Circular No. 203/2012/TT-BTC dated November 19, 2012 of the Ministry of Finance on the order and procedures for grant, management and use of certificates of eligibility for provision of audit services

THE MINISTRY OF FINANCE

Circular No. 203/2012/TT-BTC of November 19, 2012, on the order and procedures for grant, management and use of certificates of eligibility for provision of audit services

Pursuant to March 29, 2011 Law No. 67/2011/QH12 on Independent Audit;

Pursuant to the Government’s Decree No. 17/2012/ND-CP of March 13, 2012, detailing and guiding the implementation of a number of articles of the Law on Independent Audit;

Pursuant to the Government’s Decree No. 118/2008/ND-CP of November 27, 2008, defining the functions, tasks, powers and organizational structure of the Ministry of Finance;

At the proposal of the director of the Department of Audit and Accounting Regimes,

The Minister of Finance promulgates the Circular on the order and procedures for grant, management and use of certificates of eligibility for provision of audit services.

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation

This Circular provides the order and procedures for grant, management and use of certificates of eligibility for provision of audit applicable to audit firms and Vietnam-based branches of foreign audit firms.

Article 2. Subjects of application

1. Audit firms and Vietnam-based branches of foreign audit firms (below collectively referred to as audit firms).

2. Organizations and individuals involved in the grant, management and use of certificates of eligibility for provision of audit services.

Article 3. Subjects to be granted certificates of eligibility for provision of audit services

Certificates of eligibility for provision of audit services are granted to limited liability companies, partnerships, private enterprises and Vietnam-based branches of foreign audit firms that satisfy the conditions in Article 21 of the Law on Independent Audit and comply with the provisions of the Government’s Decree No. 17/2012/ND-CP of March 13, 2012, detailing and guiding the implementation of a number of articles of the Law on Independent Audit (below referred to as Decree No. 17/2012/ND-CP). For foreign-invested single-member limited liability audit firms mentioned in Clause 3, Article 62 of the Law on Independent Audit, the condition on the capital contribution level of certified public accountants specified in Clause 1 of Article 7 and on the capital contribution level of organizations specified in Clause 6 of Decree No. 17/2012/ND-CP does not apply, except when they are restructured into limited liability companies with two or more members.

Article 4. Principles of compilation of dossiers

1. Copies of papers and diplomas must be certified by a competent agency as prescribed by law.

2. An application for a certificate of eligibility for provision of audit services must be made in Vietnamese. Foreign-language papers enclosed with the application must be translated into Vietnamese and their translations must be certified in accordance with Vietnamese law.

3. Papers issued by foreign agencies or organizations or notarized or certified overseas must be consularly legalized in accordance with Vietnamese law, unless the consular legalization is exempted under a treaty to which the Socialist Republic of Vietnam is a contracting party.

4. Applicants for a certificate of eligibility for provision of audit services shall take responsibility for the accuracy and truthfulness of their dossiers sent to the Ministry of Finance.

5. Organizations and individuals that directly certify the capital amount shall take joint responsibility for the accuracy and truthfulness of the capital amount at the time of certification.

Chapter II

DOSSIER, ORDER AND PROCEDURE FOR THE GRANT, MANAGEMENT AND USE OF CERTIFICATES OF ELIGIBILITY FOR PROVISION OF AUDIT SERVICES

Article 5. Dossier of application for a certificate of eligibility for provision of audit services, applicable to limited liability companies, partnerships and private enterprises

1. An application for a certificate of eligibility for provision of audit services (made according to the form provided in Appendix I).

2. A copy of the business registration certificate or enterprise registration certificate or investment certificate.

3. A list of certified public accountants having labor contracts to work on a full-time basis at the firm (made according to the form provided in Appendix III).

4. Copies of the certificates of audit practice registration of certified public accountants.

5. A copy of the decision of the Members’ Council on the appointment of the director (director general), for limited liability companies or partnerships.

