De La Salle University - Dasmarinas

College of Business Administration and Accountancy

Final Output in Auditing Theory - ACTG309k

December 20, 2018

 MN BUSINESS SOLUTIONS CO.

PROFILE

MN BUSINESS SOLUTIONS CO, formerly Mabaga, Nava & CPAs, is an auditing, tax
compliance and consulting partnership office first established in 2004 by CPA partners managed
by Anthony G. Nava based in Imus, Cavite. It provides a wide range of business services to
companies in a variety of business including non-profit organizations & individual proprietorship.

The firm specializes in tax compliance consultancy, accounting and auditing services. MN
Business Solutions Co. is one of the professional auditing firms in Cavite, and its growth and
success are directly linked to their commitment to excellence and professional services that they
provide to clients.

MISSION. To provide high quality professional services to our clients through a team of
competent, experienced and committed professionals. Excellence and personal involvement are
paramount in our practice as the ultimate reward to our Firm is client satisfaction.

VISION. To be one of the leading auditing and consulting firms in the Southern Luzon
Region in terms of providing professional services, number of employees and number of partners
& representatives.

HISTORY

The firm was first established in 2004 by CPA partners managed by Anthony G. Nava.
The partnership was reorganized into two entities in 2010 to separate the auditing service from
non-assurance practice of the firm. The audit service of is now being handled by the individual
professional practice of Mr. Anthony G. Nava, and the non-assurance practice is done by MN
Business Solutions Company.

Mr. Anthony G. Nava is a certified public accountant and the managing partner of MN
Business Solutions Co. has extensive work experience in external and internal audit, financial
accounting and tax consultancy having worked with SGV & Co., Colgate-Palmolive Phils., Inc.
and ELBURG Shipmanagement Phils., Inc. in the Philippines and with Country Floors, Inc. in New
York, USA.

SERVICES
 1) Audit & Business Advisory. Anthony G. Nava, CPA is an assurance and business advisory
firm. Financial statement audit is the cornerstone of their assurance services, where they
provide an opinion on the fairness of the financial statements based on the representations
by management that the financial statement was prepared in accordance with Philippine
Financial Reporting Standards for SMEs.

a. Operations Assurance. Provides comprehensive reviews of the varied functions

within an enterprise to appraise the efficiency and economy of operations and the
effectiveness with which those functions achieve their objectives. This focuses on
informations systems and operating procedures.

b. Compliance Assurance. Assist management in ensuring compliance with

contractual or regulatory requirements and internal policies and procedures. With
the dynamic and ever-ending changes in our tax regulations, the firm can assist
and advise businesses in the compliance with new tax laws and regulations.

2) Accounting Services & Tax Advisory. MN Business Solutions Co. is a general professional
partnership that can help businesses to run day-today, non-strategic routine such as
accounting, bookkeeping, monthly & quarterly tax compliance and required reports of
government regulatory agencies such as SSS, Philhealth, and Pag-ibig.

a. Tax Return Assistance. MN Business Solutions Co.assists business in the timely

preparation and filing of monthly, quarterly, and Annual Tax Returns which focuses
on maximizing the benefits of exemptions in accordance with existing tax
regulations, exclusions, tax credits and deductions as provided by law.

b. Tax Assessment and Claim Assistance. MN Business Solutions Co. assists in

handling tax assessments, claims for refund, requests for rulings and other tax-
related issues.

c. Tax Compliance Review. MN Business Solutions Co. assists in the review of

compliance with existing and applicable tax rules and regulations.

ORGANIZATIONAL CHART
A. CONTEXT DIAGRAM OF EXISTING SYSTEM
B. DATA FLOW DIAGRAM OF EXISTING SYSTEM
Narrative of the Existing System:
PROCESS 1: Hire New Employees

The process of hiring new employees is vital for the payroll process since it is
where all the documents and records of employees are based. The hiring of new
employees is done by the Human Resource Department. The Process 1 accepts the
application form from the applicants.

PROCESS 2: Create Employee Time Record

Employee Time Record is the source document used by managers to keep track
of the labor hours that the employees have performed in the company. In this process, a
document is created to show the amount of time spent per employee on given tasks. A
summary of labor hours is then stored to master data.

PROCESS 3: Calculate Employee Gross Pay

In this process, the accountant in the payroll department computes the gross pay
of each employee based on the total labor hours that the employee have completed for
the period, which is indicated in the employee time record.

PROCESS 4: Calculate Employee Net Pay

In this process, the accountant in the payroll department calculates the net pay of
each employee, by deducting all the employee benefits and their corresponding
withholding taxes.

PROCESS 5: Prepare Payroll Worksheet

The payroll worksheet is done by the general accountant based on the net pay
calculated prior to process 5. It is where all the net pay of employees have been finally
prepared. The file is then stored to master data.

PROCESS 6: Authorize Payroll Worksheet

Payroll Worksheet is a document showing all the amounts that were accounted for
the computation of the net pay of each employee. In this process, the payroll worksheet
is sent to the managing partner for checking, validation and authorization of the total
amounts before the actual distribution of the salaries to the employees. After being
validated, the mandatory contributions is then remitted to respective government
agencies.

PROCESS 7: Prepare Debit Memo

 In this process, the bank issues a debit memo validating the amounts indicated in
the payroll worksheet. The debit memo is then forwarded to bank.

PROCESS 8: Issue Pay slip

The pay slip is then issued by general accountant and then distributed to
respective employees to inform that their salaries have been credited.

A. CONTEXT DIAGRAM OF RECOMMENDED SYSTEM

B. DATA FLOW DIAGRAM OF RECOMMENDED SYSTEM
Narrative of the Recommended System:
PROCESS 1: Hire New Employees

The Human Resource Department will receive application form from applicants
and will contact them for interview. After the interview, they will choose who will be hired
and the information of those who were hired will be stored in Employee Master Data.

PROCESS 2: Authorize Time in and Time out

The Human Resource Department will prepare the summary of hours worked by
the employees and will be forwarded to the Managing Partner for the authorization. The
authorized summary of hours worked will be forwarded to the bank.

PROCESS 3: Compute Employee Salary

After receiving the authorized summary of hours worked, the payroll processor
from the bank will now compute the employees’ salaries. The employees’ information will
be retrieved from Employee (Payroll) Records. This includes their name and bank account
number.

PROCESS 4: Perform Money Transfer

After computing the salaries, the bank will distribute the money to each employees’
account. The bank also issues payslip directly to the employees to confirm that they
already received their salary. They will submit a monthly salary report to the company and
report for withheld contributions. The withheld contributions such as PAG-IBIG, SSS and
Philhealth will be remitted to the corresponding agencies.

PROCESS 5: Audit Corresponding Reports

After remittance and money transfer, the company will receive a report from the
bank and it will be checked if it is done properly. The checking will be done by the

PROCESS 6: Record Payroll Transaction

After auditing corresponding reports, the remitted amounts and net pay of the
employees are being recorded by the General Accountant as paid and it will be posted on
the general ledger.