31 December 1997
MINISTRY OF FINANCE
|
SOCIALIST REPUBLIC OF
VIETNAM
Independence - Freedom -
Happiness |
No. 60-TC-CDKT
Hanoi, 1 September 1997
CIRCULAR PROVIDING
GUIDELINES FOR IMPLEMENTATION OF ACCOUNTING AND AUDITING IN RESPECT OF FOREIGN
INVESTED ENTERPRISES AND ORGANIZATIONS IN VIETNAM
Pursuant to the Ordinance
on Accounting and Statistics promulgated by Order 6-
LCT-HDNN-8 dated 20 May 1988
of the State Council of the Socialist Republic of
Vietnam;
Pursuant to the
Regulations on State Accounting Organizations issued with Decree
25-HDBT dated 18 March 1989
of the Council of Ministers (now the Government);
Pursuant to article 37 of
the Law on Foreign Investment in Vietnam approved by the
National Assembly on 12
Novemb er 1996 (hereinafter referred to as the Law on
Foreign Investment)
and articles 65, 66, 67, 68, and 69 in Chapter VIII of Decree 12-CP
of the Government dated 18
February 1997 of the Government providing detailed
regulations on the
implementation of the Law on Foreign Investment in Vietnam
(hereinafter referred to as
Decree 12-CP);
Pursuant to article 23 in
Chapter III of Decree 42-CP dated 8 July 1995 of the
Government providing
Regulations on Legal Consultancy Practices of Foreign Law
Firms in Vietnam
(hereinafter referred to as
the Regulations on Consultancy
Practices);
Pursuant to Part V on Labour
for Foreign Organizations and Individuals Operating in
Vietnam,
Foreigners Working in Vietnam, and Working Overseas [of Chapter XI*] of
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the Labour Code of
the Socialist Republic of Vietnam promulgated by Order 35-LCTN
dated 5 July 1994
(hereinafter referred to as the Labour Code);
The Ministry of Finance
hereby stipulates and provides guidelines for the
implementation of accounting
and auditing in respect of foreign invested enterprises
and branches of foreign law
firms in Vietnam as follows:
I. APPLICABILITY
1. In this Circular, the
term foreign invested enterprise shall be deemed to
include:
1.1 Foreign invested
enterprises; industrial zone enterprises; export
processing zone enterprises;
parties to business co-operation contracts,
Build-Operate-Transfer (BOT)
contracts, Build-Transfer-Operate (BTO)
contracts, and
Build-Transfer (BT) contracts where investment is
implemented in one of three
forms, namely business co-operation on the
basis of a business
co-operation contract, joint venture enterprise or
enterprise with one hundred
(100) per cent foreign owned capital.
Foreign invested enterprises
operating in all fields, including insurance
enterprises, banking
enterprises and credit institutions.
1.2 Branches of foreign law
firms in Vietnam operating under the Regulations
on Legal Consultancy
Practices of Foreign Law Firms in Vietnam
(hereinafter referred to as
law firm branches).
II. GENERAL PROVISIONS
1. Foreign invested
enterprises must comply with accounting and statistics
systems in accordance with
the Ordinance on Accounting and Statistics,
Regulations of State
Accounting Organizations,
current legislation on
accounting and auditing,
article 37 of the Law on Foreign Investment, articles
65, 66, 67, 68, and 69 in
Chapter VIII of Decree 12-CP, article 23 in Chapter III
of the Regulations on
Consultancy Practices, and the provisions stated in
this Circular.
2. Foreign invested
enterprises shall implement accounting work under the
supervision and examination
of the financial authorities and other relevant
managing authorities.
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3. All foreign invested
enterprises shall register the accounting system applied
in the enterprises and must
obtain approval from the Ministry of Finance prior
to adoption of the system.
4. Foreign invested
enterprises shall implement accounting work in accordance
with the Vietnamese
accounting system. Where foreign invested enterprises
have plausible reasons for
the application of another common accounting
system, approval thereof
must be obtained from the Ministry of Finance.
5. Foreign invested
enterprises shall comply with the registered accounting
system which has been
approved by the Ministry of Finance to be applied in
enterprises (including
amendments of and additions to the approved
accounting system).
6. Where amendments of or
additions to the registered and approved
accounting system are
necessary, foreign invested enterprises must explain
clearly the reasons therefor
and must obtain the written approval of the
Ministry of Finance prior to
making such amendments or additions.
