Chương 3 Luật Kiểm toán độc lập 2011: Doanh nghiệp kiểm toán

Chapter 3.

AUDITING FIRMS

Article 20. The types of auditing firms and branches of foreign auditing firms in Vietnam

1. The following enterprises are entitled to carry on business of audit service:

a) Limited liability companies with two or more members;

b) Partnerships;

c) Private enterprises.

2. Branches of foreign auditing firms in Vietnam are carried on business of audit services in accordance with the law regulations.

3. Enterprises, enterprises’ branches that are insufficient conditions to carry on business of audit services are not entitled to use the term "audit" in their names.

4. Auditing firms are not entitled to contribute capital to set up another auditing firm, unless the contribution of capital to foreign auditing firms to set up an auditing firm in Vietnam.

Article 21. Conditions for granting certificate of sufficient conditions to carry on business of audit service

1. When the Limited liability Company with two or more members requests for granting certificate of sufficient conditions to carry on business of audit services, must meet fully the following conditions:

a) Having certificates of business registration, certificate of enterprise registration or certificate of investment in accordance with the law regulations;

b) Having at least five practicing auditors, in which must have at least two members contributing capital;

c) Legal representative, director, or general director of the limited liability company must be practicing auditor;

d) Ensuring the legal capital as stipulated by the Government;

đ) Contributed capital portion of member as organization shall not exceed the level set by the Government. Representative of member as organization must be practicing auditor.

2. When Partnerships request for granting certificates of sufficient conditions to carry on business of audit services, must meet fully the following conditions:

a) Having certificates of business registration, certificate of enterprise registration or certificate of investment in accordance with the law regulations;

b) Having at least five practicing auditors, in which must have at least two partners;

c) Legal representative, director, or general director of the Partnerships must be practicing auditor;

3. When private enterprises request for granting certificates of sufficient conditions to carry on business of audit services, must meet fully the following conditions:

a) Having certificates of business registration, certificate of enterprise registration or certificate of investment in accordance with the law regulations;

b) Having at least five practicing auditors, including private enterprise owner;

c) Private enterprise owner is director as well.

4. When the branches of foreign auditing firms in Vietnam request for granting certificates of sufficient conditions to carry on business of audit services, must meet fully the following conditions:

a) Foreign auditing firms are allowed to provide independent audit services in accordance with the law regulations of the country where foreign auditing firms locate its head offices;

b) Having at least two practicing auditors, including the director or general director of the branch;

c) Directors or general directors of branches of foreign auditing firms are not entitled to hold the managerial, administrative positions of other enterprises in Vietnam;

d) Foreign auditing firms must send documents to the Ministry of Finance ensuring responsibility for all obligations and commitments of branches of foreign auditing firms in Vietnam;

đ) Foreign auditing firms must ensure the maintenance of capital not less than the legal capital level as stipulated by the Government.

5. Within six months from the date of business registration of audit services which auditing firms, branches of foreign auditing firms in Vietnam are not granted certificates of sufficient conditions to carry on business of audit services must conduct the procedures to reject the business line of audit services.

Article 22. Dossiers of application for certificate of sufficient conditions to carry on business of audit services

Dossiers of application for certificate of sufficient conditions to carry on business of audit services include:

1. A written application for certificate of sufficient conditions to carry on business of audit services;

2. A copy of business registration certificate, certificate of enterprise registration certificates or investment certificate;

3. A copy of certificate of registration of practicing audit of the practicing auditors;

4. Full-time labor contracts of practicing auditors;

5. Documents proving the contributed capital for limited liability companies;

6. Other documents provided by the Ministry of Finance.

Article 23. The time limit for granting certificates of sufficient conditions to carry on business of audit services

1. Within thirty days from the date of receiving valid dossiers, the Ministry of Finance issues certificates of sufficient conditions to carry on business of audit services to the auditing firms, branches of foreign auditing firms in Vietnam; in case of refusal, the Ministry of Finance must reply in writing and state clearly the reasons.

2. Where it needs to clarify the issues related to dossier requesting for granting certificates of sufficient conditions to carry on business of audit services, the Ministry of Finance requires auditing firms, branches of foreign auditing firms in Vietnam that request for certificates of sufficient conditions to carry on business of audit services to explain.

