Recent enforcement trends and high-profile investigations have also reinforced how improper accounting practices may expose companies and executives to tax penalties, litigation risks, regulatory scrutiny, and even criminal liability.
For foreign-invested enterprises (FIEs), manufacturers, and fast-growing businesses operating in Vietnam, maintaining accurate and transparent accounting documentation is becoming increasingly important as authorities strengthen oversight of tax compliance, financial reporting, and anti-fraud controls.
Vietnam’s recent enforcement cases highlight growing accounting risks
Concerns around accounting transparency and undocumented financial practices have attracted renewed attention following several recent investigations into irregular bookkeeping and financial reporting.
A recent Vietnamese media report discusses the illegal practice of maintaining “two sets of accounting books” for Bao Tin Minh Chau, one of Vietnam’s leading companies in gold, silver, and gemstone trading and craftsmanship. The case highlighted how some businesses continue to use unofficial accounting records alongside formal financial statements to conceal revenue, manipulate tax obligations, or manage off-record transactions. Such practices can create severe legal exposure when discrepancies are identified during audits, inspections, disputes, or criminal investigations.
Vietnamese authorities have also continued to strengthen enforcement of anti-corruption and financial transparency measures in recent years, particularly in sectors such as real estate, banking, construction, and public procurement. Large-scale fraud investigations have demonstrated how manipulated financial records, fictitious transactions, and undocumented liabilities may contribute to broader compliance and governance failures.
For businesses, these developments reinforce the importance of maintaining reliable accounting documentation systems that can withstand tax reviews, audits, due diligence processes, and litigation.
Why accounting documentation matters beyond bookkeeping
Accounting documentation serves purposes far beyond financial recordkeeping. Well-maintained accounting documentation helps businesses:
- Support tax declarations and financial reporting;
- Demonstrate compliance during inspections and audits;
- Verify transaction legitimacy;
- Strengthen internal controls;
- Support litigation and dispute resolution processes; and
- Improve management visibility over financial operations.
Poor documentation practices, by contrast, may create vulnerabilities even where misconduct was not intentional.
Common accounting documentation weaknesses
Businesses in Vietnam commonly encounter issues such as:
- Missing invoices or supporting documents;
- Inconsistent transaction records;
- Poor expense authorization procedures;
- Manual accounting adjustments without audit trails;
- Inadequate segregation of duties;
- Weak document retention practices; and
- Failure to reconcile accounting records with operational data.
In fast-growing companies, weaknesses in accounting documentation may emerge when operational expansion outpaces the development of internal controls.
Legal and regulatory risks under Vietnamese law
Poor accounting documentation practices may trigger multiple layers of regulatory exposure in Vietnam.
Tax and administrative penalties
Incomplete or inaccurate accounting records may result in:
- Tax reassessments;
- Denial of deductible expenses;
- Value-added tax (VAT) recovery disputes;
- Administrative fines;
- Late payment interest; and
- Increased audit frequency.
Vietnamese tax authorities increasingly rely on electronic invoicing systems, data matching, and digital compliance monitoring, making inconsistencies easier to identify during inspections.
Exposure to false financial reporting allegations
Under Vietnamese law, intentionally falsifying accounting records or financial statements may expose businesses and individuals to serious legal consequences.
Common risk areas include:
- Recording fictitious revenue;
- Concealing liabilities or losses;
- Using false invoices;
- Manipulating accounting software or accounting entries; and
- Omitting material financial information.
While some violations may initially result in administrative penalties, deliberate misconduct that causes serious financial consequences may trigger criminal liability under Vietnamese law.
Risks during litigation and investigations
Poor accounting documentation may also weaken a company’s position during:
- Commercial disputes;
- Labor disputes;
- Shareholder conflicts;
- Tax controversies;
- Regulatory investigations; or
- Fraud examinations.
Without sufficient supporting documentation, businesses may struggle to demonstrate transaction legitimacy, ownership rights, contractual performance, or internal authorization processes.
Internal control weaknesses can amplify accounting risks
Accounting documentation problems are often linked to broader weaknesses in internal control systems.
Weak internal controls create operational vulnerabilities
Poorly documented processes may increase risks involving:
- Unauthorized transactions;
- Duplicate payments;
- Procurement fraud;
- Inventory discrepancies;
- Cash leakage; and
- Financial misstatements.
Documentation gaps may also reduce management’s ability to detect irregularities early.
Informal practices remain common in some businesses
Some businesses, particularly SMEs and rapidly expanding enterprises, continue relying on informal workflows, verbal approvals, or fragmented recordkeeping systems.
While these practices may appear manageable during early growth stages, they can create significant risks once businesses face:
- External audits;
- Investment due diligence;
- Tax inspections;
- Financing applications; or
- Regulatory investigations.
Key Vietnamese laws and regulations businesses should monitor
Businesses operating in Vietnam should maintain accounting documentation practices that align with multiple legal and compliance frameworks.
Key regulations governing accounting documentation in Vietnam include:
- Law on Accounting;
- Law on Tax Administration;
- Corporate Income Tax Law;
- VAT Law;
- E-invoicing requirements;
- Enterprise Law;
- Anti-money laundering regulations; and
- Sector-specific financial reporting requirements.
Foreign-invested enterprises may also face additional compliance expectations relating to:
- Transfer pricing documentation;
- Related-party transaction reporting;
- Statutory audit obligations; and
- Cross-border payment documentation.
As Vietnam continues expanding digital tax administration systems and data integration initiatives, businesses may face greater scrutiny over documentation accuracy and consistency.
How businesses can strengthen accounting documentation practices
Businesses can reduce compliance and litigation risks by strengthening both documentation procedures and internal governance frameworks.
Improve documentation retention and consistency
Businesses should consider:
- Standardizing supporting documentation requirements;
- Maintaining centralized digital records;
- Establishing clear retention policies;
- Conducting regular reconciliations; and
- Preserving audit trails for accounting adjustments.
Strengthen internal controls
Key control measures may include:
- Segregation of financial duties;
- Approval hierarchies;
- Regular internal reviews;
- Cross-department reconciliation procedures; and
- Fraud detection controls.
Conduct periodic compliance reviews
Periodic accounting and compliance assessments may help businesses identify:
- Documentation gaps;
- Process inconsistencies;
- Tax exposure areas; and
- Weak internal controls before regulatory issues arise.
Align accounting, tax, and legal functions
Accounting documentation should not operate independently from legal and compliance oversight.
Businesses may benefit from closer coordination between:
- Finance teams;
- Tax advisors;
- Internal audit functions; and
- Legal and compliance departments.
This is particularly important for businesses involved in cross-border transactions, complex supply chains, or heavily regulated industries.
Outlook for businesses operating in Vietnam
Vietnam’s regulatory environment is becoming increasingly data-driven, transparent, and enforcement-oriented. As authorities strengthen oversight of taxation, financial reporting, anti-corruption enforcement, and digital compliance systems, accounting documentation practices are receiving greater scrutiny.
For businesses, poor accounting documentation is no longer simply an administrative weakness. Inadequate records, unsupported transactions, or weak internal controls may create broader operational, legal, financial, and reputational risks.
Conversely, businesses that invest in stronger accounting governance, transparent documentation systems, and effective internal controls may be better positioned to manage audits, support dispute resolution, attract investment, and maintain long-term regulatory compliance in Vietnam.
