Internal audit consulting is now not just a voluntary requirement but has become a mandatory regulation for many types of businesses. Decree 05/2019/ND-CPEstablishing a robust internal control system helps the board of directors and management identify significant risks early. This allows the company to make accurate strategic decisions and protect shareholder value.
In the context of Vietnam's increasingly integrated economy, errors in taxation, finance, and internal fraud can lead to serious legal consequences. In fact, over 701 listed companies that sought the services of professional internal audit consultants have significantly reduced administrative penalties. This solution optimizes operational processes and enhances transparency. Let's explore the roadmap for building an effective audit system below.
Legal framework for internal auditing in Vietnam
The legal framework for internal auditing in Vietnam is becoming increasingly完善 (perfected), creating a clear foundation for businesses to effectively implement and comply with regulations. Notably, Decree 05/2019/ND-CP stipulates the mandatory subjects and entities for internal auditing. Circular 08/2021/TT-BTC These guidelines establish standard systems. Mastering these documents helps businesses build a properly standardized internal audit department, enhancing transparency and risk management.
Decree 05/2019/ND-CP and the mandatory subjects
Understanding the relevant laws is the first step in implementing internal audit consulting. According to Articles 8 and 9 of Decree 05/2019/ND-CP, internal auditing is mandatory for public interest entities, state-owned enterprises, and large-scale administrative and public service agencies.
Below is a list of entities that are required to establish an internal audit department:
| No. | Type of unit | Terms and conditions apply | Completion deadline |
| 1 | Listed company | All companies listed on the stock exchange. | Before April 1, 2021 |
| 2 | State-owned enterprises | As a parent company operating under a parent-subsidiary model. | According to regulations on state capital |
| 3 | Public service units | Self-financing of recurrent and investment expenditures. | Total assets > 5,000 billion |
Circular 08/2021/TT-BTC on Internal Auditing Standards
When conducting internal audit consultations, experts must strictly adhere to the Vietnamese Internal Auditing Standards issued under Circular 08/2021/TT-BTC. This serves as a guiding principle ensuring independence and objectivity. This document clearly defines the professional competence of auditors throughout their practical work.
Why do businesses need professional internal audit consulting?
In a context where businesses increasingly face operational, financial, and compliance risks, the use of professional internal audit consulting services is more necessary than ever. This not only helps detect errors but also supports businesses in building effective control systems, enhancing transparency, and proactively preventing risks from an early stage.
Identifying and managing systemic risks.
Internal audit consulting services help businesses build a risk matrix covering operations, finance, and compliance. Independent assessments help management identify "blind spots" that accounting or human resources departments often overlook. This ensures that all business operations remain under safe control.
Consultants internal audit Regular reviews of key processes such as purchasing, sales, and inventory management will be conducted. The results from the audit report will serve as a basis for significant improvements in operational performance. At the same time, businesses can proactively prevent unnecessary asset losses.
Ensuring the accuracy and integrity of financial and tax reports.
In the field of accounting and auditing, discrepancies in data often lead to significant tax arrears and late payment penalties. Through internal audit consulting, errors in accounting or unreasonable revenue recognition will be addressed. Experts will help make timely adjustments before the tax authorities conduct an inspection at the business.
The table below illustrates the differences between manual controls and controls supported by internal audit consultants:
| Criteria | Traditional control | After internal audit consultation |
| Data error rate | 5% – 10% | < 1% |
| Closing time | 10-15 days | 3-5 days |
| Fraud detection capabilities | Passive (after it has happened) | Proactive (prevention from the outset) |
The process for implementing internal audit consulting at MAN.
The internal audit consulting process at MAN – Master Accountant Network is systematically structured using a risk-based approach, ensuring effectiveness and practicality for each business. Each implementation step focuses on improving the internal control system, helping businesses not only detect errors but also optimize operations and prevent long-term risks.
Step 1: Survey and assess the current state of the system.
The initial phase of the internal audit consulting process begins with understanding the control environment. We analyze the organizational structure, process flowcharts, and current management policies. The goal is to accurately determine the maturity level of the internal control system (Internal Control Maturity Model).
Step 2: Develop a risk-based audit plan.
Based on the survey results, the internal audit consulting firm will establish an annual audit plan. This plan prioritizes high-risk areas to optimize resources. This approach helps deliver the greatest value to the business in the shortest time at a reasonable cost.
Step 3: Conduct on-site audit and take samples.
