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THE STATE
BANK OF VIETNAM
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SOCIALIST
REPUBLIC OF VIETNAM
Independence- Freedom- Happiness
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No.322/1999/QD-NHNN5
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Hanoi,
September 14, 1999
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DECISION
PROMULGATING THE REGULATION ON ORGANIZATION OF INDEPENDENT AUDIT
OF CREDIT INSTITUTIONS
THE GOVERNOR OF THE STATE BANK
Pursuant to Vietnam State Bank Law
No.01/1997/QH10 and Credit Institution Law No.02/1997/QH10 of December 12,
1997;
Pursuant to the Government’s Decree
No.15/CP of March 2, 1993 on the tasks, powers and State management
responsibility of the ministries and ministerial-level agencies;
Pursuant to the Government’s Decree
No.07/CP of January 29, 1994 promulgating the "Regulation on
independent audit in the national economy"
At the proposal of the director of the Department for Banks and Non-Bank Credit
Institutions,
DECIDES
Article 1.- To
promulgate together with this Decision the "Regulation on organization of
independent audit of credit institutions".
Article 2.- This
Decision takes effect 15 days after its signing and replaces Decision
No.423/QD-NHNN5 of December 23, 1997 promulgating the provisional Regulation on
organization of audit of joint-stock commercial banks and Decision
No.272/QD-NHNN5 of August 12, 1998 on organization of audit of joint-stock
commercial banks.
Article 3.- The director
of the State Bank’s Office, the director
of the Department for the Banks and Non-Bank Credit Institutions, the
State Bank's chief inspector, the heads of the concerned units attached to the
Central State Bank, the directors of the State Bank’s provincial/municipal
branches, the chairmen and members of the Managing Boards as well as the
Control Boards and the general directors (directors) of credit institutions
shall have to implement this Decision.
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FOR THE GOVERNOR OF THE STATE
BANK
DEPUTY GOVERNOR
Tran Minh Tuan
REGULATION
ON ORGANIZATION OF INDEPENDENT AUDIT OF CREDIT INSTITUTION
(Promulgated together with the State Bank Governor Decision
No.322/1999/QD-NHNN5 of September 14, 1999)
Chapter I
GENERAL PROVISIONS
Article 1.-
1. This Regulation
stipulates the organization independent audit of credit institutions licensed
operate in Vietnam under the Law on Credit Institutions (called credit
institutions for short), including:
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b/ Joint-stock credit institutions of the State
and people (including banks and non-bank credit institutions), hereafter
referred to as joint-stock credit
institutions for short;
c/ Foreign credit institutions licensed to
operate in Vietnam
(including: joint-venture credit institutions, non-bank credit institutions
with 100% foreign capital and branches of foreign bank;
d/ Central people’s credit funds.
2. The organization of independent audit of the
regional people’s credit funds,
grassroots people's credit funds and credit cooperatives shall comply with the
State Bank's separate regulations in conformity with the management
requirements and operation scope of these organizations.
Article 2.-
Independent audit of a credit institution is the inspection and certification
by professional auditors from an independent auditing organization (called the
auditing organization for short) of the accuracy, truthfulness and legality of
accounting documents and data as well as financial statements of such credit
institution according to the current provisions of Vietnamese law.
Chapter II
SPECIFIC PROVISIONS
Article 3.- A credit
institution’s yearly financial statements
which must be audited include:
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2. The report on the business results;
3. The report on the monetary flow;
Article 4.- An auditing
report must reflect the following:
1. The evaluation and certification of the
accuracy, truthfulness and legality of the credit institution’s financial
statements; the comments and assessment of the observance of financial and
accounting policies and regimes by such credit institution.
2. The proposal made to the audited credit
institution on the detected matters which are deemed unclear in the course of
auditing, and on measures for the settlement thereof.
3. The auditing report must be signed and
stamped by the general director (director) of the auditing organization or
his/her mandatary, and signed by the auditor who takes the prime responsibility
for auditing the credit institution (written clearly under each signature must
be the auditor’s full name and
number of his/her auditing license issued by the Finance Ministry).
Article 5.- The auditing
organizations which audit credit institutions shall have to fully meet the
following conditions:
1. Lawfully operating in accordance with the
current provisions of Vietnamese law.
