Acts in violation of Law on Independent Audit in Vietnam

Acts in violation of Law on Independent Audit in Vietnam​ (Image from Internet)

1. Acts of Violations of the Law on Independent Audit

According to Article 59 of the Law on Independent Audit 2011, the acts violating the Law on Independent Audit include:

- Conducting audit services without a Certificate of Eligibility for Audit Services Business or not according to the content of the Certificate of Eligibility for Audit Services Business;

- Individuals signing audit reports when they are not eligible to be practicing auditors;

- Violating regulations on registering audit services business, registering to practice auditing;

- Violating regulations on the inspection, control of audit service quality by the Ministry of Finance;

- Violating regulations on auditing financial statements of public interest entities;

- Violating principles of confidentiality relating to audit files, clients, and audited entities;

- Committing acts prohibited under Article 13 of the Law on Independent Audit 2011;

- Violating regulations on cases of not being allowed to perform audit services as stipulated in Articles 19 and 30 of the Law on Independent Audit 2011;

- Conducting audit services without enough practicing auditors as required by the Law on Independent Audit 2011; violating regulations on charter capital, purchasing professional liability insurance, or establishing professional risk reserve funds;

- Due to lack of caution leading to errors or falsifying audit results, audit files;

- Intentionally certifying fraudulent or erroneous financial statements or colluding to falsify accounting documents, audit files, and providing false information or data reports;

- Violating regulations on the preparation, collection, classification, use, preservation, storage of audit files, and documentation related to other services;

- Incorrectly declaring to obtain a Practice Registration Certificate or Certificate of Eligibility for Audit Services Business;

- Fraud to obtain a Practice Registration Certificate or Certificate of Eligibility for Audit Services Business;

- Forging, erasing, or altering Practice Registration Certificates or Certificates of Eligibility for Audit Services Business.

- Violating principles of independent audit operation;

- Reporting false information or failing to implement reporting policies as regulated;

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

- Other acts violating the Law on Independent Audit.

2. Regulations on handling violations of the Law on Independent Audit in Vietnam

Regulations on handling violations of the Law on Independent Audit are provided in Article 60 of the Law on Independent Audit 2011 as follows:

- Organizations and individuals violating the provisions of Article 59 of the Law on Independent Audit 2011 are subject to the following forms of handling:

+ Warning;

+ Fines;

+ In addition to forms of handling stipulated in points a and b of Clause 1 Article 60 of the Law on Independent Audit 2011, organizations and individuals breaching may have their Certificates of Eligibility for Audit Services Business, auditors' certificates, or Practice Registration Certificates revoked, or may be suspended from registration or banned from participating in independent audit activities.

- Individuals violating provisions of the Law on Independent Audit 2011 may also be prosecuted for criminal liability depending on the nature and severity of the violation.

- Organizations and individuals violating provisions of the Law on Independent Audit 2011, in addition to being handled as prescribed in Clauses 1 and 2 of Article 60, may also be published on the website of the Ministry of Finance or auditing professional organizations; if causing damage, they must compensate according to the law.

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