New law subjects more firms to audit
22/12/2011 09:47 am
Laws - The Law on Independent Audit that will take effect next year will oblige more enterprises other than public and listed firms to go through audit, said the Vietnam Association of Certified Public Accountants.
Bui Van Mai, vice chairman of the association, told the Saigon Times Daily on the sidelines of a seminar on independent audit and financial statements on Wednesday that the law would apply to those firms whose financial statements would have a far-reaching social impact.
These include securities and insurance companies as well as credit institutions, Mai said.
Besides, large-scale joint stock or limited liability companies meeting criteria prescribed by the Government must also have their financial statements audited.
High requirements are set for the audit of such firms, along with clear and specific conditions to provide the public with transparent and accurate information.
Mai said the introduction of the Law on Independent Audit would enhance the control on financial statements as auditing companies are asked to improve the quality of their services and audited companies are required to be honest and reasonable in reporting their financial situations.
Under the audit law, several standards for audit practice will be upgraded, Mai said. For example, auditors and students majoring in finance or audit must take an exam to get certificates and have 3 years of experience in auditing.
The conditions for establishing auditing firms will also be stricter. Specifically, 5 certificated auditors, instead of 3 as before, and the chartered capital of VND5 billion, are needed for establishing a company.
Mai said central authorities had issued multiple documents but they hadn’t done so in a synchronous and timely manner. Especially, the inspection and treatment of violations still lack thoroughness, eroding investors’ confidence.
According to the association, there are currently 170 auditing companies in Vietnam, with only 10-15 big and healthy firms including foreign players such as KPMG, Deloitte Touche Tohmatsu, PricewaterhouseCoopers, and Ernst&Young.
These 4 international companies are holding a hefty market share of 70 percent.
On average, a foreign auditor charges VND380 million for each contract, while a local company asks for only VND35-50 million.
Bui Van Mai, vice chairman of the association, told the Saigon Times Daily on the sidelines of a seminar on independent audit and financial statements on Wednesday that the law would apply to those firms whose financial statements would have a far-reaching social impact.
These include securities and insurance companies as well as credit institutions, Mai said.
Besides, large-scale joint stock or limited liability companies meeting criteria prescribed by the Government must also have their financial statements audited.
High requirements are set for the audit of such firms, along with clear and specific conditions to provide the public with transparent and accurate information.
Mai said the introduction of the Law on Independent Audit would enhance the control on financial statements as auditing companies are asked to improve the quality of their services and audited companies are required to be honest and reasonable in reporting their financial situations.
Under the audit law, several standards for audit practice will be upgraded, Mai said. For example, auditors and students majoring in finance or audit must take an exam to get certificates and have 3 years of experience in auditing.
The conditions for establishing auditing firms will also be stricter. Specifically, 5 certificated auditors, instead of 3 as before, and the chartered capital of VND5 billion, are needed for establishing a company.
Mai said central authorities had issued multiple documents but they hadn’t done so in a synchronous and timely manner. Especially, the inspection and treatment of violations still lack thoroughness, eroding investors’ confidence.
According to the association, there are currently 170 auditing companies in Vietnam, with only 10-15 big and healthy firms including foreign players such as KPMG, Deloitte Touche Tohmatsu, PricewaterhouseCoopers, and Ernst&Young.
These 4 international companies are holding a hefty market share of 70 percent.
On average, a foreign auditor charges VND380 million for each contract, while a local company asks for only VND35-50 million.
Source: TT
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