Quản lý nhà nước đối với kiểm toán độc lập ở việt nam TT TIENG ANH

MINISTRY OF EDUCATION AND TRAINING THUONGMAI UNIVERSITY (TMU) NGUYEN THI HA STATE GOVERNANCE OF EXTERNAL AUDIT IN VIETNAM Major : Economic Management Code : 931.01.10 SUMMARY OF DOCTORAL THESIS IN ECONOMICS Hanoi, 2021 The work was completed at: Thuongmai University Science instructor: Instructor Assoc Prof., Dr Pham Thi Tue Instructor 2: Assoc Prof., Dr Do Minh Thanh Review 1: Review 2: Review 3: Thesis will be protected before the thesis review board meeting at …………………………………………………………………………………… The dissertation can be found at: National Library Library of Thuongmai University LIST OF WORK RELATED TO THE THESIS HAS BEEN PUBLISHED Nguyen Thi Ha (2016), “The relationship between costs and benefits – The big obstacle for fiscal transparency in SMEs”, Industry and trade magazine Nguyen Thi Ha (2017), “Internal audit – The third important defence line in managing rishs throughout the bank”, Industry and trade magazine Nguyen Thi Ha (2018), “State governance of external audit services in Vietnam”, Industry and trade magazine Nguyen Thi Ha (2019), “Fourth Industrial Revolution - Opportunities and challenges for Accounting and Auditing training in Vietnam”, National science seminar “Vietnam Accounting - Auditing in the context of the 4.0 technology revolution, opportunities and challenges” Nguyen Thi Ha (2019), “Design of Internal control for cash payment process at customer addresses for commercial banks”, National science seminar yearbook Nguyen Thi Ha (2020), “Management and control of independent audit services quanlity in countries – issues for Vietnam”, Finance magazine INTRODUCTION The necessity of the subject The theory of asymmetric information has shown that, there is always the fact that the parties involved in a transaction reluctantly hiden unfavourable information, inflate beneficial information, and provide unfair information The theory of the relationship between costs and benefits States that the parties providing financial information always concern the costs of providing information and the benefits that information brings To provide transparent financial information, there will inevitably have costs increasing and sometimes even the disadvantages that reduce the benefit of the providing parties Information asymmetry and the relationship between costs and benefits is the heavy barrier which influence on the quality of financial information In the economy market, the quality of economic and financial information is very important for the market's response because the spread of information will greatly affect the decision making of many objects in economy External audit is born to meet the needs of using financial information of entities in the economy and has become an indispensable activity in the operation of the economy in order to ensure market transparency, create a trust for investors and create motivation for the economic development In the process of providing audit services, there will always exist conflicts of interest between entities in the economy Therefore, there is a need for State governance to affect to and reduce conflicts and harmonize interests between stakeholders Research about successful economic management models of other countries shows that external audit is a conditional business activity that cannot be regulated by the free market but requires State governance and management to achieve to the target of generally managing the whole economy and providing the economy with a reliable, public, and transparent economic-financial information system In fact, up to now, there has not been a complete and comprehensive theoretical study on the State governance of the external audit, this is the research gap for the implementation of the thesis In Vietnam, external audit has step by step approved its position and prestige in the economy State governance toward external audit in Vietnam has made positive changes, however, there are still many shortcomings and limitations 30 years of applying is a long enough time to carry out summative studies on the State governance toward external audit in Vietnam However, there has not been a complete study on the State governance toward external audit This shows that it is necessary to have a complete, comprehensive study and use a quantitative model to analyze and evaluate the State governance toward external audit in Vietnam in terms of managing content and influencing factors and a full set of evaluation criteria, from which people can draw the outcome and the remain problems State governance toward external audit in Vietnam Stemming from the necessity of both theory and practice, I choose the topic of “Quản lý nhà nước kiểm toán độc lập Việt Nam” (State governance of external audit in Vietnam) for my doctoral thesis 2 Research objective and research tasks Research objective: The research objective of the thesis is to provide the scientific and practical bases to contribute to the completement of the State governance of external audit in Vietnam Research tasks: First, to systematize the theoretical bases of State governance of external audit in Vietnam; Second, to survey and evaluate the current situation of the State governance, according to the evaluation criteria and factors that can affect the State governance of external audit in Vietnam; Third, comment on the succeed, limitations and shortcomings as well as the causes of the limitations and shortcomings in the State governance of external audit in Vietnam; Research question There are questions to be solved in the thesis, included: Question 1: What is the differences between State governance of external audit in Vietnam and other countries? Question 2: What factors the can affect the State governance of external audit What criteria are used to evaluate the State governance of external audit? Question 3: How is the current situation of State governance? How the current situation according to the evaluation criteria and factors affects State governance of external audit in Vietnam? Question 4: What State governance of external audit in Vietnam has achieved and what are the shortcomings and limitations? What are the causes of these shortcomings and limitations? Question 5: In order to improve shortcomings and limitations in Vietnam, in which aspect that Vietnam government should improve? And what measures should be used to support State governance of external audit in Vietnam? Research object and research scope Research object: The thesis focuses on researching the theoretical and practical basis of State governance of external audit; State governance contents; evaluation criteria and factors affecting the State governance of external audit Research scope About content: The thesis researches the content of State governance of external audit in the direction of assessing the management process approach: (i) Building a legal system for external audit; (ii) Organize the implementation of policies and laws toward external audit; (iii) Inspection and supervision of external audit In order to ensure the major in depth, the thesis focuses on researching the assurance services provided by external audit, the non-assurance services that are not part of the research content of the thesis About management subjects: Participating in the State governance of external audit includes many subjects: The National Assembly, the Government, the Ministry of Finance and other relevant ministries and central branches, the People's Committees at all levels, etc Beside the general introduction of the managing model, the thesis focuses on the management activities of the main subject, which is the Ministry of Finance, a specialized management agency with the role of directly planning policy and organizing