7. Where joint venture
enterprises hire managing organizations to manage their
business operations, the
joint venture enterprises shall, in all cases, be
responsible before the law
for the activities of the managing organizations in
performance of contracts as
well as for data in financial statements. Managing
organizations shall comply
with the provisions of this Circular as one of the
applicable subjects
stipulated in clause 1.1 in Part I - Applicability.
8. The fiscal year of
foreign invested enterprises shall be in accordance with the
tax calculation year, which
may be the calendar year or a year of twelve (12)
consecutive months, as
registered by enterprises.
9. Annual financial
statements of foreign invested enterprises must be audited
by independent auditors
operating legally in Vietnam.
10. Foreign invested
enterprises shall publicly announce their annual financial
statements, information on
the business operations of the enterprises and the
results thereof to
information users as stipulated.
11. Requirements of
accounting work:
Accounting work of foreign
invested enterprises must be truthful, complete,
accurate, timely, continuous
and systematic with respect to the current
balance of and changes to
assets, capital sources, expenditure, costs of
products, services and
labour, turnover, profits earned from business
operations; and must comply
with the laws on taxation and performance of
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other obligations to the
State of Vietnam in accordance with the investment
licences (for enterprises
with foreign direct invested capital) or operating
licences (for law firm
branches).
12. Upon termination of
operation of foreign invested enterprises for any reason,
the enterprises must notify
in writing and send a financial report as at the time
of termination of operation
to the Ministry of Finance.
III. SPECIFIC PROVISIONS
A. Provisions on
Implementation of Accounting Systems
1. All foreign invested
enterprises adopting the Vietnamese accounting system
or other common accounting
systems must comply with the following
provisions:
1.1 Foreign invested
enterprises must adopt an accounting system which is
suited to their line of
business or field of operation.
1.2 The currency unit used
in accounting is the Vietnamese dong. Foreign
invested enterprises may use
a foreign currency for account-keeping and
preparing accounting reports
but mu st register it in the accounting
system applied to be adopted
and must obtain the written approval of the
Ministry of Finance prior to
implementation thereof.
Currency units other than
the approved official currency must be stated
in the value of the original
currency and converted to the official currency
at the transaction exchange
rate for each specific economic transaction or
at the exchange rate
published by the State Bank of Vietnam at the time
when the economic
transaction takes place.
1.3 The units of measurement
(in kind and time) applied in accounting shall
be the official units of
measurement of Vietnam. Other units of
measurement (if any) must be
converted to the official units of
measurement of Vietnam.
Foreign invested enterprises may use additional
measurements in accounting.
1.4 Accounting shall be
recorded in Arabic numerals and in Vietnamese or in
both Vietnamese and another
common foreign language; this must be
stated in the charter of the
foreign invested enterprise and in the
registration of the
accounting system.
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2. Fiscal year:
2.1 The fiscal year of
foreign invested enterprises must be in accordance with
the tax calculation year
stipulated in article 60 of Decree 12-CP. The fiscal
year may be the calendar
year or a year of twelve (12) consecutive months
commencing from the
beginning of a quarter and shall be registered in the
accounting system applied to
be adopted.
2.2 The first fiscal year
shall be calculated from the date of issuance of the
investment licence (or the
licence for establishment of a law firm branch)
to the end of the approved
fiscal year.
2.3 The accounting periods
in the fiscal year shall be:
- Month: from the first day
to the last day of the month.
- Quarter: from the first
day to the last day of the last month in the
quarter.
3. Time-limit for submission
and announcement of financial statements:
- Quarterly statements: no
later than fifteen (15) days from the last day of
the quarter.
- Annual statements: within
three months from the last day of the fiscal
year of the foreign invested
enterprise.
4. Bodies receiving
financial statements:
Financial statements of
foreign invested enterprises shall be submitted to the
Ministry of Planning and
Investment, the Ministry of Finance, the General
Department of Statistics,
the local tax authorities (where the head office of the
enterprise is located), and
to the parties contributing capital to the joint
ventures.
