Construction auditing firms are becoming indispensable strategic partners for investors, project management boards, and contractors in Vietnam. In the context of increasingly stringent legal regulations on public investment management and construction cost control, choosing a reputable independent auditing firm is the optimal solution to help businesses transparently manage their investment capital. This also helps relevant parties expedite the approval process for completed investment capital settlements.
According to Decree 99/2021/ND-CP According to the Government, auditing the final accounts of completed projects is mandatory for projects using public investment capital. For projects outside the state budget, cooperation with professional construction auditing firms is a powerful tool for investors to review quantities, unit prices, and minimize the risk of disallowance or tax risks arising during financial inspections and audits.
A summary of key aspects of construction auditing firms.
Construction auditing firms are independent organizations that provide services to verify the accuracy and legality of final investment project settlement reports. This service is used to scrutinize the volume, unit prices, equipment costs, and other expenses of a construction project. The target audience includes investors, project management boards, and construction contractors in Vietnam. The audit should be conducted immediately after the project is completed, accepted, and put into use to facilitate the approval of the final settlement.
What kind of work do construction auditing firms perform?
Essentially, construction auditing firms conduct a thorough review of all legal documents, investment capital, construction costs, equipment costs, and other project expenses. This work requires close collaboration between financial accounting knowledge and construction engineering expertise. Auditors compare the as-built drawings with the actual quantities accepted to identify discrepancies.
In addition, construction auditing firms are responsible for checking whether the project complies with legal regulations regarding bidding, contracts, design, and cost estimates. The entire process aims to issue an independent audit report, confirming the legal actual settlement value of the project, which serves as the basis for the investor to submit to the competent authority for approval.
For large-scale projects, basic construction auditing services This also includes evaluating the efficiency of capital utilization and controlling financial risks. This inspection helps prevent losses due to wasted materials, incorrect application of construction standards, or overpayment for work performed.
From MAN's perspective, the work of construction auditing firms is not simply about verifying figures. It's a process of protecting the legal rights of the investor against the risks of contract disputes with contractors and errors in tax obligations to government agencies.
Why should developers hire independent construction auditing firms?
The first reason is the mandatory requirement from the legal framework. According to current regulations, Group A, Group B, and Group C projects using public investment capital must undergo final audit before being submitted for approval. Delays in selecting construction auditing firms can lead to project delays in final settlement, directly affecting the closing of accounts and the handover of fixed assets.
The second reason is the direct economic benefit. Construction in Vietnam is actually very complex, with many unforeseen items, design changes, and fluctuations in material prices. By working with reputable construction auditing firms, investors will receive advice on eliminating unreasonable costs, inflated quantities, or incorrect unit prices compared to the original contract.
Managing tax risks and long-term financial risks is the third reason. Experts at MAN, with 30 years of experience, note that many businesses focus only on technical acceptance documents while neglecting the legitimacy of input invoices and supporting documents. Professional construction auditing firms will help review the legality of material invoices, avoiding the risk of tax authorities scrutinizing reasonable expenses during corporate income tax settlement.
Transparency for stakeholders is the fourth reason. A report from a competent independent auditing firm is the highest legal basis for shareholders, credit institutions, or state inspection agencies to assess the integrity of the project. This helps increase the developer's credibility in the financial and real estate markets.
Legal risks and penalties for failing to conduct a project final audit.
Delays or failure to finalize the investment capital settlement for completed projects will face severe administrative penalties as prescribed by law. Decree 16/2022/ND-CP Regarding administrative penalties for violations in construction activities, investors may be fined from 80 million to 100 million VND if they fail to prepare the final investment settlement documents for the completed project within the prescribed timeframe.
There is a risk of being inspected and having expenses disallowed by state management agencies such as the Government Inspectorate or the State Audit Office. When these agencies investigate and discover incorrect payments, the investor and related parties will have their capital recovered, and may even face criminal prosecution if serious losses of state assets are caused.