the implementation of State governance of external audit in Vietnam About time and duration: the thesis focused on State governance of external audit in Vietnam from 1991 upto now Proposing orientations and some solutions to improve the State governance of external audit in Vietnam upto 2025 with a vision upto 2030 New contributions of the thesis Academic and theoretical contributions: The thesis systemize and clarify even more about the State governance of external audit Particularly, based on the theory of “Quản trị nhà nước tốt” (Good governance), the thesis builds up a completed set of evaluation criteria of State governance of external audit (State governance of external audit Indicators – SGEAI), including efficiency, effectiveness, suitability and sustainability New researching discovery and suggestions: Through survey results and quantitative analysis, the thesis shows a gap from policy making to the organization and implementation of policies on State management for external audit These statements are expressed through the IPA model and the Kano - IPA integration matrix From the researching results, the thesis has proposed solutions to improve the State governance of external audit in Vietnam, especicaly, the thesis emphasizes the group of solutions to improve the legal system and organization and implementation of policies and laws toward external audit Some of the breakthrough proposals mentioned are promulgation of Certified Public Accountants (CPA), development of Audit quality indicators (AQIs), implementation of external audit management and supervision following the statutory model with independent committees’s participation These are suggestions with a scientific basis and high practicality for policy-makers to improve the State governance of external audit in Vietnam by 2030, with a vision to 2035 Thesis structure In addition to the introduction, conclusion, list of research works, list of references and appendices, the thesis is structured into 04 chapters CHAPTER 1: RESEARCH OVERVIEW AND RESEARCH METHODOLODY 1.1 Overview of the research situation The author summarizes domestic and foreign works related to the research topic according to the following contents: 1.1.1 External audit related studies The thesis overviews the studies about the following contents: (1) Researches on the role of external audit (2) Research on quality, efficiency of external audit 1.1.2 State governance of external audit related studies The thesis overviews the researches used assessing to State governance content methods, including: (1) Researches on building a legal system for State governance of external audit; (2) Researches on the implementation of policies and laws toward State governance of external audit; (3) Research on State governance of external audit inspection and supervision 1.1.3 Studies on influencing factors and evaluation criteria of State governance of external audit The thesis summarizes the studies about the following contents: (1) Researches on the factors affecting the State governance of external audit; (2) Researches on evaluation criteria to State governance; (3) Rearches on State governance assessment methods 1.1.4 Research gaps From the summary of previous studies, the author found some gaps in researching, which are: The analysis sheds light on the general theory State governance of external audit and the criteria for assessing the State governance of external audit Using the quantitative model to analyze the evaluation criteria to make comments on the achieved results and the remain problems State governance of external audit in Vietnam Quantitative research clarifies the influencing factors and how influence of each factor on the State governance of external audit in Vietnam 1.2 Analytical framework of the thesis On the basis of an overview of the research situation and interviews with experts in the field of State governance of external audit, the thesis determines the scope of research and builds the analytical framework: The thesis devides all factors affecting of State governance of external audit, into three groups: the group of factors in the management environment; the group of management subjects; the group of factors belonging to the management object About the contents of State governance of external audit, the thesis bases on the management process and also devides into content groups: building legal system for external audit; organize the implementation of policies and laws for the State governance of external audit (human factors and management process: organize the management structure, deploy and coordinate); inspect and supervise the external audit About assessment of State governance of external audit , the thesis is based on the theory of Good Governance, aiming at the capacity of the State, ability to cope, responsibility and giving out four evaluation criteria: (1) Effectiveness; (2) Efficiency; (3) Conformity; (4) Sustainability 1.3 Research methodology of the thesis 1.3.1 Research methodology The thesis uses dialectical materialism and historical materialism as the basis of research methodology The method of dialectical materialism is used to recognize, analyze and discover the nature of things and phenomena in its inevitable movement The method of historical materialism is used to identify the process of State governance of external audit in each stage of development of external audit Indicator, the process of changing management process, the results achieved by each stage and the issues to be continue to improve 1.3.2 Specific research methodology 1.3.2.1 Qualitative research methods Qualitative research methods are used to explore and understand deeply the content of State governance, the current situation of State governance of external audit in Vietnam The study was carried out according to Desk Research method and Site Research methods 1.3.2.2 Quantitative research methods Because the secondary data State governance of external audit in Vietnam is incompleted and has not met the research objectives, the thesis uses a quantitative method through survey using questionnaires to collect data Quantitative preliminary research is carried out to assess whether the statements in the questionnaire are clear, easy to understand or not, thereby adjusting them to suit the research object The study was carried out by submitting an online questionnaire through a detailed survey The survey form is built on the basis of the contents that need to be clarified: evaluation criteria, factors affecting the State governance of external audit in Vietnam The thesis uses the method of data processing obtained from the survey form using SPSS software and uses the IPA model to analyze the set of criteria for assessing the State governance of external audit in Vietnam in Vietnam based on survey data of related subjects The research process is carried out through the following steps: defining the research problem; review of related studies; identify research gaps and approaches; systematize the theory of State governance of the urban economy; surveying the current status of State governance of external audit in Vietnam; suggest solutions CHAPTER 2: THEORETICAL AND PRACTICAL BASIS STATE GOVERNANCE OF EXTERNAL AUDIT 2.1 Overview of external audit 2.1.1 Concept, classification of external audit 2.1.1.1 The concept of external audit From the analysis and definitions, the thesis gives the most general concept of external audit: External audit is a branch of business support services performed by professional auditing firms and auditors, based on compliance with auditing standards, in order to draw conclusions about service assurance provide to meet the needs of publicity and transparency of financial information of entities and organizations