Vietnam

Member Organizations

Member Organization Associate Other PAOs

  Vietnam Association of Accountants and Auditors
  Vietnam Association of Certified Public Accountants

Legal and Regulatory Environment

  • Overview of Statuatory Framework for Accounting and Auditing

    The Accounting Law (2015) and the Law on Independent Audit (2011) form the statutory framework for accounting, auditing, and corporate financial reporting in Vietnam.

    The Accounting Law requires all entities, public and private, to apply the Vietnamese Accounting Standards (VAS) when preparing financial statements. Under the Government Decree No. 87/2017/ND-CP, the Accounting and Auditing Supervisory Department (AASD) operating within the Ministry of Finance (MOF), is responsible for setting accounting standards. The AASD established the Vietnamese Accounting Standards Board (VASB), which has been given responsibility to develop VAS. The application of International Financial Reporting Standards (IFRS) only applies to companies that report to foreign investors; however, these statements are considered supplementary to what is required in the jurisdiction, which is to prepare financial statements that are aligned with the VAS. The VASB takes IFRS into consideration when developing VAS; however, differences remain. IFRS for SMEs have not been adopted in Vietnam, and SMEs in Vietnam follow an Accounting Regime for SMEs that has been developed by the MOF. This Accounting Regime is considered a simplified version of the VAS. The Vietnam Association of Certified Public Accountants (VACPA) reports that the MOF has planned a draft timeline of 2023-2025 to fully adopt IFRS.

    The Law on Independent Audit regulates the principles, conditions, scope, and form of independent audit activities as well as the rights and obligations of practicing auditors, auditing firms, branches of foreign auditing firms in Vietnam and the units that are audited. The Law requires application of Vietnamese Standards on Auditing (VSA) by all public interest entities (public companies, banks and credit institutions, insurance businesses, insurance brokerage businesses, and security trading and underwriting businesses), enterprises with foreign-owned capital, and finance organizations. The Government Decree No. 17 of 2012 authorizes VACPA to develop VSA in line with International Standards on Auditing (ISA). VACPA reports that the current version of VSA is based on the 2009 version of ISA with modifications.

  • Regulation of Accountancy Profession

    Under government Decree No. 87 of 2017, the Ministry of Finance (MOF) is given authority to regulate the accountancy profession in Vietnam.

    The MOF’s responsibilities include establishing qualification requirements, administering examinations, and issuing practicing certificates for both auditors and other accountancy professionals. The MOF is also responsible for setting auditing and accounting standards, establishing ethical requirements, and administering mechanisms such as quality assurance and investigative and disciplinary systems.

    The Law on Accounting (2015) sets out qualification requirements for professionals providing non-audit services (such as Chief Accountants and independent accounting practitioners). In order for an individual to become an accountant or Chief Accountant, the person is required to hold a university degree in accounting and complete two years of work experience before being offered a license to practice. In addition, those who wish to become Chief Accountants are required to hold a Chief Accountant training certificate which is developed and administered by the MOF and involves completing an approved program that can last three to six months covering five subjects. No other exam exists for these two categories; however, there are many professionals who complete a foreign qualification from a foreign professional accountancy organization (PAO) operating in Vietnam. Individuals who only hold a certificate to practice as a Chief Accountant are not allowed to conduct audit work.

    The Law on Independent Audit (2011) sets out the qualification requirements for auditors. MOF issued Circular 91 of 2017 establishes that individuals who choose to become auditors must hold a university degree in either accounting, auditing, finance, banking, economics, or business administration (a subject where seven percent of attained credits must be in finance, accounting, auditing, analysis, and tax), be employed full-time by an audit firm, complete 36 months of work experience, and pass seven components of the Certified Public Accountant examination, which is developed and administered by the MOF. Those who have completed a foreign qualification from a foreign PAO are required to complete a conversion examination offered by the MOF. All professional accountants in Vietnam who attain certificates to practice by the MOF may choose to join the two local professional accountancy organizations (PAOs) in Vietnam: the Vietnam Association of Certified Public Accountants (VACPA) and Vietnam Association of Accountants and Auditors (VAA); however, membership with either organizations is voluntary.

    All professional accountants in Vietnam are required to complete annual continuing professional development (CPD) requirements to maintain their respective license and certificates to practice. CPD is offered by various bodies and the MOF is responsible for accrediting all CPD providers and programs. Both VACPA and VAA are approved by the MOF to monitor their members’ completion of CPD requirements. Individuals who do not complete mandatory CPD requirements are reported to the MOF for disciplinary actions, including the removal of licenses. Given the overarching authority of the MOF, both PAOs act as advisors to the MOF on matters related to the accountancy profession. Both PAOs also collaborate with the MOF in administering examinations, translating international standards, and the overall standard-setting process.

  • Audit Oversight Arrangements

    The independent audit oversight authority in Vietnam is the Accounting and Auditing Supervisory Department (AASD) of the MOF and the State Securities Commission (SSC).