6. A copy of the company charter.

7. A list of capital contributors or a list of partners (made according to the form provided in Appendix IV), specifying:

a/ Full names, addresses, nationalities, numbers and dates and places of issue of the identity cards or passports or other lawful personal identification papers, for individuals; numbers and grant of issue of the audit practice registration certificates (for certified public accountants);

b/ Name and location of the head office, number and date of the decision on establishment (or business registration), for organizations; full names, addresses, nationalities, numbers, dates and places of issue of the identity cards or passports or other lawful personal identification papers, number and date of issue of the audit practice registration certificate of the individual appointed to represent the capital contributed, for organizations;

c/ The amount of capital contribution as registered, the value of actually contributed capital, the rate of ownership and the capital contribution time limit.

8. The written certification of capital, for limited liability companies, specifically:

a/ A newly established firm must have:

- The capital contribution records of founding members;

- The written certification of the deposits of founding members issued by a commercial bank licensed to operate in Vietnam, if capital is contributed in cash. The deposit must be equal to at least the capital amount contributed in cash of the founding members and may be released only after the firm is granted a certificate of eligibility for provision of audit services.

- The written certification of the result of valuation of contributed assets issued by an organization with the valuating function operating in Vietnam, if capital is contributed in assets. The written certification must be still valid on the date of submission of the dossier of application.

b/ An operating firm must have a written certification of its existing equity written in its latest financial statement (of the year of registration or the year preceding the year of registration), which is issued by another independent audit firm.

Article 6. Dossier of application for a certificate of eligibility for provision of audit services, applicable to Vietnam-based branches of foreign audit firms

1. An application for a certificate of eligibility for provision of audit services (made according to the form provided in Appendix II).

2. A copy of the foreign audit firm’s license to provide audit services (or an equivalent paper) as prescribed by the law of the country in which the foreign audit firm is headquartered.

3. A copy of the foreign audit firm’s license to open a branch in Vietnam.

4. The foreign audit firm’s document addressed to the Ministry of Finance on its assurance to take responsibility for all obligations and commitments of its Vietnam-based branch.

5. A list of certified public accountants having labor contracts and working on a full-time basis at the Vietnam-based branch of the foreign audit firm.

6. Copies of the audit practice registration certificates of certified public accountants.

7. The decision of the foreign audit firm on the appointment of the branch director (general director).

8. A written certification issued by another independent audit firm of the existing equity of the foreign audit firm in its latest financial statement (in the year of registration or the year preceding the year of registration).

9. Documents proving that the foreign audit firm allocates capital to its Vietnam-based branch.

Article 7. Order and procedures for grant, re-grant and modification of certificates of eligibility for provision of audit services

1. An applicant for the grant, re-grant or modification of a certificate of eligibility for provision of audit services shall send one set of dossier as prescribed in this Circular to the Ministry of Finance.

2. If making no request for supplementation or explanation within the time limit specified in Clause 1, Article 23, and Clause 3, Article 24 of the Law on Independent Audit, the Ministry of Finance shall consider granting, re-granting or modifying the certificate of eligibility for provision of audit services. In case of refusal, the Ministry of Finance shall issue a written reply, clearly stating the reason.

3. If the dossier of application is not valid, within 10 working days from the date of receiving the dossier, the Ministry of Finance shall request the applicant to complete the dossier.

4. When receiving the written request from the Ministry of Finance, the applicant shall complete the dossier in accordance with the request and send it back to the Ministry of Finance. After 10 working days from the date of receiving the supplemented dossier, if the Ministry of Finance does not make any written request for additional supplementation, it shall consider granting, re-granting or modifying the certificate of eligibility for provision of audit services within the time limit specified in Clause 1, Article 23, or Clause 3, Article 24 of the Law on Independent Audit.

5. If the applicant fails to supplement the dossier as requested, the Ministry of Finance may request the applicant to further complete the dossier as prescribed in Clauses 3 and 4 of this Article.

Article 8. Contents of a certificate of eligibility for provision of audit services

1. A certificate of eligibility for provision of audit services contains the following information:

a/ Name of the audit firm in Vietnamese and foreign language (if any); its abbreviated name (if any); and address of the head office;

b/ Full names of the at-law representative and the director (general director) of the audit firm (if the director is not the at-law representative);

c/ The number and date of grant of the certificate;

d/ The number and date of grant of the business registration certificate or enterprise registration certificate or investment certificate and the granting agency;

dd/ The terms and conditions which the audit firm shall abide by when using the certificate.