and change the conditions of the consumer unit, or promote the exchange of goods or financial assets 2.1.1.2 Classification of external audit There are many criteria for classifying external audit, each criterion will have a different meaning in management From the perspective of State governance of external audit, the researcher delves into some basic classification criteria as follows: i) According to the legal relationship with the audit client Statutory Audit (Compulsory Audit) According to the provisions of law, those units and organizations which are required to perform audits of financial statements and related services on the basis of audit service contracts before disclosing financial information Voluntary audit According to the provisions of law, those units and organizations which are not required to perform audits but still voluntarily perform them on the basis of audit service contracts ii) According to type of audit service provided Assurance audit service Assurance services are services provided by professional auditors and audit firms that are required to obtain sufficient and appropriate evidence, which is required to ensure the independence, to comply with auditing standards, and to draw a conclusion on the assurance of the service provided Non-assurance audit services: Non-assurance audit services are services that professional auditors and audit firms provide, without having to draw a conclusion about the assurance of the services provided 2.1.2 Basic characteristics of external audit 2.1.2.1 External audit was born and associated with the development of the market economy As the market economy grows, the supply channel which mainly comes from the stock market and banking needs to use the financial information of the object in the economy increasingly demands high levels External audit becomes a feature of the market economy, with an invisible hand, the external audit will be adjusted by the market through the quality of audit services 2.1.2.2 External audit is legally recognized, protected and strictly managed by professional associations The external audit is a business development service to support the business activities of enterprises and economic entities, so that in many countries, external audit is recognized and protected and clearly defined in the constitution and specialized laws External audit is recognized through the legal value of the services provided and establishes the legal position, standards, powers and responsibilities of Audit firms and auditors The sharing of management responsibilities through professional associations or intermediaries (independent) is a very basic feature of external audit 2.1.2.3 External audit always adheres to the principles of independence, objectivity and confidentiality External audit not only meets the information use needs of entities in the economy but in the process of providing services, it must also ensure independence, objectivity, and information confidentiality Professional ethical standards stipulate: audit firms and auditors when providing auditing services must absolutely not let materiality and emotions overwhelm independence and objectivity 2.1.3 The role of external audit in the economy 2.1.3.1 Create trust for objects in the economy The theory of asymmetric information shows that there is always the fact that the parties involved in a transaction intentionally hide unfavorable information, inflate beneficial information, and provide unfair information to other parties use The external audit must perform the role of creating a trust for the users of financial information in the economy 2.1.3.2 Healthy financial relations In the process of economic development, financial relations and accounting regimes have changed a lot The untimely inspection and control may lead to violations of the principles of financial and accounting regimes And external audit can contribute to popularizing economic and financial mechanisms and policies to put financial and accounting activities into order through it’s performance 2.1.3.3 Improve operational efficiency of entities and state governance capacity Through external audit, businesses are supported and consulted to amend and complete internal control regulations in order to prevent risks from occurring that affect business targets External audit helps to clean up financial performance in entities managing 2.2 State governcance of external audit 2.2.1 Definition of State governance of external audit Within the scope of research, the thesis approaches according to the content of the state governance process, including: building the legal system, organizing the implementation of policies and laws; inspect and supervise the external audit Accordingly, the concept of State governance of external audit is as follows: 10 or implemented by State governance through macro measures or by pressure from external audit results users Content of inspection and supervision Check and supervise in accordance with strategic direction and plan for external audit Inspect and supervise the implementation of policies and laws on external audit Inspect and supervise the performance of functions of State governance of external audit Inspection form The forms of inspection include: regular inspection, periodical inspection, irregular inspection and are carried out by the state governance agency or supervisory committee or in the form of cross-checking among audit firms 2.2.4 Criteria for evaluating State governance of external audit Based on the theory of " Good Governance", combined with qualitative research results and inheritance of research results on criteria for assessing State governance of each activity in the economy, in within the scope of the study, the thesis evaluates the state governance of the external audit through the following criteria: 2.2.4.1 Validity criteria The criteria to evaluate the effectiveness criteria, including: The adequacy, synchronism and timeliness in drafting and promulgating policies and laws for the external audit; The process and procedures for evaluating the implementation of policies and laws are publicly and clearly announced, with close coordination among state governance agencies; Consulting, answering and guiding the settlement of problems and backlogs in the process of implementing policies and laws on the external audit to ensure uniformity; Mechanism for detecting, properly identifying and promptly forecasting signs and acts of violation of law compliance and audit quality assurance; The order and procedures for dealing with violations in the management of the external audit must be strict, and the responsibilities of the management agencies and competent persons should be enhanced in handling violations; The sanctions must be strict, public, transparent, cover all cases and be enough of a deterrent; The level of participation, response of actors in the economy and accountability of regulators in the exercise of power 2.2.4.2 Effectiveness criteria The criteria to evaluate the effectiveness criteria, including: Policies and laws for the external audit meet the requirements and objectives of state governance; State governance system operates effectively to meet the requirements of comprehensive management, continuous inspection and supervision, and audit quality assurance; 11 State governance staffs with strong capacity, effectively implement their roles of managingt and supervisiing external audit; The close and synchronous coordination among direct state governance agencies with the state governance agencies in the relevant fields in the management and supervision of external audit; The inspection and supervision process is publicly and clearly announced; Policies and laws permitting the prevention, detection and handling of