Accounting and Auditing System

Vietnamese Accounting Standards and Circular 200/2014/TT-BTC

1. Currently, Vietnam has enacted 26 Vietnamese Accounting Standards (“VAS”) and Circular 200/2014/TT-BTC.

2. Legal format and recording principles for accounting supporting documents
∙ All accounting vouchers must include the legal format and legal accounting information, and printed vouchers must be based on the signatures of the CEO and the accounting manager.

∙ Accounting Reporting Language

The default language is Vietnamese. While Vietnamese summaries are accepted for some large volumes of documents prepared in languages ​​other than Vietnamese, in practice, it is common to provide substantiation in Vietnamese.

∙ Accounting period

The accounting period is generally 12 months. The first accounting period for a newly established company shall not exceed 15 months from the date of incorporation. The last accounting period shall also not exceed 15 months.

∙ Report call

Accounting records must be recorded in VND. Companies that primarily receive and settle payments in foreign currency may, provided they meet prescribed requirements, select the foreign currency to be used for accounting records and financial statements as the reporting currency and issue audit reports in that foreign currency. However, financial statements for the purpose of reporting to the competent tax authority must be converted to VND and prepared and submitted separately.

∙ Accounting documents

Accounting vouchers and accounting ledgers must be stored in the form of documents or electronic media.

∙ Corporate seal

Companies can obtain an official corporate seal from the competent authority and apply for multiple seals.

∙ Retention period

The statute of limitations for accounting records and accounting books is 10 years. In addition, the statute of limitations for tax audits is also set at 10 years.

∙ Strict formality of CoA (Accounting Code) and financial statements

Since we adopt a strict legal system, major accounting codes cannot be self-created.

∙ No obligation for quarterly review / No obligation for disclosure of segmental financial statements

Regardless of whether it is a foreign corporation, unlisted companies are not subject to quarterly review and reporting obligations, nor are they required to disclose financial statements by segment.

∙ Non-disclosure of accounting information of unlisted companies

Unlisted companies are not obligated to disclose or publicize tax returns, including audit reports.

Financial Reporting

1. The basic financial statements prepared according to VAS are structured as follows . 

Balance     Sheet​

∙     Income statement

Cash     Flow Statement

∙     Notes to the financial statements, including disclosure of changes in capital

2.       The company must directly hire a  Chief Accountant in accordance with the Accounting Act or outsource to an accounting firm registered with  the MoF ( Ministry of Finance ) .  The audit report on the annual financial statements must be jointly signed by the Chief Accountant and the Representative Director , and  the audit report  must be submitted to the relevant authorities within  three months after the end of the fiscal year .

Audit requirements

1. The annual financial statements of the following companies must be audited by an independent audit firm operating in Vietnam    .

Foreign –     invested companies are subject to this without exception.

∙     Credit institutions ,  financial institutions ,  insurance companies ,  reinsurance companies ,  insurance brokerage companies ,  branches of foreign non-life insurance companies

∙     Public companies ,  listed companies , and  companies in which a listed company holds a  20%  stake

∙     State-owned enterprises ,  companies implementing major national projects ,   Group-A projects utilizing state funds

2.      The preparation of audited financial statements for  one year  must be completed within  three months of the end of the fiscal year .  The audit report must be provided to the competent licensing authority (DPI),  local tax office ,  local statistics office, and other relevant departments required by law .  The Company must enter into an audit contract with an independent audit firm no later than  30 days prior to the end of the Company’s fiscal year .