How will violations against regulations on control of audit service quality of auditing firms and branches of foreign auditing firms be penalized?

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How will violations against regulations on control of audit service quality of auditing firms and branches of foreign auditing firms be penalized?

Vinascgroup

Pursuant to Article 68, Decree 41/2018/ND-CP, violations against regulations on control of audit service quality of auditing firms and branches of foreign auditing firms shall be penalized as follows:

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

a) Submitting reports on self-inspection of audit service quality to the Ministry of Finance and the State Securities Commission less than 15 days after the specified deadline;

b) Submitting reports on error rectification and implementation of inspectorates’ request to the inspecting authority and the professional organization in auditing less than 15 days after the specified deadline;

c) Reporting on independent audit activities upon request of the Ministry of Finance or the State Securities Commission 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 auditing firm committing one of the following violations:

a) Submitting reports on self-inspection of audit service quality to the Ministry of Finance and the State Securities Commission 15 days after the specified deadline or later;

b) Submitting reports on error rectification and implementation of inspectorates’ request to the inspecting authority and the professional organization in auditing 15 days after the specified deadline or later;

c) Reporting on independent audit activities upon request of the Ministry of Finance or the State Securities Commission insufficiently or 15 days after the specified deadline or later.

d) Late or insufficient provision of information and documents upon request of the competent authority during the control of audit service quality process.

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

a) Failure to submit reports on self-inspection of audit service quality to the Ministry of Finance and the State Securities Commission;

b) Failure to submit reports on error rectification and implementation of inspectorates’ request to the inspecting authority and the professional organization in auditing;

c) Failure to report on independent audit activities upon request of the Ministry of Finance or the State Securities Commission;

d) Failure to provide information and documents upon request of the competent authority during the control of audit service quality process.

4. A fine ranging from VND 20.000.000 to VND 30.000.000 shall be imposed on the auditing firm committing one of the following violations:

a) Failure to create a service quality control system for audit services, review services, financial information, other assurance services and related services;

b) Failure to create policies and quality control processes for each audit;

c) Failure to conduct and implement service quality control in audit services, review services, financial information, other assurance services and related services;

d) Failure to implement policies and quality control processes in each audit;

dd) Provision of false or inaccurate information or documents for the competent authority during the control of audit service quality process.

e) Failure to explain to and cooperate with the competent authority during the control of audit service quality process.

g) Failure to appoint audit practitioners and other related staff to work with the inspectorates;

h) Failure to sign the inspection report right after the inspection is complete.

5. Additional penalty:

The auditing firm committing any of the violations mentioned in Point d, Clause 3, Points e and f, Clause 4 of this Article shall have its certificate of eligibility to provide audit services suspended for 1-3 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.

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