Financial statement auditing is an independent activity aimed at verifying and providing an opinion on the accuracy and fairness of a company's financial data in accordance with legal regulations. Entering into a financial statement audit contract at the right time and following the correct procedures helps businesses ensure legal compliance, proactively manage the audit process, and enhance the reliability and transparency of financial information for investors and stakeholders.
This article will cover important information regarding contract deadlines, legal regulations on handling violations, and the practical benefits of proactively securing a financial statement audit contract early.
I. What is Financial Statement Auditing?
Auditing financial statements involves performing procedures to gather audit evidence regarding the figures and disclosures in financial statements. The procedures are selected based on the auditor's judgment, including an assessment of the risk of material misstatement in the financial statements due to fraud or error.
Auditing work also includes evaluating the appropriateness of applied accounting policies and the reasonableness of accounting estimates, as well as assessing the overall presentation of financial statements.
The auditor's responsibility is to express an opinion on these financial statements based on the results of the audit.
II. Why is it necessary to audit financial statements?
Auditing financial statements is a task. obligatory if your business belongs to entities that are required to be audited Annually, as stipulated by current state regulations. Typical examples include foreign-invested enterprises, listed companies, and certain other entities.
Furthermore, this work also serves the purpose of managing financial, accounting, and tax risks, corporate governance, etc. Auditing financial statements helps businesses have appropriately presented financial statements that accurately reflect their business operations and are readily available to provide information to third parties.
III. Legal regulations regarding the conclusion of financial statement audit contracts
1. Regarding the time of contract signing
According to the Clause 2, Article 9 Independent Auditing Law 2011:
"The contract for auditing the annual financial statements of businesses and organizations that are required to have their financial statements audited. It must be concluded no later than thirty days before the end of the fiscal year.".
Therefore, if your business belongs to entities that are required to be audited Regarding financial statements, the deadline for signing the audit contract is as follows:
- If the fiscal year Ends December 31st then no later than December 1st of that year.
- If the fiscal year ends on June 30th, then the deadline is May 31st of that year at the latest.
2. Penalties for violations of regulations on contract formation.
According to the Article 28 Decree 228/2025/ND-CP, fine amount The following violations pertain to the conclusion of audit contracts for the annual financial statements of enterprises subject to mandatory auditing:
- Agreement Insufficient content According to regulations: 5,000,000 – 10,000,000 VND
- Agreement late compared to the stipulated deadline: 10,000,000 – 20,000,000 VND
- Entering into an audit contract after conducting the audit: 30,000,000 – 40,000,000 VND
- No contract Audit contract when performing an audit: 40,000,000 – 60,000,000 VND
IV. What are the benefits of signing a contract early?
Proactively securing an audit of your financial statements early on offers several important benefits for businesses, such as:
- The report is reviewed before the year-end closing of the accounting records.
- The financial reporting process has been updated to comply with current regulations;
- Stay updated on current regulations and documents that affect the company's business operations and financial reporting;
- Providing guidance to businesses on conducting mandatory year-end inventory checks in accordance with current regulations;
- Save time completing financial reports by correcting errors;
- Timely detection of errors and inconsistencies in the presentation of information in financial reports;
- Complete the financial statements promptly so they can be submitted to the relevant parties as required by current law.
With the clear regulations and benefits mentioned, businesses required to have their annual financial statements audited should note that they should secure audit contracts well in advance to avoid unnecessary penalties and to use audit costs to generate added value for their own business.