What is internal audit according to the law in Vietnam? Which enterprises shall perform the internal audit in Vietnam?

03 enterprises that have to perform the internal audit in Vietnam

Pursuant to Clause 1 Article 10 of the Decree 05/2019/ND-CP stipulating 03 enterprises that have to perform the internal audit in Vietnam:

- Listed companies;

- Enterprises with 50% of their charter capital is held by the State, which are parent companies operating in a parent - subsidiary business model;

- State enterprises which are parent companies operating in a parent - subsidiary business model.

What is internal audit according to the law in Vietnam? Which enterprises shall perform the internal audit in Vietnam? - image from internet

What is internal audit according to the law in Vietnam?

Pursuant to Article 39 of the Law on Accounting in 2015 stipulating internal control and audit:

Internal control and audit

1. Internal control means establishment and implementation of internal mechanism, policies, procedures, and regulations conformable with law meant to prevent, discover, and deal with the risks and meet the set requirements.

2. Each accounting unit must establish an internal control system to meet the following requirements:

a) Its assets are protected from improper and inefficient use;

b) The transactions are approved intra vires and fully recorded as the basis for making and presenting truthful and reasonable financial statements.

3. Internal audit means inspection, assessment, and supervision of the completeness, appropriateness, and effectiveness of internal control.

4. Objectives of internal audit:

a) Inspect the compatibility, effectiveness, and efficiency of the internal control system;

b) Inspect and certify the quality, reliability of economic and financial information of the financial statement and administrative accounting report before they are submitted;

c) Inspect the adherence to the rules for operation, management, observance of law, regulations on finance, accounting, policies, resolutions, and decisions of the heads of the accounting unit;

d) Discover weaknesses in the management system; propose solutions for improvement of the management system of the accounting unit.

5. The Government shall regulate internal audit of enterprises, regulatory agencies, and public service agencies.

As regulated above, internal audit means inspection, assessment, and supervision of the completeness, appropriateness, and effectiveness of internal control.

What are responsibilities of internal auditors in Vietnam?

Pursuant to Clause 1 Article 23 of the Decree 05/2019/ND-CP stipulating rights and responsibilities of internal auditors:

Rights and responsibilities of internal auditors

1. Responsibilities:

a) Carry out internal audit plans that have already been approved;

b) Identify information that is sufficient, reliable, proper and useful to accomplish audit objectives;

c) Rely on appropriate analyses and assessments in order to give independent and unbiased audit conclusions and results;

d) Store related information in order to support audit conclusions and produce audit results;

dd) Bear responsibility for results of assigned internal audits;

e) Protect confidential information in accordance with laws;

g) Incessantly improve professional competencies and adhere to professional ethics;

h) Assume other responsibilities prescribed by laws and internal audit rules of each audited unit.

2. Rights:

a) In the process of carrying out internal audits, exercise independent rights to give their opinions, comments, assessments and recommendations about audited matters;

b) Request audited department/units to provide materials, documents and information related to audited matters in a timely and sufficient manner;

c) Retain written opinions on audit results within the scope of their assigned tasks;

d) Exercise other rights defined under laws and internal audit rules of each audited unit.

As regulated abvoe, internal auditors in Vietnam have following responsibilities:

- Carry out internal audit plans that have already been approved;

- Identify information that is sufficient, reliable, proper and useful to accomplish audit objectives;

- Rely on appropriate analyses and assessments in order to give independent and unbiased audit conclusions and results;

- Store related information in order to support audit conclusions and produce audit results;

- Bear responsibility for results of assigned internal audits;

- Protect confidential information in accordance with laws;

- Incessantly improve professional competencies and adhere to professional ethics;

- Assume other responsibilities prescribed by laws and internal audit rules of each audited unit.