WHO IS AN INTERNAL AUDITOR OF AN ENTERPRISE? WHICH ENTERPRISES MUST PERFORM INTERNAL AUDITS?

Who is an internal auditor of an enterprise? Which enterprises must perform internal audits? What university degree must an internal auditor of an enterprise have? Through today’s article, let’s learn about this issue with Pham Consult!

Pursuant to Article 3 of Decree 05/2019/ND-CP, the following provisions are made:

Explanation of terms

1. Internal auditor: Is the person who performs internal audits of the unit.

2. Person in charge of internal audit: Is a person assigned by a competent authority as prescribed by law or as prescribed by the unit to be in charge of the internal audit work of the unit.

3. Related persons of the person performing internal audit work: Is a biological father, biological mother, adoptive father, adoptive mother, father-in-law, mother-in-law, father-in-law, mother-in-law, wife, husband, biological child, adopted child, biological brother, biological sister, biological sibling, brother-in-law, brother-in-law, sister-in-law, sister-in-law.

Thus, the person performing internal audit work of an enterprise is the person performing internal audit work of the enterprise.

Accordingly, Article 10 of Decree 05/2019/ND-CP stipulates that the following enterprises must perform internal audit work:

– Listed companies;

– Enterprises in which the State owns more than 50% of the charter capital are parent companies operating under the parent company – subsidiary model;

– State-owned enterprises are parent companies operating under the parent company – subsidiary model.

The standards for internal auditors are stipulated in Article 11 of Decree 05/2019/ND-CP as follows:

Standards for internal auditors

1. Have a university degree or higher in majors suitable for auditing requirements, have full knowledge and always be updated on the fields assigned to perform internal auditing.

2. Have worked for 05 years or more in the field of training or 03 years or more in the current unit or 03 years or more in auditing, accounting or inspection.

3. Have general knowledge and understanding of the law and operations of the unit; have the ability to collect, analyze, evaluate and synthesize information; have knowledge and skills in internal auditing.

4. Not yet disciplined at the level of warning or higher due to violations in economic, financial, accounting management or not currently serving a disciplinary sentence.

5. Other standards as prescribed by the unit.

Therefore, the person performing internal audit work of the enterprise must have a university degree or a major suitable for the audit requirements, have full knowledge and always be updated on the fields assigned to perform internal audit.

At the same time, meet the following conditions:

– Have worked for 05 years or more in the field of training or 03 years or more working at the current unit or 03 years or more as an auditor, accountant or inspector.

– Have general knowledge and understanding of the law and operations of the unit; have the ability to collect, analyze, evaluate and synthesize information; have knowledge and skills in internal auditing.

– Has not been disciplined at the level of warning or higher due to violations in economic, financial, accounting management or is not currently serving a disciplinary sentence.

According to Article 6 of Decree 05/2019/ND-CP, the following provisions are stipulated:

Requirements to ensure compliance with the basic principles of internal auditing

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3. In internal auditing, the unit must comply with the following provisions to ensure independence and objectivity, prevent unfairness, prejudice and conflicts of interest:

a) An internal auditor shall not audit internal regulations, policies, procedures and processes for which he/she is primarily responsible for developing such regulations, policies, procedures and processes;

b) The internal auditor does not have conflicts of economic rights and interests with the audited unit or department; the internal auditor is not allowed to conduct audits of units or departments whose managers are related to him/her;

c) The internal auditor is not allowed to participate in auditing activities or departments for which he/she is responsible for performing activities or managing that department within 03 years from the date of the decision not to perform activities or manage that department;

d) The unit must have inspection measures to ensure the independence and objectivity of the internal audit work right during the audit process at the audited unit or department and during the preparation and submission of audit reports;

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Thus, internal auditors are not allowed to participate in auditing departments that they are responsible for managing within 03 years from the date of the decision not to manage that department.

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