corrupt acts in external audit activities; Publicize and transparently breach information of audit firms, practicing auditors and audited units 2.2.4.3 Matching criteria The figures for matching criteria include: Policies and laws for external audit are in line with international practices and highly appreciated by international organizations; Regulations for external audit harmonize with bilateral and multilateral international regulations and agreements; Policies and laws to ensure suitability with the development of the business community and the development of the external audit; Policies and laws toward external audit to ensure conflict resolution, harmony of interests among the parties concerned and to support the sustainable market development; Policies and laws toward external audit to achieve the consensus of the parties concerned, bring confidence to the object in the economy; Policies and laws toward external audit to ensure fair competition among audit firms 2.2.4.4 Sustainability criteria Sustainability criteria include: Policies and laws toward external audit are visionary, creative and adaptable to each stage of economic development in the integration trend; Policies and laws toward external audit to ensure feasibility not conflict with relevant legal regulations; Policies and laws toward external audit are stable, synchronous and consistent with the objectives of the external audit strategy; Policies and laws toward external audit have inheritance and high predictability; The provisions in the legal documents for external audit have the nature of creating a legal framework, not to be too detailed and rigid 2.3 Factors affecting the state governance of external audit Inheriting previous studies on state governance, the thesis divides the factors affecting state governance of external audit into groups of factors 2.3.1 Factor of the management environment From theoretical discussions and empirical studies, the thesis formulates the following hypotheses about management environment factors affecting state governance as belows: 12 First, the economic development level and social awareness about external audit Second, political institutions Third, international economic integration 2.3.2 Factors of management subject From theoretical discussions and empirical studies, the thesis formulates the following hypotheses about the management subjects as belows: First, the management method of the State Second, the management and control point of view of the State Third, the capacity of State governance staffs 2.3.3 Factors of management object From theoretical discussions and empirical studies, the thesis forms the following hypotheses: First, Audit firms's organizational and managing capacity and resources Second, the sense of law observance of the management object Third, the competitiveness of audit firms 2.4 International experience on State governance of external audit and lessons for Vietnam 2.4.1 Experience in state governance of external audit in some countries 2.4.1.1 Experience of State governance of external audit in the United States The legal system for external audit always adheres to reality and is convenient in applying Large and long-term policies are institutionalized by laws to ensure consistent enforcement, including: Law on External auditing, Law on Certified Public Accountants, and laws aimed at creating an audit quality controlling environment In the USA, State implements of decentralization of power Management and supervision functions are assigned to separated agencies, the State only focuses on performing the function of orientation, encouragement and macro management of the economy Management of external audit is carried out according to the selfmanagement model with the supervision of the State The United States conducts cross-checks between audit firms under the supervision of the National Cross-Examination Board (PRB) and The Public Company Accounting Oversight Board (PCAOB), the American Institute of Certified Public Accountants (AICPA) The United States conducts cross-checks among audit firms under the supervision of the National Cross-Checking Commission (PRB) and the The Public Company Accounting Oversight Board, American Institute of Certified Public Accountants (AICPA) 2.4.1.2 State governance experience for external audit in Singapore The legal system for external audit’s approach is objective and sustainably develop based on the shift from thinking about "performing assigned tasks" to "cooperation", from "providing services" to "value creation" always helps Singapore to have policies for sustainable economic development The external audit strategy is developed separately In Singapore, external audit managing and supervision is applied under the model of State - an advisory council The Singapore government assigns the 13 Ministry of Finance to perform the function of managing the external audit; The Public Accountants Oversight Committee (PAOC) performs a supervisory function 2.4.1.3 State governance experience for external audit in China The Chinese with its political power, builds a solid and comprehensive legal system toward external audit The separeted external audit strategy is neatly associated with socio-economic development strategies Manage and monitor external audit by the statutory model Controlling activities are carried out by many agencies: the Ministry of Finance, the State Security Commission and the China Association of Certified Public Accountants Mandatory testing combined with cross-checking 2.4.2 Some lessons for Vietnam 2.4.2.1 Lessons on building a legal system for external audit Build up a separate and visionary external audit strategy The stability and adaptability of the policy system Participation and coordination in policy implementation Enhance the level of accountability and feedback of interest groups in the economy It is necessary to have a roadmap and plan in the promulgation of legal documents Legal documents must adhere to reality The legal system must adapt to each stage of economic development and the development of accounting and auditing 2.4.2.2 Lessons on the organizational model of the external audit management and supervision system The State performs the management, professional organizations participate in supervision Separation of management function and supervision function in state governance of external audit 2.4.2.3 Lessons on external audit inspection and supervision Selection of subjects to carry out inspection and supervision Cross- checking is an effective form of testing Public and transparent results of inspection and supervision Sanctions must be strict, public, transparent and sufficiently deterrent 14 CHAPTER 3: REAL STATE OF AFFAIRS OF STATE GOVERNANCE OF EXTERNAL AUDIT IN VIETNAM 3.1 Overview of external audit in Vietnam 3.1.1 The process of formation and development of external audit in Vietnam History of external audit in Vietnam In 1991, with the decision to allow the establishment of state-owned Audit firms, Vietnam Auditing Company (VACO) and AASC Consulting and Associates (AASC) became two first Audit firms, marking the birth of this service industry in Vietnam After 30 years of establishment and development, the external audit in Vietnam has become an important supporting service industry of the economy 3.1.1.1 Developing process of external audit in Vietnam After 30 years of operating and developing, external audit in Vietnam has become a support service of the economy Based on the development of the number of audit firms, the size of customers, the structure and quality of the audit, the thesis has analyzed and evaluated the development process of the external audit into stages: The period from 1991 to 1998 This is the first phase, phase of the process of