CIRCULARS
GUIDELINES FOR PURCHASING PROFESSIONAL LIABILITY INSURANCE FOR PRACTICING AUDITORS OR ESTABLISHING A PROFESSIONAL RISK RESERVE FUND IN INDEPENDENT AUDITING ACTIVITIES
Based on the Law on Independent Auditing No. 67/2011/QH12, amended and supplemented by the Law amending and supplementing a number of articles of the Law on Securities, the Law on Accounting, the Law on Independent Auditing, the Law on State Budget, the Law on Management and Use of Public Assets, the Law on Tax Management, the Law on Personal Income Tax, the Law on National Reserves, and the Law on Handling Administrative Violations No. 56/2024/QH15;
Based on Government Decree No. 29/2025/ND-CP dated February 24, 2025, regulating the functions, tasks, powers, and organizational structure of the Ministry of Finance, as amended and supplemented by Decree No. 166/2025/ND-CP;
As requested by the Director of the Department of Accounting and Auditing Management and Supervision;
The Minister of Finance issued a Circular guiding the purchase of professional liability insurance for practicing auditors or the establishment of a professional risk reserve fund in independent auditing activities.
Chapter I
GENERAL RULES
Article 1. Scope
This Circular regulates the purchase of professional liability insurance for practicing auditors or the establishment of a professional risk reserve fund in independent auditing activities as prescribed in the Law on Independent Auditing.
Article 2. Subject of application
This Circular applies to practicing auditors, auditing firms, and other related organizations and individuals.
Article 3. Explain words
In this Circular, the terms below are construed as follows:
1. Auditing firms: These include auditing firms and branches of foreign auditing firms in Vietnam that meet the requirements for conducting auditing services as stipulated in the Law on Independent Auditing.
2. Guarantee services: These are guarantee services as stipulated in Circular No. 69/2015/TT-BTC dated May 8, 2015, issued by the Minister of Finance, promulgating the Vietnamese framework for guarantee service contracts, and any amendments, supplements, or replacements (if any).
Chapter II
SPECIFIED
Article 4. Obligation to purchase professional liability insurance for practicing auditors or to establish a professional risk reserve fund for auditing firms.
Audit firms are obligated to purchase professional liability insurance for their practicing auditors or to establish a professional liability reserve fund.
Article 5. Purchasing professional liability insurance for practicing auditors
1. Auditing firms purchase professional liability insurance for practicing auditors in accordance with the laws on insurance business.
2. The cost of purchasing professional liability insurance for practicing auditors is included in the company's administrative expenses.
Article 6. Establishment of occupational risk reserve fund
1. Audit firms shall establish a professional risk reserve fund at the end of the fiscal year at a rate of 1% of the assurance service revenue for that year.
2. The amount set aside for occupational risk reserves is included in the business's administrative expenses.
3. The balance of the occupational risk reserve fund shall not exceed 10% of the guaranteed service revenue of the current fiscal year.
If the balance of the professional risk reserve fund exceeds 10% of the assurance service revenue for the current fiscal year, the auditing firm shall reverse the excess amount and account for it as a reduction in business management expenses.
4. Audit firms are responsible for developing and issuing internal regulations for managing and using the professional risk reserve fund.
Article 7. Maintaining the purchase of professional liability insurance for practicing auditors or establishing a professional risk reserve fund.
Throughout the period during which it is eligible to provide audit services, the audit firm must ensure the continuous and uninterrupted maintenance of professional liability insurance for its practicing auditors or the establishment of a professional risk reserve fund.
Article 8. Compensation for damages to the audited entity and users of audit results.
When an auditing firm is liable for compensation for damages caused by its own errors to the audited entity and users of the audit results, the auditing firm may be compensated by the insurance company or a branch of a foreign non-life insurance company as stipulated by Vietnamese law on insurance business, according to the agreed insurance contract, or by using its professional risk reserve fund to compensate for the damages.
If the amount of compensation payable exceeds the amount paid by the insurance company or the balance of the occupational risk reserve fund, the excess amount will be included in the company's administrative expenses after deducting any compensation collected from the unit or individual causing the incident (if any), as stipulated by law.
Article 9. Tax obligations
The determination of tax obligations is carried out in accordance with tax laws.
Chapter III
ORGANIZATION OF IMPLEMENTATION
Article 10. Enforcement
1. This Circular shall take effect from January 1, 2026.
2. Point 5, Section B, Part II of Circular No. 64/2004/TT-BTC dated June 29, 2004, issued by the Minister of Finance, guiding the implementation of some provisions of Government Decree No. 105/2004/ND-CP dated March 30, 2004, on independent auditing, is hereby repealed.
Article 11. Implementation
The Director of the Accounting and Auditing Management and Supervision Department, the heads of relevant units under the Ministry of Finance, auditing firms, and other relevant organizations and individuals are responsible for implementing this Circular.