Rights and Obligations of Audit Service Businesses

1. What are the rights and obligations of an audit service business?

* Under Article 28 of the Law on Independent Auditing 2011 on the rights of audit firms:

• Providing the services prescribed in Article 40 of this Law;
• Receiving service fees;
• Establishing branches providing audit services;
• Establishing audit service business establishments abroad;
• Participating in international audit organizations and professional audit organizations;
• Requiring the audited entity to fully and timely provide necessary information and documents and explain issues relating to the audit contents; requiring the audited entity to inventory assets and reconcile liabilities relating to the audit contents; inspecting all dossiers and documents relating to the audited entity’s economic and financial activities inside and outside the entity during the audit;
• Inspecting and confirming economic and financial information relating to the audited entity inside and outside the entity during the audit;
• Requiring relevant organizations and individuals to provide necessary documents and information relating to the audit contents through the audited entity;
• Other rights as prescribed by law.

* The responsibilities of audit firms are prescribed in Article 17 of Circular 203/2012/TT-BTC (amended by Clauses 1 and 2, Article 5 of Circular 39/2020/TT-BTC) as follows:

• Maintaining and ensuring the conditions for the Certificate of eligibility to provide audit services throughout the operation period.
• Not altering or erasing the contents recorded in the Certificate of eligibility to provide audit services.
• Not leasing, lending, pledging, selling, or transferring the Certificate of eligibility to provide audit services.
• Reporting to the Ministry of Finance within 10 days from the date of loss or damage of the Certificate of eligibility to provide audit services.
• Notifying the Ministry of Finance in writing (with supporting documents) within 10 days from the date of any change to the contents prescribed in Article 26 of the Law on Independent Auditing.
• Submitting to inspections and complying with handling decisions of competent state agencies regarding the assurance of audit service business conditions and the use of the Certificate of eligibility to provide audit services.
• Submitting the Report on maintaining audit service business conditions as prescribed in Clause 1, Article 5 of Circular 39/2020/TT-BTC.
• Submitting the Annual Activity Report as prescribed in Clause 2, Article 5 of Circular 39/2020/TT-BTC.

2. May an audit service business temporarily suspend operations?

Under Article 33 of the Law on Independent Auditing 2011 and Article 14 of Circular 203/2012/TT-BTC on temporary suspension of business of audit service businesses:

• An audit firm may temporarily suspend its audit service business, but the suspension period may not exceed twelve consecutive months. An audit firm wishing to temporarily suspend its audit service business must send a notice of temporary suspension (using the form in Appendix XI) to the Ministry of Finance at least 15 days before the intended suspension date.
• An audit firm temporarily suspending its audit service business that has not yet completed audit contracts signed with clients must agree with the clients on the performance of such contracts.
• The list of audit firms temporarily suspending audit service business is published on the Ministry of Finance’s electronic portal.
• When an audit firm temporarily suspends its audit service business, its branches must also temporarily suspend their audit service business.
• Upon resuming operations, the audit firm must ensure the conditions prescribed by law and must notify the Ministry of Finance in writing no later than 10 days before the resumption date.

Thus, under the above provisions, an audit service business may temporarily suspend operations but must notify the Ministry of Finance within the prescribed time limit.

3. How is an audit service business handled if it resumes operations without notifying?

Under Clause 3, Article 14 of Circular 203/2012/TT-BTC on the notification responsibility of audit service businesses temporarily suspending operations:

Upon resuming operations, the audit firm must ensure the conditions prescribed by law and must notify the Ministry of Finance in writing no later than 10 days before the resumption date.

Based on the above, an audit service business temporarily suspending operations is responsible for notifying the Ministry of Finance in writing within the prescribed time limit upon resuming operations. Where the enterprise resumes operations without notifying, it shall be handled under Point g, Clause 3, Article 66 of Decree 41/2018/ND-CP as follows:

“Article 66. Penalties for violations of notification and reporting obligations of audit firms

3. A fine of VND 10,000,000 to VND 20,000,000 for an audit firm committing any of the following acts:

…

g) Failing to notify the Ministry of Finance in writing when resuming operations after a period of temporary suspension of audit business;”

Accordingly, this fine applies to organizations under Clause 2, Article 5 of Decree 102/2021/ND-CP.

Thus, an audit service business has the right to temporarily suspend operations but must notify the Ministry of Finance as prescribed. Where the enterprise resumes operations, it must also notify the Ministry of Finance no later than 10 days before the resumption date. Resuming operations without notifying is penalized under Point g, Clause 3, Article 66 of Decree 41/2018/ND-CP.

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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