Cases in which provision of accounting services are prohibited in Vietnam

Cases in which provision of accounting services are prohibited in Vietnam (Internet image)

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

1. Cases in which provision of accounting services are prohibited in Vietnam

According to Article 25 of Decree 174/2016/ND-CP, enterprises, household businesses providing accounting services and audit firms (hereinafter referred to as “accounting service providers”) must not provide accounting services in the cases where the manager, executive officer or the person that directly performs the account services is:

- a parent, adoptive parent, spouse, child, sibling of the manager, executive officer or chief accountant of the accounting unit, unless the accounting unit is a sole proprietorship or limited liability company owned by an individual or an extra-small enterprise not funded by state budget as defined by regulations of law on assistance for small and medium enterprises.

- any of the people specified in Clause 2 through 5 Article 68 of the Law on Accounting 2015.

+ Has a economic – financial relationship with such accounting unit; or

+ Does not have adequate professional knowledge or does not satisfy all conditions for provision of accounting services; or

+ Is providing chief accountant’s services for a client who has a economic – financial relationship with such accounting unit; or

+ Is requested by the accounting unit to work against the code of ethics or professional requirements; or

- A person in the cases specified by Code of ethics for professional accountants and auditors and the law.

2. Accounting currency in Vietnam

Accounting currency according to Article 4 of Decree 174/2016/ND-CP is as follows:

- The accounting currency is Vietnam dong; its Vietnamese symbol is “đ” and international symbol is "VND”.

Where an economic/financial transaction in a foreign currency occurs, the accounting unit must record the foreign currency and VND at the actual exchange rate, unless otherwise prescribed by law; if there is no exchange rate between the foreign currency and VND, it shall be exchanged into another foreign currency that has an exchange rate with VND.

An accounting unit whose most revenues and expenditures are in a foreign currency may use such foreign currency as the accounting currency and has to take legal responsibility for such action and notify its supervisory tax authority.

The exchange rate between a foreign currency and accounting currency in financial statements shall follow instructions of the Ministry of Finance, unless otherwise prescribed by law.

- State accounting units shall convert revenues and expenditures in foreign currencies into VND in accordance with the Law on State budget.

- Unit of products and working time in accounting include tonne, quintal (100 kilograms), kilogram, square meter, cube meter, working day, working hour and other units of measurement defined by measurement laws.

- When an accounting unit consolidates financial statements of its subsidiaries or affiliated units or when a superior state accounting unit consolidate financial statements or budget statements of its inferior units, the abbreviated currency used on the consolidated statement may be 1,000 dong if at least one entry thereon consists of 9 digits or more; 1 million dong if 12 digits or more; 1 billion dong if 15 digits or more.

- When publishing a financial statement or budget statement, the abbreviated currency specified in Clause 4 of Article 4 of Decree 174/2016/ND-CP may be used.

- When using an abbreviated currency, decimals may be rounded up if greater than or equal to 5.

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