5. Auditing of financial
statements:
Annual financial statements
of foreign invested enterprises mu st, prior to
being submitted and publicly
announced, be audited by an independent
auditing company of Vietnam
or other independent auditing company
permitted to operate legally
in Vietnam. Audit reports attached to annual
financial statements must
bear the signatures of an auditor possessing an
auditor�s certificate by the
Ministry of Vietnam or a national auditor�s
certificate issued by the
home country which is recognized by the Ministry of
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Finance of Vietnam as having
registered in the list of auditors with the
Ministry of Finance, the
signature of the director of the auditing company
and the seal of the auditing
company. Under the signature of the auditor, the
full name and number of the
auditor�s certificate (national certificate) must be
clearly stated.
6. Organization of
accounting work:
6.1 Foreign invested
enterprises shall carry out the following accounting
work: accounting voucher
system, accounting account system,
accounting book system,
financial statement system and accounting
filing system.
6.2 In order to carry out
accounting work, foreign invested enterprises may
employ full-time accounting
staff or hire an accounting service
organization operating
independently and legally in Vietnam.
6.2.1 In respect of foreign
invested enterprises with full-time accounting
staff:
(a) Sufficient accounting
staff must be employed in accordance
with the titles and
qualifications stipulated for accounting staff. Professional and
technical independence shall be
ensured in order for
accounting staff to carry out their tasks.
Accounting staff must not
concurrently be responsible forprotecting assets and
working as an accountant.
(b) The head of the
accounting staff shall be the chiefaccountant or the head of
the accounting department. The
chief accountant (or head of
the accounting department)shall assist the general
director or director of the foreign
invested enterprise in
directing all work related toaccounting, statistics and
economic information within the
enterprise.
- The chief accountant of a
foreign invested enterprise shall be selected and
appointed in writing by the
board of management (in
respect of a joint ventureenterprise) or the general
director or authorized
representative residing
permanently in Vietnam (inrespect of an enterprise
with one hundred (100) per
cent foreign owned capital).
Foreign investedenterprises must give
official notice in writing to the
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Ministry of Finance on any
changes to the positionof chief accountant (within
twenty (20) days).
- Chief accountants must
have qualifications (graduation certificates) in
accounting and finance at
the vocational secondary or
higher level; have completed a chief accountant
training course (for
Vietnamese); have necessary
economic, technical and financial knowledge; be
capable of organizing,
directing, providing
guidelines, examining and analysing financial,
accounting, and statistical work
as well as economic
information and cost accounting. A chief
accountant must have work
experience in accounting for
at least three years (in respect of university
graduates) and for at least five
years (in respect of
vocational secondary school graduates).
- Chief accountants shall be
under technical and professional supervision and
examination with
respect to finance and
accounting by financial authorities of Vietnam.
(c) Accounting staff
(including chief accountants) being Vietnamese selected by and
entering into labour contracts
with foreign invested
enterprises must be trained in the profession of finance and
accounting and be recommended
by an employment service
agency established under the laws of Vietnam (as
stipulated in article 132 of the Labour
Code).
Accounting staff (including
chief accountants) in foreign invested enterprises must
enter into labour contracts with
the enterprises and comply
with articles 131, 132 and 133 in Part V [of Chapter XI*]of
the Labour Code; and must be
able to prove their
professional capacity in accordance with clauses 6.2.1(b) and
6.2.1(c) before the relevant State
authorities.
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(d) Foreign invested
enterprises must have plans to train their accounting staff to satisfy
the requirements of accounting
work in their enterprises in
accordance with the Vietnamese accounting system and other
common accounting systems
approved by the Ministry of
Finance.
6.2.2 In cases where an
independent accounting service organization operating legally in Vietnam
is hired to carry out accounting work
on the basis of an economic
contract, the accounting services provided must be in
compliance with the provisions on accounting
work as in the case of
enterprises doing their own accounting work in accordance with the
provisions of the accounting system of the
enterprise and the
provisions of this Circular.
7. Implementation of
accounting work:
7.1 Initial records:
All economic activities
arising in the business operations of foreign
invested enterprises must be
recorded in accounting documents in
accordance with registered
forms.
Accounting documents
originating outside Vietnam must be registered
and the main contents
thereof must be translated into Vietnamese.
Accounting documents must be
original; photocopied or faxed copies are
invalid.
7.2 Foreign invested
enterprises shall have only one official system of
accounting books adopted in
accordance with the registered accounting
system. Accounting documents
are the basis for records in accounting
books. Records in accounting
books must be kept clearly, continuously,
systematically and without
any erasure.
