Finance Minister talks about solutions to prevent negativity in auditing

Continuing the question-and-answer session on the morning of March 18th, National Assembly Deputy Pham Van Hoa ( Dong Thap delegation) stated that, according to reports, there are currently more than 200 independent auditing firms nationwide. While these firms have performed well in auditing, some have overlooked errors by audited entities for the benefit of the auditors, leading to losses of state budget funds, cover-ups of wrongdoing, and corruption, such as the SCB case where three major auditing firms were involved in the wrongdoing.

"Regarding the function of managing the sector, what solutions does the Minister have to prevent and deter negative practices in the auditing sector?", Mr. Hoa asked.

Responding to questions about irregularities in auditing, the Minister of Finance stated that there have recently been instances of irregularities in independent audits in some criminal cases.

According to the Minister, this is related to many factors, such as: the competence of auditors at auditing firms; furthermore, the sense of responsibility of the officers directly involved in auditing work; and not ruling out cases of collusion to intentionally violate the law to commit wrongdoing.

"Regarding auditing work, the Ministry of Finance has directed and tightened regulations from the stage of auditors being granted auditor certificates, setting conditions in accordance with the law, and organizing examinations and training in a serious manner," Mr. Phớc said.

Citing evidence of the rigorous auditor examination process, Mr. Phớc stated that, in most years, no auditor has ever passed the exam with a success rate exceeding 30%, with the highest pass rate being only 30%. Therefore, the auditing standards and methods issued by the Ministry of Finance are not being followed.

"In the coming period, the Ministry of Finance will continue to tighten the operations of auditing firms to re-examine some dossiers, and if violations are found, they will be strictly dealt with," Mr. Phớc said, adding that there are currently 221 auditing firms nationwide with approximately 2,363 auditors, a relatively small ratio compared to other countries. However, he emphasized the need to focus on quality.

"As for misconduct by auditors, whether it's due to favoritism, incompetence, or collusion, we will provide training to improve their professional ethics, culture, and skills so they can perform their duties well," Mr. Phớc emphasized.

Finance - Banking - Minister of Finance speaks about solutions to prevent malpractice in auditing — Minister of Finance Ho Duc Phoc answers questions.

Speaking in the debate , delegate Ta Van Ha ( Quang Nam delegation) stated that recent times have shown that valuation companies not only play an important role in the economy, but in recent cases of wrongdoing, the role of valuation companies is also very important, with responsibility, or even complicity, in lowering or raising prices.

According to the delegates, there are many reasons, but the most important one is the excessive increase in the number of valuation firms in recent times, leading to complicity and violations. However, after the violations were dealt with, there was a reluctance to take action, causing difficulties in the functioning of the economy.

Therefore, the representative requested the Minister to clarify the extent of the Ministry's responsibility in this matter, and to provide solutions to overcome these shortcomings in the future.

Responding to the debate , Minister Ho Duc Phoc stated that there are only a few hundred valuation companies nationwide, and furthermore, the Ministry of Finance strictly manages the certification examination process for valuers; the violations in the past were mainly due to valuers intentionally committing wrongdoing.

The Minister cited the example of land prices, stating that applying the surplus method would reveal errors in valuation if investigated, because assets formed in the future must go through many steps such as design preparation and approval, and cost estimation, but when audited and inspected by relevant agencies, they are found to be non-compliant with regulations.

Therefore, the cause is partly due to legal regulations, but also partly due to officials intentionally committing wrongdoing; if wrongdoing occurs, disciplinary action or criminal prosecution is necessary .

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