Current status of internal audit activities at the listed enterprises in Vietnam? Difficulties and obstacles?
Basing on the recent research on some listed enterprises, we have some comments as follows:
Many of them do not clearly show off the internal audit department in their organizational chart. Though, according to their documents which are publicly announced we understand that they do perform some internal audit activities, however, they combine the internal activities to the responsibilities of other departments such as the Supervisory Board, or Risk Management Committee, or Audit Committee. It is because before the Degree 05 the establishment of an official internal audit department is not compulsory.
Many enterprises are reluctant to implement internal audit activities due to the following reasons:
- They do not have enough understanding about the internal audit (about purposes, authorities, responsibilities, and methods) so as to visualize the benefits and values brought back in comparison with expenses and effort consumed. Therefore, they do not have motivation to make changes and invest their time, finance, and personnel resources in setting up and operating the internal audit. Some enterprises still believe that the functions of internal audit are similar to those being implemented by other departments, therefore they think it is not necessary to establish a separate internal audit department.
- It may be because that the persons of high management levels have hidden interests in the business, so they do not want to have internal audit performed with the full responsibilities and authorities as it should be.
- They are not confident that they have enough resources to implement internal audit in a proper way.
- They do not want to change their current management style and their system, simply because they are afraid of changes to their habits.
For enterprises who have official internal audit departments in their organization charts, performance and responsibility of internal audit are also limited in comparison with the international standards and practices.
Main reason of above issues is the lack of supporting factors for internal audit development such as: (1) orientation and support from administration authorities and professional associations, (2) professional standards and practices, (3) a network of internal auditors and experts, (4) well trained personnel. However, in our view, we have a strong belief that the above issues will be gradually improved in the future. We can see that the internal audit compulsory requirements will soon be in force, internal audit standards and guidance are being issued, the professional associations are promoting their activities in Vietnam, and enterprises seems to be more aware of the roles and values of internal audit.