The Government Issues a New Decree Related to the Law on Independent Audit

The Government has issued a Decree amending and supplementing certain provisions of Decree No. 17/2012/NĐ-CP dated March 13, 2012, which details and guides the implementation of several articles of the Law on Independent Audit. Below are the key highlights:

1. Addition of regulations on entities subject to mandatory audit
 The new Decree adds point d to Clause 1, Article 15, stipulating:
 Enterprises that are not classified as large-scale under current regulations must still undergo mandatory audits if they meet at least two out of the following three criteria:

• Average number of employees participating in social insurance exceeds 200 per year.

• Annual revenue is VND 300 billion or more.

• Total assets are VND 100 billion or more.

The principles for determining these criteria are as follows:

• The number of employees is the total number of employees participating in social insurance as per legal regulations.

• The average is calculated by totaling the number of such employees each month and dividing by 12.

• Revenue and assets are based on financial statements prepared in accordance with accounting laws.

2. Enterprises exempted from audit when they no longer meet the criteria
A notable update is that enterprises previously subject to mandatory audits under the above regulation will be exempt if they fail to meet the criteria for two consecutive years, until they again meet the specified thresholds.

3. Limitation on the duration an auditor can sign audit reports
According to the amended Clause 2, Article 16, an audit practitioner may not sign audit reports for the same entity for more than 5 consecutive years, to enhance transparency and independence in audit activities.

4. Transitional provisions

• Audit practitioners who signed audit reports for an entity before January 1, 2025 may continue doing so under the old regulations until the end of that fiscal year.

• Enterprises whose 2024 fiscal year data meet the thresholds for revenue, assets, or labor will be subject to mandatory audits starting from the 2025 fiscal year.

5. Responsibilities for implementation
 Ministers, heads of ministerial-level agencies, heads of government-affiliated agencies, and Chairpersons of the People’s Committees of provinces and centrally-run cities are responsible for implementing this Decree.

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