HOW MUCH IS A FINNED AUDIT FIRM FOR FAILING TO PREPARE AUDIT FILES FOR TWO OR MORE AUDITS?

How much is a fine imposed on an audit firm for failing to prepare audit files for two or more audits? What types of audit firms are included? What are the conditions for obtaining a Certificate of Eligibility to conduct audit services? Let’s find out more with Pham Consult!

How much is a fine imposed on an audit firm for failing to prepare audit files for two or more audits?

According to Clause 2, Point a, Article 23 of Decree 228/2025/ND-CP, the following penalties apply:

Penalties for violations of regulations on audit documentation:

1. A fine of VND 150,000,000 to VND 200,000,000 shall be imposed for failing to prepare audit documentation for one audit.
2. A fine of VND 400,000,000 to VND 500,000,000 shall be imposed on audit firms for committing one of the following acts:
3. a) Failing to prepare audit documentation for two or more audits;
4. b) Falsifying or misrepresenting audit documentation that does not yet constitute a criminal offense as stipulated in the Penal Code.
5. Double the fine stipulated in Clauses 1 and 2 of this Article shall be imposed if the violation is detected in subsequent inspections. 4. Double the fine stipulated in Clauses 1, 2, and 3 of this Article when conducting audits for public interest entities that commit the same violations as those stipulated in these Clauses.
6. Additional penalties:
7. a) Confiscation of evidence and means used in the administrative violations for the acts stipulated in point b, Clause 2, and Clause 4 of this Article;
8. b) Suspension of auditing services for a period of 3 to 6 months from the date the penalty decision takes effect for the enterprise committing the act stipulated in point b, Clause 2 of this Article;
9. c) Suspension of auditing services for a period double the period stipulated in point b of this Clause for the auditing enterprise conducting audits for public interest entities that commit the same violations as those stipulated in point b, Clause 2 of this Article.
10. Remedial measures:

The illegal profits obtained from the falsification and misrepresentation of audit records, which do not reach the level of criminal liability as stipulated in point b, clause 2, and clause 4 of this Article, must be returned to the state budget.

At the same time, Article 6 of Decree 228/2025/ND-CP stipulates:

Money fines in the field of independent auditing

1. The maximum money fine for an administrative violation in the field of independent auditing is VND 1,000,000,000 for individuals and VND 2,000,000,000 for organizations.
2. The money fines stipulated in Chapter II of this Decree are the fines applicable to organizations except for the cases stipulated in clause 2 of Article 7; clauses 1 and 3 of Article 9; Clauses 2, 3, 4, and 5 of Article 10; Clause 1 of Article 18; Clauses 1, 2, and 4 of Article 21; Point h, Clauses 1 and 2 of Article 22; Article 36; Clauses 1, 2, 3, and 4 of Article 38 are the monetary penalties for individuals.
3. For organizations committing the same violation, the monetary penalty is twice the penalty for individuals.

Accordingly, an auditing firm that fails to prepare audit files for two or more audits will be fined from VND 400,000,000 to VND 500,000,000.

What types of auditing firms are included?

According to Article 20 of the Independent Auditing Law 2011, the following regulations apply:

Types of auditing firms and branches of foreign auditing firms in Vietnam:

1. The following types of businesses are permitted to conduct auditing services:
2. a) Limited liability companies with two or more members;
3. b) Partnerships;
4. c) Private enterprises.
5. Branches of foreign auditing firms in Vietnam are permitted to conduct auditing services in accordance with the law.
6. Businesses and branches of businesses that do not meet the conditions for conducting auditing services are not allowed to use the term “auditing” in their name.
7. Auditing firms are not allowed to contribute capital to establish other auditing firms, except in the case of contributing capital with foreign auditing firms to establish an auditing firm in Vietnam.

Accordingly, the following types of businesses are allowed to conduct auditing services:

– Limited liability companies with two or more members;

– Partnerships;

– Private enterprises.

In addition, branches of foreign auditing firms in Vietnam are allowed to conduct auditing services in accordance with the law.

Businesses and business branches that do not meet the conditions for conducting auditing services are not allowed to use the term “auditing” in their name.

Auditing firms are not allowed to contribute capital to establish other auditing firms, except in the case of contributing capital with foreign auditing firms to establish an auditing firm in Vietnam.

What are the conditions for granting a Certificate of Eligibility to conduct auditing services?

According to Article 21 of the 2011 Law on Independent Auditing, the conditions for granting Certificates of Eligibility to conduct auditing services for each type of enterprise are as follows:

(1) A limited liability company with two or more members, when applying for a Certificate of Eligibility to conduct auditing services, must meet the following conditions:

– Have a Business Registration Certificate, Enterprise Registration Certificate, or Investment Certificate as prescribed by law;

– Have at least five practicing auditors, of which at least two must be contributing members;

– The legal representative, Director, or General Director of the limited liability company must be a practicing auditor;

– Ensure the statutory capital as prescribed by the Government;

– The capital contribution of a member that is an organization must not exceed the level prescribed by the Government. The representative of a member that is an organization must be a practicing auditor.

(2) A partnership company applying for a Certificate of Eligibility to conduct auditing services must meet the following conditions:

– Possess a Business Registration Certificate, Enterprise Registration Certificate, or Investment Certificate as prescribed by law;

– Have at least five practicing auditors, including at least two partners;

– The legal representative, Director, or General Director of the partnership company must be a practicing auditor;

(3) A private enterprise applying for a Certificate of Eligibility to conduct auditing services must meet the following conditions:

– Possess a Business Registration Certificate, Enterprise Registration Certificate, or Investment Certificate as prescribed by law;

– Have at least five practicing auditors, including the owner of the private enterprise;

– The owner of the private enterprise is also the Director.

(4) When applying for a Certificate of Eligibility to conduct auditing services, a branch of a foreign auditing firm in Vietnam must meet the following conditions:

– The foreign auditing firm is permitted to provide independent auditing services in accordance with the laws of the country where the foreign auditing firm is headquartered;

– It must have at least two practicing auditors, including the Director or General Director of the branch;

– The Director or General Director of the branch of a foreign auditing firm must not hold a management or executive position in another enterprise in Vietnam;

– The foreign auditing firm must send a written guarantee to the Ministry of Finance to ensure that it is responsible for all obligations and commitments of the branch of the foreign auditing firm in Vietnam;

– The foreign auditing firm must ensure that its capital is not lower than the statutory capital level as prescribed by the Government.

Note: Within six months from the date of business registration for auditing services, if an auditing firm or a branch of a foreign auditing firm in Vietnam is not granted a Certificate of Eligibility to conduct auditing services, it must proceed with the procedure to remove the auditing services business line.