Vietnam: What is internal audit?

According to Article 16 of Circular No. 44/2011/TT-NHNN of the State Bank of Vietnam, contents of the internal audit are prescribed as follows:

- Main contents of the internal audit activity shall be to assess the adequacy, effectiveness and efficiency of the internal control system.

- Depending on the scale, level of risks as well as specific requirements of each credit institution, the internal auditors may check, assess the following contents:

+ The level of adequacy, the effectiveness and efficiency of the internal control system.

+ The application, the effectiveness and efficiency of the implementation of risk management policies and processes of the credit institution, including the processes which are implemented via the information technology system.

+ The adequacy, accuracy and security of the management information system and the financial information system, including the electronic information system and electronic banking service.

+ The adequacy, timeliness, truthfulness, reasonableness and accuracy of the accounting system and financial statements.

+ The compliance with provisions of laws, regulations on prudential ratios in activities of the credit institution, foreign bank’s branch, internal provisions, professional operation processes, rules, professional virtue rules.

+ Internal regimes, policies, processes, regulations, organizational structure of the credit institution, foreign bank’s branch.

+ Measures for ensuring the assets’ security; giving recommendations in order to improve the efficiency of systems, processes, regulations, helping to ensure the operation of the credit institution, foreign bank’s branch is safe, efficient and conformable with laws;

+ To assess the economicality and efficiency of the activities, the economicality and efficiency of the use of resources, through which the appropriateness level between the achieved results and proposed objectives shall be determined.

+ To perform other contents relating to the functions, duties of the internal auditor upon request of the Controllers' Committee, the Board of Directors, Board of Members;

In addition to provisions as stipulated above, a foreign bank’s branch shall be required to audit in line with regulations of the parent bank in conformity with provisions of this Circular.

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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