Joint Circular No. 13/2005/TTLT/BTC-BLDTBXH guides standards, conditions, procedures for appointing, dismissing, and determining salaries for chief accountants and accounting supervisors in business organizations.

JOINT CIRCULAR

Guidelines for standards, conditions, procedures for appointment, removal, and salary classification for chief accountants and accounting supervisors in business organizations and salary grading

chief accountant, responsible for accountingin business operating organizations

Pursuant to Article 37 and Article 38 of Decree No. 129/2004/NĐ-CP dated May 31, 2004 of the Government detailing and guiding the implementation of certain provisions of the Accounting Law applicable in business operations, after exchanging opinions with relevant Ministries and agencies, the Joint Ministry of Finance and Ministry of Labor, Invalids and Social Affairs hereby provides guidelines for standards, conditions, procedures for appointment, removal, and salary classification for chief accountants and accounting supervisors in business organizations as follows:

I. APPLICABLE OBJECTS

The objects subject to this Circular include business organizations conducting accounting work as stipulated in Article 2 of Decree No. 129/2004/NĐ-CP dated May 31, 2004 of the Government (referred to as accounting units), specifically as follows:

1. State-owned companies operating under the Law on State-Owned Enterprises, including:

a) State-owned corporations (State-owned corporations established according to the Law on State-Owned Enterprises in 1995 and State-owned corporations decided to be invested in and established according to the Law on State-Owned Enterprises in 2003; corporations established by companies investing and establishing themselves; State-owned investment and business capital corporations);

b) Independent state-owned companies;

c) Independent accounting subsidiary companies of State-owned corporations decided to be invested in and established by the State.

2. State-owned companies operating under the Enterprise Law, including:

a) State-owned joint-stock companies;

b) State-owned limited liability companies with one member;

c) State-owned limited liability companies with two members or more;

d) Enterprises with controlling shares or contributions from the State;

đ) Enterprises with a portion of capital from the State;

e) State-owned companies holding controlling rights over other enterprises;

3. Business organizations operating under the Enterprise Law, including:

a) Limited liability companies;

b) Joint-stock companies;

c) Partnership companies;

d) Private enterprises.

4. Foreign-invested enterprises operating under the Law on Investment by Foreign Organizations and Individuals in Vietnam.

5. Branches of foreign enterprises operating in Vietnam.

6. Representative offices of foreign enterprises operating in Vietnam.

7. Cooperatives operating under the Law on Cooperatives.

8. Individual business households and cooperative groups.

II. ASSIGNING PERSONNEL AS CHIEF ACCOUNTANTS AND ACCOUNTING SUPERVISORS, ENGAGING CHIEF ACCOUNTANTS

1. Accounting Units

Accounting units are entities specified in Part I of this Circular that conduct accounting work and prepare financial statements in accordance with the Accounting Law.

2. Assigning Personnel as Chief Accountants

Accounting units must assign personnel as chief accountants, including:

a) Accounting units specified in points 1, 2, 3, 4, 5, and point 7 of Part I of this Circular;

b) Subsidiary companies of State-owned corporations determined as accounting units;

c) Parent and subsidiary companies of State-owned corporations established by companies investing and establishing themselves and converted to the parent-subsidiary company model;

3. Assigning persons to be responsible for accounting

d) Business organizations with multi-level accounting structures, if the grassroots level is an accounting unit with significant accounting workload, must have at least two accountants. For special State-owned companies directly serving national defense and security, the assignment of chief accountants shall be regulated by the Ministry of National Defense, Ministry of Public Security, and the Government Office of Secretariat after consultation with the Ministry of Finance.

Entities and organizations assigned personnel as accounting supervisors include:

a) Accounting units specified above in point 2, if lacking a chief accountant, the head of the accounting unit must immediately assign a chief accountant. If there is no person meeting the criteria and conditions for appointment as a chief accountant, an accounting supervisor may be assigned for a maximum period of one fiscal year, after which a chief accountant must be appointed immediately.

4. Engaging chief accountants

b) Business organizations specified in points 6 and 8 of Part I of this Circular are not required to assign a chief accountant but must appoint an accounting supervisor. There is no time limit for the accounting supervisor in this case.