The risk of having depreciation expenses for fixed assets rejected by the tax authorities is significant. If a completed project lacks an approved final settlement report or reports from construction auditing firms, the tax authorities have the right to refuse to record depreciation expenses as deductible expenses when calculating corporate income tax, causing substantial financial losses for the project-owning enterprise.
The deadlock in debt collection and contract guarantee repayment between the investor and contractors is a serious issue. Without a final settlement figure verified by an auditing firm, the parties will fall into prolonged disputes, freezing cash flow and negatively impacting the business reputation of both sides in the market.
Standard audit procedures of construction auditing firms
To ensure accuracy and legal compliance, construction auditing firms typically employ a rigorous workflow comprising multiple specialized steps.
Step 1: Conduct a site survey and develop a detailed audit plan.
The auditing team will gather general information about the project scale, total investment, participating contractors, and actual disbursement status. Based on this, construction auditing firms will assess the investor's internal control system and establish an audit plan, identifying key risk areas of the project.
Step 2: Review the project's legal documents and investment sources.
Auditors conduct a thorough review of all legal documents, from investment policies and project approval decisions to design documents, cost estimates, contractor selection results, and construction contracts. This review aims to ensure the legality of the entire investment process and determine the actual capital structure disbursed for the project.
Step 3: Verify the actual quantity of work accepted and completed.
This is the most complex step, requiring auditors to have technical expertise to read the as-built drawings and compare them with the completed work volume confirmation sheet. Construction auditing firms will carefully review hidden items, earthworks, foundations, and underground structures to detect cases of duplicate acceptance or inflated work volumes compared to actual construction.
Step 4: Verify the application of construction unit prices and norms.
This step focuses on comparing the payment unit prices with the terms of the contract (lump-sum contract, fixed-price contract, or adjustable-price contract). For items arising outside the contract, construction auditing firms will check the legality of the approval of the new unit prices and their conformity with market prices at the time of occurrence.
Step 5: Review equipment costs and other project expenses.
Auditors review all invoices and supporting documents for equipment procurement, transportation costs, installation, commissioning, and certificates of origin (CO, CQ). For other costs such as project management, supervision consulting, and insurance, auditors will check whether the allocation and expenditure exceed the percentage limits stipulated by the Ministry of Construction.
Step 6: Compile data, draft report, and discuss with stakeholders.
After completing the inspection, the construction auditing firms will compile the audit findings and quantify the discrepancies that need to be deducted from the final settlement. A face-to-face meeting will be held between the investor, the auditing firm, and the contractors to discuss and clarify the discrepancies before reaching a final agreement.
Step 7: Issue the official final audit report.
Based on the agreed-upon results, the auditing firm will issue the official final investment capital settlement audit report. This report is an important legal document signed by the practicing auditor and the legal representative of the auditing firm, ready to be submitted to the settlement approval authority.
Criteria for evaluating and selecting reputable construction auditing firms.
Choosing the wrong auditing firm can lead to the final settlement report not being accepted by the state authorities, or to overlooking serious financial risks. Therefore, investors need to carefully consider the following criteria:
- First, the legal capacity and professional license of the business must be considered. The selected firm must be on the list of qualified auditing firms published annually by the Ministry of Finance. In particular, for large projects or projects funded by the state budget, the auditing firm must have a sufficient number of certified public accountants (CPAs) with specialized expertise in construction.
- Next is the practical experience of the personnel directly involved in the project. Reputable construction auditing firms often possess a team of dual-purpose experts, knowledgeable in both financial accounting and civil engineering or construction economics. Their understanding of the specific standards and unit prices of each locality is a significant advantage that helps expedite the data verification process.
- Finally, reputation and professional ethics are demonstrated through a list of similar projects successfully completed. Investors should prioritize firms with rigorous audit quality control processes, a commitment to confidentiality, and clear liability for damages as stipulated in the audit service contract.
