Today, internal auditors are not just people who check books, but also strategic "gatekeepers" for the sustainable development of businesses. Decree 05/2019/ND-CPListed companies and state-owned enterprises are required to establish this department to ensure transparency. In the context of complex financial irregularities, a robust control system becomes a critical requirement to protect shareholder interests.
Evidence from the Institute of Internal Auditors (IIA) shows that organizations with effective audit departments reduce the risk of financial fraud by up to 50%. This is especially important when implementing Circular 66/2020/TT-BTC Regarding model regulations, they help standardize processes from risk identification to improvement consulting. This article will provide a comprehensive overview of the profession and how to optimize the value they bring to the organization.
Definition and legal framework of internal auditors.
Internal auditors are professionals who provide independent assurance and advisory services to add value to an organization. They help the organization achieve its goals by applying a systems approach to assess and improve the effectiveness of risk management and operational processes.
In Vietnam, the legal framework for this profession is well-developed. Below is a summary of the most important legal documents that businesses need to be aware of when establishing a dedicated internal audit department.
Summary table of definitions and legal framework for internal auditors
To ensure that internal audits are conducted consistently and in accordance with standards, Vietnamese law has established numerous regulations clearly defining the functions, powers, and operating principles of internal auditors. These regulations not only define the legal framework for businesses but also set professional standards to enhance independence and objectivity in the process of examining and evaluating internal control systems. The table below summarizes some important legal documents and standards related to internal auditors.
| Legal documents | Main content | Applicable subjects |
| Decree 05/2019/ND-CP | Regulations on internal audit procedures, powers, and responsibilities. | Listed companies, state-owned enterprises, and public service units. |
| Circular 66/2020/TT-BTC | Issuing model regulations and guidelines for the implementation of Decree 05. | These units are subject to mandatory internal auditing. |
| Vietnamese Accounting Standards | Ethical principles and professional standards of operation. | Individuals and organizations conduct internal audits. |
The following entities are required to have internal auditors.
According to Article 10 of Decree 05, large enterprises with a profound impact on the financial market are required to establish this department. Compliance not only helps avoid legal risks but also builds strong trust with investors and tax authorities.
Specifically, companies listed on the stock market must have an auditing system to monitor the accuracy of their financial reports. In addition, state-owned enterprises in the banking and insurance sectors are also key entities requiring supervision by specialized auditors.
The role of internal auditors in corporate governance.
Internal auditors act as the "eyes and ears" of the Board of Directors, helping to identify process loopholes that the executive team might overlook. Instead of focusing solely on past figures, they look to the future by anticipating potential risks within the system.
System risk assessment and management
The primary task of an internal auditor is to identify risks that could hinder a business from achieving its business objectives. This includes strategic, financial, operational, and compliance risks related to applicable tax and accounting laws.
Once risks are identified, auditors will analyze the extent of their impact to propose appropriate control measures. This process ensures that business resources are focused on key areas, avoiding waste and loss of both tangible and intangible assets.
Check for compliance with laws and internal regulations.
In the accounting field, internal auditors review the implementation of regulations such as Circular 200/2014/TT-BTC and corporate tax laws. They ensure that all transactions are recorded accurately, with complete documentation, and comply with the prescribed filing deadlines.
Continuous monitoring helps businesses stay prepared for tax audits or independent inspections. This minimizes penalties for administrative errors or misinterpretations of legal regulations, which are frequently changing in the Vietnamese market.
The difference between internal auditors and independent auditors.
Internal auditors are part of the management team, working throughout the year to improve operational processes. In contrast, independent auditors are third parties who verify the accuracy of financial statements at a specific point in time as stipulated by regulations.
The comparison table below will help businesses better distinguish between these two types of audits based on specific operational criteria and reporting objectives.
| Criteria | Internal auditor | Independent audit |
| Reporting entities | Board of Directors, Supervisory Board | Shareholders, Tax Authority, Bank |
| Scope of operation | Comprehensive: Processes, personnel, risks | Focus on Financial Statements |
| Frequency of execution | Throughout the year | Annually (once a year) |
| Main purpose | Improve operational efficiency | Verify the reliability of financial information. |
| Legal status | Organized or outsourced staff | Independent service provider |
Evidence shows that if internal auditors do a good job, the cost of hiring them decreases. independent audit They typically decrease. A well-developed control system helps minimize accounting errors, resulting in profitable investments from both a financial and managerial perspective.
Standard workflow of an internal auditor
A professional internal auditor always adheres to a scientific process to ensure objectivity. According to international standards and Circular 66, this process consists of four stages: Planning, Implementation, Reporting, and Post-audit follow-up.
Risk-based audit planning phase
Before beginning, internal auditors must gather information within the entity to identify high-risk areas. The plan must be approved by the Board of Directors to align with the overall strategy, saving time and focusing on core issues.
