Auditing public companies and the securities sector is a key activity to ensure the transparency and integrity of financial information before its disclosure. Securities Law 2019 and Independent Auditing Law 2011Listed companies are required to conduct periodic audits to protect investors' interests. The strictness of audit standards is not only a legal obligation but also a measure of corporate governance capabilities.
In reality, serious financial irregularities often lead to a collapse of shareholder confidence, disrupting the capital market. In Vietnam, compliance with Circular 155/2015/TT-BTC has helped enhance the position of domestic enterprises. This article will analyze in detail the encouraged entities, the process, and the role of auditing services in the development of the securities market. Don't miss the important information below.
The importance of auditing public companies and the securities sector.
Auditing of public companies and the securities sector acts as a quality filter for the capital market. When a business undergoes rigorous auditing, it is indirectly affirming its financial health and business ethics to the public.
Auditing public companies and the securities sector provides stakeholders, from banks to investors, with an objective view of cash flow. This is especially important in the context of increasingly stringent corporate governance regulations and demands for greater transparency.
Auditing public companies and the securities sector goes beyond simply reviewing the numbers on the balance sheet. It's about verifying compliance with Vietnamese Accounting Standards (VAS) and moving towards the stringent International Financial Reporting Standards (IFRS).
The stock market operates based on information. Therefore, auditing of public companies and the securities sector is considered a "protective barrier" against financial fraud or the concealment of bad debts, ensuring a healthy investment environment.
Public companies and securities firms are encouraged and required to undergo audits.
Auditing of public companies and the securities sector applies to entities that have a significant impact on the capital market, such as public companies, listed organizations, securities firms, investment funds, and organizations issuing bonds to the public. By regulation, these entities are required to undergo audits. audit of financial statements To ensure transparency, compliance with standards, and investor protection, auditing is a prerequisite for bond issuers to obtain a license. It also helps assess their ability to repay, the legality of the collateral, and the intended use of the issued capital.
Typical types of businesses
Audits of public companies and the securities sector focus on entities that have a significant impact on social capital. Below is a classification of key entities according to current regulations:
| Object | Basic conditions | Role in auditing |
| Public company | Charter capital of ≥ 30 billion VND, with ≥ 100 shareholders. | Annual financial statement audit and 6-month review are mandatory. |
| Listing organization | Meets the listing requirements at HOSE/HNX. | Strictly adhere to financial reporting standards. |
| Securities company | Has a license to operate securities business. | Financial safety audit and operational reporting |
| Investment fund | Managing capital raised from investors | Publicly disclose portfolio and net asset value (NAV). |
Organization issuing bonds to the public
For these entities, public company and securities sector audits are prerequisites for issuance approval. Bond investors need assurance of the ability to repay principal and interest based on independently audited reports.
The auditing process for publicly traded companies and securities firms typically includes examining the legality of collateral assets. Additionally, auditors review the intended use of the funds raised from the issuance to ensure compliance with commitments.
Areas encouraged for development and objectives of transparency.
The field of public company auditing and the securities sector aim to build a fair financial ecosystem where all businesses have access to capital if they demonstrate transparency and accountability.
Upgrading corporate governance through public company audits and securities firms helps businesses attract large foreign investment funds. These organizations typically demand extremely high risk management standards and spotless financial reporting.
Listing and registration for trading
Businesses wishing to list on the HOSE, HNX, or UPCoM exchanges must undergo a rigorous public company and securities sector audit process. This is a crucial step to weed out weak businesses and protect the overall market integrity.
Audit reports for public companies and the securities sector provide regulatory authorities with historical profit data for at least two years. Based on this, market regulators can assess the actual capabilities of the organization applying for listing.
Disclosure of information and professional ethics
All major shareholders and insiders are subject to oversight by the public company's auditing system and the securities sector when conducting transactions. Disclosure of ownership helps prevent price manipulation or insider trading that could harm the market.
Transparency in the auditing of public companies and the securities sector helps protect small investors, who often lack the tools and expertise to independently assess the actual financial situation of businesses.
Legal regulations on auditing public companies and the securities sector.
The Vietnamese legal system has clearly defined the responsibilities of the parties involved in auditing public companies and the securities sector. Article 20 of the 2019 Securities Law emphasizes that annual financial statements must be audited by an approved organization.