The table below compares the various construction auditing firms currently available on the market, helping investors easily choose the one that best suits the scale of their project:
| Comparison criteria | The Big4 international auditing firms | Large local firm group (MAN – Master Accountant Network…) | Small-scale auditing firms |
| Suitable for the segment | These are extremely large FDI projects, projects requiring reports that meet international standards. | Large-scale government-funded projects, medium and large-scale private projects, and multinational corporations in Vietnam. | Small-scale project, local civil engineering work. |
| Professional strengths | International standard processes, strong global brand. | Our team of experts has over 30 years of experience and a deep understanding of the practical aspects of tax risk management and Vietnamese law. | Very low costs, maximum flexibility in the workflow. |
| Implementation time | It often takes a long time due to the complex internal review process. | Fast, flexible, and supportive, closely following the investor's progress in fulfilling their requirements. | Fast but carries a high risk of errors in documentation due to a lack of specialized personnel. |
| Service fee | Very high, usually calculated in foreign currency and based on hourly rates. | Reasonable and cost-effective investment, transparent pricing based on project scale. | Low price makes it easy to compete on price. |
How are construction audit fees calculated?
Construction audit fees are not applied arbitrarily but adhere to the State's legal framework as well as commercial agreements based on the scale of the project. For projects using public investment capital, construction audit service fees are determined based on a percentage rate (%) calculated on the total investment value or the proposed settlement value, as guided by Circular 96/2021/TT-BTC of the Ministry of Finance.
For projects outside the state budget, construction auditing firms will provide quotes based on an assessment of the project's complexity, the number of contract packages, the quality of completion documents, and the project's construction site. The service fees for auditing construction projects, such as industrial plants and factories, often differ from those for transportation infrastructure or office buildings due to the significant cost of imported equipment.
Typically, the contract value construction auditing services This will include all costs for on-site surveys, engineer and auditor personnel fees, and report issuance costs. Investors should note that choosing a construction audit package with excessively low prices may carry the risk of a superficial audit, failing to detect systemic errors in payment records, leading to greater losses during subsequent inspections.
Detailed price list for construction audit services at MAN.
To give your company an overview and help you prepare your budget effectively, MAN – Master Accountant Network would like to present the following table to our valued customers. basic construction audit fees Details apply to projects outside the state budget and private projects. This fee schedule is established with specific cash values to help investors easily estimate their budget:
| Total project investment capital (Unit: VND) | Civil Engineering & High-Rise Buildings (Approximate Fee in VND) | Industrial & Factory Buildings (Approximate cost in VND) | Transportation and Infrastructure Projects (Approximate cost in VND) | The accompanying support services are integrated. |
| Under 20 billion | 25.000.000 – 70.000.000 | 30.000.000 – 80.000.000 | 35.000.000 – 90.000.000 | Verify legal documents, compare drawing quantities with actual acceptance, and review the validity of input invoices (100%). |
| From 20 billion to under 50 billion | 70.000.000 – 150.000.000 | 80.000.000 – 170.000.000 | 90.000.000 – 190.000.000 | This includes the entire package under 20 billion VND, plus consultation on handling additional documents outside the contract, optimizing costs for a reasonable price. |
| From 50 billion to under 100 billion | 150.000.000 – 250.000.000 | 170.000.000 – 290.000.000 | 190.000.000 – 330.000.000 | Comprehensive audit of tax settlement documents, tax risk management consulting for construction projects, and direct support in explaining matters to relevant government agencies. |
| From 100 billion to under 300 billion | 250.000.000 – 550.000.000 | 290.000.000 – 650.000.000 | 330.000.000 – 750.000.000 | Premium service package: In-depth analysis of subcontractor tax risks, support for reviewing high-risk invoices, and rolling audits. |
| From 300 billion to under 500 billion | 550.000.000 – 900.000.000 | 650.000.000 – 1.050.000.000 | 750.000.000 – 1.200.000.000 | Conduct internal project control audits, assign seconded personnel for direct on-site coordination, and optimize the overall tax settlement plan. |
| Over 500 billion | Contact directly | Contact directly | Contact directly | Customized solutions, rolling audits based on actual construction progress, and comprehensive financial and tax structure consulting. |
Please note the service price list:
- The above service price list is for reference only, to help businesses easily prepare preliminary budget estimates for their projects.