7.3 Foreign invested
enterprises must register two types of accounting books
to be used with the local
tax authorities (where they register to pay tax):
ledgers and journals or
register of entry vouchers (the number of pages
should be registered and a
seal should be stamped between pages to
prove the integrity of the
books).
Any ledger, journal or
register of entry vouchers of enterprises which is
not certified by the local
tax authority shall not be recognized as legally
valid.
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7.4 Foreign invested
enterprises which use ready-printed accounting books
must affix a seal between
pages to prove the integrity of the books and
must inscribe the signatures
of the bookkeepers and the person having
legal responsibility within
the enterprise on all accounting books used in
a fiscal year.
7.5 Where accounting books
are recorded in computers:
- Enterprises must record
manually the fiscal year-end account balance
of consolidated accounts on
the ledgers registered with the local tax
authority.
- At the end of an
accounting period and an accounting year (upon
completion of records of
accounting books and preparation of
financial statements),
foreign invested enterprises must print
accounting books, bind them
into volumes, affix a seal between pages
to prove the integrity of
the books and inscribe the signatures of the
bookkeepers and the person
having full legal responsibility on all
accounting books used in a
fiscal year. At the end of each month,
after recording all
accounting transactions carried out, accountants
shall copy all pages of
accounting books onto a floppy disc (at least
two copies) and seal them in
accordance with the provisions on the
sealing of records.
8. Financial statements:
- Financial statements of
foreign invested enterprises must be prepared in
full and submitted on time
to the authorities specified in clause 4 of
Section A of Part III.
- Financial statements of
foreign invested enterprises must be prepared on
the basis of data in
accounting books recorded from accounting records
which are reasonable, legal
and valid.
- Financial statements must
be complete, truthful, accurate, comparative
and comprehensible and must
bear the signature of the person having
legal responsibility for the
enterprise (general director or director and
chief accountant).
9. Inventory of assets:
- At least once in an
accounting year, foreign invested enterprises must
carry out an inventory of
their assets and the entire existing assets of the
enterprises are required to
be inventoried at the end of a fiscal year.
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- Results of inventories of
assets must be reflected in minutes of inventory
and consolidated reports on
inventory of assets.
- Consolidated reports on
inventory of assets must be attached to financial
statements.
- Foreign invested
enterprises are liable to warrant the consistency of the
actual value of assets
(inventory data) with the data recorded in the
accounting books, accounting
statements and financial statements.
10. Foreign invested
enterprises are prohibited from:
- fabricating accounting
records and recording and preparing incorrectly
financial statements;
- destroying accounting
records, accounting books and accounting
statements prior to expiry
of time-limits for preservation and filing in
accordance with the
provisions related thereto currently in force;
- declaring fraudulent data,
reporting incorrectly or forcing other people to
declare fraudulent data;
using types of vouchers and samples which are
illegal and inconsistent
with the registered and approved accounting
system;
- omitting in any form from
accounting books assets, materials, sales
revenue, other earnings, and
so forth.
B. Registration of and
Procedures for Registration of Accounting Systems
1. Foreign invested
enterprises must register with the Ministry of Finance the
accounting system to be
applied by the enterprises and must obtain approval
in writing from the Ministry
of Finance prior to its application.
1.1 Prior to registration of
the accounting system, foreign invested
enterprises must select and
determine clearly the accounting system
applicable to its industry
sector and business line in accordance with the
classification of economic
sectors of the national economy.
1.2 Foreign invested
enterprises must register their accounting systems
within the time-limit
commencing from the time of issuance of an
investment licence or
operating licence. As from the time when the
investment licence or
operating licence becomes effective, any economic
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activities arising in the
foreign invested enterprise must be recorded in its
accounting books.
1.3 When any changes to the
registered contents of the approved
accounting system are
necessary, foreign invested enterprises must make
a written proposal to the
Ministry of Finance and shall not effect such
changes until approval in
writing is obtained from the Ministry of
Finance.
2. Time-limit for
registration and approval of accounting systems:
2.1 Time-limit for
registration and application for extension:
2.1.1 Within ninety (90)
days from the date on which an investment
licence or operating licence
is granted to a foreign invested
enterprise, it is required
to register the accounting system which it
applies to adopt with the
Ministry of Finance.