2. Not having economic ties (such as capital
contribution, joint venture, stock capital contribution...) with the audited
credit institutions or vice versa.
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4. Not providing services on keeping accounting
books or drawing up the final account settlement reports for the audited credit
institutions.
5. Having a contingent of qualified auditors who
meet all conditions defined in Article 6 of this Regulation to take part in the
audit of the credit institutions.
Article 6.- An auditing
organization’s auditors allowed to audit
credit institutions must fully meet the following conditions:
1. Having the audit practicing licenses (still
valid), grimed by Vietnam’s Finance Ministry;
2. Having university degrees in such fields as
finance, accountancy and banking; having at least 5 years working in the field
of finance, accountancy or banking and being the professional auditors with at
least 2 years practicing audit at the independent auditing organizations.
3. Not being the shareholders or lawful
representatives of the shareholders who own a number of the registered shares
and have the voting right in the audited credit institutions.
4. Not being members of executive boards of the
audited credit institutions.
5. Not being the clients enjoying preferential
terms of the audited credit institutions (such as being granted credit without
security or with preferential terms...);
6. Not having family tie (such as wife, husband,
farther, mother, son, daughter or sibling) with members of the Managing Boards,
the Control Boards or the Executive Directors of the audited credit
institutions;
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Article 7.-
1. The selection of
auditing organization for the annual audit of a credit institution shall be
decided by the Managing Board after consulting the Control Board (for credit
institutions with managing boards) or by the Directorate (for credit
institutions without managing boards).
2. The Managing Board, the Control Board (for
credit institutions with managing boards) or the Directorate (for credit
institutions without managing boards) shall take responsibility for the
selection of an auditing organization and auditors to participate in the audit
of their unit according to the provisions of Articles 5 and 6 of this
Regulation.
3. The auditing organization and auditors
participating in the audit of the credit institution must get the written
approval from the State Bank. Only after getting the written approval from the
State Bank can the credit institution officially sign the contract with the
auditing organization to conduct the audit.
Article 8. -
1. The credit
institution's dossier of application for the approval of an auditing
organization includes
a/ The report of the Managing Board (for credit
institutions with managing boards) or of the Directorate (for credit
institutions without managing boards), applying for the approval of the
auditing organization, which must clearly state the name and address of tile
auditing organization as well as its commitments, and the list of auditors
registered to take part in the audit, not in contravention of the provisions of
Articles 5 and 6 of this Regulation;
b/ The minutes of meetings of the Managing Board
with the Control Board (for credit institutions with managing boards) or of the
Directorate (for credit institutions without managing boards) on the agreement to
choose the concerned auditing organization;
c/ The notarized copies of the audit practicing
licenses of auditors who will participate in the audit of the credit
institution;
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e/ Other documents proving that the auditing
organization and auditors meet the conditions mentioned in Articles 5 and 6 of
this Regulation.
2. Where the credit institution decided to
choose the auditing organization and auditors of the preceding year for the
audit in the current year, the dossier of such credit institution asking for
the approval of the auditing organization shall include only documents mentioned
at Points a and b, Clause 1 of this Article, which are added with new documents
(if any) related to any changes of the auditing organization and auditors
participating in the audit.
3. After getting the approval from the State
Bank, if the auditing organization wishes to add or replace the auditor(s)
participating in the audit, the credit institution shall have to make a
selection according to the provisions of Clause 2, Article 7 of this Regulation
and submit a report thereon together with the dossier set for auditors to the
State Bank. Only after the State Bank issues the written approval, shall the
added or substitute auditor(s) be allowed to take part in the audit of the
credit institution.
Article 9.- The Governor
of the State Bank shall authorize the consideration and approval of auditing
organizations to audit credit institutions as follows:
1. The State Bank’s provincial/municipal branches shall consider and
approve the auditing organizations and auditors to audit joint-stock credit
institutions which are headquartered in their localities. After signing the
official dispatches approving auditing organizations to audit credit
institutions, the State Bank’s provincial/municipal branches shall have to send
01 copy thereof to the Central State Bank (the Department for the Banks) as
their reports thereon.
