Auditing services for FDIs enterprises are the auditing service provided to businesses with direct foreign investment in Vietnam. These services aim to ensure the transparency and reliability of financial information and business activities of FDI enterprises.
Vietnam currently possesses numerous factors that attract foreign direct investment. The substantial capital demand, potential-developing consumer market, and strategically advantageous geographic location for logistics activities are key factors. Furthermore, low labor costs, numerous tax incentives, available land, and a stable political environment all create favorable conditions for foreign enterprises to invest.
Overview of FDI Enterprises
According to the Investment Law, a foreign-invested enterprise is a company with members who contribute capital or shareholders who contribute capital and are foreign investors.
The annual financial reports of FDI enterprises must be audited independently by an auditing services company before being submitted to relevant authorities. This includes: the Ministry of Finance, statistical, tax authorities, planning and investment departments, and the industrial park management board if the enterprise is registered within an industrial park.
FDI enterprises operating in Vietnam are subject to special state management. Therefore, the execution of accounting and auditing tasks for Financial Statements must be carried out carefully and accurately in accordance with legal regulations right from the start. This ensures that the enterprise can effectively leverage tax incentives and complete the procedures related to repatriating profits abroad each year.
What are auditing services
Auditing services, also known as independent auditing, as per Vietnam’s Law on Independent Audit, refers to the practice where auditors, audit firms provide their independent opinions on financial reports and other auditing tasks based on the auditing contract.
Independent auditing consists of three main activities: financial statements audit, compliance audit, and performance audit. The auditing services for FDIs enterprises is typically focused on financial statements audit as required by the Law on Independent Audit.
Legal regulations regarding the submission of audited financial reports
FDI enterprises are required to submit year-end financial reports to the financial authority, the tax authority, the statistical authority, and the business registration authority. Additionally, enterprises with headquarters located in export processing zones, industrial parks, and high-tech zones must also submit audited annual financial reports to the Industrial Park Management Board.
The deadline for submitting audited financial reports of FDI enterprises is at least 90 days from the end of the fiscal year.
The penalty levels related to the submission of audited financial statements:
Fine from 5,000,000 VND to 10,000,000 VND for late submission of audited financial statements within less than 3 months;
- Fine from 10,000,000 VND to 20,000,000 VND for late submission of audited financial statements over 3 months or for submitting unaudited financial reports;
- Fine from 20,000,000 VND to 30,000,000 VND if the information and figures in the financial statements are untrue or if the financial reports contain inconsistent data within the accounting period;
- Fine from 40,000,000 VND to 50,000,000 VND for failing to submit financial statements to the competent state authority.
The process of auditing services for FDIs enterprises by Vinasc
Initial audit plan
Vinasc initiates the audit planning process based on client information and requirements. This process involves determining the audit method, scope, objectives, and timeline for the audit.
Understanding and evaluating internal control activities
The auditor understands and assesses the client’s internal control activities. This process helps identify the effectiveness and accuracy of the internal control system.
Understanding the client's business environment
Based on the actual characteristics of the business operations, the auditor researches and gains a comprehensive understanding of the business environment in which the client operates. This process helps define the industry and factors influencing the client’s business activities.
Assessing overall risks
Vinasc conducts an assessment of the initial risks associated with the client’s audit. This process aims to identify vulnerabilities and potential risk factors for the business.
Performing audit procedures including tests of control and tests of detail
The auditing services for FDIs will perform audit procedures, including tests of control to assess the effectiveness of the internal control system, and tests of detail to verify the accuracy and completeness of financial information.
Designing additional audit procedures
Based on the collected information, Vinasc designs additional audit procedures to examine specific aspects of the client’s operations.
Summarizing issues and client communication
The auditor summarises issues arising during the audit process, discusses with the client, and provides advice on suitable solutions to enhance processes and business operations’ effectiveness.
Issuing audit report and management letter
Finally, Vinasc releases the official audit report and management letter, presenting the findings, assessments, and recommendations related to the client’s financial information and business activities.
Key highlights when utilizing Vinasc's auditing services for FDIs
Utilizing Vinasc’s audit service helps businesses achieve legal compliance goals, conduct comprehensive and in-depth financial statement examinations, as well as receive advice on risk assessment concerning internal control systems related to financial reporting and tax filing.
Vinasc’s team of professional consultants will support the internal accounting team in providing hands-on, practical advisory experience to address issues arising within the enterprise. This simultaneously enhances the quality and experience of the accounting department.
Vinasc’s dedicated team of experts, with diverse practical experience, is segmented into specialized fields and languages to provide the best possible support tailored to each specific FDI enterprise.
Vinasc establishes a culture that emphasizes service quality and professional ethics, starting from the highest management level to all staff, aiming for customer peace of mind and satisfaction.
Contact
If your company is interested in using auditing services for FDIs, please contact Vinasc using the information below. We will gather the necessary information and send a detailed quotation for your consideration.