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CHECKING ACCOUNTING ACCORDING TO THE PROVISIONS OF LAW
Accounting audits play a crucial role in ensuring the transparency, fairness and accuracy of financial information in a business. This process holds significant importance for businesses, carrying numerous implications.
What is an accounting audit?
According to current accounting laws, accounting inspection entails “reviewing and evaluating compliance with accounting laws, the honesty, and accuracy of accounting information and data” – Clause 12 Article 3 of the Accounting Law 2015. The primary objective of accounting inspection is to ensure that accounting records and financial reports precisely reflect the financial position and outcomes of the organization.
Why Accounting Audits are Necessary
Firstly, it helps confirm the accuracy of accounting records, ensuring that financial information reflects the true condition of the business. This provides managers, shareholders, and business partners with accurate information to make strategic decisions and assess financial performance.
Secondly, accounting audits are an important tool for detecting and preventing financial fraud. This helps protect shareholders’ interests and maintain the company’s reputation in front of the public and financial markets. For the government, accounting audits also hold significant importance. Firstly, they ensure that businesses comply with accounting regulations and standards, contributing to transparency and consensus in the national financial system. This is crucial for maintaining stability and trust in the global financial system.
Thirdly, accounting audits help the government assess the effectiveness of policies and regulations related to accounting and finance. This provides information to adjust and update legal regulations when necessary, while also ensuring that businesses fulfill their responsibilities to the community and the nation. Overall, accounting audits combat opacity and fraud, creating a healthy and sustainable business and financial environment.
Which agency has the authority to inspect accounting?
Pursuant to Clause 2, Article 34 of the Accounting Law, the agencies competent to inspect accounting include:
- The financial;
- Ministries, ministerial-level agencies, Government agencies and other central agencies decide to inspect the accounting of accounting units in their assigned fields of responsibility;
- Provincial People’s Committees decide to inspect the accounting of local accounting units under their management;
- State inspection agencies, specialized financial inspectors, State Audit, and tax authorities when performing inspection, examination, and auditing tasks of accounting units.
- The superior unit decides to inspect the accounting of the affiliated unit.
What does an accounting inspection include?
Accounting audits are an important process to ensure accuracy and transparency in an organization’s financial management. This inspection decision covers many important aspects:
First, during the inspection process, ensuring that the accounting work is done properly is the primary concern. Competent authorities will confirm that accounting records are complete, correct and fair.
Second, inspection also focuses on the organization of the accounting apparatus and accountants. This ensures that there is an effective accounting system and that the person doing the work has sufficient expertise and responsibility.
Third, check the management organization and business activities in the field of accounting services. These processes and activities need to comply with regulations and standards to ensure transparency and correctness in management.
Fourth, inspection is also related to ensuring compliance with legal regulations related to the field of accounting. This places high demands on the understanding and strict implementation of legal regulations to avoid legal risks.
According to legal regulations, the accounting inspection time will not exceed 10 days, excluding weekends and holidays. In case the inspection content is complex, the time may be extended, but not to exceed 5 days for each inspection
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