New Conditions for Independent Auditing in Vietnam

Recently, the Government issued Decree 90/2025/ND-CP amending and supplementing Decree 17/2012/ND-CP detailing the implementation of a number of articles of the Law on Independent Auditing 2011, effective from April 14, 2025. In particular, Decree 90/2025/ND-CP has provided new regulations on conditions in the field of independent auditing. Below, Viet An Law analyzes some new conditions for independent auditing in Vietnam.

Regulations on audited units 

The audited unit is explained in Clause 6, Article 5 of the Law on Independent Auditing 2011 as follows: Audited units mean the enterprises, organizations that are implemented the audit under the audit contract by the auditing firms, branches of foreign auditing firms in Vietnam.

Accordingly, the audited units are specified in Article 17 of the Law on Independent Auditing 2011 and guided in Article 15 of Decree 17/2012/ND-CP supplemented by Article 1 of Decree 90/2025/ND-CP, including:

Enterprises and organizations whose annual financial statements are required by law to be audited by an auditing firm or a branch of a foreign auditing firm in Vietnam

Include:

• FDI enterprises;
• Credit institutions established and operating under the Law on Credit Institutions, including foreign bank branches in Vietnam;
• Financial institutions, insurance companies, reinsurance companies, insurance brokerage companies, branches of foreign non-life insurance companies.
• Public companies, issuing organizations and securities trading organizations.
• Other large-scale enterprises as prescribed in Point d, Clause 1, Article 37 of the Law on Independent Auditing 2011 must satisfy at least 2 of the following 3 criteria: Having an average number of employees participating in social insurance of 200 or more per year, having a total annual revenue of 300 billion VND or more, and having total assets of 100 billion VND or more.

Other enterprises and organizations are required to be audited according to relevant laws.

Enterprises and organizations must be audited by auditing enterprises or branches of foreign auditing enterprises in Vietnam.

Include:

• State-owned enterprises, except for state-owned enterprises operating in fields of state secrets as prescribed by law, must have their annual financial statements audited;
• Enterprises and organizations implementing important national projects and group A projects using state capital, except for projects in the field of state secrets as prescribed by law, must have their completed project settlement reports audited;
• Enterprises and organizations in which state-owned corporations and groups hold 20% or more of voting rights at the end of the fiscal year must have their annual financial statements audited;
• Enterprises in which listed organizations, issuing organizations and securities trading organizations hold 20% or more of voting rights at the end of the fiscal year must have their annual financial statements audited;
• Auditing enterprises and branches of foreign auditing enterprises in Vietnam must have their annual financial statements audited.

Other enterprises and organizations

Enterprises and organizations subject to annual financial statement audits as prescribed above, if required by law to prepare consolidated financial statements or general financial statements, must have their consolidated financial statements or general financial statements audited.

Other enterprises and organizations voluntarily audited

New regulations on audited entities being large-scale enterprises in Vietnam

Other large-scale enterprises must have their annual financial statements audited

Pursuant to the new regulation in Clause 1, Article 1 of Decree 90/2025/ND-CP, an additional entity is identified as an audited unit, which is the case “Other large-scale enterprises as prescribed in point dd Clause 1 Article 37 of the Law on Independent Audit that meet at least 2 out of the following 3 criteria: having an average annual number of employees participating in social insurance of over 200 persons; having an annual total revenue of over VND 300 billion; having total assets of over VND 100 billion”.

Specifically, point đ, clause 1, Article 37 of the Law on Independent Auditing stipulates: “dd) Other large-scale enterprises must have their annual financial statements audited according to Government regulations.” This is a new provision of the Law on Independent Auditing 2011 supplemented by Point a, Clause 4, Article 3 of the Law amending the Law on Securities, the Law on Accounting, the Law on Independent Auditing, the Law on State Budget, the Law on Management and Use of Public Assets, the Law on Tax Administration, the Law on Personal Income Tax, the Law on National Reserves, and the Law on Handling of Administrative Violations 2024, effective from January 1, 2026.

It can be seen that the new regulation in Clause 1, Article 1 of Decree 90/2025/ND-CP aims to guide the new regulation added in the Law on Independent Auditing amended in 2024. This new regulation has expanded the subjects of mandatory auditing.

