Chapter 3 Accounting & Audit Requirements

In Viet Nam, companies must follow the Vietnamese accounting system and transactions must be recognized in accordance with Vietnamese accounting standards. There are specific guidelines for individual industries such as banking, insurance.

The Vietnamese accounting system is a general guidance on bookkeeping and reporting. It provides rules and forms for companies to follow including a standard chart of accounts, regulated financial statements template, accounting books and documents templates, detailed double entries for companies’ transactions, required language.

There are currently 26 Vietnamese accounting standards which are mainly based on the old versions of the respective International Accounting Standards (“IAS”) at the time when they were issued. However, they have not yet been updated with recent changes of IAS and do not include some key accounting standards, such as financial instruments and impairment of assets, etc.

Accounting books and documents can be stored either in paper-form or electronic-form. However, upon request of the competent authorities, companies must print and have them signed and sealed properly. The retention periods of accounting books and documents are 5 years, 10 years or indefinitely, depending on type of the books, documents.

The accounting framework in Viet Nam is generally rule-based rather than principle-based. Therefore, to be compliant, it requires careful attention to details of bookkeeping and various administrative work on supporting documents.

Statutory reporting

Vietnamese accounting system requires regulated financial statements comprising:

• Balance sheet;

• Income statement;

• Cash flow statement;

• Notes to the financial statements.

The financial statements and accounting books are required to be signed by legal representatives and chief accountants.

The annual financial statements of all foreign-invested entities, financial institutions, insurance companies and public interest entities must be audited by a Vietnamese independent auditing company.

The annual financial statements including audited cases must be submitted to the local authorities within 90 days of the end of the financial year. Interim financial statements are required for certain cases such as listed companies.

International financial reporting standards (“IRFS”) adoption

The Ministry of Finance (“MoF”) issued Decision No. 345/QD-BTC approving the scheme for application of IFRS in Viet Nam with 3 stages:

• Stage 1: IFRS preparation (from 2020 – 2021)

• Stage 2: IFRS pilot implementation (from 2022 – 2025)

• Stage 3: IFRS compulsory implementation (from 2025) for specific subjects meeting conditions