Vietnamese lawmaker proposes one financial report per accounting period for each business

Vietnam’s National Assembly reviewed draft amendments to the Accounting Law and Independent Audit Law on November 13. Ho Chi Minh City representative Phạm Trọng Nhân proposed making clear that each business may have only one consistent financial report for each accounting period. He said he had received an email advertising a financial report preparation service that claimed it could help businesses present a stronger financial position while paying less tax. As he described it, a business could report low profits or even losses to tax authorities while submitting a report showing sound finances to a bank. This could lead to lost tax revenue and a buildup of bad loans.

Ho Chi Minh City representative Phạm Trọng Nhân.（VietVance）

Phạm Trọng Nhân said both current law and the draft amendments prohibit accounting service providers from colluding with clients to certify false figures. Banks, however, currently receive reports only from businesses, cannot access the versions submitted to tax authorities and are not required to cross-check them. He proposed that the government set rules allowing submitted reports to be accessed and compared through the electronic tax portal with the business’s consent. He also proposed banning the production and provision of software that allows recorded data to be deleted or changed without an audit trail, or that allows two sets of accounting books to be kept in parallel for the same accounting period.

Gia Lai representative Vũ Hồng Quân called for clearer provisions on accounting service providers’ duties to flag problems, report violations and refuse unlawful requests. He also urged strict penalties for those who knowingly commission or collude in falsifying figures. The draft would add four categories of conduct that could lead to the suspension of accounting services, including breaches of professional requirements, accounting standards or professional ethics that could cause or have caused serious consequences. Lâm Đồng representative Dương Khắc Mai said suspension decisions should specify the violation, legal basis, scope and duration. Nghệ An representative Thái Thị An Chung called for clearer grounds for determining when conduct is “actually capable of causing serious consequences.”

Finance Minister Ngô Văn Tuấn said users of accounting information include tax authorities, lenders, and suppliers of goods and services, and that reports must be truthful and reasonable. Finance Ministry figures show that Vietnam has more than 1 million operating businesses and about 12,500 accounting and auditing firms. About 2,500 accountants hold practicing certificates, but just over 500 actually provide accounting services. Ngô Văn Tuấn said the amendments aim to clarify the conditions under which accountants may provide services. The drafting agency will review practice requirements and prohibited conduct to prevent conflicts of interest and improve service quality.

Finance Minister Ngô Văn Tuấn speaks before the National Assembly on the morning of November 13.（VietVance）

Source: VietVance