As the requirement for the transparency of corporate financial information rises, many Vietnamese audit firms have been established in recent years. Though outnumbered, domestic audit companies are still left behind foreign companies. To seek answers to the question f how to improve the competitiveness of domestic auditing in general and domestic auditors in particular, Vietnam Business Forum interviewed Mr Ngo Duc Doan, CEO of AASC Auditing Firm Company Limited. Ngoc Anh reports.
As leader of one of the two first domestic independent auditors, what do you think about the auditing sector of Vietnam?
Set up in the 1990s, the Vietnamese auditing sector is still young but growing more mature. The service quality has significantly improved and won the customer trust. However, auditing companies still face difficulty in operation because of limited competitiveness, low human level, undiversified services, and small customer base. Moreover, independent audit companies lack close cooperation and some even tend to utilise unfair competition. Many audit firms, even the Big Four (Four biggest foreign audit firms namely PricewaterhouseCoopers -PWC; Deloitte Touche Tohmatsu-Deloitte; Ernst and Young -E&Y; KPMG) in Vietnam are ready to offer lower fees to attract customers. Some domestic companies offer low service fees and their services are also of low quality. For example, they assign improper auditors and reduce auditing procedures and processes. And, they spoil the reputation of the entire auditing industry.
The Big Four are said to capture a majority of market share in Vietnam. Why do they leave us behind so far?
According to the Vietnam Association of Certified Public Accountant (VACPA), in 2013, the Big Four accounted for 58 percent of the total market revenue while 130 Vietnamese audit firms shared 42 percent. In 2013, on average, an audit company made revenue of VND31 billion. The Big Four earned VND599 billion each while domestic companies earned just VND14 billion. AASC now has the second biggest customer base among Vietnamese auditors and has the largest revenue just after the Big Four but its absolute revenue value is much behind them. The Big Four can do it because they have strong brands, inherit customers from investors, foreign financial institutions and low fees.
What is AASC doing to compete with the Big Four and narrow the gap with foreign auditors?
AASC does not choose to confront the Big Four but cooperate with them and some small and medium auditors because we believe that cooperation will bring benefits to all parties, enhance service quality, strengthen and enhance public confidence, and increase auditing revenue. But, if we have to compete, we will seek the areas and segments with fewer confrontations.
To bridge the gap between domestic auditors and foreign auditors, we must create a prestigious, honest and transparent auditing sector, pursue sustainable development and regional and international integration. In 2013, we renamed the company to AASC Auditing Firm Company Limited. I hope that the new brand will help improve creditability and confidence of AASC in particular and Vietnam’s auditing sector in general.
What factors are necessary to develop a sustainable auditing sector?
To develop a strong and transparent audit industry and meet practical requirements, audit companies need to focus on developing human resources, foster the professional expertise and professional ethics for auditors. They also need to perfect their governance towards professionalism, publicity and transparency to have the consensus of all the staff.
Vietnamese
