Some notes on appointing a chief accountant in enterprises under the law on accounting

The Chief Accountant is the head of an entity’s accounting department and is responsible for organizing and overseeing accounting operations within the accounting unit. This is one of the most important positions in the financial and accounting management system of an enterprise. Vietnamese law imposes relatively strict requirements on the qualifications, appointment, and responsibilities of a Chief Accountant. Understanding these legal provisions not only helps enterprises mitigate legal risks but also contributes to strengthening transparent and effective corporate governance.  

This article outlines key legal issues relating to the appointment and role of a Chief Accountant in an enterprise. 

1. Is it mandatory for an enterprise to have a Chief Accountant?

Under accounting regulations, enterprises are considered accounting units in the field of business.(1) Accordingly, accounting units operating in business are required to appoint a Chief Accountant, except for micro-enterprises as defined by law. These micro-enterprises include:(2)

• For agriculture, forestry, fishery, industry, and construction sectors: enterprises with an average annual number of employees participating in social insurance not exceeding 10 and annual total revenue not exceeding VND 3 billion, or total assets not exceeding VND 3 billion. 

• For commerce and service sectors: enterprises with an average annual number of employees participating in social insurance not exceeding 10 and annual total revenue not exceeding VND 10 billion, or total assets not exceeding VND 3 billion. 

If an enterprise is unable to immediately appoint a Chief Accountant, the law permits it to assign a person in charge of accounting for a maximum period of 12 months or to engage an accounting service provider to assume the role. After the 12-month period, the enterprise is required to appoint a Chief Accountant.(3)

Complying with this obligation is not only a legal requirement but also directly affects the validity of financial statements, tax finalization reports, and the enterprise’s ability to undergo audit and inspection during business operations. 

2. Criteria for appointing a Chief Accountant in an enterprise

The Chief Accountant must satisfy the following criteria and conditions:(4)

(i) Must not fall into the categories of individuals prohibited from practicing accounting under the law, including:(5)

• Minors; individuals declared by the court to have limited or lost legal capacity; individuals currently undergoing compulsory education or rehabilitation measures.

• Individuals prohibited from practicing accounting under a legally effective court judgment or decision; individuals under criminal investigation; individuals serving a prison sentence or convicted of economic or financial crimes who have not yet had their criminal record expunged.

• Parents, children, spouses, siblings of the legal representative, head, director/general director, deputy head, deputy director/deputy general director in charge of finance-accounting, or Chief Accountant of the same accounting unit, except for private enterprises, single-member limited liability companies owned by an individual, or other cases as prescribed by the Government. 

• Individuals concurrently acting as managers, storekeepers, treasurers, or those engaged in the purchase/sale of assets within the same accounting unit, except for private enterprises or single-member LLCs owned by an individual, or other exceptions provided by law.

(ii) Must possess professional ethics, integrity, honesty, and a clear understanding of legal compliance; 

(iii) Must have professional accounting qualifications of at least an intermediate level; 

(iv) Must hold a Chief Accountant training certificate; 

(v) Must have at least two (02) years of practical accounting experience for holders of a university degree or higher in accounting, or at least three (03) years of such experience for those holding intermediate or college-level accounting qualifications. 

If a person is temporarily appointed as the person in charge of accounting instead of the Chief Accountant, he or she must still meet all of the above requirements applicable to the Chief Accountant.(6)

3. Rights and responsibilities of the Chief Accountant

Under Article 53.3 of the Law on Accounting 2015, the Chief Accountant works under the leadership of the legal representative of the enterprise and holds the following rights and responsibilities:(7)

• To implement laws and regulations on accounting and finance within the enterprise. 

• To organize and operate the accounting department in accordance with the Law on Accounting 2015; 

• To prepare financial statements in compliance with accounting regimes and standards; 

• To exercise professional independence in accounting expertise and practices. 

4. Notes on outsourcing Chief Accountant services

According to Article 56 of the Law on Accounting 2015, if an enterprise wishes to outsource the role of Chief Accountant, it must enter into a written service contract with an accounting service company or a registered accounting household business. In other words, enterprises are not permitted to engage individuals directly through service contracts to act as Chief Accountant. 

If an enterprise wishes to engage an individual to act as Chief Accountant without going through an accounting service provider, it must sign a labor contract with that individual. Such a labor relationship must comply with the provisions of labor law. 

(1) Article 3.1 of Decree 174/2016/ND-CP

(2) Article 5 of Decree 80/2021/ND-CP 

(3) Article 20.1 of Decree 174/2016/ND-CP 

(4) Article 54 of the Law on Accounting 2015

(5) Article 52 of the Law on Accounting 2015 

(6) Article 53.4 of the Law on Accounting 2015 

(7) Article 55.1 and 55.2 of the Law on Accounting 2015

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