Cases of unaccredited auditing firms or practicing auditors in Vietnam

Cases of unaccredited auditing firms or practicing auditors in Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. What are auditing firms?

According to Clause 1, Article 3 of Decree 84/2016/ND-CP, auditing firms mean auditing firms and branches of foreign auditing firms lawfully operating in Vietnam.

In which, an accredited auditing firm means an auditing firm accredited to provide audit services for public interest entities approved by competent authorities.

(Clause 2, Article 3 of Decree 84/2016/ND-CP)

2. Cases of unaccredited auditing firms or practicing auditors in Vietnam

Specifically, in Article 7 of Decree 84/2016/ND-CP, the following auditing firms or practicing auditors shall be considered unaccredited:

- An auditing firm incurs mandatory suspension from provision of audit services as prescribed in law on independent audit;

- An auditing firm fails to remedy its violations at the request of competent authorities;

- An auditing firm has audit report(s) filed for a lawsuit and competent authorities gives a conclusion of existence of the violation committed by such auditing firm;

- An auditing firm that is considered unaccredited for according to inspection or findings of competent authorities in the year in which the application is processed (hereinafter referred to as concerned year);

- A practicing auditor in charge of audit documents that are considered unaccredited according to inspection or findings of competent authorities in the concerned year;

- An auditing firm or a practicing auditor commits an administrative violation of law on audit practices that is liable to a penalty imposed by competent authorities as prescribed in the concerned year;

- An auditing firm or a practicing auditor falsifies or provides inaccurate declaration in the application;

- An auditing firm or a practicing auditor fails to provide explanation, or provide unaccredited explanation or fails to provide information and figures in connection with audit services at the request of competent authorities;

- An auditing firm or a practicing auditor has its/his/her accredited status terminated in the period of less than 24 months from the termination date;

- An auditing firm or a practicing auditor fails to comply with reporting regulations as prescribed in law on independent audit.

3. Eligibility requirements for Accredited auditing firms in Vietnam

According to Clause 1, Article 5 of Decree 84/2016/ND-CP (amended in Decree 151/2018/ND-CP), an accredited auditing firm in Vietnam shall satisfy all of the following requirements:

- It obtains a certificate of eligibility for audit services issued by the Ministry of Finance that remains valid;

- A charter capital or financed capital (for a branch of foreign auditing firm in Vietnam) of at least VND 6 billion is provided and the owner’s equity of at least VND 6 billion is maintained on the balance sheet;

- At least 10 practicing auditors employed, including Director or General Director, satisfy requirements prescribed in Article 6 of this Decree;

- It has operated in Vietnam for at least 24 months from the date on which the initial list of practicing auditors is approved by a competent authority or an initial certificate of eligibility for audit services is issued to the submission date of application for registration of audit services provision (hereinafter referred to as application);

- At least 200 entities receive audit reports on their annual financial statements issued by the auditing firm from October 01 of the previous year to September 30 of the year in which the application for registration is submitted.

Tran Thanh Rin

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