Adding up auditing’s true value to firms

Lucia Real-Martin

After the global economic crisis, emerging countries like Vietnam are reconsidering and reinforcing their financial apparatus.

To create a healthy competitive environment, what Vietnam needs to do is to enhance auditing standards to meet the international demands. VIR talks with Lucia Real-Martin, director of Association of Chartered Certified Accountants’ (ACCA) emerging markets-Asia about this matter.

What do you think is the role of strengthening the current ability of auditing staff to create an attractive business environment in Vietnam?

We believe that audit has a critical role in creating an attractive business environment in Vietnam. With business being globalised, Vietnamese businesses are now not just competing with others in the ASEAN region, but from around the world. which leads to greater interest and expectations.   

That increased interest will mean businesses will be subject to greater scrutiny. International businesses and potential investors will rely on independent audits of Vietnamese organisations to give them confidence that the organisations they seek to do business with are well run and have an excellent chance of sustaining their success in the future. This is why the audit industry has a crucial role to play in the future success of Vietnam.

A strong and stable auditing and accounting environment with qualified accounting professionals will raise the level of professionalism within the corporate and public sectors. This will further strengthen the corporate governance agenda within Vietnam which will benefit both domestic and international investors.

Which favourable conditions can ACCA bring to Vietnam to reach this target?

We have considerable experience of working in the audit industry around the world, and we are delighted to be able to work closely with the State Audit of Vietnam, the Ministry of Finance as well as the Vietnamese accounting professional bodies to ensure that audit standards and quality are maintained.

Through our good working relationship, we share the same objective of developing and improving the quality of accountants and auditors as well as their contribution for the profession. Our globally recognised qualification, which is being achieved by Vietnamese finance professionals, is a clear indication to international organisations that they can expect the highest levels of skill and diligence from Vietnam’s auditors and accountants.

ACCA has been actively promoting the value of audit in Vietnam as well as globally. In recent publications, we explore its value and future, look at what private sector auditors can learn from the public sector, and report on a series of audit roundtables from around the world.

What do you think about the harmonisation of auditing standards in the ASEAN and Vietnam as the country is integrating into the world economies, which requires the close conformation of international common practices and standards?

We believe that wider economy benefits from global standards in accounting and auditing. Global standards such as the International Financial Reporting Standards and the International Standards on Auditing are designed to deliver comparability and transparency at the global level, which help investors and businesses make more informed decisions. Benefits flow from eliminating the differences between national standards regimes and converging around a common international standard.

How will the application of international standards help Vietnam become more attractive to foreign investors?

The adoption of international standards by Vietnamese businesses will enable investors, who are equally comfortable investing in a range of global equities as in national ‘blue-chips’ to be able to compare Vietnamese businesses on a like for like basis with businesses in other countries.

The greater transparency that standards bring means that investors will feel their money is at less risk than using accounts drawn up to standards with which they are not immediately familiar. Using international standards, therefore, is likely to make Vietnam an even more attractive prospect for international inward investment.

Can you comment about Vietnam’s auditing and accounting industry?

We believe Vietnam’s auditing standards are of good quality, and we are working closely with our local partners in the government, professional accountancy bodies, universities and employers to support the development of high quality standards.

Figures from local accounting and auditing professional bodies show that there is a need for more than 9,000 trained and qualified auditors by 2020 and ACCA is committed to helping young Vietnamese by equipping them with the skills they need to become qualified accountants and auditors.