    Under the Decree No. 87 of 2017, the Ministry of Finance (MOF) is responsible for regulating the audit profession and the Law on Independent Audit outlines the principles, conditions, scope, and form of audit activities in the jurisdiction. The MOF’s responsibilities include establishing qualification requirements, administering examinations, and issuing practicing certificates for auditors. The MOF is also responsible for setting auditing standards, establishing ethical requirements, and administering mechanisms such as quality assurance (QA) and investigative and disciplinary (I&D) systems. As prescribed under MOF Circular 157/2014/TT-BTC, the MOF established and delegated the AASD and the SSC to conduct the QA reviews. The MOF accredits all continuing professional development (CPD) programs that are undertaken by auditors, who are required to complete CPD credits on an annual basis in order to maintain their practicing certificate.

  • Professional Accountancy Organizations

    Vietnam Accounting Association (VAA)

    VAA was established in 1994 as the first professional accountancy organization in Vietnam under Decision 12-TTg by the Prime Minister of Vietnam and formally named as the Vietnam Association of Accountants and Auditors under Decision 35/2004/BNV as authorized by the Minister of Home Affairs. VAA’s objectives are to unite organizations and individuals involved in the accountancy practice to develop the profession; upgrade professional skills; uphold ethics for Vietnam’s management of economic and financial issues, and integration into the community of accountancy bodies around the world. Membership with VAA is voluntary. In addition to being a member of IFAC, VAA is a member of the ASEAN Federation of Accountants (AFA).

    Vietnam Association of Certified Public Accountants (VACPA)

    • VACPA was established in 2005 under Decision 15/2005/QD-BNV by the Ministry of Home Affairs. Originally established as a professional association under the umbrella of VAA, in 2014, VACPA became a second PAO operating in Vietnam. VACPA is recognized as the national PAO for auditors and audit firms and while membership is voluntary, all members must hold a CPA certificate issued by the MOF. There are some members of VACPA that are also members of VAA. Under Article II of VACPA’s charter, the objectives of VACPA are: to develop the quality of accounting and auditing services; to preserve professional ethics; to enhance member value to be recognized by regional and international organizations; and contribute to transparency of economic and financial information in Vietnam in accordance with laws and regulations. VACPA also administers training and development for its members; works with the MOF to draft technical standards for the profession, including the national Code of Ethics; and participates in both quality assurance, and investigative and disciplinary activities, which are overseen by the MOF. In addition to being an IFAC Associate, VACPA is a member of the Confederation of Asian and Pacific Accountants.
  • Projects or Other Information

Adoption of International Standards

  • Quality Assurance

    Under Article 11 of the Law on Independent Audit (2011), the Ministry of Finance (MOF) is responsible for establishing quality assurance (QA) review systems for audit firms and auditors in Vietnam. However, as prescribed under MOF Circular 157/2014/TT-BTC, the MOF established and delegated the Accounting and Auditing Supervisory Department and the State Securities Commission to conduct the QA reviews.

    The process for QA reviews is outlined in the Law on Independent Audit and includes a self-assessment by audit firms of the system of quality control relating to audits of financial statements; a review of the quality control policies and procedures; a review of audit working papers; and an assessment of compliance with local accounting and auditing standards. This self-assessment is developed by the MOF and it provides the criteria for determining if the overall outcome of a QA review can be considered satisfactory or unsatisfactory.

    The MOF reviews the self-assessments to monitor their compliance with established auditing standards and regulations for audit firms and auditors. The MOF may enlist the assistance of the Vietnam Association of Certified Public Accountants (VACPA) if it determines the need to conduct an on-site inspection of the audit firms. VACPA reports that the QA system adopted by the MOF is mostly aligned with the requirements of SMO 1, except that the system is not linked with the investigation and discipline (I&D) system.

    Audit firms in Vietnam that provide audit and assurance services to the public are to be reviewed every three years or whenever there are instances of violations. ISQC 1 has been adopted in Vietnam as the Vietnamese Standard on Quality Control (VSQC 1).

    Current Status: Partially Adopted

  • International Education Standards

    In Vietnam, the Law of Accounting 2015 establishes qualification requirements for chief accountants and other accountancy professionals; while the Law on Independent Audit sets out qualification requirements for auditors. Certificates to practice as both chief accountants and auditors are issued by the Ministry of Finance (MOF) who is responsible for implementing the requirements as prescribed in both laws indicated above.

    In order for an individual to become an accountant or Chief Accountant, the person is required to hold a university degree in accounting and complete two years of work experience before being offered a license to practice. Those who wish to become Chief Accountants are required to hold a Chief Accountant training certificate.

    The Law on Independent Audit (2011) sets out the qualification requirements for auditors. Individuals who choose to become auditors are required to hold a university degree in accounting, be employed full-time by an audit practice, complete 36 months of work experience, and pass seven components of the Certified Public Accountant examination, which is developed and administered by the MOF. Those who have completed a foreign qualification from a foreign professional accountancy organization are required to complete a conversion examination offered by the MOF.