Implementation and evidence gathering phase
This phase employs techniques such as interviews, observation, document review, and in-depth data analysis. Internal auditors need to gather sufficient evidence to prove discrepancies, for example, by comparing VAT invoices with actual warehouse receipt records.
Prepare a report and propose improvements.
An audit report should not only list errors but also identify their root causes and proposed solutions. A skilled internal auditor will advise on optimal processes, helping businesses save costs and enhance operational information security.
Requirements regarding professional competence and ethics.
To succeed, an internal auditor needs to possess strong professional knowledge, soft skills, and professional ethics. These are the foundations that create the value of "Assurance," helping organizations operate safely and transparently in the face of market fluctuations.
Extensive professional knowledge
Professionals in this field need to have a thorough understanding of accounting standards (VAS/VFRS), tax laws, and risk management principles according to the COSO framework. A deep understanding of specific business sectors, such as manufacturing or retail, helps internal auditors provide accurate and highly applicable assessments.
Analytical and critical thinking skills
Internal auditors must be able to see through the dry numbers to the core issues. Skills in using modern data analytics tools enable them to handle large volumes of transactions and quickly detect sophisticated signs of financial fraud.
Objectivity and integrity
This is the ultimate requirement in the auditing profession. According to ethical standards, internal auditors must not allow personal gain or pressure from management to influence their results. Honesty helps them protect their personal reputation and the organization's values.
Income statistics and career prospects
There is currently a high demand for internal auditors, especially those with international certifications such as CIA. Salaries for this position are typically higher than those for general accountants due to the complex nature of the work and the high level of accountability required from management.
Below is a table showing the reference salary levels in the Vietnamese market in 2026 for different job positions:
| Experience | Rank | Salary (Million VND/Month) |
| 1-2 years | Employee / Junior | 10 – 15 |
| 3-5 years | Senior Auditor | 18 – 25 |
| 7-10 years | Department Head / Manager | 35 – 60 |
| Over 12 years | Chief Auditor / CAE | 80 – 150+ |
The career advancement opportunities for internal auditors are vast within multinational corporations. You can progress to positions such as Risk Management, Chief Financial Officer, or Supervisory Board member, building a sustainable career in senior management.
Common challenges encountered at work.
Internal auditors face significant pressure, often encountering resistance from the departments being audited. Many employees view auditing as nitpicking, leading to a lack of collaboration and difficulties in gathering information and documentation.
Another challenge is the rapid pace of technological change and sophisticated fraud schemes. Internal auditors must continuously update their knowledge of cybersecurity and IT auditing to protect the organization against emerging technological risks.
Conclude
Internal auditors play an irreplaceable role in building a transparent and secure governance system. In the digital age, possessing a highly skilled audit team is key for businesses to overcome crises and seize growth opportunities. Investing in auditing is a crucial insurance policy for an organization's assets and reputation in a volatile business environment.
Understanding the challenges businesses face, MAN – Master Accountant Network provides in-depth internal audit services. With a team of experienced professionals, we help clients comply with the law and deliver tangible value in process optimization. Let MAN be your partner in standardizing your financial and accounting management systems to the highest international standards.
Other services
- Financial statement audit services
- Internal audit services
- Internal Control System Assessment Service
- Auditing services on request
- Professional tax audit services
- Construction auditing services
- Completed project settlement audit service
Service contact information at MAN – Master Accountant Network
- Address: No. 19A, Street 43, Tan Thuan Ward, Ho Chi Minh City
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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 Internal Auditors
Is it mandatory for internal auditors to have a professional certification?
According to current regulations in Vietnam, those working in this field need a degree in accounting or law and at least two years of practical experience. Certifications such as CIA or CPA are a significant advantage but are not the only mandatory requirements under the law.
Do small businesses need to set up an internal audit department?
Even entities not subject to the mandatory requirements of Decree 05 should still hire periodic audit services. This helps business owners better control cash flow and operational processes, avoiding losses due to a lack of professional monitoring systems.
Do internal auditors have the authority to discipline employees who violate regulations?
Internal auditors are only responsible for detecting irregularities and recommending corrective measures to higher management. The authority to decide on disciplinary actions rests with the human resources department and the Board of Directors, based on labor laws and the specific regulations of each company.
What is the difference between internal audit and the supervisory board?
The Supervisory Board is elected by shareholders to oversee the Board of Directors and the Management Board. Meanwhile, internal auditors are a specialized support team, usually reporting directly to the Supervisory Board to carry out detailed audits.
How can we ensure the independence of internal auditors?
Independence is ensured through a dual reporting mechanism: functional reporting to the Board of Directors and administrative reporting to the CEO. Furthermore, auditors are not allowed to participate in the operation of the processes they will subsequently audit.
