Authority to select independent audit organizations for commercial banks in Vietnam from January 15, 2025

Authority to select independent audit organizations for commercial banks in Vietnam from January 15, 2025​ (Image from Internet)

On November 29, 2024, the Governor of the State Bank of Vietnam issued Circular 51/2024/TT-NHNN stipulating independent audits for commercial banks, non-bank credit institutions, microfinance organizations, and branches of foreign banks.

Authority to select independent audit organizations for commercial banks in Vietnam from January 15, 2025

According to Article 7 of Circular 51/2024/TT-NHNN, the authority to select independent audit organizations for commercial banks, non-bank credit institutions, microfinance organizations, and branches of foreign banks in Vietnam is as follows:

- The Members Council decides on the selection of an independent audit organization for auditing limited liability companies.

- The General Meeting of Shareholders decides on the selection of an independent audit organization for auditing joint stock companies, except as prescribed in Clause 3, Article 7 of Circular 51/2024/TT-NHNN.

- The Board of Directors decides on the selection of an independent audit organization for auditing joint stock companies under special control.

- The General Director (Director) decides on the selection of an independent audit organization for auditing branches of foreign banks.

Additionally, the content of independent audits for commercial banks, non-bank credit institutions, microfinance organizations, and branches of foreign banks in Vietnam is specifically stipulated in Article 8 of Circular 51/2024/TT-NHNN as follows:

- Independently auditing the financial statements of credit institutions and branches of foreign banks includes auditing:

+ Financial position reports;

+ Income statements;

+ Cash flow statements;

+ Notes to financial statements.

- Providing assurance services regarding the internal control system's operation in preparing and presenting the financial statements of credit institutions and branches of foreign banks.

Acts violating independent audit regulations in Vietnam

Acts violating independent audit regulations are specifically stipulated in Article 59 of Independent Audit Law 2011, including:

- Providing audit services without a Certificate of Eligibility to provide audit services or not in accordance with the content of the Certificate of Eligibility to provide audit services;

- Individuals signing audit reports without meeting the conditions as practicing auditors;

- Violating regulations on the registration of audit service businesses, registration of practicing as auditors;

- Violating regulations on audit quality inspection and control by the Ministry of Finance;

- Violating regulations on auditing financial statements of public interest units;

- Violating confidentiality principles regarding information related to audit files, clients, audit units;

- Engaging in prohibited acts as prescribed in Article 13 of Independent Audit Law 2011;

- Violating regulations on cases where audit services should not be provided as prescribed in Article 19 and Article 30 of Independent Audit Law 2011;

- Providing audit services without having the required number of practicing auditors as stipulated by the Independent Audit Law 2011; violating regulations on legal capital, purchasing professional liability insurance, or establishing a professional risk reserve fund;

- Causing errors or discrepancies in audit results and audit files due to lack of diligence;

- Intentionally certifying fraudulent or erroneous financial statements or colluding to distort accounting documents, audit files, and providing false information and report data;

- Violating regulations on creating, collecting, classifying, using, preserving, and storing audit files and documents related to other services;

- Declaring untruthfully to obtain a Certificate of Registration to practice auditing and a Certificate of Eligibility to provide audit services;

- Committing fraud to obtain a Certificate of Registration to practice auditing and a Certificate of Eligibility to provide audit services;

- Forging, erasing, or altering the Certificate of Registration to practice auditing and the Certificate of Eligibility to provide audit services.

- Violating the principles of independent audit activities;

- Reporting untruthfully or not following reporting policies as prescribed;

- The audit unit violating provisions at Clauses 1, 2, 3, and 4 of Article 39 of Independent Audit Law 2011.

- Other acts violating independent audit laws.

For more details, refer to the Circular 51/2024/TT-NHNN effective from January 15, 2025.

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