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THE
GOVERNMENT
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SOCIALIST
REPUBLIC OF VIET NAM
Independence Freedom Happiness
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No.
07-CP
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Hanoi,
January 29, 1994
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DECREE
ON INDEPENDENT AUDITING IN THE NATIONAL ECONOMY
THE GOVERNMENT
Pursuant to the Law on the Organization
of the Government dated 30 September 1992;
In order to meet the demand for the development and uniform management of
independent auditing activities within the national economy;
Following the recommendations of the Ministry of Finance;
DECREES:
Article 1. To
issue with this Decree the Regulations on Independent Auditing in the National
Economy .
Article 2
This
Decree shall be of full force and effect as of the date of its signing. The
Minister of Finance shall be responsible for providing guidelines on the
implementation of the Regulations issued with this Decree.
Article 3
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ON
BEHALF OF THE GOVERNMENT
ON BEHALF OF THE PRIME MINISTER
DEPUTY PRIME MINISTER
Phan
Van Khai
REGULATIONS
ON INDEPENDENT AUDITING IN THE NATIONAL ECONOMY
(Issued with Decree 07-CP of the Government dated 29 January 1994)
Chapter I
GENERAL PROVISIONS
Article 1
Independent
auditing means the inspection and confirmation by professional auditors in
independent auditing organizations of the accuracy and appropriateness of
accounting documents, data and the balance sheet of business enterprises,
institutions, organizations and social associations (hereinafter referred to as
accounting entities) when requested by such entities.
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Independent auditing activities
also assist accounting entities to identify and correct in a timely manner
intentional or unintentional mistakes, and to prevent breaches and damages
which may occur while carrying on business and incurring expenses.
Article 2
Independent
auditing shall be carried out at the request of the following entities:
1. Enterprises with foreign
owned capital operating under the foreign investment law of Vietnam;
2. Limited liability and
shareholding companies;
3. Private companies;
4. Co-operatives;
5. State enterprises;
6. Non-profit organizations and
social associations;
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Article 3
Independent
auditing activities shall be carried out by professional auditors (hereinafter refe rred
to as auditor). An auditor shall be a person who satisfies all conditions
stipulated in this Regulations, is recognized by an authorized State body, and
is permitted to practise
in independent auditing organizations.
Article 4
An
independent auditing organization shall be a business enterprise (an auditing
company or office) established in accordance with the provisions currently in
force on the establishment of business enterprises and the provisions of these
Regulations.
Article 5
The
Ministry o f Finance shall be the State administrative body responsible for
independent auditing activities.
Article 6
Having
obtained written approval from the Ministry of Finance, all foreign auditing
organizations carrying out auditing activities and financial accounting
consultancy services in the territory of Vietnam must be issued with a licence
from the State Committee for Co -operation and Investment. The activities of
foreign auditors and auditing organizations must comply with the Law on Foreign
Investment of the Socialist Republic of Vietnam, the provisions of these
Regulations, and international auditing practices which are recognized by the
State of Vietnam.
Article 7
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Entities requesting audits shall
provide in a timely manner all accurate and relevant information and documents
which are necessary in order to create favourable conditions
for auditors to carry out auditing activities and to pay all auditing fees in
full and on time in accordance with the agreed contract.
Article 8
Auditing
activities must be carried out in accordance with the procedure and specialized
professional method stipulated by the Ministry of Finance. Upon completing the
audit, an auditor must prepare an audit report, state his opinion in the
report, and be fully responsible for his opinion.
The auditing report must be
objective, true and fair, signed by the auditor, and certified, signed and
sealed by a senior member of the auditing organization.
Chapter II
THE AUDITOR
Article 9
An auditor
must be a Vietnamese citizen or a foreign person permitted to reside in Vietnam
and registered to practise
the profession with an independent auditing organization operating legally in
the territory of Vietnam.
Article 10
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1. A clear history: must be of
true character and honest, and have a thorough knowledge of law and the
policies and regimes of the State in relation to finance, economics, accounting
and statistics; and must not have any previous sentences or convictions.
2. Must hold an university
degree or similar qualification of a secondary college which specializes in
finance and accounting, and have experience in finance or accounting of at
least five years (in respect of an university graduate) or ten (10) years (in
respect of graduates of a secondary college).
3. Must have passed the auditor
exam set by the State Qualification Board and have been issued with a
certificate by the Ministry o f Finance.
Article 11
Current
employees of the State shall not be permitted to register to practise
as auditors in independent auditing organizations. Auditors who have their practising
certificates withdrawn shall not be permitted to re -register to practise
the profession.
Article 12
A foreign
person shall be permitted to register to practise the profession
with an independent auditing organization in Vietnam if such person is issued
with an auditor certificate by the Minister of Finance of Vietnam or by an
international auditing organization which the Ministry of Finance of Vietnam recognises.
Article 13
An
auditor shall be permitted to carry out the following auditing services:
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2. Inspection and certification
of the extent of truthfulness, fairness, and reasonableness of the balance
sheet prepared by accounting entities.