5. Relationship between chief accountant and deputy chief accountant with head of accounting department and deputy head of accounting department

Accounting units must assign a chief accountant as specified in point 2 above but cannot appoint a chief accountant or an accounting supervisor, then they must engage a chief accountant in accordance with Clause 2, Article 37, Decree No. 129/2004/NĐ-CP.

a) Those accounting units that have already appointed a chief accountant or assigned an accounting supervisor shall not appoint a head of accounting department or head of accounting division. The chief accountant or accounting supervisor will concurrently perform the duties prescribed for the head of accounting department or head of accounting division.

b) In accounting units where financial and statistical work has not been separated into distinct departments, the chief accountant or accounting supervisor will oversee both financial and statistical work.

III. STANDARDS AND CONDITIONS FOR APPOINTMENT AS CHIEF ACCOUNTANT OR RESPONSIBLE PERSON FOR ACCOUNTING, OR FOR HIRING AS CHIEF ACCOUNTANT

1. Standards and conditions for appointment as chief accountant

c) For accounting units with large accounting workloads, a deputy head of accounting department (or deputy head of accounting division) can be appointed concurrently with the chief accountant. The deputy head of accounting department (or deputy head of accounting division) assists the chief accountant.

a) Standards for appointment as chief accountant

- Regarding ethics: Must possess professional ethics, honesty, integrity, and a sense of compliance and protection of economic, financial policies, systems, and laws of the State.

- Regarding professional qualifications:

+ For chief accountants of accounting units specified in point 1, point 2, sub-point a, b of point 3, and point 4 of Part I of this Circular and chief accountants of subsidiary companies, must have a college or university degree in accounting;

The chief accountant of the accounting unit of the higher-level accounting unit that has subordinate accounting units, the chief accountant of state-owned holding companies, and the chief accountant of parent companies must have a major and vocational training in accounting at the bachelor's level or above. Specifically, for Vietnamese chief accountants working in foreign-invested enterprises established and operating in Vietnam, they must also have language proficiency as required by the enterprise to serve transactional and work-related purposes.

- Regarding actual work experience in accounting:

+ For chief accountants of the accounting units specified in points 1, 2, sub-items a and b of point 3, and point 4, Part I of this Circular, and chief accountants of subsidiary companies must have at least two years of actual work experience in accounting if they have a bachelor’s degree; in cases where they have vocational training in accounting at the associate degree level, they must have at least three years of actual work experience in accounting;

+ For chief accountants of the accounting units specified in sub-items c and d of point 3, point 5, and point 7, Part I of this Circular, and chief accountants of dependent companies of state-owned holding companies must have at least three years of actual work experience in accounting if they have vocational training in accounting at the secondary level; for those with vocational training in accounting at the bachelor's level or above, they must have at least two years of actual work experience in accounting;

+ For chief accountants of the higher-level accounting unit that has subordinate accounting units, chief accountants of state-owned holding companies, and chief accountants of parent companies must have at least five years of actual work experience in accounting.

b) Conditions for appointment as chief accountant

- Must meet the standards stipulated in sub-item a, point 1, Part III of this Circular;

- Hold a Chief Accountant Training Certificate as prescribed in Decision No. 43/2004/QD-BTC dated April 26, 2004, of the Minister of Finance, or hold a Chief Accountant Training Certificate issued before Decision No. 43/2004/QD-BTC took effect, according to the Regulation on Organizing Training and Issuing Chief Accountant Certificates attached to Decision No. 159 TC/CĐKT dated September 15, 1989, and Decision No. 769 TC/QĐ/TCCB dated October 23, 1997, of the Minister of Finance;

- Not be among the persons prohibited from being an accountant as provided for in Article 51 of the Accounting Law;

c) Standards and conditions for appointing a foreign national as chief accountant

For foreign nationals appointed as chief accountants in foreign-invested enterprises or Vietnamese enterprises, they must hold a Professional Accountant Certificate or an Accounting and Auditing Certificate issued by a foreign organization recognized by the Ministry of Finance of Vietnam; or hold a Practice Certificate in Accounting or an Auditor Certificate issued by the Ministry of Finance of Vietnam; or hold a Chief Accountant Training Certificate as prescribed by the Ministry of Finance; they must have at least two years of actual work experience in accounting, including one year of accounting work in Vietnam; not be among the persons prohibited from being an accountant as provided for in Article 51 of the Accounting Law, and be permitted to reside in Vietnam for at least one year.

