By Thanh Thuong - The Saigon Times Daily
HCMC – The Law on Independent Audit to take effect next year would oblige many more enterprises other than public and listed firms to hire auditors for reviewing their financial statements, said the Vietnam Association of Certified Public Accountants.
Bui Van Mai, vice chairman of the association, told the Daily on the sidelines of a seminar on independent audit and financial statement on Wednesday that the law will apply to those firms whose financial statements would have a far-reaching impact on the society. These included 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 are also required to have their financial statements audited.
High requirements were set for the audit of such firms, along with clear and specific conditions to provide the public with transparent and accurate information.
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 while audited enterprises to ensure honesty and reasonableness in financial statement construction.
Under the audit law, several standards for audit practice would be upgraded. For example, auditors and students majoring in finance or audit must take an exam to get certificates and have three years of experience in auditing.
In addition, the conditions for establishing auditing firms would be stricter. Specifically, five certificated auditors, instead of three like before, and the chartered capital of VND5 billion, were necessary conditions for establishing a company.
Mai said the central authorities had issued multiple legal documents but not synchronous and timely enough. Especially, the inspection and treatment of violations lacked thoroughness, eroding the confidence of investors.
According to the association, there are currently 170 auditing companies in Vietnam, with only 10-15 big and healthy firms including foreign players like KPMG, Deloitte Touche Tohmatsu, PricewaterhouseCoopers, and Ernst&Young. The four international companies are holding a hefty market share of 70%.
On average, a foreign auditing firm demands VND380 million for each auditing contract, while a local company asks for VND35-50 million.