The State Securities Commission (SSC) has the right to suspend the qualifications of auditors if it discovers errors in the auditing of public companies and the securities sector. This aims to enhance the deterrent effect and professional responsibility of auditors.
Responsibilities of the audited entity
When auditing public companies and securities firms, businesses must provide complete documentation and timely explanations. Any obstruction or provision of false information will be subject to administrative or criminal penalties depending on the severity of the violation.
List of relevant legal documents
- Law on Securities No. 54/2019/QH14.
- Law on Independent Auditing No. 67/2011/QH12.
- Decree 155/2020/ND-CP Detailed guidelines for the implementation of the Securities Law.
- Circular 96/2020/TT-BTC Guidelines on information disclosure in the market.
Mechanisms of supervision and legal responsibility in auditing public companies and the securities sector.
Auditing of public companies and the securities sector is not just a relationship between the business and the auditing firm. It is subject to multi-layered oversight from the Ministry of Finance, the Vietnam Association of Certified Public Accountants (VACPA), and the securities regulatory authority.
When a listing application is submitted, the accuracy of the public company's audit and the securities sector are the most closely scrutinized factors. Reputable auditing firms are often the top choice to ensure the application is approved quickly.
Handling violations in the securities sector
If the audit report of a publicly traded company and the securities sector contains a qualified opinion, the business may face being placed on the warning list. These are strong measures to maintain discipline and confidence in the stock market.
Every misstep in the auditing of a public company and the securities sector causes cascading losses for all stakeholders. Therefore, establishing robust internal control procedures is the optimal solution for all public companies.
Solutions to improve reporting quality through auditing of public companies and the securities sector.
For audits of public companies and the securities sector to be highly effective, businesses need to prepare a well-organized accounting system. The use of modern accounting software and a team of professional personnel are indispensable requirements.
Furthermore, hiring consulting services before an audit of a public company and in the formal securities sector helps businesses detect errors early. This minimizes the risk of auditors issuing a non-qualified opinion on the report.
An independent board of directors plays a supervisory role in ensuring that the auditing process of public companies and the securities sector is conducted objectively. They ensure that the management does not interfere with the independent work of auditors.
The quality of audits for public companies and the securities sector is directly proportional to the confidence of existing shareholders. A "clean" report is a passport that allows businesses to confidently raise capital through new share issuances.
Conclude
Auditing public companies and the securities sector is an indispensable foundation for the development of a modern market economy. Understanding regulations helps businesses not only comply with the law but also build lasting credibility. A transparent auditing process for public companies and the securities sector is the key to unlocking unlimited growth for the organization.
In MAN – Master Accountant NetworkWe provide comprehensive auditing and tax accounting services for public companies. With a dedicated team of experts, MAN is committed to working with businesses to standardize reporting and ensure absolute compliance in the auditing of public companies and the securities sector. Let MAN help you transform financial figures into solid confidence for investors and shareholders.
Service contact information at MAN – Master Accountant Network
- Address: No. 19A, Street 43, Tan Thuan Ward, Ho Chi Minh City
- Mobile/Zalo: 0903 963 163 – 0903 428 622
- Email: man@man.net.vn
Content production by: Mr. Le Hoang Tuyen – Founder & CEO MAN – Master Accountant Network, Vietnamese CPA Auditor with over 30 years of experience in Accounting, Auditing and Financial Consulting.
Frequently Asked Questions about Auditing Public Companies
Are unlisted public companies required to undergo audits?
Yes. By regulation, all public companies, whether listed or not, must undergo a public company audit and securities sector audit for their annual financial statements before publication.
What is the deadline for publishing the audit report?
Annual audit reports for publicly traded companies and securities firms must be published within 90 days of the end of the fiscal year. Semi-annual audit reports typically have a shorter deadline of 45 days.
What factors determine audit costs?
Costs are typically based on asset size, number of branches, and complexity of the business. The reputation of the firm auditing public companies and the securities sector also determines the fee.
How do qualified audit opinions affect stock prices?
A qualified opinion in the auditing of publicly traded companies and the securities sector is a negative signal. It makes investors concerned about transparency, often leading to selling pressure that causes stock prices to fall.
