In Vietnam, companies are required to appoint a “Chief Accountant” as a statutory position. The Chief Accountant role is one that is not common in most countries, particularly those with a Common Law background, and the purpose and responsibilities of the appointment is often misunderstood. Vietnamese laws state that the Chief Accountant is the “head of the accounting function”  of a company, and we will discuss further what that means.
All companies must appoint a Chief Accountant, unless they are extra-small where they can appoint an Acting Chief Accountant. Companies can also appoint an Acting Chief Accountant for up to 12 months prior to the appointment of a Chief Accountant.
Companies can also acquire the services of a Chief Accountant through an Accounting Services Firm which is registered to provide accounting services, should they choose not to employ a Chief Accountant directly.
Notwithstanding the above distinction between a Chief Accountant and Acting Chief Accountant, the laws don’t significantly distinguish between the requirements of both roles. Specifically, Chief Accountants (and Acting Chief Accountants) must :
- Have a Bachelors Degree in Accounting and at least 2 years’ experience in performing accounting work;
- Have a Certificate of Chief Accountant training;
- Meet the ethical and knowledge/skill requirements of the laws.
Appointing someone who does not meet the above requirements, or failing to appoint someone, will be liable to a VND20-30m fine .
Companies should therefore be careful when selecting and appointing their Chief Accountant. We commonly see service providers and companies name unqualified individuals just to fill the role so that they can register for taxation and open bank accounts, but this dangerous from a compliance perspective, and not in compliance with Vietnamese laws. Unless there is an appropriate understanding of the obligations of a Chief Accountant, this will likely expose the company to compliance risks, on top of the financial penalties for non-compliance.
Following on from the above requirements for appointment, what are the obligations and duties of the Chief Accountant?
On a macro level, the role can somewhat be compared to the Company Secretary role in certain aspects – they are the primary liaison between many government agencies/authorities and the company. They can also be seen as the Public Officer for tax purposes.
Chief Accountants are required to sign off on all accounting documents. This includes signing off on financial statements, financial records and all transaction vouchers of the company. They are required to be registered with the Tax Authorities and the Department of Planning and Investment, along with being registered with your bank as they need to sign certain documents as prescribed by State Bank Regulations. Chief Accountants have compliance obligations regarding the company lodgement requirements, and support the Legal Representative in this regard.
Keep in mind that Vietnamese companies are required to retain documents for every transaction in their accounting records, and these documents are to be signed by the Chief Accountant and the Legal Representative. Where the company has digital documents, which have been digitally signed, there is still a requirement to print out all electronic documents for archiving, and where an authority wishes to inspect digital documents, they will need printing and signing by the Legal Representative or Chief Accountant. In essence, regardless of digital or hard-copy documents, they all need to be printed and signed, and retained on file for inspection (as all companies are regularly inspected by tax and other authorities).
How to view the role of the Chief Accountant
You need a Chief Accountant. You need to ensure your statutory obligations are met, which include the Chief Accountant signing significant numbers of internal documents, and lodging other documents. They help ensure that the company has its overall approach to compliance being managed, including taking care of many things that Chief Accountant doesn’t personally sign in order to assist Legal Representative who still retains responsibility for all aspects of a company.
From a structural perspective, although the Chief Accountant is (per the Law on Accounting) the head of the Accounting Function, in reality the role may be under the supervision of a greater finance function, reporting to a CFO or Financial Controller, or form part of the greater compliance function of a company. Chief Accountants can object to demands from Legal Representatives (or Chief Accountants of parent entities) where the request violates laws, but they are required to follow the requests – therefore where they object to the request that violates laws, the Chief Accountant is required to document their objection so as to remove their personal liability for the action.
The Legal Representative has the greatest exposure for not meeting company requirements. However, the Chief Accountant does have certain responsibilities and liabilities arising from their role. Legal Representatives cannot simply blame the Chief Accountant for non-compliance with laws, as they have ultimate responsibility, but where the Chief Accountant incorrectly performs their role (and didn’t record an objection if they believe the instructions from their superior where incorrect), then they will have exposure.
Implications, Observations and ‘The Catch’
Significant trust is placed in the Chief Accountant. They have a specific, mandated role and can be held accountable for their role/responsibilities.
However, the Chief Accountant is not infallible, and is usually only one part of the compliance function of a company. Laws can be vague in Vietnam, and interpretation difficult. There needs to be a mechanism to review/understand a company’s obligations, and determine who is responsible for those. There also needs to be someone reviewing the work of the Chief Accountant, especially if they are solely responsible for compliance in a smaller organisation.
Where all accounting and compliance roles are placed in one person – for example, the Chief Accountant - without appropriate oversight or review, significant problems can arise; often described as the “Small Company” or “Self-Review” problem.
How does an investor or Legal Representative know that the Chief Accountant is covering all compliance obligations (including those to which they are not responsible or trained for)? Are their calculations correct? Have they updated for recent legislative changes (note: there is no specific requirement for ongoing professional training for an individual Chief Accountant holder, however Chief Accountants from licensed Accounting Service companies have 40 hours per year of mandated external professional development)/ Is the Chief Accountant telling you everything, or just covering for what they think you want to know?
In conclusion, business owners and Legal Representatives in Vietnam need to have a compliance process, which ensures compliance is a function that is separated from Chief Accountant role (or, at least the review/oversight is separated). Understanding that the Chief Accountant role is a statutory requirement, but not a total solution to compliance, is a first step that is often missed. Appointing a Chief Accountant that understands and appreciates the above, and is supportive of a structure that puts compliance and independent review above their position and title, will go a long way to compliance and success.
 Article 53, Law on Accounting 2015 (88/2015/QH13)
 Article 20, Decree No. 174/2016/NĐ-CP
 Article 51, Law on Accounting 2015 (88/2015/QH13) and Article 21, Decree No. 174/2016/NĐ-CP
 Article 17, Decree No. 41/2018/NĐ-CP
 Article 19, Law on Accounting 2015 (88/2015/QH13)
 Article 16, Article 24 and Article 29, Law on Accounting 2015 (88/2015/QH13)
 Article 10, Decree No. 41/2018/NĐ-CP
 Article 55, Law on Accounting 2015 (88/2015/QH13)