Circular No. 42/2025/TT-NHNN on independent audit for credit organizations that are cooperatives

CIRCULAR

Article 24Regarding independent audit for credit organizations that are cooperatives

Pursuant to the Law on the State Bank of Vietnam No. 46/2010/QH12;

Pursuant to the Law on Credit Institutions No. 32/2024/QH15 amended and supplemented by Law No. 96/2025/QH15;

Pursuant to the Law on Cooperatives No. 17/2023/QH15;

Pursuant to the Law on Independent Audit No. 67/2011/QH12 amended and supplemented by Law No. 97/2015/QH13 and Law No. 56/2024/QH15;

Pursuant to Decree No. 26/2025/NĐ-CP of the Government stipulating the functions, tasks, powers, and organizational structure of the State Bank of Vietnam;

At the proposal of the Director of the Credit Institution System Safety Department;

 The Governor of the State Bank of Vietnam issues this Circular on independent audit for credit organizations that are cooperatives.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

Article 1. This Circular stipulates independent audit of financial statements and implementation of assurance services regarding the internal control system in preparing and presenting financial statements for credit organizations that are cooperatives.

Article 2. The independent audit of credit organizations that are cooperatives shall be carried out in accordance with relevant laws and must comply with Articles 7, 11, 12, 13, and 14 of this Circular in the following cases:

a) Engaging an independent auditing organization to assess part or all of the internal control system at the request of the State Bank of Vietnam (hereinafter referred to as the State Bank);

b) Engaging an independent auditing organization to audit financial statements and evaluate the current financial status to serve the preparation of remediation plans as required by the State Bank under Clause 4, Article 156 of Law No. 32/2024/QH15 on Credit Institutions;

c) A cooperative bank subject to special supervision engaging an independent auditing organization to audit financial statements as provided for in Clause 1, Article 167 of Law No. 32/2024/QH15;

d) Engaging an independent auditing organization to conduct independent audits to serve requirements for banking inspections and supervision as prescribed by law.

Article 2. Applicability

This Circular applies to:

Article 3. Credit organizations that are cooperatives include:

a) Cooperative banks;

b) People's Credit Funds.

Article 4. Independent auditing organizations, practicing auditors, auditors, and other organizations and individuals related to the independent audit of credit organizations that are cooperatives.

Article 3. Explanation of Terms

In this Circular, the following terms are understood as follows:

1. Independent audit of credit organizations that are cooperatives is the act of practicing auditors or independent auditing organizations auditing financial statements and implementing assurance services regarding the internal control system in preparing and presenting financial statements of credit organizations that are cooperatives according to the audit contract.

2. Independent auditing organizations include accounting firms and branches of foreign accounting firms in Vietnam.

Article 4. Scope of Audit

Article 1. Credit organizations that are cooperatives must select independent auditing organizations in accordance with this Circular to perform:

a) Audit of financial statements;

b) Assurance services regarding the internal control system in preparing and presenting financial statements for cooperative banks and people's credit funds with total assets of VND 50 billion or more as of September 30 of the year immediately preceding the audit year.

Article 2. Review of semi-annual financial reports, audit of final project settlement reports, and other audit tasks of credit organizations that are cooperatives (if any) shall be carried out in accordance with relevant laws.

Article 5. Encouragement of Audit

The State Bank encourages credit organizations that are cooperatives to use independent auditing services to audit limitations aimed at ensuring safety in the operations of credit organizations that are cooperatives.

Chapter II

 SPECIFIC PROVISIONS

Article 6. Time for Selecting Independent Auditors

Before the end of the fiscal year, credit cooperatives must select independent auditors in accordance with this Circular to audit financial statements and provide assurance services regarding the internal control system's performance in preparing and presenting financial reports for the next fiscal year.

Article 7. Authority to Select Independent Auditors

1. The General Assembly decides on the selection of independent auditors in accordance with this Circular.

2. The Board of Directors decides on the selection of independent auditors for credit cooperatives under special supervision.

Article 8. Content of Independent Audit

1. The independent audit of the financial statements of credit cooperatives includes auditing:

a) Financial position report;

b) Operating results report;

c) Cash flow statement;

d) Notes to the financial statements.

2. Providing assurance services regarding the internal control system's performance in preparing and presenting financial reports of credit cooperatives.

Article 9. Independent Auditor's Opinion

1. Based on the audit results, practicing auditors and independent auditors must issue opinions in accordance with laws on independent audits and Vietnamese auditing standards.

2. The State Bank has the right to request independent auditors and credit cooperatives being audited to explain matters excluded from the audit report.

Article 10. Results of Independent Audit

1. The results of independent audit for credit cooperatives include:

a) Audit report on financial statements;

b) Report on the provision of assurance services regarding the internal control system's performance in preparing and presenting financial reports;

c) Management letter and related documents, evidence.

