Decision No. 486/2003/QD-NHNN On Issuing the Internal Control and Internal Audit Regulations of the State Bank of Vietnam

Pursuant to …;

Regarding the issuance of the Internal Control and Internal Audit Regulations of the State Bank

GOVERNOR OF THE STATE BANK OF VIETNAM

Pursuant to the Law on the State Bank of Vietnam No. 01/1997/QH10 dated December 12, 1997;

Pursuant to Decree No. 86/2002/NĐ-CP dated November 5, 2002 of the Government on the functions, tasks, powers, and organizational structure of ministries and ministerial-level agencies

At the proposal of the Director of the General Supervision Department,

Pursuant to …;

Article 1. The attached Decision promulgates the "Internal Control and Internal Audit Regulations of the State Bank."

Article 2. This Decision shall take effect 15 days from the date of publication in the Official Gazette and shall replace Decision No. 93/1999/QĐ-NHNN4 dated March 20, 1999 "on the issuance of the Internal Control and Internal Audit Regulations of the State Bank.".

Article 3. The Heads of the Office, the Director of the General Supervision Department, the Heads of units under the State Bank, and the Directors of the State Bank Branches in provinces and centrally-administered cities are responsible for implementing this Decision.

REGULATIONS

Internal Control and Internal Audit of the State Bank
(Attached to Decision No. 486/2003/QĐ-NHNN dated May 19, 2003) 2003 of the Governor of the State Bank)

Chapter 1:

GENERAL PROVISIONS

Article 1. Scope and objects of application:

These Regulations prescribe the organization and implementation of internal control and internal audit activities within the State Bank system.

Article 2. In these Regulations, the following terms are understood as follows:

1. Unit refers to Departments, Bureaus, Trading Offices, State Bank Branches, affiliated entities, and State Bank Representative Offices.

2. Internal Control of the State Bank (referred to as internal control) is the process where individuals or specialized control departments at the unit check the performance of each individual or unit to ensure asset safety and effective achievement of set objectives within each unit.

3. Internal Audit of the State Bank (referred to as internal audit) is the independent examination and evaluation of the completeness and effectiveness of the internal control system; the accuracy, completeness, and reliability of financial and operational reports of the State Bank; and the quality of task execution by units.

4. Dual control principle: requires that in task assignment at the unit, at least two people perform and review a task to ensure asset safety and work efficiency.

Article 3. Objectives of internal control and internal audit.

1. Ensuring compliance with state policies, laws, regulations, and operational procedures of the State Bank, preventing violations or non-compliance leading to risks in operations.

2. Ensuring that the activities of each unit are carried out according to guidelines, and that organizational measures for task execution are effective.

3. Determining and evaluating the accuracy, completeness, and appropriateness of information on financial and operational reports of units.

4. Protecting the assets and reputation of the State Bank.

5. Advising the Governor of the State Bank on amendments, supplements, or issuance of new mechanisms, regulations to enhance asset protection measures and increase operational efficiency.

Chapter 2:

INTERNAL CONTROL

Article 4. Internal control must be implemented continuously and regularly in every individual's, department's, and leadership staff's work at each unit.

Article 5. The Head of the unit bases on assigned functions and tasks to organize comprehensive and effective internal control; bears responsibility before the Governor for the quality of internal control activities at the unit.

Article 6. Contents of internal control activities

1. Issuing working regulations for unit leaders, specifying the rights and responsibilities of each leader in managing and handling tasks. The Head of the unit implements delegation and responsibility distribution for maintaining internal control among departments within the unit, aiming to comprehensively control the unit's activities.

2. Regularly, promptly, and fully disseminating state-related documents concerning banking activities, mechanisms, regulations, and operational procedures of the State Bank to all staff members in the unit.

3. Assigning tasks and responsibilities of departments and individuals based on the dual control principle, ensuring that every task has both a performer and a reviewer. Each individual and department must self-monitor and bear responsibility for their assigned tasks, ensuring work efficiency, compliance with laws, regulations, and operational procedures.

4. Leaders at each level of the unit must assess the risk level of each operation to develop appropriate control measures: supervision, pre-control, post-control, and surprise control.

