VI Financial reports are one of the indispensable records in businesses with the purpose of recording all business activities and related to the business’s budget. So, how does Vietnamese law regulate the financial statements of which businesses and organizations are required to be audited according to regulations? Through today’s article, let’s learn about this issue with Pham Consult!
Who does the financial statement audit?
Financial statement auditing is prescribed in Clause 9, Article 5 of the 2011 Law on Independent Auditing as follows:
Explanation of words
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8. Auditing practice is the business of auditing services of practicing auditors and auditing firms and branches of foreign auditing firms in Vietnam.
9. Financial statement audit is the practice of practicing auditors, auditing firms, and branches of foreign auditing firms in Vietnam examining and giving opinions on the truthfulness and reasonableness of various aspects. materiality of the audited entity’s financial statements according to the provisions of auditing standards.
10. Compliance auditing is the practice of practicing auditors, auditing firms, and branches of foreign auditing firms in Vietnam inspecting and giving opinions on compliance with laws, regulations, and The audited unit must do so.
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Accordingly, financial statement audits are performed by practicing auditors, auditing firms, and branches of foreign auditing firms in Vietnam.
The audit of financial statements is performed for the purpose of checking and giving opinions on the truthfulness and reasonableness of material aspects of the audited entity’s financial statements according to the provisions of standards. audit.
Which businesses and organizations’ financial statements are required to be audited according to regulations?
Pursuant to Article 15 of Decree 17/2012/ND-CP regulations on audited units as follows:
Audited unit
1. Enterprises and organizations whose annual financial statements are required by law to be audited by auditing firms or branches of foreign auditing firms in Vietnam include:
a) Enterprises with foreign investment capital;
b) Credit institutions established and operating under the Law on credit institutions, including foreign bank branches in Vietnam;
c) Financial institutions, insurance enterprises, reinsurance enterprises, insurance brokerage enterprises, branches of foreign non-life insurance enterprises.
d) Public companies, issuing organizations and securities trading organizations.
2. Other businesses and organizations are required to be audited according to relevant laws.
3. Enterprises and organizations must be audited by auditing firms and branches of foreign auditing firms in Vietnam, including:
a) State-owned enterprises, except state-owned enterprises operating in the field of state secrets as prescribed by law, must have their annual financial statements audited;
b) Enterprises and organizations implementing important national projects and group A projects using state capital, except for projects in the field of state secrets that must be audited according to the provisions of law. Completed project settlement report;
c) Enterprises and organizations in which state-owned corporations and corporations hold 20% or more of voting rights at the end of the fiscal year must have their annual financial statements audited;
d) Enterprises in which listed organizations, issuing organizations and securities trading organizations hold 20% or more of voting rights at the end of the fiscal year must be audited for their annual financial statements. year;
d) Auditing firms and branches of foreign auditing firms in Vietnam must be audited for annual financial statements.
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Thus, according to regulations, the annual financial statements of the following businesses and organizations must be audited by auditing firms and branches of foreign auditing firms in Vietnam:
– Enterprises with foreign investment capital;
– Credit institutions established and operating under the Law on Credit Institutions 2010, including foreign bank branches in Vietnam;
– Financial institutions, insurance enterprises, reinsurance enterprises, insurance brokerage enterprises, branches of foreign non-life insurance enterprises.
– Public companies, issuing organizations and securities trading organizations.
– State-owned enterprises, except state-owned enterprises operating in fields that are state secrets;
– Enterprises and organizations in which state-owned corporations and corporations hold 20% or more of voting rights at the end of the fiscal year;
– Enterprises in which listed organizations, issuing organizations and securities trading organizations hold 20% or more of voting rights at the end of the fiscal year;
– Auditing firms, branches of foreign auditing firms in Vietnam.
Are audited businesses and organizations required to correct existing errors and errors in financial reports at the request of the auditing company?
Pursuant to Clause 5, Article 39 of the Law on Independent Auditing 2011, the obligations of the audited unit are stipulated as follows:
Obligations of the audited entity
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3. Coordinate and create conditions for practicing auditors to perform audits.
4. Must not limit the scope of issues that need to be audited.
5. Consider requests from auditing firms and branches of foreign auditing firms in Vietnam regarding shortcomings and errors in financial statements and in compliance with the law to take timely remedial measures.
6. Timely and fully notify violations of law and violations of audit contracts in audit activities of practicing auditors and auditing firms, branches of foreign auditing firms in Vietnam to competent state agency.
7. Pay audit service fees as agreed in the contract.
8. In case of signing an audit contract with an audit firm or branch of a foreign audit firm in Vietnam for three consecutive years or more, the audit firm or branch of the foreign audit firm must be requested to Foreigners in Vietnam change practicing auditors to sign audit reports.
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According to the above regulations, the audited unit has the obligation to consider requests from audit firms and branches of foreign audit firms in Vietnam regarding existence and errors in financial statements and compliance. law to take timely remedial measures.
Thus, it can be seen that businesses and organizations are not required to correct existing or errors in financial reports at the request of auditing firms.
However, businesses and organizations need to consider the audit firm’s suggestions on existence and errors in financial reports to take timely corrective measures. Pham Consult hopes the above information will help your work.
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