2.1.2 Where a foreign
invested enterprise fails, due to any reason, to
register the accounting
system with the Ministry of Finance within
the stipulated time-limit,
it must send to the latter a written
application for extension of
registration of its accounting system
providing reasons therefor
and must obtain approval in writing of
the Ministry of Finance.
The foreign invested
enterprise must promptly fulfil the procedures
for registration of its
accounting system within the extended timelimit.
2.2 Time-limit for handling
application files for registration:
2.2.1 Within twenty (20)
days of receipt in full of an application file for
registration of an
accounting system lodged by a foreign invested
enterprise, the Ministry of
Finance shall give an official reply on the
registration of the
accounting system of the enterprise.
2.2.2 Where documentation
included in the application file for
registration of an
accounting system by a foreign invested
enterprise is inadequate or
unclear in accordance with the prevailing
provisions, the Ministry of
Finance shall request the foreign
invested enterprise to
explain the reasons therefor and to provide
additional documents. The
time taken by the foreign invested
enterprise to make such
explanations and additions shall not be
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included in the time-limit
for response stated in clause 2.2.1 of
Section B.
3. Application files for
registration:
3.1 For registration of an
accounting system with the Ministry of Finance,
foreign invested enterprises
shall submit an application file for
registration comprising the
following:
3.1.1 Application for
registration of accounting system (in the form
attached in Appendix 1).
3.1.2 Investment licence
(notarized copy or copy certified by the Ministry
of Planning and Investment).
3.1.3 Letter of appointment
of the chief accountant from the board of
management or the general
director; labour contract entered into
between the chief accountant
and the general director or director of
the enterprise.
3.1.4 Professional
certificates (graduation certificates) in accounting and
finance; certificate
certifying that the chief accountant has
completed a chief accountant
training course (notarized copy).
Professional qualifications
written in foreign languages must be certified
by a notary public.
3.1.5 Explanatory
documentation in relation to the applicable accounting
system (in cases of
additions to, abridgements or amendments of
the Vietnamese accounting
system or application for adoption of
another common accounting
system).
- Where any additions to or
amendments or detailing of the
Vietnamese accounting system
applicable at a foreign
invested enterprise is
necessary for the purpose of
conformity with the
characteristics of the production and
business activities,
detailed documents in relation to the
contents requested for
addition or amendment must be
enclosed (accounting voucher
system, accounting account
system, accounting book
system, accounting method
system and financial
statement system). These documents
must include a list
classifying the contents of the
accounting system requested
for addition or amendment
and must enclose samples and
explanations.
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- Where another common
accounting system is adopted,
upon registration thereof,
the foreign invested enterprise
must explain clearly the
reasons for the selection of the
common accounting system
and, at the same time, enclose
all documentation relating
to the accounting system applied
to be adopted by the foreign
invested enterprise, comprising
those documents listed in
clause 3 of Section D -
Application of Other Common
Accounting Systems.
3.2 Application files to be
sent to the Ministry of Finance shall include four
sets (bound):
- 1 set: to be filed at the
Ministry of Finance;
- 1 set: to be lodged with
the local tax authority;
- 2 sets: to be filed at the
enterprise.
Application files for
registration of approved accounting systems shall be
affixed with a "Registered"
seal prior to circulation.
C. Application of Vietnamese
Accounting System
1. Foreign invested
enterprises which apply to adopt the enterprise accounting
system of Vietnam must abide
by and comply with the current accounting
voucher system, accounting
account system, accounting book system,
financial statement system
and accounting filing system in accordance with
provisions.
2. Where any addition to or
abridgement or amendment of the contents and the
accounting methods is
necessary for the purpose of conformity with the
characteristics of the
production and business activities, enterprises must
apply to the Ministry of
Finance for consideration and approval. Any such
addition, abridgement or
amendment mu st follow and respect the general
principles of the Vietnamese
accounting system. Foreign invested
enterprises may only effect
the amended or abridged accounting system upon
obtaining approval in
writing from the Ministry of Finance.
Documentation submitted to
the Ministry of Finance in relation to any
addition to or abridgement
or amendment of the Vietnamese accounting
system shall be in
accordance with clause 3.1.5 of Section B of Part III.
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3. Foreign invested
enterprises which register the adoption of the Vietnamese
accounting system shall be
assisted and instructed in the course of
registering and organizing
implementation.
