Which entities are required to have their annual financial statements audited in Vietnam?

Which entities are required to have their annual financial statements audited in Vietnam?

According to Clause 1, Article 15 of Decree 17/2012/ND-CP regulating enterprises, organizations that must have their annual financial statements audited 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.

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Therefore, enterprises with foreign owned capital, credit institutions including branches of foreign banks in Vietnam, financial organizations, insurance companies, reinsurance companies, insurance brokerage companies, branches of foreign non life insurance companies, and public companies, securities issuing organizations and securities trading organizations must have their annual financial statements audited in accordance with regulations.

Note: The above-mentioned enterprises, organizations, if required to prepare consolidated or comprehensive financial statements, must implement audit for consolidated or general financial statements.

Which entities are required to have their annual financial statements audited in Vietnam? (Image from the Internet)

What are the main contents of an audit contract?

Pursuant to Article 42 of the Law on Independent Audit 2011, the audit contract shall include the following main contents:

Audit contracts

1. Auditing firms, branches of foreign auditing firms in Vietnam implement the audit services under the audit contract.

2. Audit contract is an agreement between auditing firms and branches of foreign auditing firms in Vietnam with clients on the performance of audit services. The contract audit shall be made in writing and contains the following main contents:

a) Names and addresses of clients or clients’ representatives, representatives of the auditing firms, branches of foreign auditing firms in Vietnam;

b) The purpose, scope and contents of audit services, term of the audit contract;

c) The rights, obligations and responsibilities of the parties;

d) The form of audit statement and other forms expressing the audit results such as the management letter and other reports;

đ) Audit service fees and other expenses agreed by the parties

Therefore, auditing firms and branches of foreign auditing firms in Vietnam must establish an audit contract in writing with clients on the performance of audit services as prescribed.

The audit contract must include the following main contents:

- Names and addresses of clients or clients’ representatives, representatives of the auditing firms, branches of foreign auditing firms in Vietnam;

- The purpose, scope and contents of audit services, term of the audit contract;

- The rights, obligations and responsibilities of the parties;

- The form of audit statement and other forms expressing the audit results such as the management letter and other reports;

- Audit service fees and other expenses agreed by the parties

Which individuals are not registered audit practice in Vietnam?

Pursuant to Article 16 of the Law on Independent Audit 2011, the following individuals are not registered audit practice:

Those who are not registered audit practice

1. Officials and public servants.

2. Those who are banned from practicing audit upon valid judgments and decisions of the courts; those who are being prosecuted for penal liability; those who have been convicted one of the crimes on economy, position relating to finance and accounting but not be remitted; those who are subject to administrative measures of education at communes, wards and towns, sending into medical facilities, educational institutions.

3. Persons who have criminal records on economic crimes from serious level or more.

4. Those that violate the law on finance, accounting, auditing and economic management are sanctioned for administrative violations within one year from the date of the sanction.

5. Those who are suspended to practice audit.

Therefore, the following individuals are not registered audit practice:

(1) Officials and public servants.

(2) Those who are banned from practicing audit upon valid judgments and decisions of the courts;

(3) Those who are being prosecuted for penal liability; those who have been convicted one of the crimes on economy, position relating to finance and accounting but not be remitted;

(4) Those who are subject to administrative measures of education at communes, wards and towns, sending into medical facilities, educational institutions.

(5) Persons who have criminal records on economic crimes from serious level or more.

(6) Those that violate the law on finance, accounting, auditing and economic management are sanctioned for administrative violations within one year from the date of the sanction.

(7) Those who are suspended to practice audit in the following cases:

- Having serious violations on professional skill or violations on auditing standards, professional ethical standards of accounting and auditing;

- Failing to comply with the regulations of the competent authority regarding the inspection, examination related to audit activities;

- Being fined for administrative violations in independent audit activities twice within a continuous period of 36 months;

- Professional auditors who do not have enough hours of annual knowledge update as prescribed by the Ministry of Finance;

- Professional auditors who do not fulfill the responsibilities of professional auditors;

- Other cases as prescribed by law.

Best Regards!