Some 24 out of existing 1,000 auditing firms, instead of the current 13, are expected to be eligible under new regulations for provision of auditing services to around 300 securities companies, listed companies and investment funds. The expectation follows Finance Minister’s Decision No. 89/2007/QD-BTC of October 24, which supersedes Decision No. 76/2004/QD-BTC, promulgating the Regulation on selection of accredited auditing firms to audit investment funds, listed companies or securities companies.
Auditing firms will now be required to be staffed with at least seven practing auditors (as opposed to 10 required by previous regulations), who are fully qualified, possess practice licenses and have at least two years’ professional experience. Such firms must have been in operation for at least three years rather than five years as previously stipulated. For auditing firms that have operated in Vietnam for between full six months and less than three years, their practicing auditors must have full three years’ professional experience after being granted auditor certificates.
Other criteria remain unchanged. For instance, a domestic auditing firm must have charter capital of at least VND 2 billion (USD 125,000), while a foreign-invested auditing firm must be capitalized at least USD 300,000. All such firms must have audited 30 or more clients per year in the last two years.
Companies and organizations that are planning to conduct a public offering of securities in the next three years are required to hire accredited auditing firms to audit their financial statements for the two years prior to issuing shares.
Accredited auditing firms may not audit listed or securities companies if they pool capital or enter into joint ventures with or have equity capital in those organizations or vice versa; or five percent of capital of both sides are owned by the same organization or individual.
The State Securities Commission will receive and process all license applications of firms qualified to audit listed or securities brokerage companies once a year and issue its decision by November 15. Auditing firms and auditors whose applications are rejected may reapply after two years.-