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Ministries disagree on empowering licensing bodies
The Ministry of Justice and Ministry of Finance have not reached a consensus on which official body should be empowered to grant licenses to auditing firms and also have the power to revoke licenses.
Under a draft law on independent auditing, the Ministry of Finance (MOF) will have the power to grant licenses, stop operations and revoke licenses granted to auditing firms. The Ministry of Justice (MOJ) believes that this law does not correspond with the Enterprise Law, which covers all issues relating to business registration and certificate-granting.
MOJ’s Deputy Minister Dinh Trung Tung maintains that registering business and granting certificates are two different administrative procedures, so they should be done at two different state management agencies.
According to Tung, business registration should be conducted at area departments of planning and investment and state management agencies, to which enterprises belong, should be responsible for granting certificates on meeting standards to do business.
“MOF should only take responsibility for certifying that companies have enough conditions to provide auditing services. With the certificates, institutions and individuals will register at departments of planning and investment,” Tung said.
Most auditing firms have expressed agreement with the Ministry of Justice’s viewpoint, reasoning that they, besides the service of examining financial information and verifying financial reports, also provide other kinds of services such as economic consulting, tax services, enterprise valuations and others.
“If state agencies think that auditing is a conditional business and auditing firms should be controlled by only one ministry, the companies may “dodge” the Enterprise Law. If so, state management agencies from other fields will also try to obtain the power to license, stop operations and revoke licenses,” noted Truong Thi Mai, Chair of the National Assembly’s Committee for Social Affairs.
Mai remarked that, besides special fields like finance, banking and insurance, departments of planning and investment should be the only licensing agencies.
“Currently, the Ministry of Health (MOH) grants certificates for the healthcare sector, while the Ministry of Information and Telecommunication (MIT) grants certificates in the publication sector. If we allow MOF to ‘break the regulations’, MOH and MIT will also ask for licensing power in their fields,” Mai added.
MOF not only wants the power to license auditing firms, but they also hope that the National Assembly will grant the power to accept or abrogate the right of firms to audit credit and financial institutions, insurance and public companies, plus securities issuing and trading organizations.
National Assembly’s Economics Committee’s Chair Ha Van Hien responded that, if the National Assembly agrees to MOF’s proposal, this will not come in line with the Law on Credit Institutions (Which stipulates that the central bank has the right to announce the list of auditing firms eligible for auditing banks) or the Securities Law (Which stipulates that the State Securities Commission has the right to announce the list of auditing firms eligible for auditing securities issuance, listing institutions and securities trading institutions).
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