How many auditors must a Limited liability Company that requests for granting certificate of sufficient conditions to carry on business of audit services have in Vietnam?

How many auditors must a Limited liability Company that requests for granting certificate of sufficient conditions to carry on business of audit services have in Vietnam?

Pursuant to Clause 1, Article 21 of the Law on Independent Auditing 2011, conditions for granting certificate of sufficient conditions to carry on business of audit service are as follows:

1. When the Limited liability Company with two or more members requests for granting certificate of sufficient conditions to carry on business of audit services, must meet fully the following conditions:

a) Having certificates of business registration, certificate of enterprise registration or certificate of investment in accordance with the law regulations;

b) Having at least five practicing auditors, in which must have at least two members contributing capital;

c) Legal representative, director, or general director of the limited liability company must be practicing auditor;

d) Ensuring the legal capital as stipulated by the Government;

đ) Contributed capital portion of member as organization shall not exceed the level set by the Government. Representative of member as organization must be practicing auditor.

Thus, for a limited liability company with two or more members, when applying for a certificate of sufficient conditions to carry on business of audit services, there must be at least five practicing auditors, in which must have at least two members contributing capital, in addition, must also meet other conditions specified above in Vietnam.

Can a limited liability company providing audit services with insufficient number of auditors be suspended from business in Vietnam?

According to Article 27 of the Law on Independent Auditing 2011, suspension of business of audit services and withdrawal of certificates of sufficient conditions to carry on business of audit services as follows:

1. Auditing firms, branches of foreign auditing firms in Vietnam are suspended the business of audit services as to be of one of the following cases:

a) Operating not in compliance with the scope of operation of auditing firms specified in clause 1 Article 40 of this Law;

b) Failing to ensure one of the conditions specified in the clauses 1, 2, 3 and 4 Article 21 of this Law for three consecutive months;

c) Having serious violations on professional skill or violations on auditing standards, professional ethical standards of accounting and auditing.

2. Auditing firms, branches of foreign auditing firms in Vietnam are withdrawn the Certificate of sufficient conditions to carry on business of audit services as to be of one of the following cases:

a) Declaring not complying with the reality or cheating, forging documents requesting for issuance of certificate of sufficient conditions to carry on business of audit services;

b) Failing to carry on business of audit service within 12 consecutive months;

c) Failing to overcome the violations specified in clause 1 of this Article within sixty days from the date of suspension;

d) Being dissolved, bankrupted or terminating the business of audit services by themselves;

đ) Being revoked the certificate of business registration, certificate of enterprise registration or certificate of investment;

e) Foreign auditing firm having auditing branches in Vietnam to be dissolved, bankrupted or license which was withdrawn or its operation suspended by the competent authorities of the countries where such auditing firm locates its head office.

g) Having violations provided in clause 11 and clause 15 Article 59 of this Law.

3. Auditing firm, branches of foreign auditing firm in Vietnam is withdrawn certificate of sufficient conditions to carry on business of audit services must terminate its business of audit services, since the effective date of decision to withdraw.

4. Ministry of Finance shall specify the suspension of business of audit services and withdrawal of certificates of sufficient conditions to carry on business of audit services and announce the decision to suspend the business of audit services, withdraw the certificate of sufficient conditions to carry on business of audit services within seven days on the website of the Ministry of Finance.

According to this Article, a limited liability company providing audit services with insufficient number of auditors for three consecutive months will be suspended from providing audit services. In case of being suspended due to insufficient number of practicing auditors without remedial measures within sixty days from the date of suspension, the certificate of sufficient conditions to carry on business of audit services will be revoked in Vietnam.

Is a change in the number of auditors in a limited liability company providing audit services required to be notified in Vietnam?

Article 26 of the Law on Independent Auditing 2011 stipulates that the changes must be notified to the Ministry of Finance as follows:

Within ten days from the date of change in the following contents, the auditing firms, branches of foreign auditing firms in Vietnam must notify in writing to the Ministry of Finance:

1. List of practicing auditors;

2. Failing to ensure one of the conditions prescribed in Article 21 and Article 31 of this Law;

3. Name, location where places enterprise’s head office;

4. Director or general director and legal representative, the rate of contributions of members;

5. Suspension of carrying on business of audit service;

6. Establishment and termination of operations or change of the name and location where locates head office of the branch of carrying on business of audit services;

7. Performance of the splitting, merger, consolidation, transformation, and dissolution.

Thus, if there is a change in the number of auditors practicing in a limited liability company providing audit services, the company must notify the Ministry of Finance within 10 days of the list of auditors in Vietnam.

Best Regards!