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Unlisted firms allowed independent auditors
Unlisted firms need not rely on auditors selected by the State Securities Commission to handle financial reports upon joining the over-the-counter (OTC) market.
The market is under management of Ha Noi Securities Trading Centre and will open in the third quarter of this year.
State Securities Commission made this statement in reponse to queries of investors about the auditing of unlisted firms, after seeing Bach Tuyet Cotton’s situation.
Recently, Bach Tuyet Cotton Co was suspended from trading for 11 days because of inaccurate financial reports issued by the Auditing and Informatic Services Company (AISC).
Accordingly, unlisted enterprises can now hire their own auditors to handle financial reports.
However, if the companies plan to list shares on official bourses, they must use the commission-selected auditors and submit records for the two previous years.
Previously, the commission chose 28 auditors to deal with securities issuers, listed firms and brokerages. Four of the 28 were foreign auditors.
The selected auditors must have chartered capital of at least VND2 billion (US$125,000), according to auditor requirements proposed by the Ministry of Finance in Decision No 89 last October.
An auditing firm must also have at least seven members, and have been in operation for at least three years, according to the decision.
Nguyen Vinh Tam, a lawyer in a well known Ha Noi-based law suit, said that auditing of securities issuers should be stricter, especially for firms joining the controlled OTC market.
"The risk on the OTC market is higher than on the official market. Involved parties must pay more attention to transparency, especially in business performance. Regardless of the auditors – be they selected or unselected auditing firms – enterprises must be aware of the repercussions of careless auditing."
Tam also said that market regulators should have a clear system for auditing on both official and unofficial markets to help better manage activity and ensure appropriate punishment for violators.
The OTC market under management is expected to operate in the third quarter, to help stimulate trading activity on the presently frozen market.
VNN
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