Accordingly, other large-scale enterprises whose annual financial statements are required by law to be audited by an auditing firm or a branch of a foreign auditing firm in Vietnam must satisfy at least 2 of the following 3 criteria:

• Having an average annual number of employees participating in social insurance of over 200 persons;
• Having an annual total revenue of over VND 300 billion;
• Having total assets of over VND 100 billion.

Principles for determining other large-scale enterprises

The new regulations in Decree 90/2025/ND-CP not only expand the subjects identified as audited units but also provide guidance on the principles for determining the average number of employees participating in social insurance per year, total revenue of the year, and total assets of other large-scale enterprises as follows:

• The number of employees participating in social insurance is the total number of employees managed, employed and paid salaries and wages by the unit participating in social insurance according to the law on social insurance;
• The average number of employees participating in social insurance per year is calculated by dividing the total number of employees participating in social insurance in all months of the previous year by 12 months;
• The number of employees participating in social insurance for the month is determined at the end of the month and based on the social insurance payment documents of that month that the enterprise submits to the social insurance agency;
• Total revenue of the year is determined on the financial statements of the previous year prepared by the unit under the provisions of the law on accounting;
• Total assets are determined at the end of the fiscal year on the annual financial statements of the previous year prepared by the unit under the provisions of the law on accounting.

In case the criteria for determining large-scale enterprises are not satisfied

Enterprises subject to this new regulation that do not satisfy the criteria for determining large-scale enterprises for two consecutive years will not be required to conduct mandatory audits until they continue to meet the prescribed criteria.

New conditions for independent auditing in Vietnam related to auditors when performing audit statements

Pursuant to Clause 12, Article 5 of the Law on Independent Auditing 2011, the audit statement means the written report made by practicing auditors, auditing firms, branches of foreign auditing firms in Vietnam after the completion of the audit, giving opinions on financial statements and other contents which have been audited under the audit contract. Accordingly, the audit report on financial statements and audit reports on other audit work of entities required to be audited under the provisions of law are prepared under the provisions of Vietnamese auditing standards.

Regarding the auditor when performing the audit statement, the law stipulates as follows:

• Previously, Clause 2, Article 16 of Decree 17/2012/ND-CP, a practicing auditor was not allowed to sign audit statements for an audited entity for more than three (03) consecutive years.
• However, according to the new regulations in Decree 90/2025/ND-CP, the amendment is as follows: “A practicing auditor is not allowed to sign an audit statement for an audited entity for more than 5 consecutive years”.
• Thus, the new regulation in Decree 90/2025/ND-CP has increased the period in which a practicing auditor is not allowed to sign an audit report for an audited entity from “more than 3 consecutive years” to “more than 5 consecutive years”. This allows the auditor to sign an audit report for an audited entity for a longer period (more than five consecutive years).

This provision is intended to be consistent and compatible with the Law on Independent Auditing amended in 2024, effective from January 1, 2025, accordingly, Clause 8, Article 39 of the Law on Independent Auditing 2011 is amended as follows: “Where concluding the audit contract with an auditing firm, branch of foreign auditing firm in Vietnam for three consecutive years or more, it shall require auditing firm, branch of foreign auditing firm in Vietnam to change the practicing auditors who sign the audit statement.”

Note on transitional provisions relating to new conditions in the field of independent auditing

Pursuant to Article 4 of Decree 90/2025/ND-CP on transitional regulations as follows:

• Practicing auditors who have signed audit reports for an audited entity prior to January 01, 2025 may continue to sign audit reports for such entity in accordance with Article 2 of this Decree.
• Enterprises with total revenue and total assets as shown in the financial statements for the 2024 fiscal year, and employing an average number of employees participating in social insurance in 2024 that satisfy the criteria prescribed in Clause 1 Article 1 of this Decree, shall be subject to mandatory audit for their financial statements from the 2025 fiscal year onwards.

Above is the consultation on new conditions for independent auditing in Vietnam. If you have any related questions or need consultation in the field of accounting and auditing, please contact Viet An Law for the best advice and support!