2. The form of certificate of eligibility for provision of audit services is provided in Appendix V to this Circular.

Article 9. Modification of a certificate of eligibility for provision of audit services

1. An audit firm shall carry out the procedures for requesting modification of its certificate of eligibility for provision of audit services when changing the contents of such certificate as prescribed in Clause 1, Article 8 of this Circular.

2. A dossier of request for modification of a certificate of eligibility for provision of audit services comprises:

a/ A written request for modification of a certificate of eligibility for provision of audit services (made according to the form provided in Appendix VI);

b/ The original certificate of eligibility for provision of audit services, which is last granted;

c/ A report describing in detail the requested modification and relevant documents.

Article 10. Re-grant of a certificate of eligibility for provision of audit services

1. An audit firm having a certificate of eligibility for provision of audit services may apply for its re-grant in the following cases:

a/ The certificate is lost or damaged;

b/ The firm is divided, split, merged, consolidated or has its form of ownership converted.

2. The audit firm shall apply for the re-grant of the certificate of eligibility for provision of audit services within 20 days from the date on which the certificate is lost or damaged, or from the date of completion of its division, split, merger, consolidation or conversion of the form of ownership.

3. A dossier of application for the re-grant of a certificate of eligibility for provision of audit services when it is lost or damaged comprises:

a/ An application for the re-grant of a certificate of eligibility for provision of audit services (made according to the form provided in Appendix VII);

b/ The original certificate, unless it is lost;

c/ Other relevant documents.

4. A dossier of application for the re-grant of a certificate of eligibility for provision of audit services in case of division, split, merger, consolidation or conversion of the form of ownership must be made according to Articles 5 and 6 of this Circular.

Article 11. Fee payment

1. The applicant for the grant, re-grant or modification of a certificate of eligibility for provision of audit services shall pay a fee upon submitting the dossier of application.

2. The levels, management and use of the fees for the grant, re-grant and modification of certificates of eligibility for provision of audit services are prescribed by the Ministry of Finance.

Article 12. Termination of provision of audit services

1. An audit firm will have its provision of audit services terminated in one of the cases specified in Clause 1, Article 27 of the Law on Independent Audit.

2. An audit firm subject to termination of the provision of audit services shall stop providing audit services from the date on which the decision on the termination is issued.

3. The Ministry of Finance shall announce a decision to terminate the provision of audit services on its website within 7 (seven) days from the date on which the decision is issued

Article 13. Revocation of a certificate of eligibility for provision of audit services

1. An audit firm will have its certificate of eligibility for provision of audit services revoked in one of the cases specified in Clause 2, Article 27 of the Law on Independent Audit.

2. An audit firm that has its certificate of eligibility for provision of audit services revoked shall stop providing audit services from the date on which the decision on the revocation is issued.

3. The Ministry of Finance shall announce a decision to revoke a certificate of eligibility for provision of audit services on its website within 7 (seven) days from the date on which the decision is issued.

4. The audit firm shall return its certificate of eligibility for provision of audit services to the Ministry of Finance within 10 days from the date on which the decision on the revocation is issued.

Article 14. Voluntary suspension of provision of audit services

1. An audit firm wishing to suspend the provision of audit services shall send a notification of the suspension (made according to the form provided in Appendix XI) to the Ministry of Finance at least 15 days before the expected date of suspension.

2. The list of audit firms suspending the provision of audit services must be posted on the website of the Ministry of Finance.

3. When resuming its operation, an audit firm shall ensure all conditions as prescribed by law, and send a written notification to the Ministry of Finance at least 10 days before the date of resumption of operation.

Article 15. Stoppage of provision of audit services

1. An audit firm wishing to stop the provision of audit services shall send a dossier of request for stoppage of the provision of audit services to the Ministry of Finance.

2. A dossier of request for stoppage of the provision of audit services comprises:

a/ A written request for stoppage of the provision of audit services;

b/ A report on the uncompleted audit contracts and other service contracts as prescribed at Point b, Clause 1, Article 40 of the Law on Independent Audit;

c/ Measures and commitment to assure the rights and legitimate interests of clients and involved parties;

d/ Solutions and measures to settle uncompleted audit contracts and other service contracts (if any).

