National Assembly delegates from Nghe An are concerned about the proposal to increase the level of handling violations in the field of independent auditing by 20 times.

Comrade Nguyen Duc Hai - Member of the Party Central Committee, Vice Chairman of the National Assembly presided.

The National Assembly Delegation of Nghe An province was led by Comrade Thai Thanh Quy - Member of the Party Central Committee, Permanent Deputy Head of the Central Economic Committee, Chairman of the Provincial People's Council, Head of the National Assembly Delegation of the province.

Speaking at the discussion, delegate Thai Thi An Chung - Member of the Provincial Party Executive Committee, Deputy Head of the National Assembly Delegation of Nghe An province raised some opinions on amending and supplementing a number of articles of the Law on Independent Audit.

Accordingly, delegates expressed agreement with the proposals to increase the subjects that need to be audited, which are: "Large-scale enterprises and other organizations must have their financial statements audited according to Government regulations; other enterprises and organizations according to relevant laws".

Because the current law does not regulate this, a number of large-scale enterprises, organizations, or real estate companies that are not listed, not public, and do not need to be audited have had a serious impact on society in recent times.

The delegate from Nghe An expressed his agreement that the draft Law has amended and supplemented regulations on handling violations of the law on independent auditing; the content covers the handling of violations of the law and is consistent with the principles of handling violations.

Specifically, depending on the nature and severity of the violation, it may be handled by administrative or criminal measures and may have additional penalties. In case of causing damage, compensation must be paid according to the provisions of law.

At the same time, delegates also agreed to increase both the level and the statute of limitations for handling violations to ensure deterrence for auditing firms and auditors. Because recently, when investigating and handling a number of major cases that occurred at SCB, Van Thinh Phat, FLC, it showed the responsibility of a number of agencies and units, including auditing organizations and auditors, for dishonest audit reports.

However, delegate Thai Thi An Chung said that the penalty level and statute of limitations as proposed in the draft Law, including: "maximum administrative fine of 1 billion VND for individuals, 2 billion VND for organizations and statute of limitations of 5 years" is not appropriate.

“The maximum fine proposed by the draft compared to the maximum fine prescribed by the Law on Handling of Administrative Violations for violations in the field of independent auditing (VND 50 million for individuals and VND 100 million for organizations) is 20 times higher,” the delegate cited. “The statute of limitations for penalties proposed by the draft Law is 5 years, while the maximum statute of limitations for penalties prescribed by the Law on Handling of Administrative Violations is 2 years.”

Meanwhile, the maximum fine of VND1 billion under the Law on Handling of Administrative Violations is only applied to violations in the fields of management of sea areas, islands and continental shelves, nuclear and radioactive substance management, atomic energy; currency, precious metals, gemstones, banking, credit; oil and gas activities and other mineral activities, environmental protection, and fisheries.

“If we increase the administrative fines for auditing, will there be a question of increasing them in the accounting field, since these two fields are quite similar in nature?”, the delegate from Nghe An repeatedly asked questions to express his concern. “Is it appropriate to increase the fines in the auditing field to be closer to the field with the highest fines, which is securities?”

According to the delegate, if compared with the nature, level and consequences of violations, it can be seen that violations in the securities sector directly and immediately affect hundreds, thousands, even millions of transactions as well as investors. Violations in the auditing sector affect indirectly, with a delay and a much narrower scope of influence.

In addition, delegate Thai Thi An Chung also said that she was really concerned about the reason why the draft Law provides very heavy penalties for minor violations such as: returning the certificate of registration to practice auditing/certificate of eligibility to conduct auditing services later than prescribed; violating regulations on application documents for the auditor certificate exam...

"The increase must be considered to ensure it is appropriate to the nature, level and consequences of the violation, the violator and to ensure a general correlation with other fields," the delegate said, proposing that the maximum penalty should only be increased by 2 times compared to the current level and the statute of limitations should be 2 years for administrative violations in the field of independent auditing.

Because if the regulations are as drafted, it will certainly affect the development of the independent auditing industry in Vietnam, an industry that needs 3-4 times more human resources than the current number compared to the market size.

In addition, the delegate of Nghe An delegation also proposed to add regulations: auditors registered to practice auditing must be members of a professional auditing organization and assign responsibility to the professional auditing organization in coordinating inspection and supervision of compliance with auditing standards and professional ethics standards of accounting and auditing.

The current law does not stipulate that practicing auditors must be members of a professional auditing organization. Meanwhile, this provision has been applied in many countries and has brought about efficiency in the coordination between professional organizations and state management agencies, contributing to improving the quality of auditing and ensuring the sustainable development of independent auditing.