Vietnam: Requirements for ensuring the fundamental principles of internal audit

According to Circular No. 44/2011/TT-NHNN of the State Bank of Vietnam, requirements for ensuring the fundamental principles of internal audit are as follows:

1. An internal auditor must be equitable, unbiased and try to avoid any conflict of interests. An internal auditor shall be entitled and obliged to report any problem that is potential to affect his independence and objectiveness relating to the internal audit that is delegated by the head of the internal audit mechanism (hereinafter called the Chief of Internal Audit).

2. The Chief of Internal Audit shall thoroughly grasp, monitor and ensure the independence and objectiveness of the internal auditors. In case where the independence or objectiveness is or may be affected, the Chief of Internal Audit shall notify the Controllers’ Committee.

3. In the internal audit activity, the credit institution, foreign bank's branch shall implement following regulations so as to ensure the independence and objectiveness, to avoid the unfairness, bias and conflict of interests:

- An internal auditor shall not audit any regulation, internal policy, procedure or process of which the auditor takes the main responsibility in the establishment;

- The internal auditor has no conflict of interest with the audited unit, division; the internal auditor shall not audit the unit, division of which the manager is a related person of the internal auditor;

- The internal auditor shall not participate in the audit of the operation, of which the auditor is in charge, or division, which is managed by the auditor in a period of 03 years since the decision that the auditor stops performing the operation or managing the division.

- To have measures of checking to ensure the independence and objectiveness of the internal audit task immediately during the audit process at the audited unit, division and in the period of preparation, delivery of audit report;

- Audit recognitions in the internal audit report shall be carefully analyzed and based on the collected data, information for the purpose of objectiveness;

- Result of the function performance of the Chief of Internal Audit shall be checked, reviewed and assessed by the Controllers’ Committee on a regular basis.

- The internal audit shall be required to preserve the independence and objectiveness in auditing operations, procedures or divisions to which the internal audit provided consultancy previously. In this case, the internal audit shall be entitled and obliged to fully analyze and assess procedures, processes and internal control system. Responsibility for the operations, processes or divisions to which the internal audit provided consultancy previously shall still belong to the leader of the audited unit, division.

Moreover, credit institutions, foreign bank's branches shall be required to comply with provisions in Clause 3 Article 9 and Article 13 of Circular No. 44/2011/TT-NHNN in order to ensure the speciality of internal audit.

View details at Circular No. 44/2011/TT-NHNN of the State Bank of Vietnam, effective from February 12, 2012.

Thuy Tram

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