Circular No. 22/TC-CĐKT guiding the implementation of the Independent Audit Regulation in the national economy issued together with Government Decree No. 7-CP dated January 29, 1994.

CIRCULAR

Guidelines for Implementing the Independent Audit Regulation

issued together with Decree No. 7/CP dated January 29, 1994 of the Government

To implement Decree No. 7/CP dated January 29, 1994 of the Government on the Independent Audit Regulation in the national economy, the Ministry of Finance provides specific guidelines as follows.

I. GENERAL PROVISIONS

1. Independent audit is a type of service activity involving auditing and financial accounting advisory services conducted by professional auditors of independent audit organizations at the request of enterprises, organizations, and agencies.

The function of independent auditors is to verify and confirm the accuracy, truthfulness, and reasonableness of accounting data, documents, and final reports of enterprises, organizations, and agencies (hereinafter referred to as units), and based on the audit results, provide conclusions evaluating compliance with laws, policies, financial and accounting systems, and the effectiveness of unit operations.

Accounting data, documents, and final reports of units that have been verified and confirmed by independent auditors serve as reliable bases satisfying the requirements of the units, state agencies, and all organizations and individuals related to or concerned about the activities of the units.

2. The main objects of independent audit are enterprises belonging to various economic sectors. In addition to enterprises, other objects of independent audit may include administrative and public service units, mass organizations, social organizations, and international organizations when these organizations have needs or when higher-level management agencies, tax authorities, or state agencies require it.

For audit objects that are foreign-invested enterprises operating under the Law on Foreign Investment in Vietnam, limited liability companies, joint-stock companies operating under the Law on Enterprises, annual audits must be conducted and annual final reports submitted to state management agencies must be accompanied by audit reports from independent audit organizations legally operating in Vietnam or another independent audit organization approved by the Ministry of Finance.

For other audit objects, in the short term, audits will be carried out when accounting units have needs (needs of enterprises, boards of directors, member meetings...) or when functional state management agencies require them (higher-level supervisory agencies, financial agencies, tax agencies) and only within the scope of the required contents (annual settlement, settlement of completed construction projects, determination of joint venture capital contribution value, enterprise shareholding value, determination of business results, asset liquidation, sale...).

3. Independent audit work is performed by professional auditors (referred to as auditors).

Auditors are individuals recognized by the State and permitted to practice in the field of independent audit. Auditors must register their practice with a legally established audit organization.

4. An independent audit organization is a business entity (Audit Company or Audit Office) established by agencies, organizations, or founders in accordance with current regulations on establishing businesses (State Enterprise Law, Private Enterprise Law, Company Law, Law on Foreign Investment in Vietnam) and regulations on establishing audit organizations in the Independent Audit Regulation.

Foreign audit organizations conducting auditing and financial advisory services in Vietnam through joint ventures or business cooperation contracts with Vietnamese audit organizations or wholly foreign-owned audit companies must obtain a license from the State Committee on Cooperation and Investment of Vietnam after obtaining written agreement from the Ministry of Finance.

Activities of auditors and foreign audit organizations must comply with the Law on Foreign Investment in Vietnam, provisions in the Independent Audit Regulation, current Vietnamese regulations and policies, and internationally recognized auditing standards acknowledged by the Vietnamese State.

6. Units and organizations requesting audits have the freedom to choose Vietnamese or foreign audit organizations legally operating in Vietnam to sign audit contracts. If a unit invites a foreign audit organization that has not yet been permitted to operate in Vietnam, the unit must report and obtain approval from the Ministry of Finance, and the unit must bear responsibility for paying the taxes that the foreign audit organization is required to pay to the Vietnamese State according to the relevant laws governing such activities in Vietnam.

7. Audit work must be conducted in accordance with current Vietnamese auditing methods and standards and internationally recognized auditing standards acknowledged by the Vietnamese State. Upon completion of the audit work, the auditor must prepare an audit report, record their comments in the audit report, and bear full responsibility for those comments. The audit report must contain the following main elements:

The truthfulness and reasonableness of the figures on the unit's accounting report.

The situation of accounting work at the unit and compliance with accounting regulations and procedures.

Recommendations.

The audit report must be truthful and objective. The audit report must be signed by the auditor and confirmed, signed, and stamped by the leadership of the audit organization.

