Is a joint stock company a public company in Vietnam? Aren’t financial statements of a joint stock company required to be audited?
Is a joint stock company a public company in Vietnam?
Pursuant to Article 32 of the 2019 Law on Securities in Vietnam stipulating as follows:
Public companies
1. A joint-stock company will become a public company in one of the following cases:
a) The company has a contributed charter capital of at least 30 billion VND and at least 10% of the voting shares are being held by at least 100 non-major shareholders;
b) The company has successfully made its IPO by registration with the State Securities Commission as prescribed in Clause 1 Article 16 of this Law.
2. The joint-stock company mentioned in Point a Clause 1 of this Article shall submit the application for public company registration as prescribed in Clause 1 Article 33 of this Law to the State Securities Commission within 90 days from the day on which the requirements specified in Point a Clause 1 of this Article are fully satisfied.
3. Within 15 days from the receipt of the valid application from the joint-stock company mentioned in Point a Clause 1 of this Article, or from the receipt of the report on completion of the offering prescribed in Point b Clause 1 of this Article, SSC shall confirm the registration of the public company, publish the company’s name, operations and other information on the State Securities Commission’s media.
Thus, a joint-stock company will become a public company in one of the following cases:
- The company has a contributed charter capital of at least 30 billion VND and at least 10% of the voting shares are being held by at least 100 non-major shareholders;
- The company has successfully made its IPO by registration with the State Securities Commission.
Is a joint stock company a public company in Vietnam? Aren’t financial statements of a joint stock company required to be audited?
Aren’t financial statements of a joint stock company required to be audited?
Pursuant to Clause 1, Article 15 of Decree No. 17/2012/ND-CP stipulating the audited entities as follows:
Audited entities
1. Enterprises and organizations whose annual financial statements, as prescribed by law, must be audited by the audit firm, branches of the foreign audit firm in Vietnam, include:
a) Enterprises with foreign owned capital;
b) Credit institutions which are established and operating under the Law on credit institutions, including branches of foreign banks in Vietnam;
c) Financial organizations, insurance companies, reinsurance companies, insurance brokerage companies, branches of foreign non life insurance companies.
d) Public companies, securities issuing organizations and securities trading organizations.
Thus, when a joint-stock company meets the conditions of being a public company, then the joint-stock company is in the case of having its financial statements audited.
Thus, in the case of a joint stock company that is not a public company, the financial statements are not audited.
Is it possible if the Company still chooses the audit unit that has audited for the Company in the previous year?
Pursuant to Clause 6, Article 9 of Decree No. 17/2012/ND-CP stipulating as follows:
Cases where the audit firms and branches of foreign audit firms in Vietnam are not entitled to audit
Cases where audit firms and branches of foreign audit firms in Vietnam are not entitled to perform audit as stipulated in Article 30 of the Law on independent audit shall be guided in detail as follows:
1. Audit firms, branches of foreign audit firms in Vietnam who are performing or performed in the preceding year one of the following services for audited entities:
a) Recording in Accounting Book, making financial statements;
b) Performance of internal audit service;
c) Designing and implementation procedures of internal control;
d) Other services which affect the independence of practicing auditors and audit firms, branches of foreign audit firms in Vietnam in accordance with provisions of professional ethics standards of accounting and auditing.
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6. The audited entity performed in the preceding year or is performing audit of financial statements or other auditing services for the audit firms, branches of the foreign audit firms in Vietnam.
7. The audited entity is organization contributing capital to the audit firm; the audited entity is the parent company, subsidiary company, associated company, joint venture company, superior unit, subordinate unit, company in the same conglomerate of organization contributing capital to the audit firm.
8. The audit firm directly or indirectly participates in management, control and capital contribution in all forms into the audited entity.
9. Other cases in accordance with provisions of professional ethics standards of accounting and auditing and provisions of law.
Thus, according to the above provisions, the company is not allowed to choose an audit unit that has audited for the Company in the previous year.
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