On January 22nd, 2019, the Government issued Decree No. 05/2019/ND-CP on internal audit. This Decree takes effect from April 1, 2019.
Accordingly, Article 10 of Decree 05/2019/ND-CP stipulates that the following units must perform internal audit, including:
Listed company;
Enterprises where the state owns more than 50% of charter capital are parent companies operating under the model of parent company – subsidiary companies;
State-owned enterprises are parent companies operating under the model of parent company – subsidiary companies.
Besides, businesses that are not in the above cases are encouraged to carry out internal audit.
The above enterprises can hire an independent auditing organization to qualify for audit activities in accordance with the law to provide internal audit services. If an enterprise hires an independent auditing organization to provide an internal audit service, it must ensure the basic principles of internal audit and requirements to ensure compliance with the basic principles of the audit internal.
In summary, with the promulgation of the above Decree 05/2019, the Government has developed a legal framework for internal audit activities, contributing to improving transparency in corporate governance.