Principles of correcting accounting books in Vietnam

Bookkeeping repair is the process of adjusting the financial information in the accounting books of a business to more accurately reflect the financial position and business results. The repair of accounting books also needs to comply with the provisions of the law because this activity involves many different issues. The following article will provide information related to some key principles when performing the bookkeeping process.

Purpose of bookkeeping activities in accounting

According to Article 24 of the Accounting Law 2015 and Article 88 of Circular 133/2016/TT-BTC, accounting books are tools used to record, organize, and store all economic and financial transactions related to accounting units.

The content of accounting books

Accounting books should include the following information, depending on the specific type of economic operation:

• Time of arising: Specify the day, month and year of the economic event in the accounting books.
• Information of accounting records: Include the number, date, month and year of accounting documents to have a basis for recording on the books.
• Summary content of economic operations: A brief description of the nature of the arising economic transaction.
• Amount incurred: Write down the exact amount related to the economic event.
• Opening balance, amount arising in the period, ending balance: A summary table of financial position, including initial balance, transactions arising in the period and ending balance.

Building a bookkeeping form will help ensure that all the necessary information is documented in a specific and organized manner.

Principles when repairing accounting books

The repair of accounting books must comply with the methods prescribed by law as follows according to Article 27 of the Accounting Law 2015:

In case the accounting books have errors, they will not be erased to lose information and data, but will have to use the following three methods to correct:

(1) Correction recording: This is done by crossing out a straight line where there is an error and recording the correct number or letter at the top. This process must be signed by the chief accountant located next to it.

(2) Record negative numbers: Use red ink or put the wrong number in parentheses, and then write down the correct number. This also requires the signature of the chief accountant for confirmation.

(3) Record adjustments: Create “adjustment documents” and add discrepancies to correct the correct information.

Note: In case the ledger is managed by electronic means, the repair process is usually carried out through the adjusted recording method.

If errors are detected after submitting annual financial statements to competent state agencies, the correction of the accounting books should be carried out on the books of the year in which the errors were detected, and a detailed explanation of the repair process is required.

Administrative penalties for correcting accounting errors that are not in accordance with the prescribed methods

If the corrector fails to correct accounting errors according to the above principles and methods, they will be administratively fined according to the provisions of Point b, Clause 2, Article 9 of Decree 41/2018/ND-CP, specifically:

Individuals will be fined from VND 3,000,000 to VND 5,000,000 if they commit the following acts. Note: According to the provisions of Article 6, Decree 41/2018/ND-CP (amended by Article 5, Decree 102/2021/ND-CP), in case the organization violates the same act, the fine will be double the level applied to the individual:

• Incomplete bookkeeping according to the main contents as prescribed;
• Carry out correction of errors in the accounting books without compliance with the prescribed method;
• Do not print accounting books on paper after closing books on electronic media for accounting books that require printing on paper as prescribed.

Administrative penalties for other cases related to accounting books:

Fine from 1,000,000 VND to 2,000,000 VND:

Making accounting books does not give out all the information as prescribed.

The ledger does not comply with the norm, including recording with a pen and ink, recording inserts above or below, overlapping; Do not perform cross-sections at the end of the page, and other violations related to note-taking.

Fine from 3,000,000 VND to 5,000,000 VND:

The accounting book does not fully record the main information as prescribed.

Correct errors on books that do not comply with regulations.

Do not perform the printing of paper ledgers after closing them on electronic media.

Fine from 5,000,000 VND to 10,000,000 VND:

Performing the opening of accounting books at the wrong time.

Accounting documents do not come with complete or incorrect bookkeeping information.

The information and figures recorded in the books of the following year are not successors of the previous year.

Failure to close accounting books in accordance with regulations or cases prescribed by law.

Fine from 20,000,000 VND to 30,000,000 VND:

Premature cancellation or intentional damage to the accounting books.

Leave out of the accounting books assets and liabilities of the entity or related to the unit without reaching the level of criminal prosecution.

For specific advice, please contact Siglaw Law Firm for the fastest and most detailed answer:

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