Businesses and organizations are required to have audits

Sending comments to the 8th Session of the 13th National Assembly, voters of Kien Giang province requested the Government to add business groups that need to conduct periodic financial statement audits at least once a year.

Currently, financial statements of enterprises with state capital, enterprises that are credit institutions... are required to be audited. However, most businesses are joint stock companies and limited liability companies that are not required to have periodic financial statements audited.

Therefore, many businesses have a very large scale of operations but their financial reports lack reliability (because they have not been audited), causing difficulties in some cases where financial reports need to be used, including Appraisal of loans to businesses from credit institutions.

Regarding this issue, the Ministry of Finance responded to voters in Kien Giang province as follows:

According to current regulations of the law on independent auditing, all large joint stock companies (including public, listed companies and equitized state-owned enterprises with state ownership of more than 50% charter capital ...) and single-member limited liability companies whose owners are represented by the state must periodically audit their financial statements, specifically as follows:

Clause 1 and Clause 2, Article 37 of the Law on Independent Auditing, stipulates as follows:

“Enterprises and organizations whose annual financial reports are required by law must be audited by auditing firms and branches of foreign auditing firms in Vietnam, including:

– Enterprises with foreign investment capital;

– Credit institutions established and operating under the Law on Credit Institutions;

– Financial institutions, insurance businesses, insurance brokerage businesses;

– Public companies, issuing organizations and securities trading organizations.

Enterprises and organizations must be audited by auditing firms and branches of foreign auditing firms in Vietnam, including:

– State-owned enterprises, except state-owned enterprises operating in fields that are state secrets according to the law, must be audited for their annual financial statements;

– Enterprises and organizations implementing important national projects and group A projects using state capital, except for projects in the field of state secrets as prescribed by law, must be audited for reports. Final settlement report of completed project;

– Enterprises and organizations with State capital contribution and other projects using state capital prescribed by the Government must be audited for their annual financial statements or completed project settlement reports;

– Auditing firms and branches of foreign auditing firms in Vietnam must be audited for their annual financial statements.

Subjects must audit financial statements

According to the provisions of Article 15 of Decree No 17/2012/ND-CP dated March 13, 2012 of the Government detailing and guiding the implementation of a number of articles of the Law on Independent Auditing, businesses and organizations whose annual financial statements are required to be audited by the enterprise. Current audits include:

– Enterprises with foreign investment capital;

– Credit institutions established and operating under the Law on Credit Institutions, 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 according to the law, must be audited for their annual financial statements;

– Enterprises and organizations implementing important national projects and group A projects using state capital, except for projects in the field of state secrets as prescribed by law, must be audited for reports. Final settlement report of completed project;

– 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 be audited for their annual financial statements;

– Enterprises whose 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;

– Auditing firms and branches of foreign auditing firms in Vietnam must be audited for annual financial statements.

Thus, the subjects that must audit financial statements are quite broad as suggested by the Kien Giang Provincial National Assembly Delegation.

On the other hand, for businesses and economic organizations, the law on independent auditing does not require annual financial statements to be audited but is required by management, such as when borrowing from banks. commercial, using capital from international organizations has also audited financial statements at the request of these organizations.

In addition, according to the provisions of Article 10 of the Law on Independent Auditing, "The State encourages businesses and organizations to hire audit firms and branches of foreign audit firms in Vietnam to audit financial statements, Completed project settlement report and other audit work before submitting to competent state agencies or before making financial disclosure.

Regulations on administrative penalties for units that do not perform audits

In order for the above current legal regulations to be strictly implemented, the Ministry of Finance has implemented the following measures:

– The Ministry of Finance has submitted to the Government to promulgate Decree No105/2013/ND-CP dated September 16, 2013 regulating administrative sanctions in the field of accounting and independent auditing, including regulations on administrative sanctions for audited units that do not conduct mandatory audits. for financial statements, completed project settlement reports, consolidated financial statements, general financial reports and other audit work in accordance with the provisions of law on independent auditing and the law other relevant.

– The Ministry of Finance has issued Circular No 157/2014/TT-BTC October 23, 2014 regulations on quality control of audit services, including quality control of financial statement audits.

– The Ministry of Finance has also sent a document to agencies and units competent to receive financial reports of subjects required to audit financial statements according to regulations, requesting agencies, The unit does not accept financial statements without an attached audit report, and requires businesses and organizations to audit financial statements and immediately notify competent state agencies. Ministry of Finance to perform the state management function of accounting activities, independent auditing and handling of violations according to the provisions of law.

Currently, the majority of businesses and organizations that are required to have their annual financial statements audited according to current regulations of the law on independent auditing have clearly understood and implemented this regulation.

In order for the audit of financial statements to be carried out strictly, openly and transparently, in addition to the management role of the Ministry of Finance as a State management agency, there are also roles of ministries, branches and localities. , capital ownership agencies.

Therefore, in the coming time, the Ministry of Finance will continue to coordinate with relevant agencies to propagate and disseminate the law and strengthen inspection and strictly handle violations.

Chinhphu.vn