formation and development of external audit in Vietnam The period from 1999 to 2010 This is the period that shows the strong development of external audit in Vietnam both in terms of number of audit firms, professional staff as well as the number of guests and the diversification of audit services Period from 2011 to present The year of 2011 marked an important transformation of external audit in Vietnam The effective law of external audit has raised the position of external audit to a new level, laid a sustainable legal basis for the development of external audit and expanded the statutory audit audience 3.1.2 Current status of external audit in Vietnam The thesis has in-depth research on the current state of external audit in Vietnam according to the stages of development, then making a comprehensive assessment of the current state of external audit in Vietnam on contents The amount and structure of the customer; The amount and scale of audit firms; The amount and quality of professional staffs, practical auditors; Service structure of external audit; Quality of external audit services; International integration From the analysis of the real stat of affairs, the thesis affirms that history has proven that the economies with successful key economic markets cannot develop spontaneously and cannot be without the intervention and support of the State Over the past 30 years, with the management methods and management tools of the State, the external audit in Vietnam has gradually affirmed its position and prestige in the economy The nature of operations has been positively changed 15 from performing statutory audits to performing services Orienting in the new period, audit firms must aim for a healthy competition and competition in service quality, limiting and gradually eliminating competition of reducing service fees affecting the quality of audit services In order to achieve this goal and orientation, it is necessary to have the management and support from the State toward external audit in Vietnam 3.2 Analyze the real situation of state governance of external audit in Vietnam 3.2.1 Building a legal system for external audit Over the past 30 years, along with the development of economy and society in general and external audit in particular, the legal system as the basis for the state governance of external audit has been gradually improved Based on the content of formulating and promulgating policies and laws for internal audit, the thesis systematizes the process of building a legal system for external audit into stages: 3.2.1.1 Period from 1991 to 1998 This is the phase of the process of building and forming the legal framework for external audit in Vietnam During this period, the Government issued 01 Decree (Decree 07-CP); The Ministry of Finance issued 01 Circular (TT 22TC/CDKT) and 01 Decision (Decision 237/TC/QD/CDKT) This is the stage when the policies and laws for external audit are still in their infancy 3.2.1.2 Period from 1999 to 2010 During this phase, the State has continuously supplemented and perfected the legal framework on CG, especially policies on quality controlling of audit services A series of legal documents were issued to correct and overcome the shortcomings of the previous documents In the period from 1999 to 2010, the government issued 03 Decrees, 02 Circulars and many other important decisions to regulate and manage the geothermal economy This is the period when the State concentrates the most on promulgating the system of policies and laws for external audit services 3.2.1.3 The period from 2011 to present State governance policies is concretized through a system of legal documents in order to create a legal corridor for the economic development From 2011 upto now, the Government has issued 07 Decrees and 20 Circulars and many important decisions to regulate and manage external audit The most important milestone of this period was in 2011, the National Assembly promulgated the Law on Independent Audit, stipulating the principles, conditions, scope and form of audit activities; rights and obligations of practicing auditors, audit firms, foreign branches of audit firms in Vietnam and audited entities The Law on External audit has created the highest legal framework and fundamentally reformed the legal framework for external audit in Vietnam The Ministry of Finance has developed the "Accounting and Auditing Strategy to 2020, with a vision to 2030" and approved by the Government under Decision No 480/QD-TTg/2013 The accounting and auditing strategy is one of the branch strategies of the Financial Strategy until 2020, which plays an important role in regulating and developing the economy 16 The legal system on accounting and auditing has undergone fundamental innovations and improvements, creating a legal framework with three legal layers (Law - Standards - Regime, instructiom), but compared with the changes of international practices are not really completed, synchronous and not updated fully and timely 3.2.2 Organizing the implementation of policies and laws toward external audit 3.2.2.1 Model of external audit management in Vietnam In Vietnam, the State uniformly manages external audit in accordance with the legal model Based on the management model and the participation of professional organizations in practice management, the thesis systematizes the management model of the external audit in Vietnam into phases: The period from 1991 to 2005 This is the phase when external audit began to form and operate in Vietnam During this period, in order to be consistent with the political institutions and the ultimate effectiveness of state governance agencies, the Government assigned the Ministry of Finance to be the state governance agency responsible for the management and supervision of external audit in Vietnam The period from 2005 to present During this phase, State governance of external audit in Vietnam perfomes with the statutory model in conjunction with professional organizations folloing Decision No 47/2005 /QĐ-BTC of the Ministry of Finance which transferred some contents related to career management to VACPA 3.2.2.2 Organizing of the state governance of external audit The thesis has deeply analyzed the organization of the state governance system for the external audit in Vietnam according to the system of state governance agencies and the coordination mechanism among agencies The external auditing law issued in 2011 clearly states, "The Government unifys to apply the state governance of external audit, the Ministry of Finance is responsible to the Government for the implementation of the state governance of external audit " 3.2.2.3 The process of organizing the implementation of policies and laws The thesis has deeply analyzed the process of organizing the implementation of policies and laws from management agencies to implementing agencies: Audit firms, practical auditors, audited units During the implementation process, the thesis evaluates that the Ministry of Finance and relevant ministries, branches and specific fields such as banking, insurance, securities, etc have actively implemented and coordinated to solve the problem resolve problems that are arising during implementation 3.2.3 External audit supervision and inspection in Vietnam 3.2.3.1 Inspection and supervision agencies In the period from 1991 to 2005, the inspection and supervision of external audit was carried out by the Ministry of Finance by supervising of the operation of the practicing enterprises and auditors From 2006 to 2014, external audit is inspected, monitored by the Ministry of Finance and delivered to VACPA to check audit services quality From 2015 until now, implementing Circular 157/2014/TT-BTC, the Ministry of Finance has not authorized VACPA to