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THE MINISTRY
OF FINANCE
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SOCIALIST
REPUBLIC OF VIET NAM
Independence - Freedom – Happiness
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No. 52/1998-TT-BTC
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Hanoi, April 16,
1998
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CIRCULAR
GUIDING THE
ORGANIZATION OF INTERNAL AUDIT APPARATUS AT STATE ENTERPRISES
In
furtherance of Decree No.59-CP of October 3rd, 1996 of the Government
promulgating the Regulation on financial management and business
cost-accounting by State enterprises, the Ministry of Finance issued Decision
No.832/TC/QD/CDKT of October 28, 1997 stipulating the regulation on internal
audit applicable to State enterprises. To well carry out the internal audit at
enterprises, the Ministry of Finance hereby guides the organization of internal
audit apparatus at State enterprises as follows:
A.
GENERAL PROVISIONS
1. All State enterprises, including: production
and/or business enterprises, public utility enterprises, corporations, unions
of enterprises and other independent cost-accounting enterprises shall have to
organize internal audit apparatuses fully capable of performing the internal
audit in accordance with Decision No.832/TC/QD/CDKT of October 28, 1997 of the
Minister of Finance.
2. This Circular shall guide in detail the
organization of internal audit apparatus for each type of State enterprises.
With regard to other contents, the provisions of the Regulation on internal
audit issued together with Decision No.832-TC/QD/CDKT of October 28, 1997 of
the Minister of Finance shall apply.
B.
SPECIFIC PROVISIONS
I. ORGANIZATION OF INTERNAL AUDIT APPARATUS AT
STATE ENTERPRISES, WHICH ARE CORPORATIONS OR UNIONS OF ENTERPRISES (HEREAFTER
REFERRED TO AS CORPORATIONS)
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1. Corporation's internal audit section
1.1. The corporation's internal audit section must
be organized independently from other functional sections of the corporation
and subject to the direction and leadership of the General Director. The
section shall be staffed with 3 to 5 persons.
1.2. The corporation's internal audit section is
led by a head to be appointed by the General Director. The head of the internal
audit section and the auditors shall not concurrently undertake any managerial
and executive jobs in the corporation.
1.3. The head of the corporation's internal
audit section must meet the following criteria:
- Have full qualifications of an internal
auditor as prescribed in Article 12 of the Regulation on internal audit issued
together with Decision No.832/TC/QD/CDKT of October 28, 1997 of the Minister of
Finance;
- Have the capability of organizing and running
the corporation's internal audit activities.
1.4. Order and procedures for the appointment of
the head of the corporation's internal audit section:
The corporation shall submit a dossier proposing
the appointment of the head of the internal audit office to the General
Department on Management of State's Capital and Property at Enterprises. Such a
dossier shall include:
- The official dispatch proposing the
appointment of the head of the corporation's internal audit section;
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- Copies of the university diploma on economics,
finance and accounting or business administration and certificate proving that
the appointed person has attended a training program on internal audit.
Within 15 days after receiving the full valid
dossier, the General Department on Management of State's Capital and Property
at Enterprises shall have to consider and reply in writing.
Basing him/herself on the written consent of the
General Department on Management of State's Capital and Property at
Enterprises, the General Director of the corporation shall issue a decision on
the appointment of the head of the internal audit section.
1.5. The head of the corporation's internal
audit section shall be dismissed if he/she commits one of the following
violations:
- Violating the legislation, policies, financial
and/or accounting regulations, the State's management regime, resolutions and
decisions of the Managing Board and the Directorate, and therefore being
disciplined with warning or higher level;
- Being dishonest and not objective, covering or
intentionally falsifying the internal audit results;
- Displaying incapability of organizing and
running the corporation's internal audit during his/her working process.
A decision on dismissal of the head of internal
audit section shall be signed by the General Director and sent to the General
Department on Management of State's Capital and Property at Enterprises.
1.6. All expenses for the operations of the
internal audit section, including salaries and allowances of the section's head
and auditors shall be accounted into the corporation's managerial cost. The
section's head and auditors shall be graded with basic salary according to the
wage scale applicable to the State officials and shall enjoy salaries and
bonuses according to the salary and bonus distribution regime in the State
enterprises stipulated by the Government, depending on the enterprise's
operation results.
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- To assist the corporation's leaders in
assessing the implementation of internal rules, inspecting the effectiveness of
the internal control system, performance of financial and accounting work as
well as the observance of legislation, State's policies and regulations,
resolutions and decisions of the Managing Board and the Board of Directors.
- To propose, through the internal audit, to the
corporation's leaders measures to adjust the management of the unit's finance
and accounting, propose the competent level to handle violations of the State's
financial and accounting regime.
- To provide professional training, guidances
and direction for the contingent of auditors in the corporation.
- To organize the audit at the corporation's
head office and its member units according to the audit plan already approved
by the General Director. To inspect, handle and summarize internal audit
results of the corporation and its member units.
2. Organization of internal audit apparatus at
the corporation's member enterprises.
2.1. Depending on the production and business
scale, and the volume of work to be audited at member units, internal audit
teams or groups may be organized, each is staffed with 2 to 3 persons.
- For independent cost-accounting member
enterprises of the corporation, having the legal person status, internal audit
team (or group) must be set up and directed by the enterprise's director.
- For dependent cost-accounting member units of
the corporation, depending on the characteristics of each unit, the
corporation's internal audit section may directly perform the audit or appoint
auditors to work directly at such dependent units.
2.2. The number of auditors of an internal audit
team (or group) shall be decided by the enterprise's director. Each internal
audit team (group) is led by a head to be appointed by the director of the
member enterprise. The team or group head and internal auditors shall work
independently and not concurrently undertake any other jobs in the enterprise.
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2.4. All expenses for the operations of internal
audit teams (groups), including auditors' salaries and allowances, shall be
accounted into the enterprise's managerial cost.
2.5. Internal audit teams (groups) at member
enterprises shall not only have the task of regularly and directly organizing
the internal audit at their respective enterprises according to the contents
provided for in the regulation on internal audit, but also be subject to
professional direction of the corporation's internal audit section and
participate in the audits organized by the corporation's internal audit
section.
II. ORGANIZATION OF INTERNAL AUDIT APPARATUS AT
INDEPENDENT ENTERPRISES
Independent enterprises (which are not
corporation members) shall have to organize their internal audit apparatus in
the form of internal audit teams (groups) to be placed under the directors as
it is provided for the corporation's member enterprises in Point 2, Section I
above.
C.
IMPLEMENTATION PROVISIONS
1. The General Department for Management of
State's Capital and Property at Enterprises shall have to organize professional
training courses for auditors of State enterprises in the second and third
quarters of 1998, monitor and inspect the organization of internal audit
apparatuses at the State enterprises.
2. In the fourth quarter of 1998, the State
enterprises shall have to complete the organization of their internal audit
apparatuses fully capable of auditing their 1998 financial reports.
Agencies managing the State's capital and
property at enterprises and State enterprises shall have to implement this
Circular. In the course of implementation, any arising problems shall be
reported to the Ministry of Finance for study and appropriate amendment.
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THE MINISTRY OF
FINANCE
VICE MINISTER
Pham Van Trong