What Happens If You Fail to Hire or Manage a Chief Accountant in Vietnam?

Introduction

For foreign-invested companies operating in Vietnam, appointing a Chief Accountant (“CA” / Kế toán trưởng) is widely recognized as part of basic compliance. However, in practice, I often see cases where management does not fully anticipate what can happen if the company fails in hiring or managing the CA role properly.

This article is written for company managers. It summarizes—using practical and easy-to-visualize examples—what kinds of problems may arise when CA hiring/management goes wrong.

1. Case #1: CA-related violations and administrative fines

Vietnamese regulations define various violations and administrative fines relating to the appointment and operation of a Chief Accountant. Below are representative examples and indicative fine ranges (for organizations).

Typical violations and indicative fines (organization level)

These issues can happen even without bad intent. For example, a CA resigns and the company “temporarily manages without a CA” and postpones formal arrangements until the busy season ends, or a CA handover is done informally (verbally) without proper documentation.

Also, the CA is expected to sign annual financial statements. If a CA resigns mid-year and is replaced, the incoming CA will still be expected to sign the annual statements. It is natural for them to want the numbers for the period before their start date to be in a condition they can explain. From management’s perspective, it may feel unnecessary to re-check what has already been booked, but allocating time for this verification is reasonable—especially in situations where accountability can become sensitive.

In reality, my impression is that many foreign-invested companies are managing to avoid the types of violations listed above. In the next sections, I will focus on situations that are more likely to occur—and become more costly—in practice.

2. Case #2: Large tax assessments and penalties after a tax audit

In many foreign-invested companies in Vietnam, the CA handles both accounting and tax matters. From a management perspective, it is especially important to ensure that tax compliance and tax risk management are properly covered in hiring and day-to-day management.

Tax audits for foreign-invested companies in Vietnam can be strict. When the tax authority identifies issues, the financial impact can include additional tax assessments plus penalties (commonly 20% of the additional tax, and in cases assessed as tax evasion, 100%–300% of the additional tax) as well as late payment interest (typically 0.03% per day). In recent years, the tax authority has increasingly screened target companies in advance, and when an audit occurs, the resulting assessment amount can become significant.

Given this environment, the CA is expected to manage tax matters carefully on a daily basis in order to minimize audit findings. This requires not only keeping up with regulations that change year by year, but also understanding how the tax authority tends to interpret ambiguous areas. Vietnam has many practical tax issues where interpretation differs depending on the tax officer in charge.

For example, in corporate income tax audits, there have been increasing cases where overtime payments exceeding the statutory overtime limits are treated as non-deductible expenses. In my view, this trend has grown since around 2020. Importantly, this is not necessarily because a new law was issued; rather, the tax authority’s internal stance—“this violates labor law, therefore it should be non-deductible”—has become stronger. This illustrates why it is critical to assign tax responsibilities to someone who updates information continuously and understands not only the written law but also real-world enforcement tendencies.

Another key point: while having the Chief Accountant certificate/training is mandatory, the CA exam itself is often said to be not very difficult, and some people say the pass rate is above 95%. This means that “having the CA certificate” alone does not prove strong capability or experience. Management needs to evaluate the candidate’s practical track record carefully.

Finally, on the accounting side, foreign-invested companies commonly have their financial statements reviewed by professional auditors at least annually, meaning there is usually an external chance to detect large issues. Tax, however, often does not receive third-party checking until a tax audit actually occurs—so it is not unusual for companies to realize issues only when the audit begins. If a company wants a stronger approach (even at higher cost and workload), periodic tax reviews—either internally or by external advisors—can be an effective option.

3. Case #3: Fraud and misconduct

Another serious scenario is fraud involving the Chief Accountant. Examples include cash or bank embezzlement, bribery, kickbacks, and tax-related misconduct. Sometimes the CA acts alone; in other cases, multiple people collude and the CA becomes involved.

Fraud tends to occur more easily when duties and authority are concentrated around the CA. This can include aggregating payment requests, entering transactions into accounting software, handling bank procedures, controlling original supporting documents, knowing the “real” approval flow, and acting as the key contact for vendors, accounting firms, and auditors. When initiation, approval, banking authority, cash handling, and review are not separated, fraud becomes easier, and detection becomes slower.

In foreign-invested companies, another practical factor is that foreign managers may not understand Vietnamese. That language gap can make it harder to notice early warning signs from day-to-day communication and informal workplace signals.

Personally, I am aware of multiple cases in foreign-invested companies where fraud losses occurred with CA involvement. This risk becomes higher in start-up phases or smaller sites where resources are limited, or where the head office/management team is controlling the Vietnam site remotely (for example, by visiting only occasionally).

As countermeasures, assessing a candidate’s compliance mindset and integrity is important, but building a system that reduces fraud opportunities is equally important. In theory, internal fraud tends to occur when three elements align: opportunity, motivation, and rationalization. While there are many prevention measures, at a minimum, companies should remove “opportunity” by implementing segregation of duties. If segregation is difficult due to limited headcount, then at least ensure that final approvals are made by the company head, and that management regularly reviews bank transactions and financial results and actively questions unusual items.

In addition, if a company representative or a Chief Accountant is involved in fraudulent accounting or tax evasion—or if serious consequences occur due to negligence in their duties—criminal penalties may apply. There have been cases where a CA was sentenced even without directly committing the fraud, because they overlooked major embezzlement by employees or provided formal approvals without sufficient control, and this was judged as negligence in their role.

Such criminal cases may encourage CAs to take their duties seriously, but they can also create excessive pressure. I know capable professionals who feel that “becoming a Chief Accountant is scary” and prefer not to take the role. For that reason, some companies provide a “Chief Accountant allowance.”

Conclusion

In Vietnam, the Chief Accountant role is not only a formal “mandatory appointment.” Depending on how the role is operated, it can become a key point where tax risk and governance risk surface. From a management perspective, it is essential not to rely only on whether the person holds the CA certificate, but to assess whether the candidate has the capability required for the actual scope of work.

At the same time, companies should design approvals, authorities, and a review line so that too much work, information, and power do not concentrate in one CA role. If this article helps managers prevent major issues by improving how they hire and manage the CA function, I would be very glad.

FAQ

What should we do when we change the Chief Accountant in Vietnam?

You should treat a CA change as a controlled project: formal decision/appointment, structured handover (books, documents, access rights, open items), and communication with relevant parties (bank, auditors, accounting firm). Weak handover often becomes a real problem later during audits or inspections.

If a candidate has the CA certificate, can we assume tax and audit matters will be fine?

No. The certificate is an important requirement, but it does not automatically mean strong practical capability. For foreign-invested companies, confirm real experience such as tax audit handling, evidence discipline, working with auditors, and internal control mindset.

Why are tax audits said to be stricter for foreign-invested companies?

FDI companies often have more complex transaction structures (related-party transactions, cross-border items, expat PIT, etc.) and therefore face stronger documentation and explanation requirements. Audit target selection increasingly involves screening, so findings can be larger when an audit occurs.