Which Enterprises Must Have an Accountant?

1. Which enterprises must have an accountant? Which cases are exempt?

Under Article 20 of Decree 174/2016/ND-CP on chief accountants and accountants in charge:

• Accounting units must arrange a chief accountant, except for the units specified in Clause 2 of this Article. Where a unit cannot immediately appoint a chief accountant, it shall arrange an accountant in charge or hire services to act as chief accountant as prescribed. The maximum period for arranging an accountant in charge is 12 months, after which the accounting unit must arrange a chief accountant.
• Accountants in charge:
  • State-sector accounting units including: an accounting unit with only one accountant or one person serving concurrently as accountant; and commune/ward/town budget and finance accounting units — these do not appoint chief accountants but only accountants in charge.
  • Micro enterprises under the law on support for small and medium enterprises may arrange an accountant in charge and are not required to arrange a chief accountant.
• The term of appointment of chief accountants of state-sector accounting units, and the term of appointment of accountants in charge of the units specified at Point a, Clause 2 of this Article, is 5 years, after which the procedures for reappointment of chief accountants and accountants in charge must be carried out.
• When changing a chief accountant or accountant in charge, the legal representative of the accounting unit or the manager/operator of the accounting unit must organize the handover of work and accounting documents between the former and the new chief accountant or accountant in charge, and notify the relevant departments in the unit and the agencies where the unit opens transaction accounts of the name and signature specimen of the new chief accountant or accountant in charge. The new chief accountant or accountant in charge is responsible for their own accounting work from the date of handover. The former chief accountant or accountant in charge remains responsible for the accounting work during the period they were in charge.

Under Clause 4, Article 3 of the Law on Accounting 2015, accounting units are agencies, organizations and units including: agencies with state budget revenue and expenditure tasks at all levels; state agencies, organizations and public service units using the state budget; organizations and public service units not using the state budget; enterprises established and operating under Vietnamese law; branches and representative offices of foreign enterprises operating in Vietnam; cooperatives and cooperative unions — and these units prepare financial statements.

Based on the above, units that must have accounting personnel are:

• Newly established enterprises may arrange an accountant in charge for a maximum of 12 months. After 12 months, the enterprise must arrange a chief accountant.
• Enterprises must arrange a chief accountant, except for micro enterprises.
• Micro enterprises under the law on support for small and medium enterprises may arrange an accountant in charge instead of a chief accountant.

Thus, no enterprise is permitted to operate without accounting personnel.

2. Must the accountant be an employee of the enterprise, or may one be hired externally?

Under Clause 1, Article 49 of the Law on Accounting 2015:

An accounting unit must organize its accounting apparatus, arrange persons to perform accounting work, or hire accounting services.

Thus, enterprises are responsible for organizing the accounting apparatus and may either arrange accounting personnel or hire accounting services.

Accordingly, hiring services to perform accounting, chief accountant or accountant-in-charge services is regulated in Article 22 of Decree 174/2016/ND-CP as follows:

• Business-sector accounting units; organizations and public service units not using the state budget, and other accounting units specified in Clause 3, Article 3 of this Decree, may hire accounting service businesses to perform accounting or to act as chief accountant or accountant in charge. Organizations and public service units using the state budget may hire accounting service businesses to perform accounting or to act as chief accountant or accountant in charge, as decided by the unit’s legal representative.
• When an accounting service business assigns a person to provide accounting services to a client, it must ensure compliance with Clause 1, Article 51, Articles 56 and 58 of the Law on Accounting, and the person must not fall under the cases of persons not permitted to perform accounting or not permitted to provide accounting services as prescribed in Articles 19 and 25 of this Decree.
• When an accounting service business assigns a person to provide chief accountant or accountant-in-charge services to a client, it must ensure compliance with Articles 56 and 58 of the Law on Accounting, Article 21 of this Decree, and the person must not fall under the cases of persons not permitted to perform accounting or not permitted to provide accounting services as prescribed in Articles 19 and 25 of this Decree.
• A person hired to provide accounting services has the rights and responsibilities of an accountant prescribed in Clauses 2 and 3, Article 51 of the Law on Accounting 2015. A person hired to provide chief accountant or accountant-in-charge services has the rights and responsibilities of a chief accountant prescribed in Article 55 of the Law on Accounting 2015.
• The legal representative of the accounting unit is responsible for hiring accounting services, chief accountant services, or accountant-in-charge services.

3. Is an enterprise penalized if it does not arrange someone in charge of accounting?

Under Point a, Clause 2, Article 17 of Decree 41/2018/ND-CP on penalties for violations of regulations on organizing the accounting apparatus and arranging persons to perform accounting or hiring accounting services:

A fine of VND 10,000,000 to VND 20,000,000 applies to any act of failing to organize the accounting apparatus of the accounting unit; failing to arrange persons to perform accounting or to act as chief accountant, or failing to hire accounting service organizations or individuals to perform accounting or to act as chief accountant as prescribed.

Accordingly, the above fine applies to individuals. For organizations committing the same violation, the fine is twice the fine applicable to individuals (Clause 2, Article 5 of Decree 102/2021/ND-CP).

Thus, enterprises are required to arrange a chief accountant or an accountant in charge in accordance with the law. An enterprise may appoint a chief accountant or accountant in charge, or hire external accounting services. If an enterprise fails to arrange persons to perform accounting work or hire persons to perform accounting, it will be subject to the above fines.

Notes on applying current legal provisions

This article belongs to the Enterprise Knowledge & M&A group and is presented for reference, helping readers understand the legal issue at an overview level before preparing dossiers or conducting transactions.

Legal provisions may change depending on timing, locality, dossier type and specific circumstances. Where it is necessary to determine the exact legal basis applicable to your dossier, you should contact an ANT Legal lawyer at 0966.475.966 for review and advice before proceeding.

Common risks to note

• Applying legal texts that have been amended, supplemented or replaced.
• Preparing incomplete dossiers, documents or evidence.
• Misunderstanding the applicable conditions, procedures, time limits or competent authority.
• Signing, filing or conducting transactions without fully assessing legal risks.

How can ANT Legal help?

ANT Legal assists in reviewing specific situations, checking dossiers, identifying the applicable legal basis, advising on handling plans, and representing you in working with individuals, organizations or competent authorities when necessary.

For quick advice, you may contact a lawyer at 0966.475.966.

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