Supreme Auditing Standards System – Effective Tools For the State Audit Office Of Vietnam

Supreme Auditing Standards System – Effective Tools For the State Audit Office Of Vietnam


Prof. Dr. Doan Xuan Tien, Deputy Auditor General of Vietnam

In the context of Vietnam’s rising economy along with strong regional and global economic integration, a healthy, transparent and sustainable public finance holds extremely important implications. The role of the State Audit Office of Vietnam (a.k.a. SAV) in monitoring and supervising the public finance and assets usage and management became an urgent and inevitable requirement of the society. The SAV’s supreme auditing standards system, which was developed by selectively adapting international auditing standards, in accordance with Vietnam’s legal, practical and operational environment, will be a useful tool for the SAV to enhance capacity, while promoting the role of contributing to building a transparent and sustainable public finance.

As an inevitable trend, when the country’s economic and social development reaches higher stage, the requirement for a healthy and transparent public finances become more urgent than ever. In particular, the position and role of financial inspection agencies in improving the Government’s accountability specifically on public finance and property management, anti-corruption, preventing resources wastefulness, promoting international integration, carrying out public finance, as well as transparency and administrative reform is increasingly focused and enhanced.

With its constitutionalized legal status in Vietnam’s 2013 Constitution, the SAV has shown important progress in terms of the state audit activities’ size, quality, effectiveness and impact on the country’s financial system, gradually matching the Parliament as well as citizens’ trust and expectations. Indeed, the SAV is fully aware of the requirement for accurate, honest, and objective audit opinions. Therefore, the development and implementation of a supreme auditing standards system that complies with international auditing practices and standards (ISSAIs), while ensuring conformity with Vietnam’s practical conditions and environment became an indispensable requirement in order to enhance the independence, effectiveness and efficiency in state auditing activities, thereby enhancing the SAV’s capacity, expertise, professionalism, status, credibility and image within the International Organization of Supreme Audit Institutions (a.k.a. INTOSAI) community.

For Vietnam, the application of ISSAIs presents a valuable opportunity to essentially standardize and improve the SAV’s operation quality in general, as well as state auditing activities in particular. This development will help the SAV to achieve key content and objectives of organization’s development strategy toward 2020. The application of the new supreme auditing standards will essentially play a major part in building a transparent and sustainable public finance.

1.    Drafting Process

In 1999, the SAV developed and promulgated the first supreme auditing standards system. Then in 2010, the organization amended and revised a new auditing standards system to replace the system previously issued in 1999. Both supreme auditing standards systems aforementioned had been practiced effectively and essentially became an important foundation in developing professional guidelines and regulations, as well as conducting audits over the different development phases of the SAV.

In 2013, initiated from the commitment of the SAV with the INTOSAI Development Initiative (IDI) and the ASOSAI regarding ISSAIs implementation, the SAV had researched and developed a new supreme auditing standards system that is more scientific, better reflects actual practical environment in Vietnam, and gearing towards complying ISSAIs. After 3 years of hard work and dedication, with collaborative efforts of industry-leading experts from: the Ministry of Finance (MOF), the Vietnam Association for Certified Public Accountants (VACPA), major independent audit firms, universities, academies and senior auditors of the SAV, in July 2016, the SAV has officially completed the development and promulgation of the revised supreme auditing standards system.

This auditing standards system  consists of  auditing standards at three levels (Level 2 – The prerequisites for the implementation of supreme auditing function, such as a code of professional ethics and audit quality control; Level 3 – the basic auditing principles as the basic principle of state auditing activities, as well as the basic principles of financial audit, compliance audit and performance audit, and Level 4 – auditing guidelines: detailed instructions on audit risk management, audit materiality determination, audit sampling, analytical and auditing procedures for beginning balance…) for all 3 types of audits (financial audits, compliance audits and performance audit)

2.    The impact of supreme auditing standards system

The new supreme auditing standards system will have a positive and profound impact on  five major groups of beneficiary, including: the SAV, the state auditors, the auditees, the National Assembly and Government’s bodies, and the public.

The supreme auditing standards system provides principle and core guideline, which will serve as a fundamental tool for the auditors when conducting audits. In addition, this is an effective tool for the SAV to guide, inspect, monitor and assess the state auditors’ performance and stakeholders. The new supreme auditing standards system also provides information and guidance to auditees for cooperating purposes during the audit process. Furthermore, the new auditing standards system will assist the National Assembly and Government bodies, state administrative agencies, and the public in monitoring the audit activities carried out by the SAV, thereby improving the transparency of audit activities, ensuring the accuracy, truthfulness and objectivity of audit opinions, reinforcing confidence in the quality and impact of state audit activities.

3.    Putting the system state auditing standards into practice

One of the SAV’s top midterm priorities is to quickly implement the new supreme auditing standards system into practice for which a feasible and specific roadmap has been developed to implement this system comprehensively and effectively.

The process of applying the new supreme auditing standards system into practice will be an arduous process with full of challenges, requiring the SAV to demonstrate a firm political will and consensus. It also requires that the SAV’s auditors must be thoroughly aware of the fundamental meaning, value, and importance of the supreme auditing standards, show the courage to overcome innovation aversion mindset, as well as the willingness to apply the updated professional knowledge and auditing standards.





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