2. The Department for the Banks shall consider
and approve auditing organizations and auditors to audit the State credit
institutions, foreign credit institutions and central people’s credit funds.
Article 10.- Order and
procedures for consideration and approval of auditing organizations
1. Before September 30 every year, the Central
State Bank shall announce the list of auditing organizations allowed to audit
credit institutions so that the credit institutions may proceed with the
selection according to the provisions of Articles 5 and 6 of this Regulation.
2. Within 30 days before the end of a fiscal
year, each credit institution shall have to select an auditing organization as
prescribed by law which shall audit its operations and send the dossier
stipulated in Article 8 of this Regulation to the State Bank for consideration
and approval of the audit.
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b/ The dossiers of application for the approval
of auditing organizations of the State credit institutions, foreign credit
institutions and central people’s credit
funds shall be forwarded to the Central State Bank. Within 15 days after
receiving the complete dossier asking for approval of in auditing organization,
the Central State Bank shall consider and reply in writing, stating its
approval or disapproval. In case of disapproval, the Central State Bank shall
notify the concerned unit of the reasons therefor.
3. The written approval of an auditing
organization to audit credit institutions, issued by the Central State Bank
(the Department for the Banks) and by the State Bank’s provincial/municipal
branches shall be made according to the set form.
Article 11.- Within 120
days after the end a fiscal year, the audited credit institutions shall have to
send to the State Bank the auditing reports enclosed with their audited
financial statements. More concretely:
1. A joint-stock credit institution shall send 3
copies of the report to the State Bank’s branch in the province or city where
it is headquartered. Within 15 days after receiving the report, the State Bank’s provincial/municipal branch shall have to
consider and give its appraisal comments on the situation of
organization and operation of the concerned credit institution, which shall be
sent together with two copies of the report to the Central State Bank (the
Department for the Banks and the Banking Inspectorate).
2. A State credit institution, a foreign credit
institution or a central people’sredit fund shall send 2 copies of the report
to the Central State Bank (the Department for the Banks and the Banking
Inspectorate).
Article 12.-
Responsibilities of the audited credit institutions
1. To sign the auditing contracts with the selected
auditing organizations, clearly stating the requirements on the to be-audited
contents, the auditing charge and responsibilities of the parties involved in
the auditing process, and the handling of breaches of the auditing contract.
2. To accurately, adequately and promptly
provide their accounting and financial documents of the accountancy and finance
units is well as other documents related to the audited contents at the
auditors' request;
3. To create favorable conditions, not to cause
difficulties to the auditing organizations and auditors in the auditing
process; and at the same time, respect the comments and proposals stated in the
auditing reports.
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Article 14.-
Responsibilities of auditing organizations and auditors that audit credit
institutions.
1. An auditing organization that wishes to audit
a credit institution shall have to file its written request to the Central
State Bank (the Department for the Banks) before June 30 each year for consideration
and approval of its audit of the credit institution. The written request must
clearly state the situation of the auditing organization’s organization,
operation and auditing experiences, enclosed with other necessary documents so
as to prove and commit itself to strictly comply with the provisions of Article
5 of this Regulation; and enclosed with the legal dossier of the auditing
organization (if it is the first time) as well as a list of the qualified
auditors to take part in the audit as prescribed in Article 6 of this
Regulation. As for 1999, auditing organizations having a demand to audit credit
institutions shall have to send their written requests together with the
dossiers to the Central State Bank (the Department for the Banks) before October
31, 1999.
2. Auditing organizations and auditors that
audit credit institutions shall have to take responsibility for the auditing
results according to the provisions of law and this Regulation; for their
violations of the State’s regulations on
auditing; and for information secrecy according to the provisions of
Article 104 of the Law on Credit Institutions, and pay compensation for the
damage caused to audited credit institutions when breaking its commitments (if
any) in the contracts.
3. In cases where an auditing organization
violates the provisions of this Regulation or the auditing results fail to
satisfy the requirements (according to the appraisal of the State Bank), the
State Bank may limit the number and types of credit institutions to be audited
by such auditing organization or may not permit it to audit credit institutions.
Chapter III
IMPLEMENTATION
PROVISIONS
Article 15.- Any
amendment to this Regulation shall be decided by the Governor of the State Bank.
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