What categories are included in the additional audit subjects?

DNHN - On the morning of November 7, the National Assembly discussed the draft amendment of several articles across seven laws, with a particular focus on adding new audit subjects.

Addition of Clauses 5 and 6 to Article 37

During the session, delegates generally agreed on the need to amend specific articles of these seven laws to address current challenges, facilitating business operations and meeting the country’s emerging needs.

Delegate Thái Thị An Chung (Nghệ An delegation) expressed support for expanding the scope of subjects required to undergo audits. She advocated for the addition of Clauses 5 and 6 to Article 37 of the Independent Auditing Law, specifying that “large-scale businesses and other organizations must conduct financial audits as mandated by government regulations; this also applies to businesses and organizations defined by relevant laws.”

Delegate Chung explained that the absence of these provisions in the current Independent Auditing Law has allowed some large-scale businesses and unlisted or private real estate companies to avoid audits, which has had significant societal impacts.

Around 20,000 businesses to be subject to additional audits

Delegate Bùi Thị Quỳnh Thơ (Hà Tĩnh delegation) also supported expanding audit subjects. According to Thơ, a preliminary government review has identified two criteria: enterprises with an average workforce of over 200 employees and those with an annual revenue exceeding VND 300 billion or assets over VND 100 billion.

Based on these criteria, an estimated “20,000 businesses would fall under the new audit requirements”, which is a considerable number. Delegate Thơ requested clarification on the broader audit purposes, questioning if the rationale provided—namely, addressing misconduct in some private businesses—adequately justifies the broad application.

Delegate Thơ noted that the annual financial audit process could be costly and resource-intensive, potentially hindering business operations. Under the current Article 37 of the Independent Auditing Law, audit subjects are specified by sector and field. Adding scope based on size alone could result in inconsistent audit application within the same law. She urged a clear delineation of audit subjects by industry to ensure alignment with Article 37's current provisions.

Additional provisions for Article 18 of the Independent Auditing Law

Beyond expanding audit subjects, another reason for amending the Independent Auditing Law lies in the perceived ineffectiveness of existing audit oversight measures, which also garnered attention from delegates.

Delegate Thái Thị An Chung highlighted that “current law does not require practicing auditors to be members of a professional auditing organization.” She noted that many countries mandate this, creating a cooperative framework between professional bodies and regulatory authorities to improve audit quality and ensure the sustainable development of independent auditing.

Consequently, Delegate Chung suggested that the National Assembly and Government include a provision in Article 18 of the Independent Auditing Law to obligate auditors to become members of a professional auditing organization. This would “support regulatory bodies in managing and enhancing audit service quality while strengthening the roles and responsibilities of professional organizations.”

Additionally, she recommended amending Article 12 to assign professional auditing organizations a role in coordinating and monitoring adherence to auditing standards and ethics. She likened this to existing legal requirements for lawyers and notaries, whose professional organizations also have such obligations.

Xuan Hoang