3. The audit firm shall notify the stoppage of the provision of audit services to its clients (audited units) and involved parties, and on the mass media at least 30 days before officially stopping the provision of audit services.

4. A notice of stoppage of provision of audit services mentioned in Clause 1 of this Article must specify:

a/ The time of stoppage and reasons for the stoppage of the provision of audit services;

b/ Measures and commitment to assure the rights and legitimate interests of clients and involved parties.

Article 16. Branches of audit firms

1. Branches of an audit firm may only provide audit services when satisfying all conditions specified in Article 31 of the Law on Independent Audit.

2. An audit firm that registers for the provision of audit services by its branch shall send one set of dossier to the Ministry of Finance, which comprises:

a/ A written registration for provision of audit services by its branch (made according to the form provided in Appendix VIII);

b/ A copy of the operation registration certificate of the branch granted by a business registration agency;

c/ Copies of the audit practice registration certificates of certified public accountants working at the branch;

d/ The decision to appoint the branch director.

3. Within 30 days after receiving a valid dossier, the Ministry of Finance shall issue a written reply on its approval for each branch. In case of refusal, the Ministry of Finance shall clearly state the reason.

4. A branch of an audit firm that fails to satisfy the conditions specified in Article 31 of the Law on Independent Audit for three consecutive months shall be terminated from providing audit services.

5. In case an audit firm is terminated from providing audit services, all of its branches will also be terminated from providing audit services.

6. A branch terminated from providing audit services shall stop providing audit services from the date on which the decision on the termination is issued.

Article 17. Responsibilities of audit firms

1. To maintain and assure the conditions for being granted a certificate of eligibility for provision of audit services throughout the course of operation.

2. Not to tamper with the contents of the certificate of eligibility for provision of audit services.

3. Not to lease out, lend, pledge, purchase, sell and transfer the certificate of eligibility for provision of audit services.

4. To report to the Ministry of Finance within 10 days from the date on which certificate of eligibility for provision of audit services is lost or damaged.

5. To send a written notification (enclosed with documentary proof) to the Ministry of Finance within 10 days from the date on which a change prescribed in Article 26 of the Law on Independent Audit occurs.

6. To submit to the examination and inspection and comply with handling decisions issued by competent state agencies regarding the assurance of the conditions for provision of audit services and the use of the certificate of eligibility for provision of audit services.

7. Before October 31 every year or upon request, to send to the Ministry of Finance reports on the maintenance of the conditions for provision of audit services (made according to the form provided in Appendix IX), together with the documents prescribed in Articles 5 and 6 of this Circular if they have any changes compared to the latest submission.

8. Annually, to send reports on their operation in the year (made according to the form provided in Appendix X) and financial statements of the preceding year to the Ministry of Finance. The deadline for sending such reports is April 10 of the subsequent year. The time limit for sending financial statements is 90 days from the end of the fiscal year.

Article 18. Disclosure of information on audit firms

1. The Ministry of Finance shall post on its website:

a/ The list of audit firms eligible for providing audit services;

b/ The list of audit firms and branches of audit firms that are terminated from providing audit services, have their certificates of eligibility for provision of audit services revoked, or receive warnings about the conditions for providing audit services during the period in which they fail to assure the conditions for providing audit services as prescribed;

c/ The list of audit firms that voluntarily suspend or stop the provision of audit services.

2. Within 30 days from the date the certificate of eligibility for provision of audit services is granted, an audit firm shall post the information specified at Points a, b and c, Clause 1, Article 8 of this Circular on 3 consecutive issues of a printed or electronic newspaper.

Chapter III

IMPLEMENTATION PROVISIONS

Article 19. Effect

1. This Circular takes effect on May 1, 2013.

2. Any problems arising in the course of implementation should be promptly reported to the Ministry of Finance for consideration and appropriate revision.-

For the Minister of Finance
Deputy Minister
TRAN XUAN HA

(Note: All appendices to this Circular are not translated).