP's policy and shareholder protection policy. This is the ESOP program was committed before the MWG has high profit growth. MWG ESOP's policy of value-added share of the business to be created for the employees who contributed. ESOP policy has created incentives for employees and shareholders of MWG contribute added value for Business. Bonus and incentive shares to employees have contributed positively. Specifically, EAT 2015 reached 1,075 billion VND , up 50% compared to 2014 - the equivalent of 20% exceeds the plan EAT, ESOP Shares will be 5% of the shares in issue. However MWG has  not accounted for the cost of issuing shares in the ESOP share issuance BCTC. The issue of shares will be made at the same price 0 charter capital increase but no new money into the company, that the company would be taken from a portion of retained earnings " put in "equity. Simple to understand is to use part of the money of shareholders to reward employees. Compare the market price of the shares will keep their majority MWG over VND100,000 / share. Therefore, if the rate of 5% and  price equal to 0 the intensity level in the interests of shareholders will be more. For questions of representatives of foreign investment funds on the MWG not recognized  cost  ESOP shares issued to employees in the financial statements, Mr Tai (Chairman of the MWG) said Vietnam accounting standards do not require the recognition of share issuance costs ESOP (release value) to the financial statements, as well as recognizing it as an expense for accounting. Thus it can be said that the way the law is not wrong MWG. In 2016  Director board adopted  ESOP shares bonus policy based on the rate of growth compared to 2015 and the maximum release rate is 3% of the total shares in issue at the time of release.