Internal Audit

Setting up an Internal Audit function in private sector

Our Private Equity Survey 2019 revealed that most private companies are over-confident in their corporate governance. However, in the view of experts, corporate governance in Vietnam is still poor.

Improper management practices and lack of effective corporate governance are hindering Vietnamese firms’ competitiveness, making Vietnamese businesses “slow to grow”.

Internal Audit plays a key part in the corporate governance. With effort to enhance corporate governance in Vietnam market, the Government issued Decree 05/2019/ND-CP (“Decree 05”) on Internal Audit (IA) which came into effect on 1 April 2019. The Decree 05 applies to state regulatory authorities, state-owned public service organisations as well as listed companies and state-owned enterprises to implement and adopt IA practices.

While the requirement is not compulsory for private companies, setting up an appropriate Internal Audit function is one key part in enhancing corporate governance, especially when your operation reaches a sizable level, or when external funding is needed for growth.

In this publication, we would like to provide you with a step-by-step guidance on setting up a new IA function, focusing on:

1. Internal Audit’s value proposition

2. Steps for setting up a new Internal Audit function

3. Seek professional support when needed