II. AUDITORS.

1. Vietnamese citizens recognized as practicing auditors must meet the following criteria:

Have a clear background confirmed by the agency where they work or the local government where they reside, possess honesty, integrity, a thorough understanding of laws and policies, economic, financial, accounting, and statistical systems of the State, and have no criminal record.

Hold a bachelor's or specialized secondary degree in finance and accounting, and have worked in financial and accounting positions for five years or more (if holding a bachelor's degree) or ten years or more (if holding a secondary degree).

Have passed the national auditor examination organized by the National Examination Board and obtained a certificate from the Minister of Finance.

Be accepted to work at an independent audit organization legally operating in Vietnam and registered in the list of auditors with the Ministry of Finance.

A current civil servant of the State shall not register to practice as an auditor in an independent auditing organization.

2. Foreign citizens wishing to practice auditing in Vietnam must meet the following conditions:

Legally reside in Vietnam.

Hold an auditor certificate issued by the Ministry of Finance of Vietnam or hold an auditor certificate issued by an international auditing organization recognized by the Ministry of Finance of Vietnam and must be proficient in Vietnamese economic, financial, accounting, and auditing laws.

Be accepted for employment at an auditing organization legally established in Vietnam.

Have registered on the list of auditors with the Ministry of Finance.

3. The training, professional knowledge enhancement, and auditor examination shall be conducted according to a unified program and regulations prescribed by the Ministry of Finance.

Successful candidates will be awarded an auditor certification by the National Examination Board and will receive an auditor certificate from the Minister of Finance when they register for work at an independent auditing organization operating legally in Vietnam.

The auditor certificate issued is valid for a period of five years from the date of issuance. After this period, the holder must complete procedures to obtain a new certificate.

4. Auditors may perform the following auditing and financial advisory services:

Verify the legality and validity of financial documents, accounting data, and compliance with state accounting and financial regulations.

Examine and confirm the truthfulness and reasonableness of final reports prepared by accounting units.

Examine and confirm the value of capital contributions by joint venture participants, shareholders, and the truthfulness, reasonableness, and completeness of accounting data and final reports of joint ventures, dissolution, mergers, spin-offs, privatization, bankruptcy, and other cases as stipulated by law.

Financial and accounting appraisals and advisory services related to financial management, accounting, taxation, etc., upon customer request.

In addition to the above auditing and financial advisory services, auditors may also provide other advisory services as specified in the establishment permit of the auditing organization.

5. Auditors must perform their auditing tasks in accordance with the following principles:

Adhere to the laws of the Socialist Republic of Vietnam.

Ensure honesty, independence, objectivity, fairness, and confidentiality of information.

Comply with current Vietnamese accounting and auditing standards and internationally recognized accounting and auditing standards acknowledged by the Socialist Republic of Vietnam.

6. Auditors may only provide auditing services to client entities where there are no economic relationships (such as capital contributions, loans, processing contracts, service contracts, agency sales contracts, etc.), no familial relationships with entity leaders (spouses, parents, grandparents, children, or full siblings), and no bookkeeping or report preparation services for the entity.

7. Auditors have the responsibility to:

Strictly adhere to auditing principles; fulfill all terms of the auditing contract; prepare audit reports, sign the audit reports, and bear legal responsibility before the law, the independent auditing organization, and the client regarding the honesty and objectivity of the audit results and comments in the audit report.

During the performance of duties, auditors shall not obstruct or interfere with the management operations of the audited entity and shall not accept any payment outside the agreed auditing fee in the contract.

Auditors who violate auditing regulations or laws (such as intentionally violating rules, colluding to cover up violations, using professional techniques to conceal errors, accepting bribes, providing unobjective and truthful audit reports, etc.) may have their auditor certificates revoked and be subject to legal penalties depending on the severity; if such violations cause material losses to clients, auditors must compensate for the losses.

8. Auditors have the right to:

Professional independence (adhering to laws, professional standards, and methods).

Request clients to provide complete and timely accounting and financial documents and other relevant materials related to the audit content.

Cross-check and verify economic information related to the audited entity both within and outside the entity (if necessary).

During the audit process, if auditors discover that the audited entity is violating the law, they have the right to notify and recommend corrective measures and include their opinions in the audit report.

Auditors have the right to refuse to conduct audits for clients if they determine that the conditions or capabilities for conducting the audit are insufficient.