2. The audit report on financial statements, report on the provision of assurance services regarding the internal control system's performance in preparing and presenting financial reports of credit cooperatives must comply with laws on independent audits, accounting standards, Vietnamese auditing standards, and other relevant laws.

3. The management letter must reflect specific issues and events during the audit process, including: actual conditions, risk potential, recommendations of auditors, and opinions of managers and executives of credit cooperatives related to such events. The management letter must at least contain the following contents:

a) General approach, scope of the audit, and additional requirements;

b) Evaluation of significant changes in policies and practices affecting financial statements, the internal control system's performance in preparing and presenting financial reports of credit cooperatives;

c) Risks that may significantly affect financial statements, the internal control system's performance in preparing and presenting financial reports of credit cooperatives;

d) Recommendations for adjustments by independent auditors and practicing auditors concerning matters or events that have affected or may significantly affect financial statements, the internal control system's performance in preparing and presenting financial reports of credit cooperatives;

đ) Disagreements with managers and executives of credit cooperatives about issues that may significantly affect financial statements, the internal control system's performance in preparing and presenting financial reports of credit cooperatives or the opinions of practicing auditors and independent auditors. Practicing auditors and independent auditors must clearly state the resolution of these disagreements and the extent of their impact;

e) Other issues agreed upon in the audit contract.

Article 11. Requirements for independent auditing organizations conducting cooperative credit bank audits

1. Established and have at least three years of auditing experience in Vietnam.

2. Have net assets of at least 10 billion VND.

3. Have at least five practicing auditors participating in cooperative credit bank audits. Among them, there must be at least three practicing auditors with at least two years of experience in auditing financial and banking sectors.

4. Practicing auditors and representatives of independent auditing organizations participating in cooperative credit bank audits must meet the standards stipulated in Article 13 of this Circular.

5. Not engaged in purchasing bonds, buying assets, contributing capital, or joint ventures with cooperative credit banks.

6. Not a customer currently receiving unsecured loans or preferential loans from cooperative credit banks.

7. Not conducting audits of cooperative credit banks for five consecutive years immediately preceding the audit year.

8. Not subject to legal violations related to independent auditing in the two years immediately preceding the audit year.

9. The auditing organization and practicing auditors conducting cooperative credit bank audits must belong to the list of auditing organizations and lists of practicing auditors approved to conduct audits for public interest entities as published by the Ministry of Finance during the audit period.

10. Not in a situation where auditing is not permitted according to laws on independent auditing.

11. Meet other requirements for independent auditing as stipulated by laws on independent auditing.

Article 12. Requirements for independent auditing organizations conducting audits of people's credit funds

1. Practicing auditors and representatives of independent auditing organizations participating in people's credit fund audits must meet the standards stipulated in Article 13 of this Circular.

2. Not a customer currently receiving unsecured loans or preferential loans from people's credit funds.

3. Not conducting audits of the same people's credit fund for five consecutive years immediately preceding the audit year.

4. The auditing organization and practicing auditors conducting people's credit fund audits must belong to the list of auditing organizations and lists of practicing auditors approved to conduct audits for public interest entities as published by the Ministry of Finance during the audit period.

5. Not in a situation where auditing is not permitted according to laws on independent auditing.

6. Meet other requirements for independent auditing as stipulated by laws on independent auditing.

Article 13. Standards for practicing auditors and representatives of independent auditing organizations participating in audits of credit institutions that are cooperatives

1. Not a customer currently receiving unsecured loans or preferential loans from the cooperative credit institution being audited.

2. Not subject to legal violations related to independent auditing in the two years immediately preceding the audit year.

3. Not in a situation where auditing is not permitted according to laws on independent auditing.

4. Meet other requirements for independent auditing as stipulated by laws on independent auditing.

Article 14. Responsibilities of independent auditing organizations and practicing auditors participating in auditing credit cooperatives

1. Fulfill all obligations as prescribed by laws on independent auditing.

2. Bear responsibility for the completeness, accuracy, and timeliness of information provided to credit cooperatives during the process of selecting independent auditing organizations.

3. Comply with legal regulations related to financial statements and operations of credit cooperatives.

4. Provide explanations and audit documents upon written request from the State Bank, including explanations regarding matters excluded from the audit report.

5. During the audit process, if discovering that the audited credit cooperative does not comply with relevant legal regulations within the scope of auditing, they must notify and recommend corrective measures to the audited credit cooperative; record opinions in the audit report or management letter as required under Clause 2 and Clause 3, Article 10 of this Circular.

6. After issuing the audit report, if there are significant violations due to non-compliance with laws and regulations within the scope of auditing, the independent auditing organization must inform the audited entity and third parties according to Vietnamese auditing standards and notify the State Bank.

