Internal auditors are personnel who perform independent, objective assurance and advisory activities to increase value and improve organizational operations. In the context of the digital economy, this role is not merely about data reconciliation but has become a strategic partner helping the Board of Directors identify system vulnerabilities early.
According to data from the Institute of Internal Auditors (IIA), companies with professional internal control departments reduce losses from financial fraud by up to 40%. In Vietnam, Decree 05/2019/ND-CP The establishment of a mandatory legal framework for internal auditing in listed companies has affirmed the irreplaceable status of this position. Join MAN – Master Accountant Network for an in-depth analysis of this career path.
Legal framework and requirements for becoming an internal auditor in Vietnam
The promulgation of Decree 05/2019/ND-CP and Circular 8/2021/TT-BTC These regulations have marked a major turning point for the industry. They redefine the responsibilities of internal auditors and set stringent professional and ethical standards to ensure transparency in corporate financial systems.
Based on Article 11 of Decree 05/2019/ND-CP, individuals performing control duties must meet the required qualifications in terms of education and experience. Personnel must possess a university degree in Accounting, Auditing, Finance, or Law. Furthermore, candidates must have at least two years of practical work experience in directly related fields.
Professional competency standards as per current regulations.
In addition to academic qualifications, internal auditors are encouraged to possess international certifications such as CIA or CISA to enhance their credibility. A thorough understanding of auditing standards (VSA) and tax regulations is a prerequisite for accurately assessing a company's compliance before regulatory inspections.
| Criteria | Detailed requirements | Legal basis |
| Educational level | University degree or higher (Accounting, Auditing, Law, Finance) | Decree 05/2019/ND-CP |
| Practical experience | Minimum 2 years of relevant professional experience. | Article 11 of Decree 05 |
| Supplementary knowledge | Tax law, Management accounting, Risk management | IIA & VSA Standards |
| Priority Certificate | CIA, CPA, ACCA, CISA | Expert recommendation |
Professional ethics and independence
Independence is the "soul" of the profession. An internal auditor is not permitted to audit activities they directly managed within the previous 12 months. Objectivity helps them make honest assessments, preventing self-serving behavior that could harm the organization's budget.
The core functions of internal auditors in a management system.
The role of an internal auditor is not just to find errors, but to create solutions. The functions of an internal auditor include: evaluating control systems, risk management, and ensuring compliance. Each pillar requires in-depth analysis of cash flows and actual operating processes within the entity.
Through review, internal auditors help businesses detect market, credit, or operational risks early. This is especially important at multinational corporations, where discrepancies in transfer pricing policies or tax reporting can lead to billions of dong in fines from government agencies.
Evaluating the internal control system (ICS)
Internal control systems are likened to a company's "immune system." Internal auditors are responsible for checking whether the control points are functioning as designed. For example, in the purchasing process, the separation of tasks between approval and payment must be monitored to prevent collusion.
Risk management and fraud prevention
Fraud often occurs when there is a “fraud triangle”: Opportunity, Pressure, and Rationalization. Internal auditors play a role in eliminating the “opportunity” by establishing technical barriers. Analyzing unusual data in the ledger is often a crucial clue in uncovering cases of embezzlement.
Consulting on improving operational processes.
This is the most important added value. Instead of simply pointing out errors, professional internal auditors will propose cost-optimization solutions. These recommendations help the Board of Directors restructure the organization, eliminating unnecessary intermediate steps that waste significant financial resources.
Detailed workflow of an internal auditor
To ensure quality, all audits must adhere to a four-stage process: Planning, Execution, Reporting, and Follow-up. Each stage requires internal auditors to maintain complete documentation, ensuring evidentiary value in accordance with current Vietnamese Accounting Law.
During the planning phase, risk-based auditing is crucial. Internal auditors need to focus resources on high-risk areas such as inventory or bad debts. Thorough planning optimizes time and ensures effective audits.
Implementation and evidence gathering phase
Here, techniques such as interviews, observation, and document comparison are applied. Internal auditors often use supporting software to extract data from ERP systems. Technology helps increase accuracy and shorten the time compared to traditional manual auditing methods within businesses.
Prepare an audit report and recommendations.
An audit report is a product that demonstrates professional competence. A quality report must analyze the root causes and potential consequences of irregularities. Internal auditors need to present concisely to the Board of Directors to reach a consensus on a plan to rectify the identified deficiencies.
