Vietnam: Criteria used for measuring or evaluating the subject matter

According to the Vietnam’s Framework for assurance service contracts promulgated together with Circular No. 69/2015/TT-BTC of the Ministry of Finance of Vietnam, criteria are standards used for measuring or evaluating the subject matter. Criteria may be official e.g. when making a financial statement, criteria may be Vietnam’s Accounting Standard; when making a report on internal control effectiveness, criteria may be based on an existing framework for internal control or separate targets; when making a report on conformity, criteria may be laws, regulations, or terms and conditions of a contract. Criteria may be less official e.g. internal rules and regulations or agreed-upon levels of effectiveness of works (such as number of meetings of the Board of Directors in a year).

An appropriate criterion has 05 characteristics below:

1. Relevance: A criterion is relevant when information about the subject matter assists decision-making by intended users;

2. Completeness: A criterion is complete when information about the subject matter provided according to such criterion does not overlook elements that may affect the decision-making by the information users. An adequate criterion shall contain standards for presentation and explanation (where appropriate);

3. Reliability: A criterion is reliable when it allows consistent and reasonable measurement or evaluation of subject matter, including presentation and explanation (where appropriate) by different auditors and audit firms in similar cases;

4. Neutrality: A criterion is neutral when it helps providing unbiased information about the subject matter in the specific situation of the service contract;

5. Understandability: A criterion is understandable when the user can understand information about the subject matter.

View more details at the Circular No. 69/2015/TT-BTC of the Ministry of Finance of Vietnam, effective from January 01, 2016.

Ty Na

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE