Internal audit regulations
Crowe Vietnam provides a comprehensive summary of regulations related to internal audit, helping you stay updated on the latest information and changes, while ensuring strict compliance with both Vietnamese and international auditing standards.
- Decree 05/2019/ND-CP: This decree provides an overall framework covering all matters related to the organization and implementation of internal audit activities within enterprises. View details here
- Circular 66/2020/TT-BTC: This circular provides a sample Internal Audit Charter that enterprises can refer to when developing their own internal audit policies. View details here
- Circular 8/2021/TT-BTC: Issued on January 25, 2021, this circular sets out the Vietnamese Internal Audit Standards and the professional ethics principles for internal auditors. View details here
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The Institute of Internal Auditors (IIA) has issued the International Professional Practices Framework (IPPF), which includes:
1. Mission of Internal Audit
2. Mandatory Guidance, including:
- Core Principles for the Professional Practice of Internal Auditing
- Definition of Internal Auditing
- Code of Ethics
- International Standards for the Professional Practice of Internal Auditing (including Attribute Standards and Performance Standards)
3. Recommended Guidance, including:
- Implementation Guidance
- Supplemental Guidance
👉 To access the full materials, visit: theiia.org
Decree 05 shares substantial similarities with three key components of the International Professional Practices Framework (IPPF) issued by the Institute of Internal Auditors (IIA):
1. Code of Ethics
2. Core Principles for the Professional Practice of Internal Auditing
3. Attribute Standards
However, the IPPF additionally includes:
4. Definition of Internal Auditing
5. Performance Standards
6. Supporting materials, including Implementation Guidance and Supplemental Guidance
Definition of “Internal Audit”: While Decree 05 does not provide a formal definition of internal audit, it instead outlines the “Objectives of Internal Audit.” In contrast, the IPPF places strong emphasis on a formal, globally accepted definition of internal audit, which serves as the foundation guiding the development of detailed standards and practices. All related standards and practices are aligned with and built upon this definition.
Role of “the Board” in approving internal audit matters: Decree 05 refers to certain leadership levels with approval authority but does not offer a unified definition of the “Board.” Under international standards, the body approving internal audit matters must be the highest governing body of the organization — and crucially, it should include independent, non-executive members (commonly referred to as “the Board”) to ensure the internal audit function’s independence within the organization.
Decree 05 mentions the “Board of Directors” for listed companies; however, in some governance structures, the board may lack independent or non-executive members, compromising its ability to safeguard internal audit independence. In such cases, the appropriate oversight body would need to be the “Supervisory Board” (Ban Kiểm soát) reporting to the General Meeting of Shareholders to ensure alignment with international expectations.
Independence and Objectivity: Decree 05 appears to define independence largely at the individual level, whereas the IPPF makes a clear distinction:
- Organizational Independence refers to the structural independence of the internal audit function.
- Individual Objectivity refers to the personal impartiality of internal auditors.
The IPPF specifically highlights that these two concepts are often confused, although they carry distinctly different meanings. To clarify, the IPPF provides dedicated, detailed guidance (see Supplemental Guidance) because both concepts are fundamental pillars of effective internal auditing.