What is independent audit? Some regulations on independent audit in Vietnam

What is independent audit? Some regulations on independent audit in Vietnam (Internet image)

1. What is independent audit?

According to Clause 1, Article 5 of the Law on Independent Audit 2011, independent audit means the auditor practicing a profession, auditing firms, branches of foreign auditing firms in Vietnam inspecting and giving their independent opinions on the financial statements and other audit works under the audit contract.

2. Objective of independent audit in Vietnam

Independent audit activities aim to contribute: 

- To the transparency of economic information, finance of units that are audited and other enterprises, organizations;

- To strengthen investment environment;

- To practice thrift and prevent and combat waste, prevent and combat corruption;

- To detect and prevent violations of law;

- To raise the effectiveness, management efficiency, administration of economy, finance of the State and business operation of enterprises.

(Article 4 of Law on Independent Audit 2011)

3. Independent audit dossier in Vietnam

Independent audit dossiers are specified in Article 49 of the Law on Independent Audit 2011 as follows:

- Practicing auditors, auditing firms, branches of foreign auditing firms in Vietnam must collect and record sufficient necessary documents and information in the audit profile relating to each audit to make the basis for forming their audit opinion and demonstrate that the audit was conducted in accordance with the law regulations and auditing standards.

- Practicing auditors, auditing firms, branches of foreign auditing firms in Vietnam must be documented audit profile in accordance with provisions of auditing standards.

4. Law violations on independent audit in Vietnam

Law violations on independent audit include:

- Carrying on business of audit services without the certificate of sufficient conditions for business of audit services or not complying with the contents of the certificate of sufficient conditions for business of audit services;

- Individuals who sign audit statements without sufficient conditions as the practicing auditors;

- Violation of regulations on business registration of audit services, audit-practice registration;

- Violation of regulations on inspection and quality control of audit services of the Ministry of Finance;

- Violation of regulations for auditing the financial statements of the units with the public interest;

- Violation of the information confidentiality rules related to audit records, clients and audited units;

- Performance of prohibited acts provided in Article 13 of Law on Independent Audit 2011;

- Violation of regulations on the cases which are not entitled to perform audit services specified in Article 19 and Article 30 of Law on Independent Audit 2011;

- Carrying on business of audit services without sufficient number of practicing auditors in accordance with regulations of Law on Independent Audit 2011; violation of the provisions on legal capital, purchase of professional liability insurance or establishment of occupational risk reserve fund;

- Due to carelessness leading to errors or distorting the audit results, audit records;

- Deliberately certifying financial statement with fraud, mistake, or colluding to falsify accounting records, audit records and providing false information and report data;

- Violation of regulations on the establishment, collection, classification, use, storage, archiving audit records and documents of other relevant services;

- Untruthful declaration to be issued certificates of audit practice registration and certificates of sufficient conditions for business of audit services;

- Fraud to be issued certificates of audit practice registration and certificates of sufficient conditions for business of audit services;

- Forging, erasing, and fixing certificates of audit practice registration and certificates of sufficient conditions for business of audit services.

- Violation of the principles of independent audit activities;

- Reporting untruthfully or failing to implement the reporting regime as prescribed;

- Audited units violating the provisions of the clauses 1, 2, 3 and 4 of Article 39 of Law on Independent Audit 2011.

- Other acts of violating law on independent audit.

Diem My

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE