Preparing an audit report is a crucial step in determining the value of an entire audit, as it is the document that management, shareholders, and regulatory bodies rely on to assess the company's financial situation. (According to Clause 12, Article 5) Independent Auditing Law 2011The audit report must clearly state the auditor's opinion after the completion of the audit as per the signed contract. For many internal auditors and chief accountants, the difficulty lies not in gathering evidence but in presenting it correctly according to standards while still highlighting the material issues.
This article summarizes all current regulations, implementation procedures, and practical experiences from our team of experts. MAN – Master Accountant NetworkThis unit has over 30 years of experience in tax, accounting, and auditing consulting in Vietnam. The content is suitable for internal auditors, chief accountants, and those directly responsible for drafting or reviewing audit reports within businesses.
Summary of key aspects of audit report preparation
- Preparing an audit report is the process of drafting a document that presents the auditor's opinion on the fairness and accuracy of the financial statements after the completion of an audit.
- What it is used for: as a legal basis for decisions on borrowing capital, issuing securities, settling taxes, and disclosing financial information.
- This applies to: practicing auditors, audit firms, and entities subject to mandatory audits under legal regulations.
- When needed: immediately after the auditor has gathered sufficient appropriate audit evidence, and before the deadline for public disclosure of financial statements.
- Legal basis: Law on Independent Auditing 2011, Decree 41/2018/ND-CP, Decree 90/2025/ND-CP amending Decree 17/2012/ND-CP.
What is audit reporting? Understanding its legal implications is crucial.
According to the regulations at Independent Auditing Law 2011An audit report is a document prepared by a practicing auditor or audit firm after the completion of an audit, providing an opinion on the financial statements and other audited matters as per the contract. In short, preparing an audit report is the process of compiling all professional conclusions into a legally binding document.
A common mistake made by many internal auditors is that an audit report is not simply a list of errors. It is a concluding document that must reflect the truthfulness and reasonableness of the overall assessment. financial reports on material aspects, based on audit evidence gathered throughout the course of work.
What is the purpose of auditing financial statements when preparing an audit report?
Before preparing the audit report, auditors need to clearly define the objectives of the audit, as this is the basis for selecting appropriate audit procedures.
- Verify the accuracy and fairness of financial statements in accordance with current accounting laws and auditing standards.
- Assess the level of compliance with legal regulations and accounting standards when a business prepares its financial statements.
- Detect, prevent, and promptly report errors, fraud, or legal violations related to financial reporting.
- Enhancing the transparency and objectivity of financial reporting, and protecting the legitimate rights and interests of stakeholders.
- Propose solutions to improve the internal control system and financial reporting process of the enterprise.
Why are businesses required to prepare properly formatted audit reports?
An audit report that is incorrectly formatted or lacks required information may render the entire financial statement incomplete when submitted to regulatory authorities. (According to Clause 2, Article 12) Decree 41/2018/ND-CPBusinesses that submit financial statements without attached audit reports, or that publicly disclose financial statements with incomplete content as required by regulations, may be fined from 10,000,000 to 20,000,000 VND.
Specifically, this penalty applies to the following actions:
- The financial statements were not disclosed in full as required by regulations.
- Submit financial statements without an attached audit report in cases where an audit is mandatory.
- Submitting financial reports to the regulatory authority three months or more late compared to the prescribed deadline.
- Publicly disclosing financial statements without audited reports, or disclosing them more than three months late compared to the prescribed deadline.
Besides the risk of fines, a poorly prepared audit report directly impacts a company's reputation with banks, investors, and shareholders. From this perspective... MAN – Master Accountant NetworkMost disputes between businesses and tax authorities during tax settlement stem from audit reports lacking clear and substantiated evidence, leading to prolonged data reconciliation processes.
What are the mandatory contents when preparing an audit report?
When preparing an audit report, auditors must ensure that all sections comply with Vietnamese auditing standards. Missing any section will render the report invalid during internal quality reviews or inspections by regulatory authorities.
- Number and title: clearly state the issue number, the standard title is “Independent Audit Report”.
- Recipient of the report: Specify the person responsible for receiving the report, usually the board of directors or the management team.
- Introduction: states the name of the audited entity, the name of each report that makes up the financial statement set, a brief reference to significant accounting policies and other disclosures, the end date of the accounting period, and the date of preparation and page number of the audited financial statements.
- The responsibilities of the audited entity and the auditor: clearly define who is responsible for preparing the financial statements and who is responsible for providing an opinion.
- Audit opinion: unqualified or unqualified, with standard sample statement as required.
- The signatures of the two practicing auditors clearly state their full names and professional registration numbers.
- Date of audit report, name and address of the auditing firm.
Types of audit opinions when preparing an audit report.
Choosing the right type of opinion is the most difficult part of preparing an audit report, as it directly affects how readers understand the company's financial condition.
| Audit opinion type | When to apply | Impact on businesses |
| Full acceptance | The financial statements reflect a fair and true view in all material respects. | Increase credibility with banks and investors. |
| Except | There are material errors, but they do not permeate the entire report. | A detailed explanation of the excluded section is needed. |
| Contradictory | Material and pervasive errors affecting the entire financial statement. | High risks involved in borrowing capital and issuing securities. |
| Refusing to comment | Insufficient appropriate audit evidence has been collected. | The financial statements are considered unverified. |
In an unqualified opinion, auditors typically use a statement affirming that the financial statements fairly and reasonably reflect the financial position in all material respects, in accordance with the applicable financial reporting framework. This serves as a clear distinction from qualified or adverse opinions when preparing an audit report.
What is the significance of an audit report for a business?
In addition to meeting legal requirements, a properly prepared audit report also brings many practical benefits to the management of a business.
- Verifying the accuracy and fairness of financial reports helps management understand the true state of finances and business performance.
- The independence of the auditing firm increases the credibility of financial reports to shareholders, investors, and banks.
- Supporting businesses in fulfilling their commitments to financial transparency and compliance with accounting and tax regulations.
- It serves as the legal basis for loan transactions, securities issuance, tax settlements, and investment decisions.
- It helps businesses identify and correct errors or fraud in financial management early on, thereby improving internal governance efficiency.
See more articles at: Top 10 Reputable and Professional Auditing Service Companies in Ho Chi Minh City
The standardized audit report preparation process follows a step-by-step procedure.
A well-structured audit report preparation process helps auditors save time and minimize errors in presentation. Below are the steps that the team of experts at MAN applies when implementing audits for corporate clients.
Step 1: Consolidate the collected audit evidence.
Before preparing the audit report, auditors need to review all records, documents, meeting minutes, and audit procedures performed throughout the audit. This is a fundamental step in determining the appropriate type of audit opinion.
Step 2: Determine the level of importance and the issues that need to be emphasized.
Auditors classify findings according to their impact on the financial statements, thereby deciding which issues should be included in the "Matters of Emphasis" or "Material Issues" section of the audit report.
Step 3: Draft the content according to the standard template.
The audit report should be prepared according to the prescribed structure, including an introduction, responsibilities of the parties, audit opinion, and basis for the opinion. At this stage, the language should be concise, avoiding lengthy explanations that may be difficult for non-expert readers to understand.
Step 4: Cross-check and quality review
Before release, the audit report must undergo at least one round of independent internal review within the auditing firm to ensure consistency between the audit opinion and the evidence gathered.
Step 5: Sign and present to management.
The completed audit report is signed by two practicing auditors and then presented directly to the company's management for discussion of key issues before official publication.
How can I present an audit report that is both up to standard and highlights the key issues?
This is the most common concern for internal auditors and chief accountants. Preparing an audit report that adheres to standard formats is mandatory, but ensuring that business leaders can immediately understand the core issues requires specific presentation skills.
- Separate the “audit opinion” section from the “matter to emphasize” section using bold headings, avoiding combining them into a single long paragraph.
- Using a summary table of significant deviations with specific data instead of verbal descriptions helps leaders quickly grasp the extent of the impact.
- Place a one-page summary at the top of your presentation to management, before going into detail on each item.
- For recurring issues across multiple audit periods, it is necessary to clearly note that these are unresolved issues to create pressure for their complete resolution.
According to experts at MAN – Master Accountant Network With over 30 years of experience in auditing and tax consulting in Vietnam, a good audit report isn't necessarily a long one, but rather one that allows even non-accounting professionals to understand a company's financial risks within the first few minutes of reading.
Common risks when preparing audit reports and how to avoid them.
- Risk 1: Choosing the wrong type of audit opinion: Many young auditors issue unqualified opinions even when material misstatements remain unaddressed, due to time pressure or client relationships. This poses significant legal risks for both the auditor and the audit firm in the event of a retrospective audit.
- Risk 2: Invalid audit report date: Current regulations state that the audit report date must not be earlier than the date the auditor has gathered all the appropriate audit evidence. Errors in dates, seemingly minor, are actually the most frequently cited mistakes by audit quality control authorities.
- Risk 3: Auditor's signature is not valid: According to Article 2 of Decree 90/2025/ND-CP amending Clause 2, Article 16 of Decree 17/2012/ND-CP, practicing auditors are not allowed to sign audit reports for the same audited entity for more than 5 consecutive years. Many audit firms overlook the rotation of auditors signing reports, leading to violations during service quality inspections.
- Risk 4: Lack of basis for the audit opinion: Presenting opinions without clearly stating the basis and evidence leading to those conclusions makes the audit report unconvincing and easily raises doubts about its objectivity when compared with tax authorities or state auditors.
Case Study: Handling situations involving qualified opinions when preparing audit reports
Background
A manufacturing company in Binh Duong had a significant discrepancy between its book inventory and the actual physical inventory at the end of the fiscal year, but the management wanted the audit report to be fully accepted to support their bank loan application.
How MAN handled it.
The team at MAN – Master Accountant Network Additional audit procedures were performed, comparing inventory receipts and issues for the past three months and working directly with the warehouse department to determine the cause of the discrepancies. After determining that the discrepancies had a material but not pervasive impact on the entire financial statement, the audit report was prepared with a qualified opinion, including a detailed explanation of the cause and specific figures in the basis of the opinion.
Result
The company was still able to complete its loan application thanks to a clear explanation that helped the bank understand the true nature of the problem, instead of rejecting the application due to doubts about transparency. The management also had a concrete basis to rectify the warehouse management process in the following quarter.
Audit report preparation solutions and audit services from MAN – Master Accountant Network
For businesses that lack a sufficiently strong internal audit department, or require an independent entity to ensure audit reports meet standards when submitted to regulatory authorities and banks, auditing services from MAN – Master Accountant Network It is designed to directly support the chief accountant throughout the entire process, going beyond simply issuing the final audit report.
MAN's team of CPAs all hold auditing licenses issued by the Ministry of Finance, are committed to client confidentiality, and assume clear legal responsibility for each audit opinion issued. Over 500 clients have returned to use our services for the second time in the past year, the majority of whom are manufacturing and FDI businesses in the Southern region.
Sample audit service packages
Below is a reference price list for financial statement audit services; the actual fee will depend on the size of revenue, the number of branches, and the complexity of each company's documentation.
| Service package | Scope of work | Suitable candidates |
| Basic audit | Auditing the annual financial statements and issuing an independent audit report. | Small and medium-sized enterprises, not yet listed on the stock exchange. |
| Extended audit | Audit and review of the internal control system. | Large-scale manufacturing enterprise with multiple branches. |
| Specialized FDI audit | Audit conducted at the request of the foreign parent company, bilingual reconciliation. | Foreign invested enterprises |
Note: The above price list is for reference only. The specific fee will be quoted in detail by MAN after a thorough assessment of each business's profile and scale.
MAN currently serves clients nationwide, with a strong focus on areas with a high concentration of manufacturing and FDI businesses, such as District 1 and District 7 in Ho Chi Minh City, as well as industrial zones in Binh Duong and Dong Nai provinces. Having a direct presence in these areas allows our team of auditors to gain a thorough understanding of the operational realities of each type of business when preparing audit reports.
Expert opinion: Practical experience in preparing audit reports.
Experts at MAN – Master Accountant Network It's important to note that much of the dispute between auditors and businesses doesn't lie in the figures themselves, but in the wording of the audit opinion. Ambiguous wording in the basis of the opinion can mislead the bank into misunderstanding the actual level of risk posed by the business, leading to a refusal of disbursement even if the issue isn't serious.
Practical experience shows that internal auditors should proactively communicate material findings to independent auditors beforehand, rather than waiting until the audit report is officially released to respond. This approach helps shorten the time to finalize the report and avoids the need for last-minute renegotiations of audit opinions, a time when businesses are often rushing to prepare documents for submission to regulatory authorities.
Another professional tip from the MAN team is to always keep a record of the exchange between the two parties when disagreements arise regarding the presentation of the audit report. This is crucial documentation that helps the audit firm demonstrate its independence and objectivity if it is later subject to a quality audit.
Conclude
Preparing an audit report is not just the final administrative step of an audit; it's a document that determines how a business is perceived by banks, investors, and regulators. A well-prepared audit report that clearly presents key issues will help business leaders make quicker and more accurate decisions, while minimizing legal risks in the event of a retrospective audit.
MAN – Master Accountant Network We partner with businesses throughout the entire process, from financial statement audits to tax and accounting consulting, with a team of experienced CPAs and a commitment to absolute confidentiality. If your business needs to review its audit report preparation process or is looking for a suitable firm, contact us. auditing services For independent and reliable advice, contact MAN – Master Accountant Network for specific guidance tailored to your individual situation.
Other 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
- Financial statement audit services
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
- E-mail: man@man.net.vn
- Google Business Profile: View MAN – Master Accountant Network's Google Business Profile
- LinkedIn Founder: View expert Le Hoang Tuyen's LinkedIn profile.
Responsible for production and professional content review by: Mr. Le Hoang Tuyen – Founder & CEO of MAN – Master Accountant Network, CPA Vietnam with over 30 years of experience in accounting, auditing, taxation, and corporate financial consulting.
Frequently Asked Questions about Preparing Audit Reports
How many signatures are required on an audit report?
The audit report must bear the signatures of two practicing auditors, each signature accompanied by their full name and audit practice registration number as required by regulations.
Who is responsible when an audit report contains errors?
Practicing auditors and audit firms are responsible for the opinions expressed in their audit reports, while the audited entity is responsible for the accuracy of its prepared financial statements.
What is the penalty for a company that fails to submit an audit report?
According to Decree 41/2018/ND-CP, a fine of VND 10,000,000 to VND 20,000,000 applies to the act of submitting financial statements without an attached audit report in cases where auditing is mandatory.
Can an auditor sign an audit report for the same client for multiple consecutive years?
Yes, but according to Decree 90/2025/ND-CP, auditors cannot sign audit reports for the same entity for more than 5 consecutive years. Businesses need to rotate auditors after this period.
Does an audit report with a qualified opinion affect eligibility for bank loans?
There is an impact, but the extent depends on the content being excluded. If the explanation in the audit report is clear enough and not directly related to the ability to repay the debt, the bank may still consider disbursing the loan.
