Vietnam: What are the fundamental functions of the internal audit?

According to Article 8 of Circular No. 44/2011/TT-NHNN of the State Bank of Vietnam, objectives and fundamental functions of the internal audit are specified as follows:

- To operate for the safety, efficiency of the credit institution, foreign bank's branch.

- To check, give independent assessment on the sufficiency, conformity, effectiveness and efficiency of the internal control system for improving and perfecting the internal control system. For the purpose of this objective, the unit performing internal audit is encouraged to consult and participate in the establishment, improvement and completion of the internal control system, providing that the principle of independence and objectiveness as prescribed in this Circular shall not be violated.

- To identify and prevent any illegal act; improving the effectiveness of the management, administration and operation of the credit institution, foreign bank's branch.

- To ensure the security of information and continuous operation of the operational information system.

- To give recommendation in order to improve the efficiency of the systems, processes, regulations, and to ensure the operation of the credit institution, foreign bank's branch is safe, effective and conformable to the laws.

Besides, fundamental principles of internal audit are specified as follows:

- Independence: the organization and operation of internal audit shall be independent from other units, management, operational divisions of the credit institution, foreign bank's branch; the internal auditor shall not be allowed to assume works that are subjects of internal audit; the credit institution is required to ensure that the internal audit shall not be hindered by any intervention in performing the reporting and assessment.

- Objectiveness: the internal audit division, internal auditor shall be required to ensure the objectiveness, truthfulness, justice and unbiased.

- Professionality: internal auditor must be a person who has essential knowledge, qualification and skill in internal audit, does not concurrently assume other specialized positions or works of the credit institution, foreign bank's branch; the internal auditor should have adequate knowledge to identify signals of fraudulence, knowledge about risk in banking activity and measures of controlling information technology to perform the assigned works. The internal audit division shall have at least 01 auditor who is qualified and skilled to control key information technology and high-tech audits.

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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