Overview of Accounting and Auditing in Vietnam

Vietnam has undergone remarkable economic progress in recent decades, becoming one of the region's fastest-growing economies. Manufacturing, services, agriculture, and tourism are among the varied industries of the nation. The accounting profession in Vietnam has experienced substantial changes to meet worldwide standards. Local companies and regulatory bodies commonly accept the Vietnam Accounting Standards (VAS) framework. This approach promotes investor trust and facilitates cross-border transactions by ensuring uniformity and openness in financial reporting. The Vietnamese Government has taken great measures to increase transparency and the regulatory environment, including adopting international accounting standards and implementing strong corporate governance practices.

What is Audit?

An audit is a comprehensive examination of an organization's financial records by an auditor. To ensure that all departments follow the agreed procedure of necessary papering transactions, this process includes looking over various books of accounts and performing physical inspections of the inventory. The audit's main goal is to verify the dependability and accuracy of the financial accounts that the organization has given. The organization wants to assure stakeholders by performing audits to confirm the accuracy of its financial data. The auditor thoroughly reviews the financial records, runs tests and analyses, and confirms the existence and accuracy of inventory during an audit. Verifying the validity and accuracy of the financial statements is the ultimate objective.

What is Accounting?

The systematic method of recording financial transactions relating to businesses is known as accounting. It includes the steps involved in compiling, analyzing, and reporting these transactions to regulatory organizations, oversight organizations, and tax authorities. A key step in the accounting process is the creation of financial statements, which are condensed representations of the financial activities that occurred within a particular accounting period. These financial statements offer a thorough insight into a business's operations, financial situation, and cash flow.

Vietnamese Accounting Standards

Accounting services are critical in Vietnamese enterprises' financial management and decision-making processes. These services assist organizations in complying with regulatory obligations, analyzing their financial performance, and making educated business decisions by delivering accurate and trustworthy financial information.

A standardized framework for accounting and bookkeeping practices governs the proper recording of expenses and income for firms operating in Vietnam. These regulations, known as Vietnamese Accounting Standards (VAS), act as the guiding principles that specify how financial accounts and records should be prepared and recorded. According to the law, businesses with both domestic and international investment functioning in the nation are required to record their financial transactions using the Vietnam Accounting Standard (VAS). Foreign businesses can choose to keep two sets of accounting records: one that complies with VAS rules and one that is tailored for their overseas headquarters. By 2025, the Vietnamese Government will replace VAS with International Financial Reporting Standards (IFRS).

Accounting Period of Vietnam

The standard accounting cycle in Vietnam runs from January 1 to December 31 and coincides with the calendar year. The financial year also falls within this time frame. However, after completing the necessary registration with the local Tax Department, businesses have the option to select alternative 12-month periods that begin on the first day of each quarter, for instance, from April 1 to March 31 of the following year, from July 1 to June 30 of the following year, or from October 1 to September 30 of the following year.

Auditing in Vietnam

In accordance with the Government's directive, the State Audit Office of Viet Nam (SAV) was established on July 11, 1994, under Decree No. 70/CP. The Prime Minister issued Decision No. 61/TTg on January 24, 1995, along with the Charter on the Organization and Functioning of the SAV, which establishes the SAV's operational guidelines. The SAV's audit results have a considerable impact on how important issues involving the public finances and assets of the country are managed, administered, monitored, approved, and decided.

The State Audit Office (SAV) has continually used Auditing Standards as a framework to direct its audit activities throughout its existence. The SAV audit team and auditors are required to abide by these standards, which include fundamental concepts and procedures that regulate the conduct and administration of audit activities. They act as a cornerstone for upholding auditors' ethical standards and quality control. The National Assembly conducts an election to choose the Auditor General, who is in charge of the State Audit Office. The tenure of the Auditor General is defined by law. 

Basic Regulations on Auditing in Vietnam

The basic regulations on auditing in Vietnam include the following: 

• Audited subjects include organizations, persons, commercial operations, assets, and financial transactions related to the State budget.
• In compliance with auditing regulations, auditing organizations must register and receive suitable licensing. To achieve successful audit work, these units must follow laws on competence, ethics, mentality, and behaviour.
• Audits are carried out with the highest thoroughness, correctness, independence, objectivity, and honesty. They include analyzing the audited entity's internal controls, scrutinizing financial and accounting information, identifying risks, and making suggestions to improve performance.
• Audit results are necessary papered in the form of an audit report, which gives a judgment about the correctness and reliability of the audited data. When illegal content or misbehavior is identified, the report should specifically mention such concerns and provide suggestions.
• Collaboration between the auditing unit and the audited entity: Throughout the auditing process, the auditing unit must maintain tight collaboration with the audited entity. The company being audited must give enough information and records relevant to its activities.

Services offered by Enterslice

Our professional team of Chartered Accountants (CAs), Chief Financial Officers (CFOs), and consultants are committed to providing our customers with complete accounting services. Enterslice provide the following services based on our expertise:

• Assisting in the establishment of correct accounting records in accordance with applicable rules.
• Providing accurate financial accounts to provide a clear knowledge of business performance.
• Tracking corporate costs and discovering potential financial malfeasance. Migrating from paper-based or out-of-date computerized accounting systems to cloud-based platforms for greater accessibility.
• Preparation of monthly management accounts, cash flow statements, budgets, and forecasts for better decision-making.
• Assisting in the production of yearly statutory financial statements and ensuring compliance with filing requirements.
• Liaison with auditors during the audit process to assist in the review of the company's financial records.
• Providing treasury and payment processing expertise to streamline financial operations.
• Accounting, tax, and control review of expenditure claims and payment applications.
• Assisting with the implementation of accounting systems, such as chart of accounts establishment, master data management, and customized reporting.
• Creating accounting policies and control processes for the accounting department of the customer.
• Providing qualified accountants and managers on a temporary or part-time basis.
• Examining accounts for appropriateness and providing suggestions for improvement.
• Providing in-house accountants with training to help them improve their skills and expertise.

Our team of experts is dedicated to providing dependable and effective accounting services that are tailored to each client's specific requirements. For the success of our client's operations, we work to provide accurate financial reporting, regulatory compliance, and informed decision-making.