Distinguishing between internal auditors and independent auditors.
Many people confuse these two roles, but their nature and objectives are distinctly different. While internal auditors serve the governance and executive interests, independent auditors aim to verify the integrity of financial statements for shareholders, banks, and tax authorities.
Below is a comparison table to help businesses clearly define their roles:
| Criteria | Internal auditor | Independent Auditor (External) |
| Reporting entities | Board of Directors | Shareholders, Government Agencies |
| Main objective | Improve operations and risk management. | Verify the accuracy of the financial statements. |
| Scope of work | All organizational activities | These are mainly financial transactions. |
| Continuity | Perform this regularly throughout the year. | Performed periodically on a quarterly/annual basis. |
| Legal relationship | Staff or hire a consultant | An independent external consulting firm |
Collaboration between the two parties is absolutely essential. Independent auditors can rely on the internal auditor's review findings to reduce the amount of detailed testing required. This helps businesses save significantly on annual audit costs while still ensuring financial security.
Essential skills for success in internal auditing.
Success in this industry demands more than just numerical knowledge. A good internal auditor needs critical thinking skills to avoid accepting superficial explanations. The ability to "read" the risks behind the seemingly perfect numbers in financial reports is a skill that requires years of practical training.
Communication and negotiation skills are also extremely important. When performing their duties, internal auditors often face resistance from departments. Convincing them that the audit is to help, not to punish, requires tact and a professional, objective attitude.
Data analytics and technology capabilities
In the Big Data era, proficiency in SQL, Python, or specialized auditing software is a significant advantage. Modern internal auditors must process millions of lines of data to find anomalous trends—something undetectable by the naked eye in traditional, dense Excel files.
Legal and tax acumen
The Vietnamese legal system frequently changes its circulars and decrees. An internal auditor who fails to keep up with the latest VAT and corporate income tax policies may make inaccurate assessments. This makes businesses vulnerable to heavy tax arrears when authorities conduct actual tax audits.
Salary and career progression for internal auditors
This profession offers a stable income and high status. Depending on the size of the company, the income of an internal auditor varies. In large corporations or banks, the compensation often includes many attractive benefits commensurate with the responsibility of protecting the organization's assets.
The career progression path begins as an intern, progresses to full-time employee, team leader, and finally to Chief Auditor (CAE). Long-serving internal auditors often have the opportunity to become CFOs or members of the Board of Directors. A deep understanding of every aspect of operations provides a solid foundation for a successful career.
- Entry-level (1-3 years): Salaries range from 10 to 15 million VND per month.
- Senior level (3-6 years): Salary ranges from 18 to 30 million VND per month, professional certification required.
- Manager/Director level (>8 years): Salaries can exceed 50-100 million VND per month.
Common challenges and difficulties encountered in practice.
Despite the promising outlook, internal auditors face immense pressure. Conflicts of interest are a common challenge. Sometimes, audit findings touch upon "special interest groups," requiring auditors to possess strong political acumen and unwavering support from top management.
Another challenge is the ever-changing landscape of financial technology. High-tech crimes are becoming increasingly sophisticated, forcing internal auditors to constantly learn. Without continuous updating, personnel will quickly become outdated and lose the ability to protect the organization against modern risks.
Conclude
Internal auditors are the loyal "guardians" that help businesses navigate market storms and legal risks. Investing in them is key. internal control system Professionalism is not a wasted expense. It's a smart investment to protect profits and maintain sustainable growth for the organization.
If your business needs to establish a process control or evaluation department, MAN – Master Accountant Network is ready to assist. We offer outsourced professional internal auditors with in-depth knowledge of tax laws and international standards. Contact MAN today for peace of mind while focusing on business growth.
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 the Internal Auditor Profession
What major do I need to study to pursue this career?
You should graduate from university with a degree in Accounting, Auditing, or Finance. However, students majoring in Law or Information Systems can also pursue this path if they acquire sufficient professional knowledge and auditing certifications.
What size business should have an audit department?
The law mandates that listed companies must have internal auditors. For private enterprises, if revenue exceeds VND 100 billion, hiring internal auditors is the optimal solution to protect assets and control costs effectively.
How valuable is a CIA certification?
CIA is the gold standard international certification specifically for the internal auditing profession. Possessing CIA provides internal auditors with globally standardized knowledge and opportunities to work at multinational corporations with competitive salaries.
