How will violations against obligations of firms providing transboundary audit services be penalized?

Pursuant to Article 64, Decree 41/2018/ND-CP, violations against obligations of firms providing transboundary audit services shall be penalized as follows:

1. A warning shall be imposed on the foreign auditing firm committing one of the following violations:

a) Informing the Ministry of Finance that one of the conditions required for provision of transboundary audit services is not met less than 15 days after the specified deadline;

b) Submitting audited annual financial statements with independent auditing firms’ audit statements attached, the local audit service authority’s reports on compliance with regulations of law on provision of audit services and other regulations of law to the Ministry of Finance less than 15 days after the specified deadline;

c) Submitting reports on execution of contracts for provision of transboundary audit services in Vietnam to the Ministry of Finance less than 15 days after the specified deadline.

2. A fine ranging from VND 5.000.000 to VND 10.000.000 shall be imposed on the foreign auditing firm in the following cases:

a) Informing the Ministry of Finance that one of the conditions required for provision of transboundary audit services is not met 15 days after the specified deadline or later;

b) Submitting audited annual financial statements with independent auditing firms’ audit statements attached, the local audit service authority’s reports on compliance with regulations of law on provision of audit services and other regulations of law to the Ministry of Finance less 15 days after the specified deadline or later;

c) The report on execution of contracts for provision of transboundary audit services in Vietnam does not have sufficient contents or is submitted to the Ministry of Finance 15 days after the specified deadline or later.

3. A fine ranging from VND 10.000.000 to VND 20.000.000 shall be imposed on the foreign auditing firm committing of the following violations:

a) Failure to inform the Ministry of Finance that one of the conditions required for provision of transboundary audit services in Vietnam is not met;

b) Failure to submit audited annual financial statements with independent auditing firms’ audit statements attached, the local audit service authority’s reports on compliance with regulations of law on provision of audit services and other regulations of law to the Ministry of Finance;

c) Failure to report or reporting falsely on execution of contracts for provision of transboundary audit services in Vietnam.

4. A fine ranging from VND 30.000.000 to VND 50.000.000 shall be imposed on the foreign auditing firm committing one of the following violations:

a) Committing prohibited acts or providing audit services in prohibited cases as specified in regulations of the Vietnamese Law on Independent Audit;

b) Failure to comply with Vietnamese audit standards and accounting and audit code of ethics while providing transboundary audit services in Vietnam;

c) Failure to explain the contents relevant to provision of transboundary audit services in Vietnam to the Vietnamese authorities.

5. Additional penalty:

The foreign auditing firms committing the violation mentioned in Point a, Clause 4 of this Article shall have its certificate of eligibility to provide transboundary audit services in Vietnam suspended for 3-6 months from the day the decision on penalty imposition comes into effect.

As an established company in the field of tax and legal consulting, Vinasc hopes to adequately inform our customers to help them mitigate the risk during operation in Vietnam. Should there be any further concern, please contact Vinasc’s Customer Care department for timely support.