D. Application of Other
Common Accounting Systems
1. The Ministry of Finance
shall only consider and approve the application of
other common accounting
systems (other than the Vietnamese accounting
system) in the following
cases:
- A foreign invested
enterprise successfully demonstrates that it is
impossible and inconvenient
to manage the enterprise using the
Vietnamese accounting system
and that it has no other choice but the
application of another
common accounting system.
- A foreign invested
enterprise is doing business in a special field in
relation to which the
Vietnamese provisions and guidelines on
accounting are silent.
2. Foreign invested
enterprises applying for adoption of other common
accounting systems must
comply with the following principles:
2.1 Other common accounting
systems shall only apply with respect to the
four following items:
samples of the accounting voucher system; samples
of the list, contents and
accounting method of the account system and
recording method of the
accounting book system; samples, norms and
methods to formulate
financial statements.
2.2 The general principles
of the Vietnamese accounting system with respect
to the accounting voucher
system and the accounting book system shall
be complied with.
3. Documents relating to the
accounting system which is the subject of
application for adoption
(attached to the application file for regis tration of the
accounting system as
stipulated in clause 3.1.5 of Section B of Part III) shall
include the following:
- Accounting policies,
principles and standards applicable at the foreign
invested enterprise.
- List of applicable
accounting vouchers classified according to six criteria:
paid employees, goods in
stock, sales consumption, currency, fixed
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assets, production and
business; this list shall be accompanied by
samples of vouchers to be
officially adopted.
With respect to self-printed
receipts, the enterprise must, in addition to
explaining them in the
application file for registration of the accounting
system, send them to the
General Department of Taxation for registration
and approval.
- List of accounting account
system (code, name and nature) classified in
accordance with the
principles of classifying accounts, enclosing
explanatory documents
regarding the nature and method of cost
accounting of accounts;
regarding the relationship between the accounts
and the general accounting
diagram on the use of the accounting system
(and the accounts reflecting
major economic transactions in relation to
assets, business capital
sources and reports on results of production and
business operation).
- List of applicable
accounting book system (classified in accordance with
general and detailed
accounting books systems), enclosing samples of
books which are the subject
of application for official adoption; diagram
to explain recording from
the original documents to the general and
detailed accounting book and
formulation of financial statements;
explanation of the method of
recording and the relationship between the
general accounting book
system and the detailed accounting book
system.
With respect to the
applicable accounting book system, only one of the
four common accounting forms
is allowed to be adopted in Vietnam at
present (Ledger, Entry
Voucher, General Journal, Journal).
- List of financial
statements system, enclosing samples and explanations
of the method for
calculation and formulation of targets in financial
statements.
The financial statements
system shall include the accounting balance
sheet, the report on
business results, the report on cash flow and the
explanation of financial
statements.
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E. Auditing of Foreign
Invested Enterprises
1. With respect to foreign
invested enterprises:
1.1 Auditing must be
implemented in all foreign invested enterprises
including compliance with
the provisions on accounting and financial
statements.
1.2 Annual financial
statements of foreign invested enterprises must be
audited by an independent
auditing company of Vietnam or another
independent company
permitted to operate in Vietnam in accordance with
the laws on auditing prior
to submission to the relevant authorities and
public announcement.
1.3 Auditing reports must be
attached to the annual financial statements of
foreign invested enterprises
when submitted to the relevant authorities
and announced publicly.
1.4 Auditing reports shall
include the following major contents:
1.4.1 Certification of
objectivity, truthfulness and reasonableness of
financial statements and
accounting data.
1.4.2 Evaluation and
assessment of implementation of accounting;
compliance of the accounting
system registered and approved by
the Ministry of Finance;
compliance of accounting regulations,
systems and laws.
1.4.3 Recommendations.
1.5 The auditing report must
bear the signatures of the auditor with his or her
surname, name and number (of
auditor?s certificate) clearly stated and of
the director and must be
affixed with the seal of the independent auditing
company.
2. When auditing the annual
financial statements of foreign invested
enterprises, independent
auditing companies shall:
2.1 only be permitted to
carry out an audit of the accounting documents of
foreign invested enterprises
which are implemented in accordance with
the accounting system
registered and approved for application by the
Ministry of Finance;
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2.2 not be permitted to
carry out the audit of financial statements which they
have prepared themselves or
where they have provided accounting
services for the formulation
of the financial statements of the foreign
invested enterprise;
2.3 have the juridical
status of an independent legal entity and shall ensure
truthfulness and objectivity
when auditing a foreign invested enterprise
subject to an audit;
2.4 be responsible before
the law for the independence, objectivity and
truthfulness of the audit
results.
