Independent audit services are the main service accounting for the largest proportion of services provided by Vinasc. The primary clients of this service are FDI enterprises as required by the Law on Independent Audit of Vietnam.
The reputation and reputation of independent auditing services firms depend on the two most important criteria: high professionalism and compliance with professional ethics.
Requirement for transparency and disclosure of financial reporting information
Disclosure and transparency of financial reporting information of companies is the top priority for most economies worldwide, including Vietnam. True and fair financial statements are the fundamental basis for effectively carrying out tasks such as statistics, forecasting, and enhancing the efficiency of governmental and economic organization management.
Furthermore, transparently disclosing financial reporting information also ensures equitable access to information among investors, establishing long-term credibility with domestic and international investors alike. Moreover, it could indirectly reduce capital-raising costs in the market, promoting economic development objectives.
The role of independent audit services
Independent audit service plays the role of an independent third party with its own expertise and professional ethics, providing objective assessments on the accuracy and reasonableness of financial reports.
The independent audit activities are increasingly enhanced, ensuring the transparency of financial information and the compliance of businesses and economic organizations, fostering a healthy investment environment; contributing to the detection and prevention of misconduct by enterprises and economic organizations, enhancing the effectiveness and efficiency of state economic and financial management, as well as the business operations of enterprises.
What are independent audit services?
Independent audit service, as defined by the Vietnamese Independent Audit Law, refers to the practice in which auditors or audit firms provide their independent opinions on financial reports and other audit engagements based on audit contracts.
Independent audit encompasses three main activities: financial statement audit, compliance audit, and performance audit.
Independent audit for FDI enterprises
Vietnam has several competitive advantages to attract FDI inflows, including:
- High capital demand;
- Potential consumer market still in the process of development;
- Favorable geographical location for investment activities;
- Low labor costs;
- Participation in multiple free trade agreements;
- Suitable office rent and electricity prices;
- Various tax and land incentives;
- Political stability.
An enterprise with foreign direct investment is one of the organizations that the Law on Independent Audit of Vietnam stipulates to have its financial statements audited annually.
Sharing the same goal of disclosing and transparent financial information, however, the independent audit of FDI enterprises is given priority over the Government’s statistical, forecasting and tax management objectives. In addition, using independent auditing services is also a requirement of overseas parent companies for the purpose of controlling, managing as well as listing on foreign stock markets.
Overview of the independent audit services process at Vinasc
Gathering information
The auditor learns about the business environment of the company, including its industry, internal control systems, financial processes, and relevant policies. Simultaneously, the auditor gathers documents, records, financial reports, memoranda, contract agreements, and other information to establish the necessary database for the auditing process.
Risk assessment and planning
The auditor assesses the overall risks associated with the business and the financial reporting processes. Based on this assessment, the auditor plans the audit, which includes defining the scope of the audit, selecting audit methods, and determining the necessary time and resources.
Performing the audit
The auditor carries out audit procedures to ascertain the reasonableness and reliability of the financial report. Audit procedures involve examining documentary evidence, verifying the accuracy of figures, evaluating applied accounting methods, checking compliance with legal regulations, and other relevant provisions related to the financial report.
Analysis and evaluation of results
Independent audit services will analyze the audit results, comparing the figures in the financial report with accounting standards, auditing standards, and relevant tax regulations. Additionally, auditors will assess the effectiveness of the internal control system related to the financial reporting process. From these assessments, they provide comments and conclusions regarding the reasonableness and reliability of the financial report.
Preparing the audit report
The auditor prepares the audit report based on the audit results and applicable auditing regulations and standards. Typically, an audit report includes an introduction, audit objectives, audit scope, audit methods, audit findings, and the auditor’s opinion.
Discussing with the management board and issuing the audit report
The auditor confers with the management and the finance department of the enterprise to interpret the audit results, answer questions and provide additional information. After agreeing on the content, the audit report will be released.
Client documentation required for an audit
For the independent audit service to be conducted effectively, with quality and efficiency, the collaboration of both parties, namely the audit firm and the client, is essential. Some documents that clients should prepare beforehand include:
- Complete financial statements
- Legal documents of the company
- Accounting records and detailed financial statements, such as payroll, inventory records, depreciation allocation, accounts receivable and payable summaries, …
- Tax declarations for the year
- Bank statements
- Main contracts for sales, borrowing, lending, and savings
- Other supporting documents.
The added value of Vinasc's audit services to businesses
Enhancing the credibility of financial reports
Having an independent third party assess accuracy and compliance with financial regulations enhances the reliability of financial reports.
Objective assessment
Independent audit services ensure objectivity in the process of identifying, assessing, and reporting on a company’s financial situation. This helps ensure that financial reports are not influenced by personal interests or external pressures.
Enhancing internal control processes
Independent audit assesses the effectiveness of the internal control system and financial processes within a business. By providing observations and recommendations, independent audit helps the business enhance and strengthen its internal control processes, minimize risks, and improve operational performance.
In-depth consultation
Independent auditors possess specialized knowledge and experience in finance, accounting, taxation, and legal matters. This provides a comprehensive view of the existing risks within the business and enables to offer effective solutions.
Key highlights at Vinasc
Vinasc places a high level of importance on the quality of independent audit services and cultivates an organizational culture to ensure this quality from top management to all staff members. Audit standards are adhered to, the quality of audit documentation is assessed, and a quality control system is monitored.
Vinasc also places special emphasis on adhering to professional ethics in the field of auditing. We establish policies, disseminate requirements, and establish procedures to detect and address issues related to non-compliance with professional ethics.
Contact
If your company is interested in Vinasc’s independent audit services, please contact us using the information provided below. We will send a detailed quotation for your consideration.