Eligibility standards of internal auditors in Vietnam

Eligibility standards of internal auditors in Vietnam (Internet image)

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

1. Eligibility standards of internal auditors in Vietnam

According to Article 11 of Decree 05/2019/ND-CP, eligibility standards of internal auditors include:

- Hold undergraduate degrees in majors meeting audit requirements, acquire sufficient and updated knowledge about assigned internal audit sectors.  

- Have at least 5 years’ working experience in the industries relevant to their training majors or at least 3 years’ experience in working for their current employer or at least 3 years' experience in working in the audit, accounting or inspection field.

- Acquire general knowledge and understanding about laws and business operations of audited units; have competence in collecting, analyzing, assessing and consolidating information; have knowledge and skills related to the internal audit.

- Have not yet been subject to any discipline in a warning or severer form that is likely to be imposed on any violation arising from economic or financial administration or accounting activities or, at present, be not subject to disciplinary actions.

- Meet other standards prescribed by audited units.

2. Internal audit rules and processes in Vietnam

According to Article 12 of Decree 05/2019/ND-CP, internal audit rules and processes are as follows:

- Internal audit rules must set out regulations on objectives, scope of operation, position, duties, powers and responsibilities of an internal audit department in an audited unit, and relationship of that department with others;

Requirements concerning independence, objectivity, fundamental principles, requirements concerning professional qualification and assurance of internal audit quality and other contents.

- Internal audit processes shall include the followings: providing regulations and specific instructions on methods of assessment of risks, preparing annual internal audit plans, planning each internal audit, methods for carrying out internal audits, preparing and submitting audit reports, monitoring and supervising post-audit corrections, keeping track of implementation of post-audit recommendations, filing records and documents related to internal audits.   

- After consulting provisions laid down herein, units performing internal audits must formulate their internal audit rules and processes relevant to their particular business characteristics. These units shall be encouraged to adopt international internal audit rules if these practices are not contradictory to provisions of this Decree and other legislative documents.

- Authority to promulgate internal audit rules shall be delegated to:

+ Ministers, Heads of Ministry-level agencies, Heads of Governmental bodies over Ministries, Ministry-level agencies and Governmental bodies;

+ People’s Committees of centrally-affiliated cities and provinces over People’s Committees of centrally-affiliated cities and provinces;

+ Heads of state-owned public service units over state-owned public service units;

+ Management Boards over listed companies;

+ Management Boards over enterprises with 50% of their charter capital is held by the State, which are parent companies operating in a parent - subsidiary business model;  

+ Members’ Boards and Presidents of enterprises over state enterprises which are parent companies operating in a parent - subsidiary business model.  

3. Internal audit approaches in Vietnam

According to Article 13 of Decree 05/2019/ND-CP, internal audit approaches are as follows:

- The method for carrying out the internal audit means the risk-oriented auditing approach that prioritizes the concentration of resources on auditing of units, departments or processes assessed at the high level of risk.

- Internal audit plans must be developed based on results of the risk assessment, must be updated and revised to correspond to variations arising from business activities of units and changes in associated risks.

Ho Quoc Tuan

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