2. Standards and conditions for appointing a person responsible for accounting

A person appointed as responsible for accounting must meet all the ethical and professional qualifications prescribed for a chief accountant but may lack sufficient actual work experience in accounting or may not hold a Chief Accountant Training Certificate as stipulated in sub-item b, point 1 above.

3. Standards and conditions for individuals hired as chief accountant

A person hired as chief accountant must meet the following standards and conditions:

a) Hold a Practice Certificate in Accounting as prescribed in Article 57 of the Accounting Law or an Auditor Certificate as prescribed in Article 13 of Decree No. 105/2004/NĐ-CP dated March 30, 2004, of the Government on Independent Auditing;

b) Hold a Chief Accountant Training Certificate as prescribed by the Ministry of Finance;

c) Have a business registration for accounting services or a practice registration for accounting and auditing in an accounting and auditing service company as prescribed by law;

d) Not be among the persons prohibited from being an accountant as provided for in Article 51 of the Accounting Law.

IV. PROCEDURES FOR APPOINTMENT, REMOVAL, REPLACEMENT OF CHIEF ACCOUNTANT OR RESPONSIBLE PERSON FOR ACCOUNTING; HIRING AND TERMINATION OF CONTRACT WITH PERSONS HIRED AS CHIEF ACCOUNTANT

1. Procedures for appointing, dismissing, and replacing chief accountants and persons responsible for accounting

a) For state-owned companies specified in point 1, Part I of this Circular, when proposing to appoint, dismiss, or replace a chief accountant or person responsible for accounting, they must prepare a dossier similar to the dossier for appointing Deputy Directors or Deputy General Directors for chief accountants; and a dossier for appointing Heads of Departments or Heads of Divisions for persons responsible for accounting, to be submitted to the competent authority as prescribed in Clause 1, Article 25 and Clause 2, Article 40 of the State-Owned Enterprise Law.

b) For organizations specified in points 2 and 3, Part I of this Circular, the procedures for appointing, dismissing, or replacing chief accountants or persons responsible for accounting are as follows:

- For limited liability companies specified in sub-items b and c of point 2 and sub-item a of point 3, Part I of this Circular, they shall implement according to the Company Charter and be decided by the Board of Members as prescribed in sub-item d, Clause 1, Article 35 of the Enterprise Law;

- For joint-stock companies specified in sub-items a, d, f, and e of point 2 and sub-item b of point 3, Part I of this Circular, they shall implement according to the provisions of sub-item e, Clause 2, Article 80 of the Enterprise Law, according to the Company Charter, and be decided by the Board of Directors;

- For partnership companies specified in sub-item c of point 3, Part I of this Circular, they shall implement according to the Company Charter and be decided by the Board of Members of the partnership company;

- For private enterprises specified in sub-item d of point 3, Part I of this Circular, they shall be decided by the enterprise owner;

c) For foreign-invested enterprises and branches of foreign enterprises operating in Vietnam specified in points 4 and 5, Part I of this Circular, the procedures for appointing, dismissing, or replacing chief accountants or persons responsible for accounting are as follows:

- For wholly foreign-owned enterprises and branches of foreign enterprises, the decision is made by the Investor;

- For joint ventures between Vietnam and foreign countries, the decision is made by the Joint Venture Management Board.

d) For cooperatives specified in Point 7, Part I of this Circular when requesting to appoint, dismiss, or replace the chief accountant or accounting supervisor, they shall implement the provisions set forth in Point b, Clause 1, Article 27 of the Law on Cooperatives and such decisions shall be made by the Management Board of the Cooperative.

đ) For representative offices of foreign enterprises operating in Vietnam; individual households and cooperative groups specified in Points 6 and 8, Part I of this Circular and basic-level accounting units of business organizations that have multi-level accounting systems, the appointment, dismissal, or replacement of the person responsible for accounting or chief accountant (if any) shall be decided by the legal representative of the accounting unit.

2. Procedures for signing contracts for hiring and terminating contracts for hiring accountants-in-chief

a) For businesses and cooperatives which are accounting units required to arrange for an accountant-in-chief but do not appoint but instead hire an accountant-in-chief, the hiring of an accountant-in-chief must be decided by the authority with the power to appoint the accountant-in-chief as stipulated in Point 1 above.

b) The cost of hiring an accountant-in-chief according to the agreement in the service contract with an accounting or auditing service enterprise, or directly signing a service contract with the hired person who has registered for accounting services.

c) For businesses and cooperatives which are accounting units that hire an accountant-in-chief, if the hired person violates the provisions in the contract, the contract will be terminated. The procedure for terminating the contract for hiring an accountant-in-chief shall be carried out in accordance with the procedures for signing a contract for hiring an accountant-in-chief with an accounting or auditing service enterprise or with the person directly hired.

