The Ministry of Finance proposed to draft a Law amending and supplementing the Law on Independent Audit (effective from January 1, 2012).

The Ministry of Finance said that Article 60 of the Law on Independent Auditing and Decree No. 41/2018/ND-CP stipulates administrative sanctions for violations in the field of independent auditing.

However, in the actual implementation process, there are shortcomings such as: The penalty level is low, not enough to be a deterrent (maximum 50 million VND for individuals, 100 million VND for organizations); the statute of limitations for penalties is not appropriate (1 year), leading to most cases when violations are detected, the statute of limitations for penalties has expired.

With current regulations, "auditing enterprises and violators are not afraid or hesitant to violate the provisions of the Law on Independent Auditing and guiding documents," the Ministry of Finance emphasized.

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According to the Ministry of Finance, the administrative penalty for violations by independent auditors is still low and not deterrent enough. Photo: Hoang Ha

In order to comply with international practices and precedents of other relevant regulations (such as regulations on sanctions for violations in the securities sector), the Ministry of Finance proposes in the draft Law amending and supplementing the Law on Independent Auditing a number of contents including: The statute of limitations for handling violations of the law on independent auditing is 10 years; the maximum fine is 3 billion VND for organizations and 1.5 billion VND for individuals...

At the same time, add some forms of sanctions such as: revocation of the certificate of eligibility to conduct auditing services, revocation of the auditor certificate, revocation of the certificate of registration to practice auditing, suspension of auditing services, suspension of auditing practice...

Nationwide, there are currently about 2,400 practicing auditors with certificates of registration to practice auditing, and more than 220 auditing enterprises with certificates of eligibility to provide auditing services.

By May 2024, 6,387 people had been granted Vietnamese auditor certificates; of which, 2,501 people were working in auditing enterprises.

From 2013 to present, 114 auditors have been suspended from practicing auditing, 3 auditing firms have been suspended from providing auditing services, and 3 auditing firms have had their certificates of eligibility to provide auditing services revoked.

From 2015 to present, 67 auditing firms and 8 auditors have been administratively sanctioned for violations.

Some cases are reported to be related to subjects committing illegal acts, fraud, causing damage to investors (such as Thang Long Auditing Company - TDK, International Auditing - Financial Consulting Company...).

Most recently, in the Van Thinh Phat case, hundreds of billions of dong were "drained" from Saigon Commercial Joint Stock Bank (SCB), but for 10 years (2012-2022), SCB's financial reports were audited by three leading auditing companies including Ernst & Young Vietnam, Deloitte Vietnam, and KPMG Vietnam, and no signs of irregularities were detected.

Many countries impose very large fines in the auditing field. Some countries even do not limit the maximum fine amount or the statute of limitations.

In the UK in 2017, the Financial Reporting Council (FRC) fined PwC £5.1 million and the auditor in charge of the audit was fined £115,000 for conducting an audit for RSM Tenon in 2011 that was not in accordance with auditing standards and auditing procedures.

Grant Thornton has been fined £4m for failing to audit Nichols and the University of Salford for the financial years 2013 to 2018.