Accounting Law 2015: Prohibition of establishing two accounting book systems

The new Accounting Law adds many prohibited acts in the accounting field, including establishing two accounting book systems, renting or borrowing accountant certificates, certificates of registration to practice accounting services, etc. There will be a Decree with specific regulations on sanctions in the accounting field.

Deputy Minister of Finance Vu Thi Mai introduced information about the Law on Accounting at the press conference.

This is the information given by Deputy Minister of Finance Vu Thi Mai at the press conference of the Office of the President announcing new laws passed by the National Assembly, including the Law on Accounting.

Supplementing the principle of recording at fair value

Introducing the Accounting Law, the Deputy Minister of Finance said that an important accounting principle added by the 2015 Accounting Law is the fair value principle. Previously, the 2005 Accounting Law only regulated accounting at original cost, which did not accurately reflect the actual status of assets and liabilities at the time of preparing financial statements, and was not in line with international practice.

Under the new Law, the value of assets and liabilities is initially recorded at original cost. After initial recognition, for certain types of assets or liabilities whose values ​​fluctuate frequently according to market prices and whose values ​​can be reliably re-determined, they are recorded at fair value at the end of the financial reporting period. Determining and accounting for fair value is technical, so the Law assigns the Ministry of Finance to specify the assets and liabilities that are recorded and re-evaluated at fair value, and the accounting method for recording and re-evaluating at fair value.

Another new content of the Law on Accounting is the addition of prohibited acts, including: establishing two or more accounting systems, or providing financial reports with inconsistent data in the same accounting period; Renting, borrowing, leasing, lending accountant certificates, accounting practice certificates; Hiring individuals or organizations that do not meet the conditions for practicing or doing business in accounting services to provide accounting services for their units; Practicing accountants and accounting service enterprises colluding with customers to provide false accounting information...

In addition, the Law also adds many new regulations on state financial reports, the responsibility of the Ministry of Finance and related units to prepare state financial reports; professional ethics standards for accounting, accounting accounts, accounting inspection, internal control, accounting service business, etc.

The 2015 Accounting Law takes effect from January 1, 2017. Regarding state financial reports, the Law stipulates that the Government prepares the necessary conditions to begin preparing state financial reports, no later than 24 months from the effective date of the Law.

There will be a Decree on handling violations in the field of accounting.

At the press conference, leaders of the Ministry of Finance answered many questions from reporters about the new contents of the Accounting Law.

Responding to questions about sanctions for violations, Deputy Minister Vu Thi Mai said that in the near future, there will be a Decree specifically regulating administrative sanctions for violations in the field of accounting. In cases of larger violations leading to criminal violations, they will be handled according to the provisions of criminal law.

Regarding the prohibited act of establishing two accounting systems, although it has been stipulated in the law such as the Law on Tax Administration, according to Deputy Minister Vu Thi Mai's explanation, the Law on Tax Administration stipulates penalties for tax fraud and evasion. In case two accounting systems lead to tax fraud and evasion, the penalty will be for tax fraud and evasion, but there is no provision for the act of two accounting systems in general in the regulations on accounting organization and accounting book recording.

"Therefore, in order to have a legal basis for administrative sanctions and clear and transparent regulations, as well as good compliance with accounting laws, there must be regulations prohibiting the practice of establishing two accounting book systems, which the 2005 Accounting Law does not yet have," said Deputy Minister Vu Thi Mai./.

According to Financial Times