This is the stage where auditors conduct interviews, observations, and direct document examinations. Modern internal audit consultants often employ statistical sampling techniques and specialized software. This ensures the representativeness and reliability of the audit evidence collected.
Step 4: Prepare a report and advise on corrective solutions.
After the audit is complete, the internal audit consultant will discuss the findings with management. The final report not only lists the deficiencies but also provides highly feasible recommendations. This solution is always customized to suit the unique business characteristics of each company.
Common types of internal audit consulting services
Businesses can choose from various forms of internal audit consulting depending on their size, resources, and management objectives. Each type of service offers unique benefits, from cost optimization and team enhancement to ensuring compliance with international standards. Choosing the right model will help businesses maximize the value of their internal audit activities.
Full outsourcing
Outsourced internal audit consulting services help businesses save on recruitment and training costs. Businesses will have access to a team of experienced professionals holding international certifications such as CIA, CISA, or ACCA. Your business will have a professional team without having to maintain a large, in-house workforce.
Co-sourcing
With this approach, the internal audit consulting firm will work alongside the organization's existing audit department. This is an optimal solution for projects requiring in-depth expertise or technology transfer. Businesses can both leverage internal personnel and adopt modern audit methodologies.
Evaluating the quality of internal audit (QA) activities
According to international standards, the internal audit department needs to be independently evaluated at least every five years. In this case, the internal audit consultant acts as an objective third party. We will assess whether the department's operations comply with the standards and deliver real value.
Detailed analysis of common risks in accounting and taxation.
In accounting and tax operations, risks are always present if a business lacks a robust control system. These errors not only affect the reliability of the business. financial reports Furthermore, it can lead to tax arrears and penalties from the tax authorities. Early identification of common risks will help businesses proactively prevent them and ensure compliance with legal regulations.
Risks related to inventory and fixed asset management.
During internal audit consultations, the risk of inventory loss is often very high. The main causes are lax inventory management processes or a lack of cross-checking. The lack of regular inventory checks leads to serious discrepancies in financial statements, affecting the company's reputation.
Risks related to tax and invoicing compliance.
Utilizing internal audit consulting services helps businesses review the legality of input invoices. According to Circular 78/2021/TT-BTC, the management of electronic invoices requires absolute accuracy. Experts will help you check the content of economic transactions to ensure that invoices are always valid and legal.
Below is a list of common tax errors discovered during audits:
- VAT deductions are not eligible if the payment is made using non-cash methods.
- Salary and bonus costs are not clearly specified in the employment contract.
- Related-party transactions were not fully declared in accordance with Decree 132/2020/ND-CP.
Optimizing the organizational structure through internal audit consulting.
Internal audit consulting goes beyond simply identifying errors; it's a tool that helps businesses restructure and optimize their operations. Through the application of technology and improvements to the control environment, businesses can enhance governance efficiency, minimize risks, and move towards sustainable long-term development.
Digital transformation in control operations
The current trend in internal audit consulting is the application of AI technology to analyze big data. Instead of manual probabilistic checks, the system can scan entire transaction data to find anomalies. This technology helps prevent financial fraud more thoroughly and transparently than ever before.
Building a culture of integrity and transparency.
A core value that internal audit consulting brings is a change in the mindset of the workforce. When each employee understands that every action is monitored by a fair system, self-discipline will be enhanced. This is a crucial prerequisite for the sustainable development of any organization.
Conclude
Internal audit consulting is the golden key to helping businesses thrive in a volatile business environment. Establishing a professional control system is not simply about complying with the law; it's also about affirming the transparency and credibility of the business to investors and international partners.
MAN – Master Accountant Network proudly offers comprehensive internal audit consulting solutions with a team of highly experienced professionals. We are committed to partnering with businesses to build robust risk management systems and optimize costs. Let us protect the financial and legal security for the sustainable growth of your business.
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
- 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 Internal Audit Consulting
Do small businesses need to undergo internal audit consulting?
While the law doesn't mandate a dedicated internal audit department for small businesses, regular internal audit consultations are essential. They help business owners better manage cash flow and avoid tax risks as they expand.
What is the typical cost for internal audit consulting services?
The cost depends on the scale and complexity of the control process. However, the investment in internal audit consulting is always significantly lower than the risk of tax penalties or asset losses caused by a lack of control.
What is the difference between independent auditing and internal auditing?
Independent audits focus on the integrity of financial reporting for third parties. Internal audit consulting, on the other hand, focuses on risk management, operational improvement, and serving the direct management objectives of the leadership team.