control the quality of audit 17 services The Ministry of Finance directly inspects and supervises the internal audit, VACPA cooperates in checking the quality of audit services and giving advises on overcoming the errors discovered after the inspection 3.2.3.2 Content and form of inspection and supervision In fact, at present, the content of inspection and supervision of the external audit is only limited at checking the compliance with the law, the content of supervision of professional quality is still very limited Inspection and supervision are carried out in two forms: direct inspection and indirect inspection by state governance agencies, no cross-checking among audit firms 3.2.3.3 Results of inspection and handling of errors The thesis summarize, analyzes and evaluates the results of inspection and handling of violations according to the results of UNSCNN (Audit firms group which provides services to customers who are entities with public interests in the securities sector) and Department of Accounting and Auditing Regulations (Audit firms group provides accounting services for customers who are enterprises and other organizations) The thesis comes up with the assessment: In fact, the inspection, whether in direct or indirect form, only stops at assessing legal compliance, inspection content but is still limited at professional quality supervision This situation is caused because the Department of Accounting and Auditing Regulations staffs, UBCK staffs and auditors participating in the inspection team not have enough practical experience, the auditors mobilized to participate in the inspection team are limited 3.2.4 Evaluation of State governance of external audit in Vietnam through survey results according to the following criteria By distributing survey questionnaires, the thesis has assessed the importance and implementation level of State governance of external audit in Vietnam according to criteria: effectiveness, efficiency, suitability, and sustainability Through a quantitative research model based on survey results, the thesis evaluates the state governance of external audit in Vietnam according to the criteria from which policy implications are given 3.2.4.1 Check the reliability of the scale (Cronbach's Alpha) The criteria are coded into corrected items with the symbols respectively: HL; HQ; PH; BV Each corrected items will be assigned observed variables corresponding to the questions in the survey (Appendix 17), on two scales: importance and performance Each scale is rated from to following the Likert scale With a score from to 5, the distance value = (Maximum value - Minimum value) / n = (5-1)/5 = 0.8, so the meaning of the average scores is as belowss: Importance level: Scale: 1= Not important; 2= Less important; 3= Normal; 4= Important; = Very important GPA: 1.00 - 1.80: Very unimportant; 1.81 - 2.60: Unimportant; 2.61 - 3.40: Normal; 3.41 - 4.20: Important; 4.21 - 5.00: Very important Performance level: 18 Scale: 1=Very low; 2= Low; 3=Average; 4= High; 5=Very high GPA: 1.00 - 1.80: Very low; 1.81 - 2.60: Low; 2.61 - 3.40: Average; 3.41 4.20: High; 4.21 - 5.00: Very high The data is collected on the basis of direct distribution of survey forms and sent via email to subjects, including: State governance agencies directly engaged in external audit; State governance agencies in related fields; Professional organizations on accounting and auditing; audit firms; auditors; audited units; Subjects to use the results of the external audit The number of survey questionnaires issued was 588, the number of collected response was 308 The valid survey questionnaire was cleaned off and the IPA model was run on SPSS software to assess the state of state governance of the external audit in Vietnam The thesis uses evaluation criteria, with 25 observed variables, so the minimum sample size is n = 50 + x 25 = 250 samples With a size of 308, it is guaranteed and suitable for the research model To consider the questions that have been consistent and highly reliable or not, the thesis was done testing the coefficient Cronbach - Alpha As the results, those evaluation criteria are come out greater than 0.9, the correlation coefficient greater than 0.4, so that the criteria for evaluating is reliable and highly associated with with each other, the criteria have very high internal consistency 3.2.4.2 Correlation matrix analysis of evaluation criteria The results of the correlation matrix analysis show that the criteria for assessing State governance of external audit in Vietnam are positively correlated with each other and have statistical significance with 99% confidence There is a difference in the degree of correlation among the criteria: between the validity criterion and the efficiency criterion, there is a good average correlation with a linear correlation coefficient higher than 0.4; the correlation of the level of performance between the efficiency criteria and the appropriate criteria has a high average correlation with the correlation coefficient higher than 0.5; among the remaining criteria are at acceptable level and ensure no multicollinearity phenomenon The results confirmed, a set of highly reliable evaluation criteria was used for further studies 3.2.4.3 Results of testing mean and standard deviation of each criterion The results showed that assessing the importance and performance levelwith a standard deviation lower than the average value means respondents answer relatively aligned, the data collected have reliability high reliability, suitable for research purposes Based on the average value of the importance and performance level of each element in the criteria for assessing State governance of external audit in Vietnam, the thesis plots a Kano-IPA scatterplot Based on the survey results and scatter plot, the summary table of the Kano - IPA matrix, the thesis makes comments and policy implications In the 25 factors built for evaluation, the research shows that : Factors that the State needs to focus on to improve These factors are evaluated with very high level of importance in the state governance of external audit but the degree of implementation in practice is assessed as low or very low This group includes 11 elements, of which are 19 effectiveness criteria, are of efficiency criteria, are of relevance criteria and are of sustainability criteria The study results suggest offering solutions to improve the level of implementation of these elements to ensure that those factors which are concerned as being important in the state governance of external audit in Vietnam need to be focused on the implementation Factors that the State needs to continue to maintain There are factors, in which, element belongs to the effectiveness criterion, elements belong to the efficiency criteria, element belongs to the appropriate criterion and element belongs to the sustainability criterion These factor are evaluated to be concerned at very high level of importance in the State governance of external audit and performance level in practical situation are high and very high Factors that the State should not pull too much resources There are factors, in which, factors belong to the effectiveness criteria, element belongs to the efficiency criterion, and element belongs to the sustainability criterion These factors are evaluated as less important or not important for state governance of external audit, but the level of performance are high and very high That means, in the condition that resources for state governance are limited, the State should limit investment on them Factors that the State should re-consider or should not focus on There are factors, in which, element belongs to the effectiveness criterion, element belongs to the efficiency criterion, elements belong