- Please contact MAN directly for free consultation and a quote that is optimally designed and best suited to your business needs.
- The fees mentioned above do not include value added tax (VAT) and are calculated based on the actual proposed settlement value of the project.
- The actual costs will be agreed upon and fixed in the audit service contract, with no additional fees beyond the agreed-upon list.
- For projects in remote or geographically dispersed areas, the fee may vary slightly from 5% to 10% to cover the costs of field surveys by the technical expert team.
Why is MAN a trusted partner for construction audit services in Vietnam?
MAN – Master Accountant Network proudly stands as one of the leading and most reputable construction auditing firms in the Vietnamese market. We provide solutions. audit Comprehensive, helping investors thoroughly resolve obstacles in completing the final investment capital settlement documents. With a combination of financial knowledge and construction engineering expertise, auditing services MAN always ensures accuracy, objectivity, and strict adherence to legal regulations.
MAN's outstanding difference lies in its team of experts with over 30 years of practical experience. We don't just check the numbers on paper; we also have a deep understanding of the realities of tax risk management in Vietnam. This expertise allows MAN to easily identify potential risks related to illegal invoices, non-deductible expenses, and common construction accounting errors, thereby providing the most optimal solutions for businesses.
Geographically, MAN provides auditing services nationwide. We have a strong advantage in rapid deployment in major economic centers and industrial zones such as District 1 and District 7 (Ho Chi Minh City), Binh Duong, Dong Nai, Long An, and Hanoi. Our understanding of the specific construction management and tax policies of each locality allows MAN to expedite the process of working with state management agencies when explaining final settlement figures.
In addition to construction auditing services, MAN offers a diverse ecosystem of financial services including financial statement auditing, comprehensive accounting services, and in-depth tax consulting. We are committed to the highest legal responsibility for the reports we issue, while also applying a policy of absolute client confidentiality in accordance with international standards. The fact that over 500 large corporations and FDI businesses have trusted and partnered with MAN over the years is the clearest evidence of the quality of our services.
A real-world case study from MAN – Master Accountant Network
To help businesses better visualize the actual value of the service, here is a summary of a challenging situation that MAN's experts successfully handled for a major industrial plant project investor in Binh Duong.
- Project contextThe electronic component manufacturing plant construction project has a total proposed investment of 320 billion VND. The investor is facing significant difficulties as the previous project management board handed over incomplete documents, many construction items outside the initial contract lack approved supplementary cost estimates, and VAT invoices from some subcontractors show signs of tax risk due to the contractor's company having ceased operations.
- Solutions from MAN – Master Accountant NetworkMAN's team of experienced construction engineers and auditors immediately arrived at the construction site to conduct measurements and surveys of hidden items to compare with the as-built drawings. Simultaneously, MAN's tax risk management experts reviewed and categorized the entire system of input invoices and documents, and contacted the tax authorities directly to verify the legality of invoices from contractors who had ceased operations.
- Results achievedMAN helped the investor identify and reasonably deduct over 12 billion VND in costs due to contractors duplicating quantities and applying incorrect standard unit prices. In particular, through MAN's timely professional consulting solutions, the investor was able to legalize all incurred costs worth 25 billion VND in accordance with construction laws, avoiding the risk of being scrutinized by the tax authorities during corporate income tax settlement, successfully protecting the project's cash flow.
Expert opinion from MAN on tax risks in construction audits.
Managing tax risks in construction investment projects is always a headache for every business owner in Vietnam. Financial and auditing experts at MAN, with over 30 years of experience, have compiled and identified the most common tax risks that investors frequently encounter, as follows:
- The biggest risk relates to the legality of invoices for construction materials. Many subcontractors, in an attempt to optimize costs, use invoices from "phantom" businesses or businesses that ceased operations before the invoices were issued. During tax audits, this becomes problematic if companies are not thoroughly vetted. basic construction audit Previously, all construction costs corresponding to these invoices would be disallowed by the tax authorities, and businesses could face heavy penalties for tax evasion.