Article 24. Re-granting, modification of Certificates of sufficient conditions to carry on business of audit services

1. Certificates of sufficient conditions to carry on business of audit services shall be re-granted or modified in the following cases:

a) Having the change of contents of certificate of sufficient conditions to carry on business of audit services;

b) Certificate of sufficient conditions to carry on business of audit services is lost or damaged;

c) Division, separation, merger, consolidation, or transformation of ownership form.

2. Dossier of application for re-granting, modifying the certificate of sufficient conditions to carry on business of audit services includes:

a) Written request for re-granting, modifying the certificate of sufficient conditions to carry on business of audit services;

b) The original certificate of sufficient conditions to carry on business of audit services which has been granted, except for the case that the original copy is no longer;

c) Other documents related to the re-granting, modification of certificate of sufficient conditions to carry on business of audit services.

3. Within twenty days from the date of receiving valid dossiers, the Ministry of Finance re-grants, modifies the certificate of sufficient conditions to carry on business of audit services; in case of refusal, the Ministry of Finance must reply in writing, and states clearly the reason.

Article 25. The fees for granting, modifying Certificate of sufficient conditions to carry on business of audit services

1. Auditing firms, branches of foreign auditing firms in Vietnam request for granting, re-granting, modifying Certificate of sufficient conditions to carry on business of audit services must pay fees.

2. Minister of Finance shall prescribe the fees for granting, re-granting, modifying the Certificate of sufficient conditions to carry on business of audit services.

Article 26. The changes must be notified to the Ministry of Finance

Within ten days from the date of change in the following contents, the auditing firms, branches of foreign auditing firms in Vietnam must notify in writing to the Ministry of Finance:

1. List of practicing auditors;

2. Failing to ensure one of the conditions prescribed in Article 21 and Article 31 of this Law;

3. Name, location where places enterprise’s head office;

4. Director or general director and legal representative, the rate of contributions of members;

5. Suspension of carrying on business of audit service;

6. Establishment and termination of operations or change of the name and location where locates head office of the branch of carrying on business of audit services;

7. Performance of the splitting, merger, consolidation, transformation, and dissolution.

Article 27. Suspension of business of audit services and withdrawal of certificates of sufficient conditions to carry on business of audit services

1. Auditing firms, branches of foreign auditing firms in Vietnam are suspended the business of audit services as to be of one of the following cases:

a) Operating not in compliance with the scope of operation of auditing firms specified in clause 1 Article 40 of this Law;

b) Failing to ensure one of the conditions specified in the clauses 1, 2, 3 and 4 Article 21 of this Law for three consecutive months;

c) Having serious violations on professional skill or violations on auditing standards, professional ethical standards of accounting and auditing.

2. Auditing firms, branches of foreign auditing firms in Vietnam are withdrawn the Certificate of sufficient conditions to carry on business of audit services as to be of one of the following cases:

a) Declaring not complying with the reality or cheating, forging documents requesting for issuance of certificate of sufficient conditions to carry on business of audit services;

b) Failing to carry on business of audit service within 12 consecutive months;

c) Failing to overcome the violations specified in clause 1 of this Article within sixty days from the date of suspension;

d) Being dissolved, bankrupted or terminating the business of audit services by themselves;

đ) Being revoked the certificate of business registration, certificate of enterprise registration or certificate of investment;

e) Foreign auditing firm having auditing branches in Vietnam to be dissolved, bankrupted or license which was withdrawn or its operation suspended by the competent authorities of the countries where such auditing firm locates its head office.

g) Having violations provided in clause 11 and clause 15 Article 59 of this Law.

3. Auditing firm, branches of foreign auditing firm in Vietnam is withdrawn certificate of sufficient conditions to carry on business of audit services must terminate its business of audit services, since the effective date of decision to withdraw.

4. Ministry of Finance shall specify the suspension of business of audit services and withdrawal of certificates of sufficient conditions to carry on business of audit services and announce the decision to suspend the business of audit services, withdraw the certificate of sufficient conditions to carry on business of audit services within seven days on the website of the Ministry of Finance.