to the relevance criteria, and element belongs to the sustainability criterion These factors are evaluated as less important or not important in the State governance of external audit and performance level is low or very low That means, in the condition of limited resources, the State should re-consider or should not pay too much attention to these factors 3.3 Factors affecting the state governance of external audit in Vietnam Inheriting the studies, by the method of expert interviews, the thesis develops and builds a questionnaire to assess the factors affecting the state governance of external audit in Vietnam The questionnaire was sent to survey subjects: Direct State governance Agency (Accounting Supervision and Auditing Department Ministry of Finance); Relevant state governance agencies (SSC, State Bank, Insurance Supervision Department and Legal Department - Ministry of Finance); Professional organizations (Association of practicing auditors, Vietnam Association of Accountants and Auditors) Data is collected on the basis of direct voting and sending via email The number of questionnaires distributed was 153, the results of 125 valid questionnaires were cleaned and run on SPSS software as a basis to analyze the factors affecting the State governance of external auditin Vietnam 3.3.1 Survey the factors affecting the state governance of external audit in Vietnam The thesis performs the Cronbach's Alpha reliability test according to each group of factors to answer the question: Is the collected data reliable and consistent 20 with the research objectives? What are the factors that have different effects on the state governance of external audit in Vietnam? 3.3.2 How each groups of factors affect state governance of external audit in Vietnam After testing the scale of factors affecting the state governance of the external audit in Vietnam, the thesis continues to make statistics on how each groups of factors affect state governance to analyze in detail the characteristics of the variables, as well as comparison to make statistical inferences about the relationship among variables, as a basis for assessing how each groups of factors affect state governance of external audit in Vietnam 3.4 Commenting on the State governance toward external audit in Vietnam From the results of testing the major influencing factors and the situation on State governance toward external audit in Vietnam, the thesis draws outcome achievement and the issues raised in the state governance of external audit in Vietnam These will be the important practical basis for the thesis to develop solutions to complete state governance of external audit in Vietnam 3.4.1 Achievements First, the legal system has gradually created a legal framework for the development of external audit Second, the organization of the State governance system of external audit is increasingly being perfected in order to strengthen the supervision function Third, the public and transparent controlling process promotes efficiency in the state governance of external audit 3.4.2 Limitations First, the legal system has not yet met the requirements of practical management and the requirements for expansion and development of external audit Second, the organization of implementation of policies and laws on external audit still has many limitations and inadequacies Third, the inspection and handling of violations in external audit has not been highly effective 3.4.3 Causes of the existence and limitations Reasons from the management agencies The proactiveness of state governance agencies is not actually high The organizational model of state governance is not capable enough for covering the market of external audit The quality of human resources is lacking and not much experience The information technology infrastructure system and public services serving the state governance of external audit not reach good quality Cause from audit firms and auditors The awareness of professional ethics and compliance with legal policies of audit firms and auditors is still not high Audit firms's organizational structure and internal control regulations have not been completed Other causes from the management environment The society's awareness of external audit is not really basic and widespread 21 The transfer of practice management content to professional associations is still limited CHAPTER 4: COMPLETE STATE GOVERNANCE OF EXTERNAL AUDIT IN VIETNAM 4.1 Development orientation and perspective on completing state governance of external audit in Vietnam to 2025 with a vision to 2030 4.1.1 Forecast of socio-economic situation and development trend of external audit in Vietnam On the basis of the economic, social and financial reform objectives set forth, the thesis proposes the development trend of the external audit in Vietnam to 2030 and a vision to 2035: First, external audit market in Vietnam will have more participation from foreign investors Second, the industrial revolution will be powerful application to external audit Third, Audit firms will expand their scale and strengthen their competitiveness in the direction of diversifying the types of services provided and improving the quality of audit services 4.1.2 Orientation to develop external audit in Vietnam to 2025 and vision to 2030 Firstly, the external audit development is in line with the national socioeconomic and financial development orientation in each period, ensuring the implementation of international commitments which Vietnam is a member Second, expand and develop the external audit on both supply and demand aspects Third, develop and expand the external audit in a professional manner, encouraging SMEs to expand their scale and enhance their competitiveness 4.1.3 Perspectives and orientation to improve the state governance of external audit in Vietnam The thesis takes the view of State governance of external audit in Vietnam: The views on the regulatory role of the State of external audit ; Viewpoints on the formulation, promulgation and publication of auditing standards and professional ethics standards ; Viewpoints on the organization of the State governance system for external audit ; Perspectives on performing audit quality control cross-checks ; Perspectives on empowerment of professional organizations From the management point of view, the thesis giving orientations to improve the state governance of external audit in Vietnam: First, increase the level of publicity, transparency and accountability in the exercise of responsibility and exercise of state governance power on external audit Second, the system of policies and laws for the external audit must meet the requirements of practical management and be consistent with international practices 22 Thirdly, the state governance system and the capacity of state governance personnel must ensure the good performance of the management and supervision functions toward external audit Fourth, inspection and supervision activities combine compliance monitoring with professional quality supervision to promptly detect potential risks for timely and effective interventions 4.2 Solutions to improve the state governance of external audit in Vietnam by 2025 with a vision to 2030 The thesis has proposed bases based on the results of data processing from the Kano-IPA integrated method; based on the results of the assessment of the causes of shortcomings and limitations in State governance of external audit; and orient external audit development in Vietnam until 2025 with a vision to 2030 Since then, launch group solutions 4.2.1 Group of solutions on building legal system for external audit Develop an external audit strategy Completing legal documents for external audit First, promulgate the Law on Certified Public Accountants (CPA