- The second risk is the inconsistency between the technical acceptance schedule and the timing of financial invoice issuance. According to regulations, invoices must be issued immediately upon completion of the work acceptance report (either in stages or for the entire project). However, in reality, many contractors wait until the final settlement of the entire project before issuing invoices all at once. This discrepancy leads to businesses being penalized for late payment of VAT and corporate income tax due to incorrect recording of revenue and expenses in the wrong accounting period.
- The third risk lies in the allocation of costs for imported equipment and project management expenses. Many businesses struggle with capitalizing costs incurred during construction investment into the original cost of fixed assets. Incorrect capitalization (such as including normal production and business costs in the original cost of investment or vice versa) will lead to incorrect depreciation, directly affecting business results and the amount of corporate income tax payable annually.
- To optimize costs and avoid the aforementioned risks, experts at MAN recommend that businesses proactively hire construction audit services in parallel with the project's construction progress, rather than waiting until the entire project is completed. Phased audits will help detect and address errors in invoices, documents, and accepted quantities immediately, ensuring absolute safety for future tax settlement documents.
Conclude
Construction auditing firms play a crucial role in ensuring the transparency, accuracy, and legality of project financial data before commissioning and use. Through thorough review of the volume, unit prices, and legal aspects of the entire project, auditing services help investors and contractors minimize risks related to cost overruns, legal risks, and especially serious tax risks during business audits.
If your business is looking for a reputable auditing partner to support your investment projects, contact MAN – Master Accountant Network today. With a team of experts boasting over 30 years of practical experience and a deep understanding of tax risk management in Vietnam, we are committed to providing professional construction auditing solutions that optimize costs and offer maximum protection for your investment capital.
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 Construction Auditing Firms
When is it mandatory for a construction project to hire an independent construction audit firm?
According to current Vietnamese law, all projects using public investment capital or non-public state investment capital with a total investment level of Group B or higher are required to undergo a final audit by an independent auditing firm before submitting the final investment capital settlement to the competent authority for approval. For projects using other sources of capital, independent auditing is not mandatory by law but is necessary to protect the legitimate interests of the investor and ensure financial transparency.
What is the deadline for submitting the final project settlement report after acceptance and handover?
The deadline for submitting final settlement reports is clearly defined depending on the project scale. For Group A projects, the deadline is 9 months; for Group B projects, it is 6 months; and for Group C projects, it is 3 months from the date of signing the handover minutes for putting the construction into use. Late submission of final settlement reports beyond this deadline will result in the investor facing administrative penalties for violations in construction activities as stipulated by the Government.
Are the costs of hiring a construction auditing firm considered reasonable project expenses?
Yes. The cost of hiring an independent auditing firm to conduct an audit of the completed investment capital settlement is a legitimate expense item, belonging to the "other expenses" category in the total investment of the project. This expense is fully permitted to be accounted for in the original cost of the fixed assets of the project for depreciation purposes and is considered a reasonable expense deductible when determining the corporate income tax of the investor.
Will the auditing firm be held liable if the final settlement figures are later found to be inaccurate?
Yes. Construction auditing firms and auditors signing audit reports are fully responsible before the law and clients for the accuracy and objectivity of the data and assessments in the issued audit report. In cases where negligence causes significant discrepancies leading to losses of state budget funds or financial damage to the investor, the auditing firm must compensate for the damages and may have its professional license revoked.
What documents does a business need to prepare before a construction audit?
The investor needs to prepare three main groups of documents, including: Legal documents (investment policy, project approval, design documents, cost estimates, winning bid decision, contract); Settlement documents (as-built drawings, volume acceptance minutes, phase acceptance minutes, final settlement value calculation sheet); and Financial documents (VAT invoices for materials and equipment procurement, bank payment documents, disbursed capital reports).
