According to the auditing law which takes effect the next year, more companies will have to have their finance reports audited, not only public companies or the companies that list their shares on the stock market as stipulated by the current laws.
Bui Van Mai, Deputy Chair of the Vietnam Association of Certified Public Accountants VACPA, said on the sideline of a workshop on auditing held in HCM City several days ago, that more companies will be added into the list of the companies subject to compulsory auditing
He said that besides public and listed companies, some kinds of businesses whose finance reports have impacts on a large scale, such as the companies in the finance sectors, including securities, insurance companies or commercial banks, will have to have their finance reports audited. The information about the operation of the companies needs to be clarified, because the collapse of the companies, if occurring, will have big impacts on many people.
He also said that the requirements on auditing these companies would be very high, while strict rules would be set up to ensure that the information to be exposed to the public is accurate and transparent.
Besides, some kinds of large scale joint stock or limited companies will also be forced to have their finance reports audited.
If the number of companies to be audited increases, the number of certified auditors will also increase to satisfy the higher demand. Therefore, Mai said that the requirements on the people who practice auditing would be reconsidered.
Under the current regulations, newly graduates and auditors only can attend the exams to obtain practicing certificates after three years of working. Meanwhile, the regulations may be changed in the way that they can attend exams for certificates immediately if they want.
This, according to Mai, will help increase the number of auditors, thus providing more auditors to the market.
Mai went on to say that the requirements on the establishment of auditing firms would be stricter. At present, an auditing firm can be set up if there are three certified public accountants. However, in the future, the number of certified accountants would be increase to five. Especially, auditing firm must have at least five billion dong in chartered capital.
Bill Palmer, Asia Director of Australian ICAA, said that the auditing law which takes effect in 2012 will help heighten the standards on auditing activities and provide a perfect legal framework for auditing firms to operate.
He said that Vietnamese businesses should change their outlook when hiring an auditing firm. They should not only consider the quality of services and prestige of the firms, but also into the qualifications of auditors, who directly implement the auditing contracts.
Regarding the auditing fee, he said that businesses should not choose the auditing firms which require not too low fees, because this may affect the quality of the auditing.
According to VACPA, there are 170 operational auditing firms, but there are only 10-15 big and prestigious firms. These include four international firms KPMG, Deloitte Touche Tohmatsu, PricewaterhouseCoopers, Ernst&Young. The four firms alone hold 70 percent of the market share, while 20 big domestic firms hold 20 percent of the market share, and the remaining ones just hold 10 percent.
One of the group of four biggest companies have the average auditing fee of 380 million dong per auditing contract, while Vietnamese firms set up the fee of 35-50 million dong.