3. Inspection and certification
of the value of the capital contributed by joint venture parties and
shareholders; inspection and certification of whether the accounting data and
balance sheet prepared by entities involved in a joint venture, dissolution,
merger, division, privatization, bankruptcy, and other cases are true and fair
and complete and accurate in accordance with the law.
4. Carrying out financial and
accountancy valuation, and consultancy services in respect of financial,
accountancy, and taxation management at the request of the client.
Article 14
An
auditor has a duty to perform an audit in accordance with the following
principles:
1. Compliance with the law of
the State of Vietnam.
2. To ensure that data is true,
independent, objective, fair and confidential.
3. Compliance with all
Vietnamese accounting and auditing standards which are currently in force and
all internationally recognized accounting and auditing standards which the
State of Vietnam accepts.
4. The auditor shall only be
permitted to carry out auditing services for a client entity which is not in
any way economically related to the auditor, and the head of such entity must
not be a relative of the auditor.
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An
auditor shall have the following responsibilities:
1. To comply strictly with all auditing
principles stipulated in article 14 of these Regulations; to perform faithfully
all terms of the auditing contract; to be responsible before the law and
responsible to the independent auditing organization and client for all
auditing results and opinions stated in the audit report.
2. Whilst carrying out his duty,
an auditor must not hinder or interfere with the management activities of the
entity which is the subject of the audit and shall only be permitted to receive
the audit fee which has been agreed to in the auditing contract.
3. Where an auditor breaches the
provisions of these Regulations or the law, the auditor may have his practising
certificate withdrawn, be dealt with in accordance with the law, and be liable
for payment of compensation if the client suffers material damages.
Article 16
An
auditor shall have the right to:
1. Be professionally independent
in carrying out his work;
2. Request the client to supply
all accounting and financial documents and other documents which are relevant
to the performance of an audit;
3. Compare and verify all
economic information relating to the entity which is being audited, within and
outside the entity (if required);
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5. Refuse an audit request of a
client if the auditor considers that there are insufficient conditions, o r
that he lacks the capacity to perform the audit.
Chapter
III
AUDITING ORGANIZATION
Article 17
To
establish an independent auditing organization (an auditing company or office)
the following conditions must be satisfied:
1. All conditions stipulated by
the provisions of the law on the establishment of businesses which are
currently in force must be satisfied.
2. There must be at least five
personnel who are issued with auditor certificates. The head of the auditing
organization must be an auditor.
3. There must be written
approval of the Ministry of Finance and a licence to establish
issued by an authorized State body in accordance with the provisions of the
law.
Article 18
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Article 19
The
independent auditing organization shall, within the scope of its management
authority, be responsible for managing the professional activities of its
auditors, be responsible before the law and to its clients for any breaches of practising
standards committed by the organization or its auditors, and compensate clients
for damages caused.
Article 20
An
independent audit ing
organization shall be an independent economic accounting entity permitted to
collect fees from the provision of services in order to cover its expenses. The
level of fees charged as stated in the auditing contract agreed to between the
two parties shall be based on the volume and degree of complexity of the audit
work and the list of audit fees determined by the Ministry of Finance.
The independent auditing
organization must carry out all obligations to the State Budget in accordance
with the law and purchase insurance cover from insurance companies in order to
provide for the risk of having to pay compensation to clients for damages
caused.
Chapter IV
STATE ADMINISTRATION OF
AUDITING ACTIVITIES
Article 21
Independent
auditing organizations shall be considered as businesses and be subject to
inspection and supervision by State administrative bodies.
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Article 22
The
Ministry of Finance shall carry out the State administrative function in
respect of auditing activities. State administration consists of:
1. Promulgation of auditing
standards and principles, and other guidance documents on auditing methods and
the profession.
2. Promulgation of provisions on
and guidelines for the implementation of regulations on training for, and
fostering of the auditing profession, regulations on the type of exam and the
issuing of the auditor practising
certificate, and regulations on the establishment of a State Examination Board
for the purpose of organizing exams and issuing auditor practising certificates
in accordance with the provisions of the State.
3. Evaluation of application
files for the establishment of an auditing organization, and organization of
the registration and the implementation of a uniform administrative system of
auditors.
4. Stipulation of a list of
auditing fees which shall apply uniformly in the auditing profession.
5. Inspection of the compliance
of auditing organizations with the law and auditing regulations in carrying out
auditing activities and dealing with any dissatisfaction or dispute which may
arise from an audit report.
The decision of the Minister of
Finance in respect of any dissatisfaction or dispute relating to an audit
report shall be final.
Chapter V
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Article 23
These
Regulations shall be of full force and effect as of the date of signing and
shall apply to all independent Vietnamese auditing organizations and all
foreign auditing organizations operating in Vietnam.
Article 24
All
previous provisions which are inconsistent with these Regulations are hereby
repealed.
ON
BEHALF OF THE GOVERNMENT
ON BEHALF OF THE PRIME MINISTER
DEPUTY PRIME MINISTER
Phan
Van Khai