Article 15. Responsibilities of credit cooperatives

1. Select independent auditing organizations in accordance with this Circular.

2. Within thirty days from the date of deciding to select an independent auditing organization, have the responsibility to send a written notification about the selected auditing organization to the State Bank as follows:

a) Cooperative banks shall send to the State Bank (through the Credit Institution Management and Supervision Department).

b) People's Credit Funds shall send to the State Bank branch in the region where the main office of the People's Credit Fund is located.

3. Fulfill all obligations as prescribed by laws on independent auditing.

4. Provide explanations regarding matters excluded from the audit report upon written request from the State Bank.

5. Within ninety days from the end of the fiscal year, submit the audit report on financial statements, service guarantee implementation reports concerning internal control system activities in preparing and presenting financial statements and management letters to the State Bank as stipulated in Clause 2 of this Article.

6. Send a written notification to the State Bank as stipulated in Clause 2 of this Article when detecting violations by practicing auditors or auditing organizations during the independent auditing process, and in cases of disputes over the results of independent auditing, reporting, explaining, and proposing solutions according to relevant laws.

7. Publicly disclose financial information in accordance with current regulations.

Article 16. Responsibilities of units under the State Bank

1. The Department of Management and Supervision of Credit Institutions shall be responsible for:

a) Analyze, evaluate, and recommend measures to handle audit reports concerning financial statements and service guarantee implementation reports for the internal control system's activities in preparing and presenting financial statements and management letters of cooperative credit banks;

b) Report and propose to the Governor of the State Bank the following contents:

(i) In case of receiving notification documents from cooperative credit banks as prescribed in Clause 6, Article 15 of this Circular;

(ii) In case of receiving reports from the State Bank Branch Area as prescribed in Point d, Clause 3 of this Article;

(iii) Notify the Ministry of Finance when discovering or receiving reports from the State Bank Branch Area as prescribed in Point a, Clause 3 of this Article regarding independent auditors and auditing organizations violating laws during the independent audit of people's credit funds;

c) Provide comments on specialized monetary and banking matters in audit reports concerning financial statements and service guarantee implementation reports for the internal control system's activities in preparing and presenting financial statements and management letters of cooperative credit banks upon request of competent authorities.

2. The State Bank Inspectorate shall be responsible for inspecting and supervising the implementation of this Circular and handling according to its authority or recommending the Governor of the State Bank to handle cooperative credit banks violating provisions of this Circular and other laws on independent audits.

3. The State Bank Branch Area shall be responsible for:

a) Analyzing, evaluating, and handling audit reports concerning financial statements and service guarantee implementation reports for the internal control system's activities in preparing and presenting financial statements and management letters of people's credit funds received as prescribed in Clause 5, Article 15 of this Circular.

In case of discovering independent auditors and auditing organizations violating laws during the independent audit of people's credit funds, the State Bank Branch Area shall report and propose timely handling to the Governor of the State Bank (through the Credit Institution Management and Supervision Department).

b) Receiving notifications as prescribed in Clause 6, Article 15 of this Circular for people's credit funds and handling according to their functions and tasks;

c) Inspecting, supervising, and handling according to its authority people's credit funds violating provisions of this Circular and other laws on independent audits;

d) Providing comments on specialized monetary and banking matters in audit reports concerning financial statements and service guarantee implementation reports for the internal control system's activities in preparing and presenting financial statements and management letters of people's credit funds headquartered in the area of the State Bank Branch Area upon request of competent authorities;

đ) Recommending the Governor of the State Bank (through the Credit Institution Management and Supervision Department) to handle matters exceeding the authority of the State Bank Branch Area.

4. Other related units under the State Bank shall be responsible for coordinating according to their functions and tasks at the request of the Credit Institution Management and Supervision Department.

Chapter III

IMPLEMENTING PROVISIONS

Article 17. Responsibility for Implementation

Heads of units under the State Bank, cooperative credit banks, people's credit funds, independent auditing organizations, practicing auditors, auditors, and related organizations and individuals are responsible for organizing the implementation of this Circular.

Article 18. Effective Date

1. This Circular takes effect from January 1, 2026, and begins applying independent audit of financial statements and service guarantee implementation for the internal control system's activities in preparing and presenting financial statements as prescribed in this Circular from the 2027 fiscal year.

2. Circular No. 39/2011/TT-NHNN on independent audit of credit institutions and foreign bank branches and Circular No. 24/2021/TT-NHNN amending and supplementing certain articles of Circular No. 39/2011/TT-NHNN on independent audit of credit institutions and foreign bank branches cease to be effective from the date this Circular takes effect.

3. Audit contracts signed before the date this Circular takes effect shall continue to be implemented according to the signed audit contract or amended and supplemented according to this Circular. Service guarantee implementation for the internal control system's activities in preparing and presenting financial statements shall be carried out according to this Circular instead of the independent audit of the internal control system from the 2025 fiscal year./.