Law) Second, adjust and supplement a number of legal documents Develop and issue policies on development, market expansion and quality improvement of audit services Develop a mechanism to regularly update and supplement auditing standards and professional ethics standards to suit international practices and Vietnam's conditions Completing policies and laws to prevent unfair competition and reduce service fees affecting the quality of audit services 4.2.2 Group of solutions on organizing the implementation of policies and laws for independent audit Tyoke transparent management functions and supervisory functions of State governance of external audit Implement the management and supervision of the external audit according to the statutory model with the participation of independent committees Implement the mechanism of autonomy, personnel rotation to improve management capacity Strengthen the autonomy and create coordination, clear alignment and decentralization in management and supervision of external audit activities 4.2.3 Group of solutions on external audit inspection and supervision Improve the management mechanism for collection and use of inspection and supervision fees to ensure resources for effective inspection and supervision activities Increase auditing and supervise auditing quality Completing the internal control process of the audit firm through the development of Audit Quality Indicators (AQIs) 4.2.4 Group of other solutions Raise social awareness about external audit 23 Enhance the level of publicity, transparency and accountability in the exercise of responsibility and exercise of state governance power over the external audit Strengthening international integration in the state governance of external audit Enhance the capacity and role of professional associations hội 4.2.5 Conditions for implementing the solution In order to implement necessary solutions, there must be coordination of competent agencies and professional associations on auditing The thesis has given the conditions to implement the solution: The National Assembly, Government, Ministries and ministerial-level agencies need to pay attention to orient and promptly include in the law-making program: Law on Certified Public Accountants, amending and supplementing the Law on External audit, and developing legal documents and legal documents related to digital marketing services Reviewing regulations to ensure the uniformity and consistency of contents related to external audit with other relevant legal documents such as Civil Code, Penal Code, Investment Law, Competition Law, etc Enterprise Law The Government creates favorable conditions for mechanisms and policies in perfecting the state governance system, separates management and supervision functions in the state governance of external audit services The Ministry of Finance needs to allocate sufficient and appropriate resources to complete the legal framework on external audit, well organize and manage domestic and foreign resources as well as prepare other necessary conditions to ensure the implementation of the plan to develop the Law on Certified Public Accountants and update auditing and ethical standards profession in accordance with international practices Professional organizations must have solutions to strengthen their role and quality of operations, strongly innovate, be more in terms of organization, operation method and content to their job well as a place of occupational gathering and controlling At the same time, perform well the professional management function and professional ethics of the team of audit practitioners Strengthen relationships with international professional organizations in accounting and auditing in researching, exchanging experiences and learning about the contents and methods of management, inspection and supervision of external audit To be able to survive and develop requires every audit firms and practicing auditors to make constant efforts to improve and maintain audit quality Audit firms must establish and maintain an internal control system to prevent risks from damaging professional ethics to protect itself before the intervention of external forces is required 24 CONCLUSION State governance of the external audit has an important meaning for the development of external audit and the stability of the economy The external audit will not be able to develop and make the best contribution to the economy without the assurance of the legal framework, the effectiveness and efficiency of the state governance, and the inspection and supervision of audit quality On the basis of synthetic application of qualitative and quantitative research methodology, the thesis has performed the research tasks: Analyze, systematize, and contribute to supplement and clarify some theoretical issues underlying the State governance of external audit: State governance of external audit content, evaluation criteria and factors affecting to the State governance of external audit Analyze the real state of affairs of external audit in Vietnam through the development stages, thereby identifying the facing problems of external audit in Vietnam Analyzes and assesses the current situation of state governance of external audit in Vietnam Based on IPA model, analyze the criteria for assessing state governance of external audit in Vietnam on the basis of survey data as a basis for making comments on the achieved results, limitations and causes in term of State governance of external audit Propose viewpoints and orientations to improve the state governance of external audit in Vietnam and propose solutions to improve the state governance of external audit in Vietnam The thesis has met the requirements and research purposes set forth However, there are still some limitations as follows: The sample size of the thesis survey is 308, although it is guaranteed and suitable for the research model, it is not really high due to the limited number of audit firms and state governance agencies Some survey subjects were not really enthusiastic in answering, leading to still empty votes; There has been no test of the theoretical model on the level of influence of the factors on state governance of external audit The results of model analysis of the factors affecting the state governance of external audit in Vietnam have only stopped at assessing the degree of reliability of the scale and analysis of the linear correlation among the factors, not going into depth analysis of the impact of the factors on the state governance of external audit; Research on the state of state governance of external audit according to the evaluation criteria has not yet quantified the level of management perfection according to the regression equation but only tested the correlation between the criteria State governance of external audit is a new, specific and relatively broad research topic, so the thesis cannot fully solve the specific contents The research problem of State governance of the external audit needs to be further researched and perfected The author is looking forward to receiving comments, suggestions and discussions, instructions from scientists to improve the thesis ... audit in Vietnam Stemming from the necessity of both theory and practice, I choose the topic of ? ?Quản lý nhà nước kiểm toán độc lập Việt Nam? ?? (State governance of external audit in Vietnam) for my... EXTERNAL AUDIT IN VIETNAM 3.1 Overview of external audit in Vietnam 3.1.1 The process of formation and development of external audit in Vietnam History of external audit in Vietnam In 1991, with... even more about the State governance of external audit Particularly, based on the theory of ? ?Quản trị nhà nước tốt” (Good governance), the thesis builds up a completed set of evaluation criteria