Article 28. Rights of auditing firms, branches of foreign auditing firms in Vietnam

1. Auditing firms have the following rights:

a) To provide the services stipulated in Article 40 of this Law;

b) To receive fee;

c) To establish branches carrying on business of audit service;

d) To locate its establishment to carry on business of audit service in foreign countries;

đ) To participate in the international audit organizations, professional organizations on audit;

e) To request the audited units to provide sufficiently and timely the necessary information, documents and explain issues related to the contents of audit; To request inventory of assets, debt comparison of audited unit related the contents of audit; to inspect all records and documents related to economic and financial operation of the audited unit inside and outside of the unit during the course of audit;

g) To inspect, confirm the economic and financial information related to the audited unit inside and outside of the unit during the course of audit;

h) To request the concerned organizations and individuals to provide necessary documents and information related to the contents of the audit through the audited unit;

i) Other rights in accordance with the law regulations.

2. Branches of foreign auditing firms in Vietnam have the rights stipulated in point a, b, e, g, h and i clause 1 of this Article.

Article 29. The obligations of auditing firms, branches of foreign auditing firms in Vietnam

1. To operate under the contents stated in the certificate of sufficient conditions to carry on business of audit services.

2. To allocate staffs with appropriate qualifications to ensure the quality of audit services; to manage professional activities of practicing auditors.

3. Annually report the list of practicing auditors to the competent state agency;

4. To pay compensation for damage to the clients, the audited units on the basis of the audit contracts and under the provisions of law.

5. To purchase professional liability insurance for practicing auditors or to set up professional risk reserve fund in accordance with provisions of the Ministry of Finance.

6. To notify the audited unit when seeing that the audited unit has signs of law violation on economy, finance, accounting.

7. To provide information on the practicing auditors and auditing firms, branches of foreign auditing firms in Vietnam to the competent state agencies.

8. To provide audit records, documents as requested in writing by the state the competent state agencies.

9. To report periodically or irregularly the independent audit activities.

10. To provide timely, completely, accurately information and documents as requested by the competent agencies in the process of examination, inspection, and take responsibility for the accuracy and truthfulness of the information and documents which were supplied; to comply with provisions of competent state agencies for the examination, inspection.

11. To take responsibility before the law, clients for the audit results under audit contracts signed.

12. To take responsibility with the person who uses the audit results when such person:

a) Has benefit directly related to the audit results of the audited unit at the date of signing the audit statement;

b) Has a reasonable understanding on the financial statements and the basis for making the financial statements to be the accounting standards, the accounting regime and other provisions of concerned law;

c) Has used carefully the information in the financial statements audited.

13. To refuse to conduct audit when deemed not guaranteeing the independence, inadequate qualifications, insufficient conditions for conducting audit.

14. To refuse to conduct audit when clients, audited units request contrary to professional ethical, professional skill requirements or contrary to provisions of law.

15. To organize operation quality audit and to be subject to quality audit of audit services in accordance with provisions of the Ministry of Finance.

16. Other obligations in accordance with the law regulations.

Article 30. The cases that auditing firms and branches of foreign auditing firms in Vietnam are not entitled to audit

1. Auditing firms are not entitled to perform audit in the following cases:

a) Doing or having done in the preceding year the work of book keeping, making financial statement, or internal audit to the audited unit;

b) Doing or having done in the preceding year the services different from the services specified in point a of this clause affecting the independence of practicing auditors and auditing firms in accordance with provisions of the professional ethical standard of accounting, auditing.

c) Members participating in the audit, managers, administrators of the auditing firms being founding members, shareholders or purchasing shares or contributing capital into the audited units or having other economic, financial relations with the audited units in accordance with provisions of professional ethical standards of accounting and auditing;

d) Persons who are responsible for managing, administering the auditing firms have parents, spouse, child, natural brother, sister being founding members, shareholders or purchasing shares or contributing capital into the audited units and having significant influence on the audited units or persons who are responsible for management, administration, members of the inspection committee or the chief accountants of the audited units;

đ) Persons who are responsible for management, administration, members of the inspection committee or the chief accountants of the audited units and are the persons who contribute capital as well and have significant influence on the audited units;

e) Auditing firms and audited units established or participated in the establishment by the same individual or enterprise or organization;

g) Audited unit has made in the preceding year or ongoing the audit of financial statements for its own;

h) Other cases in accordance with law regulations.

