Many businesses have "overstated" hundreds of billions, thousands of billions of dong after audits - Photo: AI
The sharp increase in the number of fines reflects the strict supervision of the management agency. However, many questions have also been raised about the quality of accounting of listed companies. How will "famous" enterprises with discrepancies of hundreds of billions or thousands of billions be handled? When will they be "named"?
Many businesses have 'skewed' post-audit profits
In a newly issued decision, the Securities Commission has fined Vietnam Electricity Construction Joint Stock Corporation (VNE) for many violations.
Including the error of disclosing incorrect information in the 2023 financial report. Specifically, in the 4th quarter 2024 report prepared by VNE, the profit after tax was more than 1.3 billion VND, but after auditing, it lost more than 28 billion VND, a difference of 2,225%.
Previously, many businesses were also punished for similar violations, most of which had their after-tax profits adjusted sharply downward when audited. It should be emphasized that this difference is not a new phenomenon, but in the past, these violations were not punished as frequently as they are now.
Speaking to Tuoi Tre , a long-time auditor said that the publication of large incorrect figures directly affects investors' rights.
In addition to fines, businesses that commit serious violations, repeat violations, or intentionally falsify reports may have their transactions suspended, their public company status revoked, or even have their files transferred to an investigation agency if there are signs of securities crimes, fraud, or financial fraud.
Data: FIDT Companion Hub
According to Mr. Ta Quoc Duong - Head of Hub Dong Hanh Business Department - FIDT Investment Joint Stock Company, the act of disclosing false information about profits between self-prepared financial statements and audited financial statements is determined to be a violation of information disclosure in Clause 5, Article 42 of Decree 156/2020, which has been amended and supplemented by Clause 33, Article 1 of Decree 128/2021.
Mr. Duong said that before this regulation, the act of publishing false information or concealing information in securities activities would be punished if not prosecuted.
Previous regulations made it difficult for regulators to determine violations, especially in cases where there was a large difference in profits between self-reported and audited reports.
Meanwhile, current regulations help management agencies easily identify violations, thereby promptly handling and issuing penalty decisions. Mr. Duong commented that this could be the main reason for the increase in the number of penalties recently.
Accounting quality problem or deliberate fraud?
Speaking to Tuoi Tre, a former leader of the Vietnam Association of Accountants and Auditors said there are many reasons leading to incorrect financial reports.
First, some businesses deliberately make mistakes. "It's not all due to poor accounting quality. In many cases, businesses deliberately make mistakes because the penalties were not strict in the past, and they are willing to take advantage of loopholes," he said.
Besides the intentional factor, the expert said that there is also a cause from the quality of accounting, especially when applying international financial reporting standards.
In addition, some businesses reported profits but after auditing, they turned into large losses not due to incorrect accounting, but due to the application of different financial mechanisms at different times, such as bad debt provisioning.
Mr. Duong agreed that many businesses still have shortcomings in accounting practices and internal control systems. Errors in recording revenue, expenses, asset valuation or provisioning often stem from inconsistencies in the application of Vietnamese Accounting Standards (VAS) or limitations in professional capacity.
This causes the self-prepared financial statements to differ significantly from audited reports - where standards are applied more strictly and independently.
"It cannot be denied that a number of businesses deliberately take advantage of the 'gap' between the time of announcing self-prepared and audited financial reports to serve their own interests," said Mr. Duong.
'Book-beautifying' to increase profits in self-reported reports is often aimed at increasing stock prices, improving image before issuing shares or maintaining conditions for borrowing capital and issuing bonds.
Enterprises need to improve the quality of auditing and accounting in the new context
The former leader of the Vietnam Association of Accountants and Auditors said that businesses need to improve their accounting capacity and comply with new standards, while state agencies need to issue clear and consistent regulations to minimize legal risks for businesses.
Mr. Ta Quoc Duong said the sharp increase in the number of businesses being penalized also reflects the process of perfecting the legal framework and tightening supervision by management agencies.
In the context of Vietnam's efforts to build a transparent stock market, regulations on information disclosure are strongly strengthened to protect investors and improve market quality.
This is an important preparatory step towards the goal of upgrading Vietnam's stock market from "frontier" to "emerging".
BINH KHANH
Source: https://tuoitre.vn/loi-nhuan-venh-tien-ti-sau-kiem-toan-goc-khuat-chat-luong-ke-toan-hay-co-tinh-gian-doi-20250702193440154.htm
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