Internal audit approaches in Vietnam

Internal audit approaches in Vietnam (Internet image) 

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

1. Internal audit approaches in Vietnam

Internal audit approaches in Vietnam according to Article 13 of Decree 05/2019/ND-CP is 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.

2. Annual internal audit plans in Vietnam

 Annual internal audit plans in Vietnam according to Article 14 of Decree 05/2019/ND-CP is as follows:

- Based on objectives, policies, scale and level of risks of activities and available resources, internal audit departments shall develop annual internal audit plans containing information about the extent of internal audit, audited subjects, audit objectives and audit time and distribution of resources.

- Annual internal audit plans of units performing internal audits shall have to meet the following requirements:

+ Risk-orientedness: Operations/management and operations departments at high level of risk must be audited at least once a year;

+ The audit plan must save adequate time for performing unscheduled audits right after receipt of an audit request or upon receipt of information about signs of offences or high risks of audited subjects.

- Annual internal audit plans of audited units may be revised when there is any basic change in the scale of operations, risk variations or existing resources.

- Following years’ internal audit plans shall be submitted to:

+ Ministers, Heads of Ministry-level agencies, Heads of Governmental bodies in case of auditing of Ministries, Ministry-level agencies and Governmental bodies;

+ People’s Committees of centrally-affiliated cities and provinces in case of auditing of People’s Committees of centrally-affiliated cities and provinces;

+ Heads of state-owned public service units in case of auditing of state-owned public service units;

+ Management Boards or Control Boards in case of auditing of listed companies;          

+ Management Boards or Control Boards in case of auditing of 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, Presidents of enterprises or Control Boards in case of auditing of state enterprises which are parent companies operating in a parent - subsidiary business model;   

+ Other departments under internal audit rules of each audited unit.

- Authority to grant approval of audit plans 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. Filing and archival of internal audit records and documents in Vietnam

 Filing and archival of internal audit records and documents in Vietnam according to Article 18 of Decree 05/2019/ND-CP as follows:

-  Records and documents created in each internal audit must be in writing and stored in order so that organizations and individuals (that are qualified and have good understanding of the audited unit's operations) entitled to have access to them may understand internal audit activities and results.

- Audit reports, records and documents must be filed and archived at audited units in accordance with laws on archival.

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