FINANCIAL STATEMENT AUDIT – WHAT BUSINESSES NEED TO KNOW

Starting from the 2025 financial year, under the revised Law on Independent Audit and Decree 90/2025/NĐ-CP, the scope of entities required to conduct financial statement audits has been significantly expanded.

In addition to the traditional entities such as FDI enterprises, credit institutions, public companies, securities issuers, securities trading organizations, and units utilizing state budget funds, the new regulation now includes large-scale enterprises as part of the mandatory audit group.

Specifically, an enterprise will be subject to mandatory audit if it meets at least 2 out of the following 3 criteria:

• The average number of employees participating in social insurance during the year exceeds 200 people;

• The total annual revenue exceeds VND 300 billion;

• The total assets exceed VND 100 billion.

In this article, we will provide in-depth explanations of what independent audit is, why it is necessary, and the administrative penalties and risks businesses may face if they fail to comply with audit regulations — especially for CEOs, CFOs, Chief Accountants, and business owners preparing financial reports for the upcoming fiscal year.

Key Highlights of Decree 90/2025/NĐ-CP You Should Know

1. Effective Date and Applicability

Decree 90 officially takes effect from April 14, 2025. Enterprises classified as large-scale based on their 2024 financial data will be required to conduct audits for the 2025 financial year.

2. Expansion of Entities Subject to Mandatory Audit

Previously, companies that were unlisted or not state-funded often fell outside the mandatory audit scope. Decree 90 broadens this to include large-scale private enterprises, aiming to promote greater financial transparency and internal governance.

3. Criteria for Identifying Large-Scale Enterprises

An enterprise is considered large-scale if it meets at least 2 out of the following 3 conditions:

• Average number of employees enrolled in social insurance > 200

• Total revenue > VND 300 billion

• Total assets > VND 100 billion

4. How to Calculate These Indicators

• Average number of employees: Total number of employees participating in social insurance each month of the previous year divided by 12 months.

• Total revenue and total assets: Based on the financial statements of the previous fiscal year (assets calculated at year-end).

5. Transitional Regulations

If a company is classified as “large-scale” but fails to meet the criteria for two consecutive years, it will temporarily not be subject to mandatory audit until it qualifies again.

6. Rotation of Auditors

A new requirement is the limit on the duration an auditor can sign audit reports for the same client — no more than 5 consecutive years. This ensures greater independence and avoids overly familiar relationships that may compromise audit quality.

7. Penalties and Risks for Non-Compliance

Enterprises required to conduct audits but fail to do so may face administrative penalties under accounting and financial regulations. They may also be subject to inspections by regulatory authorities. Furthermore, failure to comply can damage the company's reputation, and affect relationships with investors, banks, and business partners.

8. Audit Quality Requirements

Audit reports must comply with Vietnamese Auditing Standards and be performed by licensed audit firms. Properly conducted audits ensure data integrity, risk control, and enhance trust from stakeholders.

9. Recommendations for Businesses to Ensure Compliance

To stay compliant and audit-ready, businesses should:

• Assess now whether they fall under the scope of mandatory audit

• Standardize accounting systems, books, and documentation

• Select a reputable and qualified audit firm that understands the latest legal updates

• Sign audit contracts early to allow sufficient preparation time

• Establish an internal control system to support a smooth audit process

The expanded audit requirements under Decree 90/2025/NĐ-CP are not only a legal obligation, but also an opportunity for businesses to improve financial transparency, enhance credibility, and strengthen internal management.

If you're a CEO, CFO, or Chief Accountant, don’t risk misclassification or delayed preparation that could expose your company to penalties or audit failure.

Take action today:

• Check if your business qualifies as a large-scale enterprise under the new criteria

• Consult a trusted audit firm for advice and financial system standardization

• Plan your audit early to stay ahead of deadlines

With over 20 years of experience in the Vietnamese market and a team of more than 400 professionals in Hanoi and Ho Chi Minh City, RSM is the trusted partner of thousands of businesses — from multinational corporations and FDI companies to listed and private local enterprises.

We offer not only audit, tax, and consulting services, but also support businesses in risk management, operational optimization, and sustainable development. Contact us now for detailed consultation regarding financial statement audits via hotline: 0988 139 090