5. Specifying internal reporting systems, democratic systems, and financial transparency systems within the unit.

Article 7. The Internal Control Department (in units with a separate Internal Control Department) is directly managed by the Head of the unit, assisting the Head in organizing and implementing internal control across all areas of the unit's activities; it is directly guided by the General Supervision Department regarding control processes and methods.

Article 8. The Head of the unit is responsible for creating conditions for internal auditors to have relative independence when performing their duties.

Chapter 3:

INTERNAL AUDIT

Article 9. The General Supervision Department conducts internal audits of units under the State Bank, bearing responsibility before the Governor for conclusions and recommendations stated in internal audit reports.

Article 10. Principles of internal audit

1. Compliance with laws, regulations, operational procedures, and the approved internal audit program by the Governor of the State Bank.

2. Ensuring independence, honesty, objectivity, and confidentiality of state secrets and those of the audited unit.

3. Not obstructing operations or interfering with management activities of the audited unit.

Article 11. Scope of internal audit

1. Auditing the financial statements of the State Bank.

2. Auditing compliance of units.

3. Auditing operations and assessing the performance of units to achieve the State Bank's common goals.

Article 12. Financial statement audit

Financial audit is the process whereby the Bank of Vietnam's Auditors conduct an independent examination and evaluation of the financial statements and related information of the Bank of Vietnam to confirm their accuracy, truthfulness, completeness, reasonableness, and compliance with current state accounting, financial management, and construction principles and regulations of both the state and the Bank of Vietnam.

Article 13. Compliance Audit

Compliance audit is the process whereby the Bank of Vietnam's Auditors base their examination and evaluation on current state and Bank of Vietnam regulations and the implementation status of the audited entity to assess compliance with laws, rules, mechanisms, and operational procedures of the audited entity, thereby identifying violations, errors in management, preventing risks in banking operations.

Article 14. Operational Audit

Operational audit is the process whereby the Bank of Vietnam's Auditors base their examination and evaluation on files and documents to independently review the implementation of tasks by an entity in terms of organization, management, operation, resource utilization, administrative and technical measures, and business practices to achieve objectives, thereby assessing the effectiveness and efficiency of the entity's operations.

Article 15. Responsibilities and Authorities of the Head of the Internal Audit Team

1. The Head of the Audit Team is responsible for directing and managing the team's overall work to ensure the completion of the audit plan.

2. Requesting the audited entity and related entities to provide files, documents, and information within the scope of the audit.

3. Promptly addressing any issues encountered with the audited entity during the audit process within their authority and immediately reporting serious issues to the Department of General Audit Leadership.

4. Compiling and drafting the audit report and presenting it at the audited entity; being accountable to the Governor and the Department of General Audit Leadership for the audit conclusions of the team; collecting and retaining audit files.

Article 16. Responsibilities and Authorities of Entities Subject to Internal Audit

1. Adhering to internal audit decisions.

2. Providing complete information, files, documents, and means to support the internal audit.

3. Being responsible for the truthfulness, completeness, and accuracy of all materials provided to the internal audit team.

4. Having the right to explain and report to the audit team about the team's conclusions or to reserve opinions and present them to authorized authorities if they do not agree with the audit team.

5. Implementing recommendations and reporting the implementation status of audit conclusions and recommendations in writing to the Governor through the Department of General Audit.

Article 17. Responsibilities and Authorities of the Department of General Audit Leadership of the Bank of Vietnam:

1. Issuing or submitting to the Governor for issuance of internal audit procedures of the Bank of Vietnam.

2. Developing internal audit programs and plans for submission to the Governor of the Bank of Vietnam for approval.

3. Being authorized by the Governor of the Bank of Vietnam to issue decisions to establish internal audit teams according to the approved plan, except for teams auditing departments and central bank bureaus.

4. Performing other tasks as stipulated in the organizational and operational regulations of the Department of General Audit.

Chapter 4:

IMPLEMENTING PROVISIONS

Article 18. The Department of General Audit Leadership of the Bank of Vietnam provides detailed guidance on the implementation of this Regulation.

Article 19. Any supplementation or amendment to this Regulation shall be decided by the Governor of the State Bank.