2. Branches of foreign auditing firms in Vietnam are not entitled to conduct audit in the following cases:

a) Doing or having done in the preceding year the work of book keeping, making financial statement, or internal audit to the audited unit;

b) Doing or having done in the preceding year the services different from the services specified in point a of this clause affecting the independence of practicing auditors and the branches in accordance with provisions of the professional ethical standard of accounting, auditing;

c) Members participating in the audit, managers, administrators of the branches being founding members, shareholders or purchasing shares or contributing capital into the audited units or having other economic, financial relations with the audited units in accordance with provisions of professional ethical standards of accounting and auditing;

d) Persons who are responsible for managing, administering the branches have parents, spouse, child, natural brother, sister being founding members, shareholders or purchasing shares or contributing capital and having significant influence on the audited units or persons who are responsible for management, administration, members of the inspection committee or the chief accountants of the audited units;

đ) Persons who are responsible for management, administration, members of the inspection committee or the chief accountants of the audited units and are the persons who have significant influence on the branches as well in accordance with provisions of professional ethical standards of accounting and auditing;

e) Audited unit has made in the preceding year or ongoing the audit of financial statements for its own branches;

g) Other cases in accordance with law regulations.

Article 31. Branches of auditing firms

1. Conditions for the branches of auditing firms entitled to carry on business of audit services:

a) Auditing firms have sufficient conditions to carry on business of audit services as stipulated in Article 21 of this Law;

b) A branch has at least two practicing auditors, including the branch director. Two practicing auditors are not at the same time as auditor registering to practice in the head office or other branches of auditing firms.

c) Being approved in writing by the Ministry of Finance.

2. Branch of the auditing firm not ensuring conditions specified in clause 1 of this Article after three consecutive months shall be suspended from trading the audit services.

3. Where the auditing firm is suspended from trading the audit services, the branches of such auditing firm also suspended from trading the audit services.

Article 32. Establishments of foreign auditing firms

1. Auditing firms are established its establishments of trading audit services in foreign countries in accordance with provisions of the investment laws of Vietnam and the laws of the home countries.

2. Within thirty days from the date of establishment or termination of operations of the business establishment of overseas audit services, the auditing firm must notify in writing together with copies of documents on the establishment or termination of the operation of the establishment to the Ministry of Finance.

Article 33. Temporary Suspension of carrying on business of audit services

1. Auditing firms, branches of foreign auditing firms in Vietnam are entitled to suspend temporarily the audit services business; however the time limit for temporary suspension does not exceed twelve consecutive months.

2. Auditing firms suspend temporarily to carry on business its audit services, its branches must also suspend temporarily to carry on business its audit services.

3. Auditing firms, branches of foreign auditing firms in Vietnam suspend temporarily to carry on business its audit services but have not completed yet the audit contracts signed with clients; they must deal with clients on the performance of such contracts.

4. When re-operating, auditing firms, branches of foreign auditing firms in Vietnam must ensure the conditions in accordance with provisions of the law and must notify in writing to the Ministry of Finance no later than ten days prior to the re-operating date.

Article 34. Termination of carrying on business of audit services

1. Auditing firms terminate the business of audit services in the following cases:

a) To terminate by themselves;

b) To be divided, separated, merged, consolidated, dissolved;

c) To be withdrawn business registration certificate, certificate of enterprise registration, investment certificate or certificate of sufficient conditions to carry on business of audit services;

d) Director of the private enterprise is deceased;

đ) Other cases in accordance with regulations of the law on enterprises.

2. Branches of foreign auditing firms in Vietnam terminate the business of audit services in the following cases:

a) As decided by the foreign auditing firm that has established its branch;

b) According to provisions in point c and point đ clause 1 of this Article.

3. In case of termination of the business of audit services as stipulated in point a clause 1 of this Article, the auditing firm must notify in writing to the Ministry of Finance no later than thirty days prior to the termination date.

4. The Ministry of Finance shall specify the procedures for termination of the business of audit services.

Article 35. Termination of operation of branches of auditing firms

1. Branches of auditing firms terminate its operation in the following cases:

a) As decided by the auditing firm that has established its branch;

b) The auditing firms that have established the branch terminating its operation;

c) Other cases in accordance with regulations of law on enterprises.

2. Auditing firms have the rights and perform the obligations of its branches and resolve the issues related to the termination of operation of its branch.

Article 36. Foreign auditing firms

Foreign auditing firms perform the audits in Vietnam in the following forms:

1. Contributing capital to the auditing firm that has been established and operating in Vietnam to establish an auditing firm;

2. Establishing branches of foreign auditing firms;

3. Providing audit services across the border in accordance with the Government’s provisions.