PROFESSIONAL AUDITING SERVICES AT MAN
As we enter 2025, auditing continues to play a crucial role in helping businesses gain clarity on their financial status while building trust with tax authorities, investors, and relevant stakeholders. Nevertheless, many businesses remain vague about the auditing process and the real value this service brings. Partnering with a competent and experienced auditing firm contributes to ensuring transparency and regulatory compliance in financial and accounting activities. In the following content, MAN will delve into every aspect of auditing services, from the basic concept to key considerations when ing the right partner.
1. What is an auditing service?
Auditing service is the process of independent examination, evaluation, and verification of financial data prepared by an enterprise, aiming to ensure the truthfulness and fairness of the financial statements in accordance with the law and Vietnamese Auditing Standards (VSA). This is a mandatory activity for many types of businesses, as stipulated by the Law on Independent Audit and related guiding documents up to 2025.
Through auditing services, businesses not only ensure that financial statements are properly presented but also detect errors, fraud, or potential risks in operations early on. This is also a crucial basis for management to adjust strategies, internal controls, and strengthen the financial management system.
Professional, reputable auditing services!
Hiring independent auditors from professional auditing firms like MAN Auditing Company brings several practical benefits, including:
❖ Ensuring Accuracy: Financial statements truthfully reflect the financial position and business results.
❖ Regulatory Compliance: Ensuring full application of Vietnamese Auditing Standards (VSA) and current legal regulations.
❖ Increasing Credibility: Enhancing the level of trust with shareholders, partners, investors, and regulatory agencies.
❖ Minimizing Risks: Early detection of errors, fraud, or financial risks, leading to timely corrective actions.
❖ Supporting Better Governance: Through auditors recommendations, businesses optimize internal processes and enhance management effectiveness.
❖ Objectivity and Transparency: Unlike internal self-checks, independent audit ensures that conclusions are not influenced by internal company members.
Furthermore, Auditing Services now strictly adhere to the Law on Independent Audit No. 67/2011/QH12 and Vietnamese Auditing Standards (VAS), ensuring transparency and legality in every report. These benefits are especially important for FDI enterprises, listed companies, or entities preparing for an IPO and seeking bank loans, as the transparency and reliability of financial statements are decisive factors in capital mobilization and management.
2. Which entities are subject to mandatory audit under Vietnamese law?
Financial Statements (FS) are important legal documents that truthfully reflect the financial position and operating results of a business. According to the Accounting Law No. 88/2015/QH13 (Article 42) and guiding documents such as Circular 200/2014/TT-BTC, the following entities are obligated to hire an independent auditing unit to examine and evaluate their annual periodic financial statements:
Auditing service process!
Organizations and enterprises whose annual periodic FS are required by law to be audited by a foreign auditing enterprise or branch operating in Vietnam. These include:
≫ Foreign Direct Investment (FDI) enterprises.
≫ Credit institutions operating and established under the Law on Credit Institutions.
≫ Financial companies, insurance companies, and insurance brokers.
≫ Public companies, and organizations trading and issuing securities.
Enterprises and organizations that must be audited by a foreign auditing enterprise or branch operating in Vietnam. These include:
≫ State-owned companies (except for companies operating secretly as regulated by the State, whose annual FS must be audited).
≫ Companies and organizations implementing national projects, Group A projects with State capital (except for projects classified as state secrets, whose completed project settlement reports must be audited).
≫ Companies and projects using State capital as stipulated by the Government, whose annual FS or completed project settlement reports must be audited.
≫ Auditing companies and foreign auditing company branches operating in Vietnam, whose annual FS must be audited.
3. Regulations on mandatory auditing
Here is a summary of the regulations regarding mandatory auditing:
◊ Mandatory audit is performed on annual periodic Financial Statements, completed project settlement reports, as well as other financial data of the audited entity.
◊ The audit contract for annual mandatory FS of enterprises and organizations must be signed at least 30 days before the end of the fiscal year.
◊ Companies and organizations obligated to be audited must submit their Financial Statements along with the audit report to the competent authority and include the audit report when disclosing the FS. If the competent authority receives the FS of an obligated company or organization without the accompanying audit report, they must notify a higher competent authority for handling according to regulations.
◊ In case of failure to perform the audit, the company or organization will be subject to an administrative fine ranging from 40 million VND to 50 million VND.
4. Classification of popular auditing services today
Auditing is classified into various types and levels of assurance depending on the objectives, scope, purpose, and auditing procedures. Financial statement audits often adhere to International Standards on Auditing (ISA) and other local auditing standards. There are many types of audits, including financial audit, operational audit, statutory audit, compliance audit, etc. In this article, MAN Auditing Services Company will explain 15 main types of audits currently performed in the industry or common auditing practice.
5. List of 15 types of audit and assurance services
Classification of auditing services!
➜ State Audit: The State Audit Office, an agency under the National Assembly, operates independently, examining the use of public finance to ensure budget transparency and prevent corruption.
➜ Independent Audit (External Audit): Performed by auditing firms, including services like financial statement audit, tax consulting, legal and risk consulting, etc. Complies with international or local ethical and auditing standards.
➜ Internal Audit: An independent, objective assurance and consulting activity designed to add value and improve an organizations operations.
➜ Forensic Audit: Used in fraud investigations, legal disputes, bankruptcy, insurance claims, etc. Results are often admissible in court.
➜ Statutory Audit (Mandatory Audit): A legally required audit of financial statements, applicable to businesses, banks, organizations, etc., performed by independent auditing firms like MAN - Accounting and Auditing Services.
➜ Financial Audit: The periodic audit of financial statements (annual, semi-annual, quarterly) performed by independent auditors according to VAS or IFRS.
➜ Tax Audit (Tax Inspection): An inspection or tax finalization activity conducted by the tax authority to assess the businesss compliance with tax laws, often conducted routinely or unexpectedly.
➜ Information Technology (IT) Audit: Evaluates the reliability, security, and integrity of the IT systems supporting financial statement preparation, commonly applied to entities using accounting software or ERP.
➜ Compliance Audit: Examines adherence to legal regulations, internal policies, and specialized industry regulations within the enterprises operating field.
➜ Economy and Efficiency Audit (Value-for-Money Audit): Evaluates the economy, efficiency, and effectiveness of the enterprises resource utilization to optimize costs and enhance operational performance.
➜ Financial Statement Review: A limited assurance form of financial statement examination, not providing a full audit opinion, often used for bank loans or internal purposes.
➜ Agreed-Upon Procedures Engagement: The auditor performs specific procedures requested by the client and reports on factual findings, without issuing an audit opinion.
➜ Integrated Audit: Simultaneously performs multiple audit scopes (financial, technical, social, etc.) for multi-sector organizations such as NGOs or large corporations.
➜ Consolidated Audit: The audit of the aggregated financial statements of a parent entity with many subsidiaries or branches across various countries, often performed by multiple auditing firms in coordination.
➜ Special Purpose Audit: Performed when internal incidents arise, such as fraud or violations, upon request from the board of directors or the audit committee, often conducted by internal auditors.
➜ Operational Audit: Evaluates processes, systems, and internal controls to improve operational efficiency and effectiveness and proposes enhancements to add value to the business.
MAN is committed to supporting businesses even after the contract has ended. Should errors occur, we will readily cooperate with the business to provide timely and reasonable corrective measures. This includes compensation for any losses incurred by the business during the cooperation period due to MANs failure to meet its responsibilities and contractual commitments.
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