In this article
Every year, an FDI company must engage an independent audit firm for its annual financial statements. The question is not only what it costs but which firm can meet the group's requirements, understands the industry and keeps to the timetable. This article sets out a comparison framework and a scorecard so you can choose an audit firm on a sound basis. It is written from the company accountant's perspective by the accounting team at ACCA Consulting Vietnam.
1. Start from the group's requirements, not the price list
Before requesting quotes, ask the parent company three questions: does the group appoint a global audit firm; must the subsidiary submit a reporting package for the group audit; and do banks or partners require a specific audit brand? If the answer to all three is "yes", the choice has more or less been made.
If the group lets the subsidiary choose, the company has more options. The minimum mandatory condition: the audit firm and its practising auditors must be eligible to provide audit services under current regulations. Ask the firm to provide evidence of this in its proposal.
2. Big Four vs. mid-tier and small audit firms
| Criterion | Big Four and large international networks | Mid-tier and small firms |
|---|---|---|
| Group audit coordination | Smooth when the group uses the same network | Check their experience preparing reporting packages under group instructions |
| Fees | Usually higher | Usually more flexible |
| Engagement team | Standardized processes; staff may change from year to year | Usually more stable, with direct partner access |
| Peak-season availability | Fully booked; book early | More flexible but with limited resources |
| Industry experience | Industry specialists available | Varies by firm; ask for a list of clients in the same industry |
There is no choice that is right for every company. A small trading company whose group does not require a specific firm is often well served by a mid-tier firm with FDI experience. A factory belonging to a listed group usually needs a large international network to align with the group audit process.
3. A weighted scorecard for choosing an audit firm
How it works: choose 5–6 criteria, assign weights according to the company's priorities, score each firm from 1 to 5, multiply by the weights and add up. The weights below are only an example for an FDI company that reports to a group.
Illustrative example; each company should adjust the weights to its own priorities.
View as table
| Meets group requirements | 25% |
| Team quality | 20% |
| Audit fee | 20% |
| Industry experience | 15% |
| Timeline commitment | 10% |
| Management letter advisory value | 10% |
Illustrative example. Weighted totals: Firm A = 3.75; Firm B = 3.70. The small gap comes from the most heavily weighted criterion, group requirements.
View as table
| Firm A | Firm B | |
|---|---|---|
| Group requirements | 5 điểm | 3 điểm |
| Team | 4 điểm | 4 điểm |
| Fee | 2 điểm | 5 điểm |
| Industry experience | 4 điểm | 3 điểm |
| Timeline | 3 điểm | 4 điểm |
| Management letter | 4 điểm | 3 điểm |
The example shows that a low-fee firm can score almost as well as a high-fee firm, and the outcome depends heavily on the weights the company sets. The scorecard helps the board of directors see the trade-offs and keeps a record of the basis for the decision to explain to the parent company.
4. Questions to ask audit firms
- Who are the engagement partner and team leader, and have they audited companies in the same industry?
- What is the expected timetable: stock count, fieldwork, draft, issuance?
- Does the fee include the group reporting package, the management letter and an English version?
- In what cases are additional fees charged (late documents, expanded scope)?
- Does the firm provide other services to the company, and could this affect independence?
- What is their sample PBC list and expected turnaround time for answering queries?
5. Suggested selection process
- 1Define requirements
Agree scope, language and reporting framework with the parent company.
- 2Invite 2–3 firms
Send information on size, transaction volume, industry and preferred timetable.
- 3Score the firms
Use the weighted scorecard and record specific comments for each criterion.
- 4Negotiate
Clarify additional fees, timeline and points of contact.
- 5Sign before 31 December
Secure the stock count and fieldwork dates during peak season.
FAQ
Must an FDI company use a Big Four firm?
No. The regulations only require the annual financial statements to be audited by an eligible independent audit firm; choosing a Big Four firm usually stems from group or partner requirements.
Should we choose the firm with the lowest fee?
Only if that firm also meets the other important criteria. Use the scorecard to compare the overall picture, including additional fees and the risk of missing deadlines.
Can our accounting service provider also audit the company?
It is not advisable and is generally not permitted, because it affects independence. Accounting and audit should be performed by two separate firms.
Books ready for a fast audit, whichever firm you choose
ACCA Consulting Vietnam helps FDI companies close their books, prepare the PBC and work with the audit firm of their choice. Get advice on our accounting services.
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