MoF attempting to ease requirements on stock auditors

The Ministry of Finance (MoF) is trying to lower requirements on auditing companies, hoping to settle the problem of the lack of auditors for the stock market.

MoF said it was amending Decision No 76 on auditing companies eligible for the stock market, setting easier requirements on auditing companies. With the new regulation, there would be 23 auditing companies eligible to provide auditing services on the stock market instead of 13 companies as currently.

Under the current regulations, stipulated in Decision No 76, an eligible auditing company must have at least three auditors who have practicing certificates granted by the Ministry of Finance. The directors of the companies must have a certificate and three years of experience.

Bui Van Mai, Director of the Accounting and Auditing Department under the Ministry of Finance, said that Decision No 76 was enacted in 2004, when the stock market was a fledgling one with only 20 listing companies and few transactions. Since 2006, the market has witnessed vigorous development, and the number of institutions which have the demand for auditing has increased by 10 fold compared to 2004.

The problem now is that Vietnam needs more and more auditing companies eligible to provide auditing services for the stock market. And MoF thinks easing the requirements on auditing companies will provide more service providers for the market.

Mr Mai said that in the last time, as only a few auditing companies were accepted, the licenced companies did not have to compete fiercely with each other, which allowed the companies to demand abnormally high auditing fees, while companies did not have many choices.

However, Mr Mai acknowledged that it would be unfeasible to settle this problem by setting up fixed ceiling levels of fee. He said that the government was striving to remove the imposition of prices and fees on goods and services, and MOF could not act contrary to this process.

“Our principle is that MOF only guides the method of calculating fees, while not imposing,” said Mr Mai.

Regarding the concerns of the public that the quality of auditing services would be disregarded once MOF eased the requirements on auditing companies, Mr Mai said that the existence of more auditing companies on the stock market did not mean that auditing quality would become lower.

“We cannot say for sure that a company with more auditors and more experience is better than another one. The most important thing for an auditing company is that it must ensure that it can provide true information.”

Mr Mai said that the existence of more auditing companies on the market would bring more choices to companies and institutions. Big companies and groups will need big and well-known auditing service providers. Meanwhile, as for smaller companies, small auditing companies which can provide services at ‘soft’ fees would be a good choice.

Source: VNE