Taxman disdainful of audited reports

At the presentation on tax policies and resolving tax-related problems held by Vietnam Chamber of Commerce and Industry (VCCI), senior officials from the Tax General Department asserted that tax agencies do value corporate financial reports issued by independent auditing firms but quite a few businesses have expressed their discontent over the fact that local tax agencies totally ignore auditing results supplied by auditing firms.

Businesses complained that tax agencies’ rejection of audited financial reports causes a lot of trouble for them given that auditing will be mandatory for businesses.

Asked why tax agencies are inclined to disbelieve audited reports, Pham Van Huyen deputy director of the Tax General Department said that is because figures issued by independent auditing firms and those by tax agencies on corporate finance often differ. Huyen said independent audits take into account only invoices and vouchers that regard just the accuracy of accounting records, while making no insight into what businesses are allowed to record under the existing accounting system. Meanwhile, tax agencies are concerned on the eligibility of expenses seeking equality in doing business.

Tax agencies will check corporate figures in the case of difference between figures released by auditors and those found by tax agencies, said Huyen adding that when tax agencies verify corporate financial reports, it does not mean that businesses are mandated to repeat accounting records, but that verification is aimed at figuring out businesses’ compliance with existing accounting rules.

Huyen conceded the existing inconsistency among auditing, accounting, financial reporting and taxation rules. Also, it is a fact that legal documents guiding tax rules are revised quite regularly, while auditing firms fail to keep abreast of the changes.

“When the disparity between results reported by auditors and those by tax agencies is narrowed, auditing results will be accepted by tax agencies”, said Huyen.

Director of the Accounting System Department of the finance ministry Bui Van Mai said the ministry will add regulations with a view to increasing legal validity of audited financial reports. However, Mai said in order to have their auditing results accepted by taxmen businesses should hire independent auditing firms that regularly conduct audits for tax-related purposes.

[Intellasia Legal News]

 

Category: Legal