V. SALARY FOR CHIEF ACCOUNTANTS AND ACCOUNTING SUPERVISORS

1. For state-owned companies specified in Point 1, Part I of this Circular, the chief accountant shall be assigned a position salary according to the company's grade as stipulated in the salary table for General Directors, Directors, Deputy General Directors, and Chief Accountants issued together with Decree No. 205/2004/NĐ-CP dated December 14, 2004 of the Government.

In cases where the aforementioned state-owned companies appoint a person to be the accounting supervisor, the accounting supervisor shall be assigned a professional and vocational salary and shall enjoy the position allowance as a Department Head of the same grade as stipulated in Item 6, Article 3 of Decree No. 205/2004/NĐ-CP dated December 14, 2004 of the Government.

2. For organizations engaged in business activities specified in Points 2, 3, 4, 5, and Point 7, Part I of this Circular, the salary of the chief accountant and accounting supervisor shall be agreed upon by both parties and recorded in the labor contract according to the wage scale and salary table determined by the enterprise or cooperative.

3. For organizations engaged in business activities specified in Points 6 and 8, Part I of this Circular that assign a person to be the accounting supervisor or chief accountant (if any), the salary of the accounting supervisor or chief accountant shall be agreed upon by both parties and recorded in the labor contract.

VI. IMPLEMENTATION

1. Accounting units shall be responsible for:

a) Must appoint or assign a person meeting the criteria and conditions to serve as the chief accountant or accounting supervisor of the unit in accordance with Decree No. 129/2004/NĐ-CP and the guidance provided in this Circular;

b) Implement the provisions regarding the procedures for appointing, dismissing, and replacing the chief accountant or accounting supervisor as stipulated in this Circular;

c) The decision to hire a chief accountant must comply with the provisions of this Circular.

2. Ministries managing industries, provincial people's committees under the central government shall be responsible for:

a) Directing and guiding business organizations to carry out the review of the current team of chief accountants; implementing the arrangement, procedures for appointing, dismissing, replacing, and assigning salaries to chief accountants and accounting supervisors, and hiring persons to serve as chief accountants in accordance with the regulations of the State;

b) Coordinating with financial and accounting academies, universities, and colleges, and the Vietnam Association of Accountants and Auditors to organize training courses for chief accountants to appoint chief accountants;

c) For accounting units currently having a Head of Accounting Department or Head of Accounting Division, if they meet the criteria and conditions, they shall be appointed as chief accountants; if they do not meet the conditions, they shall be transferred to become accounting supervisors.

3. The Ministry of Finance shall be responsible for:

a) Taking the lead in researching and guiding the supplementation of criteria, conditions, procedures for appointing, dismissing, replacing chief accountants and accounting supervisors, and hiring persons to serve as chief accountants in accordance with the Accounting Law;

b) Coordinating with the Ministry of Labor, Invalids, and Social Affairs to inspect the implementation of the appointment, dismissal, replacement, and assignment of salaries to chief accountants and accounting supervisors in business organizations in accordance with the provisions of this Circular.

VII. IMPLEMENTATION PROVISIONS

1. Based on the contents stipulated in this Circular, ministries managing industries, provincial people's committees under the central government shall direct business organizations to implement the appointment, dismissal, replacement, and assignment of salaries to chief accountants and accounting supervisors, and hiring persons to serve as chief accountants in accordance with the regulations of the State.

2. This Circular shall take effect fifteen days after its publication in the Official Gazette. The Circular No. 64/TT-LB dated December 12, 1990 of the Ministry of Finance and the Ministry of Labor, Invalids, and Social Affairs guiding the appointment and assignment of salaries to chief accountants and deputy chief accountants of state-owned enterprises is hereby abolished. During the implementation process, if there are any difficulties, please report them to the Ministry of Finance and the Ministry of Labor, Invalids, and Social Affairs for consideration and resolution.

During the implementation process, if there are any difficulties, please report them to the Ministry of Finance and the Ministry of Labor, Invalids, and Social Affairs for consideration and resolution./.