IV. REGULATIONS ON CONVERSION OF
APPLICABLE ACCOUNTING SYSTEMS
1. Foreign invested
enterprises which have registered application of the
Vietnamese accounting system
prior to 1 January 1996 must implement the
conversion to strict
compliance with the enterprise accounting system
currently in force under
Decision 1141-TC-QD-CDKT of the Ministry of
Finance dated 1 November
1995.
2. Foreign invested
enterprises which have applied for registration and obtained
approval of another common
accounting system and which do not fall under
the objects of Section D of
Part III must, after one year (as from the date on
which this Circular takes
effect) convert to the application of the Vietnamese
accounting system and must
re-register the accounting system applicable at
the enterprise with the
Ministry of Finance as stipulated in this Circular.
3. Foreign invested
enterprises which have been granted an investment licence
or operating licence but
have failed to register the accounting system with the
Ministry of Finance up to
now must quickly complete the required procedures
and register the applicable
accounting system in accordance with the
provisions of this Circular.
V. ORGANIZATION OF IMPLEMENTATION
AND EFFECTIVENESS
This Circular shall replace
Circular 84-TC-CDKT of the Ministry of Finance dated 23
October 1993 and take effect
as of the date of its signing.
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The subjects in clauses 1.1
and 1.2 of Part I - Applicability - must seriously and fully
comply with the provisions
of this Circular. Any breach of the provisions of this
Circular shall be dealt with
in accordance with the Ordinance on Accounting and
Statistics
dated 10 May 1988 and the
regime for administrative penalty of the Socialist
Republic of Vietnam.
Relevant State authorities
shall be responsible for instructing, directing and
inspecting enterprises under
their control in accordance with the provisions of this
Circular.
In the process of
implementing this Circular, any difficulties or obstacles should be
reported to the Ministry of
Finance for timely resolution.
For the Minister of Finance
Vice Minister
VU MONG GIAO
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Appendix 1
Form of Official Letter for
Registration of Accounting System
Unit name: SOCIALIST
REPUBLIC OF VIETNAM
Official address:
Independence - Freedom - Happiness
Official Letter no.:
Tel: ; Fax:
Re: Registration of
Accounting System
.........., day/month/year
To: Ministry of Finance
(Accounting Systems
Department)
- Pursuant to the Law on
Foreign Investment in Vietnam passed by the National
Assembly on 12 November
1996;
- Pursuant to Decree 12-CP
of the Government dated 18 February 1997 providing
detailed regulations on the
implementation of the Law on Foreign Investment in
Vietnam;
- Pursuant to Circular No.
......... TC-CDKT of the Ministry of Finance dated .........
1997 providing guidelines
for implementation of accounting and auditing in
respect of foreign invested
enterprises and organizations in Vietnam.
Name of company:
...............................................................................
Line of business:
...................................................................................
Investment Licence
(Operating Licence) no.: ......., dated ........ issued by the Ministry
of Planning and Investment
(Ministry of Justice);
hereby applies for
registration of adoption of the accounting system with the
following contents:
1. - Applicable accounting
system: Vietnamese (or foreign) for business line:
....... (industry,
construction, agriculture, services, .............)
- Initial documents system:
....................................
- Account system:
.................................................
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- Accounting book system:
(selecting one of the four accounting forms:
General Journal, Entry
Voucher, Journal, Ledger)
- Financial statement
system: Accounting Balance Sheet, Business and
Production Result Report,
Cash Flow Report, Financial Report
Explanation.
2. Languages used in
accounting: Vietnamese and ...........
3. Currency used in
accounting: ........................................
Other currencies arising
must be converted to ......... at the exchange rate at
which each economic
transaction was carried out or the exchange rate
published by the State Bank
of Vietnam at the time the economic transaction
was carried out.
Unit of measurement used in
accounting: Following the official measurement
system applicable in
Vietnam.
4. Applicable accounting
year:
First accounting year: From
......... to ..........
Following accounting year:
From ...... to ...... annually.
5. Depreciation:
...................................................................................
We kindly request
consideration and approval by the Ministry of Finance.
Director
(Signature and seal)