New regulations on conditions for auditing enterprises are entrusted or hired to audit in Vietnam

New regulations on conditions for auditing enterprises are entrusted or hired to audit in Vietnam (Internet image) 

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

New regulations on conditions for auditing enterprises are entrusted or hired to audit in Vietnam

Specifically, an auditing firm that is considered or selected to entrust or hire an audit must fully meet the following conditions, except for other special cases:

- Being an auditing firm that is qualified to operate legally and approved to be on the public list of the Ministry of Finance and the State Securities Commission (in the field of securities) or selected annually by the World Bank (WB) (for projects funded by the WB)...".

- In the past 3 consecutive years, there have been no violations handled by state agencies or professional auditing associations related to audit quality.

- Auditing enterprise in the 03 immediately preceding years and in the period from the audited period at the time of signing the entrustment contract or hiring the auditing firm, it does not perform accounting bookkeeping services, preparing financial reports, auditing services, asset valuation, management consulting, or financial consulting for customers who are audited units that the State Audit entrusts or hires to audit; failure to perform the above services during the audited period within the audit content that the State Audit entrusts or hires to audit.

- Person responsible for management and administration of the auditing firm without being a member, founding shareholder, purchasing shares, contributing capital to the audited unit, or having other economic or financial relationships with the audited unit according to the provisions of professional ethical standards for accounting and auditing.

- The person responsible for the management and operation of the auditing firm does not have a biological father, biological mother, adoptive father, adoptive mother, parents-in-law, spouse, children, biological brothers, biological sisters, or younger siblings who are members, founding shareholders or purchase shares, contribute capital and have significant influence over the audited entity, or are people responsible for management, administration, a member of the control board, or the chief accountant of the audited unit.

- Persons responsible for management and administration, members of the supervisory board, or the chief accountant of the audited unit must not also be capital contributors and have significant influence over the auditing enterprise.

- The auditing firm and the audited unit do not have the same individual, enterprise, or organization established or participating in the establishment.

(Article 9 Regulations promulgated together with Decision 1250/QD-KTNN 2023)

Procedures for selecting audit firms in Vietnam according to Decision 1250/QD-KTNN

When there is a need to entrust or hire an audit, the State Audit announces the agency or organization that needs to entrust or hire an audit; Procedures and documents for registering to receive entrustment or hiring an audit according to the provisions of the Law on Bidding.

Auditing firms that are qualified and have a need to undertake entrustment or hire audits must register with the State Audit (through the State Audit Office).

Profile include:

- Application to entrust or hire an auditor.

- Notarized copy of Business Registration Certificate (or Investment Certificate) and Company Charter.

- Certificate of eligibility to conduct business in auditing services.

- List of customers in 03 consecutive previous years and in the period from the audited period to the time of signing the trust contract or hiring the auditing firm.

- List of registered auditors with a valid practicing certificate issued by the Ministry of Finance, accompanied by a curriculum vitae, which summarizes the working process of practicing auditors and directors of auditing firms.

- Other documents as required by the State Audit.

Based on the subject and need to entrust or hire an audit, the list of audit firms submitting bids/proposals, the audit firm appraisal council shall consider and submit to the State Auditor General the qualified audit firm.

The State Audit Office presides and coordinates with the Department of Audit Regulation and Quality Control and units under the State Audit that need to entrust or hire auditors to help the State Auditor General organize contractor selection according to the provisions of the Law on Bidding.

(Article 10 of Regulations promulgated together with Decision 1250/QD-KTNN 2023)

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