    The Law on Independent Audit, the Circular No. 150 of 2012, and Circular No. 56 of 2015 establishes the obligations of Vietnamese practicing auditors in regards to continuing professional development (CPD), which the Vietnam Association of Certified Public Accountants (VACPA) indicates is fundamentally consistent with IES 7 but is not specifically referenced. The MOF accredits different providers to offer CPD courses in Vietnam. Both professional accountancy organizations in Vietnam, VACPA and the Vietnam Association of Accountants and Auditors (VAA) are accredited providers of CPD courses.

    Based on information from the World Bank Report on the Observance of Standards and Codes (ROSC): Accounting and Auditing module and as reported by VACPA, the IES are not incorporated into accountancy education requirements in Vietnam, and it is unclear if the IES requirements are being considered for adoption.

    Current Status: Not Adopted

  • International Standards on Auditing

    Under Article 6 of the Law on Independent Audit, the Ministry of Finance (MOF) is responsible for setting auditing standards in Vietnam.

    Prior to 2008, the MOF issued 37 Vietnam Standards on Auditing (VSA), which were developed in line with standards issued by the IAASB. In 2012, under Circular No. 214 issued by the MOF, the Vietnam Association of Certified Public Accountants (VACPA) was directed by the MOF to update the VSA.

    As of June 2018, there are 47 VSA in Vietnam, which VACPA reports have been developed in line with the 2009 ISA with minor modifications. VACPA reports that the MOF has no plans to review and adopt the latest ISA, which include the new auditor’s report. VACPA reports that the 2012 IAASB Handbook has been translated into Vietnamese for its member’s reference.

    Current Status: Partially Adopted

  • Code of Ethics for Professional Accountants

    Under the Law on Accounting 2015 the Ministry of Finance (MOF) is responsible for establishing ethical requirements for all professional accountants in Vietnam. Professional accountancy organizations in Vietnam are not required and have not established their own separate ethical codes.

    The MOF has adopted the 2014 IESBA Code of Ethics which is applicable to all professional accountants in the jurisdiction. Members of both the Vietnam Association of Accountants and Auditors (VAA) and Vietnam Association of Certified Public Accountants (VACPA) are required to adhere to the Code as set by the MOF.

    It is unclear if there are plans by the MOF to review and adopt the latest IESBA Code of Ethics. However, VACPA reports that it has plans between 2019 and 2020 to begin translating the latest IESBA Code of Ethics.

    Current Status: Partially Adopted

  • International Public Sector Accounting Standards

    The Ministry of Finance is responsible for setting public sector accounting standards.

    Under Government Decree No.25/2017/ND-CP, No.174/2016/ND-CP, Circular No.107/2017/TT-BTC, public sector entities follow a specialized Accounting Regime designed for the public sector but it is unclear what standards were referenced during its development. There have been efforts by local and international stakeholders to promote the adoption of IPSAS to the MOF; however, it is unclear if there are plans for the MOF to do so.

    The Law on Accounting, revised in 2015, also provides regulations on government financial reporting. The MOF has indicated that as part of the National Accounting General Project, in 2020, a government financial reporting template will be completed by the Vietnam State Treasury (VST). It is envisioned that the VST, as a part of this project template, will develop a Treasury and Budget Management Information System to serve the needs of accounting in the public sector.

    Current Status: Not Adopted

  • Investigation and Discipline

    Under Decree No. 41 of 2018, the Ministry of Finance (MOF) is responsible for establishing and administering an investigation and disciplinary (I&D) mechanism, that is mainly linked to the quality assurance review system in Vietnam for all professional accountants.

    The Law on Independent Audit sets out the types of violations that would warrant an investigation, and lists the sanctions that would be imposed on individuals guilty of misconduct. The I&D mechanism implemented by the MOF is not aligned with the requirements of SMO 6.

    Current Status: Partially Adopted

  • International Financial Reporting Standards

    Under Government Decree No. 87/2017/ND-CP, the Accounting and Auditing Supervisory Department (AASD), operating within the Ministry of Finance (MOF), is responsible for setting accounting standards for all entities in Vietnam. The AASD established the Vietnamese Accounting Standards Board (VASB), which has been given responsibility to develop Vietnamese Accounting Standards (VAS).

    The Law on Accounting, which was revised in 2015, requires the MOF to develop accounting standards on the basis of international accounting standards but taking the national context into consideration. VAS are therefore to be applied by all entities during the preparation of financial statements while the IFRS are only applied when companies are reporting to foreign investors and these statements are considered supplementary.

    As of July 2018, the Vietnam Association of Certified Public Accountants (VACPA) reports that the MOF continues to take IFRS into consideration when developing or reviewing the VAS but IFRS are still not adopted in Vietnam. IFRS for SMEs are also not adopted. SMEs in Vietnam follow an “Accounting Regime for SMEs” developed by the MOF, which VACPA reports is a simplified version of the VAS.

    The MOF has established a draft timeline of 2023–2025 to fully adopt of IFRS.

    Current Status: Not Adopted

Disclaimer

IFAC bears no responsibility for the information provided in the SMO Action Plans prepared by IFAC member organizations. Please see our full Disclaimer for additional information.

Methodology

Methodology
Last updated: 11/2018
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