III. AUDITING ORGANIZATIONS

Agencies, organizations, or founders wishing to establish an independent auditing organization (Company or Audit Office) must meet the following conditions:

Meet all legal requirements for establishing various types of enterprises (state-owned enterprises, limited liability companies, joint-stock companies, private enterprises, depending on the specific case).

Have at least five individuals holding auditor certificates. The head of the auditing organization must be an auditor.

Be approved in writing by the Minister of Finance for establishment permission and be authorized by the competent state authority to establish according to the law. The procedures and formats for reviewing establishment files and issuing establishment decisions for independent auditing organizations are carried out according to the current laws governing the establishment of various types of enterprises.

2. Independent auditing organizations, after obtaining the establishment permit, must register for business with the competent state authority and publish in central and local newspapers the name, address, mission, functions, and leadership personnel as required by law. Any changes to the independent auditing organization's registered contents with the state authority must be re-registered or supplementary permission obtained.

3. Independent auditing organizations must register their list of auditors with the Ministry of Finance.

Within fifteen days from the date of registration of the auditor list by the auditing organization, the Ministry of Finance will issue auditor certificates to those auditors who have passed the auditor examination and been accepted for employment at the auditing organization.

During their operation, auditing organizations must promptly report to the Ministry of Finance the list of auditors who have ceased practice, transferred to other jobs, or had their auditing license revoked to remove them from the auditor list and reclaim issued auditor certificates.

Auditors who cease practice, transfer to other jobs, or have their auditing license revoked must return their auditor certificates to the Ministry of Finance within one month from the official date of ceasing work at the auditing organization. Beyond this period, the auditor certificates issued by the Minister of Finance will lose their legal validity.

4. Independent auditing organizations are responsible for managing and directing all professional activities of auditors under their management.

In cases where auditors violate professional principles and regulations, the auditing organization must bear joint responsibility. If an auditor causes damage to a client, the auditing organization must be liable to the client for compensation according to the terms agreed upon in the audit contract.

5. Independent auditing organizations are independent economic accounting units, entitled to charge service fees to cover expenses. The fee level for each audit contract is agreed upon by both parties based on the volume, complexity of the work, working time, and the fee framework set by the Ministry of Finance.

Independent auditing organizations must purchase insurance from legally operating insurance organizations in Vietnam to guard against risks when required to compensate for damages caused to clients.

6. Independent auditing organizations must fully fulfill tax obligations and other payments to the state budget as prescribed by law.

IV. STATE MANAGEMENT OF AUDITING ACTIVITIES

1. Activities of independent auditing organizations must comply with state laws and be subject to inspection and supervision by state management agencies like any business enterprise.

Accounting data, documents, and final reports of enterprises, organizations, and agencies that have been confirmed by independent auditing organizations are trusted and utilized by state agencies for their management needs. In cases where confirmed accounting data, documents, and final reports lack necessary reliability or raise suspicion, state management agencies within their authority and responsibilities will directly recheck and make management decisions based on their inspection results. Enterprises, organizations, and agencies must comply with state management agency decisions, while also requesting the auditing organization to review the audit report results, and if there are disagreements or disputes, they should refer to local financial authorities or the Ministry of Finance for resolution.

2. The Ministry of Finance implements state management functions over auditing activities in the national economy. These management functions are carried out through measures such as:

Issuing and guiding the implementation of auditing principles, standards, and professional methods applicable in the national economy.

Issuing and directing the implementation of training programs and content for auditor skills development, examination rules, and issuance of auditor licenses, establishing national examination committees, and organizing examinations to issue auditor licenses.

Reviewing and providing opinions on applications for establishment of auditing organizations. Organizing registration and unified management of auditor lists.

Setting a fee framework for audits, after consultation with the Government Price Control Board, for uniform application in auditing activities.

Supervising compliance with laws and auditing regulations in the operations of auditing organizations, resolving any disputes arising from audit results. Any disputes regarding audit results, the opinion of the Minister of Finance is the final decision.

VI. IMPLEMENTATION PROVISIONS.

This Circular takes effect from the date of signature. Existing auditing organizations established before the effective date of the Independent Auditing Organization Regulation may continue their operations according to their registered bylaws, prepare their staff for participation in auditor examinations, register their auditor lists with the Ministry of Finance, and reorganize their activities in accordance with the Regulation./.