The State Securities Commission recently issued a decision suspending the professional status of four auditors from Deloitte Vietnam: Pham Hoai Nam, Le Dinh Tu, Do Hong Duong, and Tran Van Dang, effective from June 25 until the end of 2024. Le Dinh Tu, Deputy General Director, signed the 2019 semi-annual audit report for the Saigon Joint Stock Commercial Bank (SCB).

According to the semi-annual consolidated financial review report signed by Le Dinh Tu on September 30, 2019, Deloitte found no issues that would lead them to believe the interim consolidated financial statements did not present fairly, in all material respects, the financial position of SCB as of June 30, 2019, and the consolidated results of its operations and cash flows for the six-month period then ended, in accordance with applicable accounting standards and regulations for credit institutions in Vietnam.

On March 5, the Ho Chi Minh City People’s Court began the trial of the Van Thinh Phat and SCB case, involving over 1,000 people. On April 11, the defendant Truong My Lan was sentenced to death on three counts and ordered to pay 677 trillion VND in compensation.

A total of 81 defendants were convicted, including Do Thi Nhan (former Director of the State Bank of Vietnam’s Banking Supervision Department), who received a life sentence for embezzlement.

Truong My Lan was convicted of embezzling 677 trillion VND from SCB, double the amount stated in the indictment. She was accused of manipulating and directing several SCB leaders and staff, as well as key leaders in Van Thinh Phat’s ecosystem of companies, to commit illegal acts and misappropriate a large sum of money, causing severe consequences.

The public has also questioned the role of audit firms in this case. For many years before the incident, Deloitte Vietnam and two other major international audit firms audited SCB. Deloitte audited SCB from 2017 to mid-2019, with Le Dinh Tu signing the final audit report.

Recently, investors have been increasingly concerned about the reliability of financial statements from publicly listed companies following major scandals in Vietnam and other countries. For instance, in SCB’s consolidated financial statements for Q2/2022, the bank's assets were still recorded at over 761 trillion VND, despite the massive embezzlement by Truong My Lan.

Globally, the auditing industry faced an unprecedented scandal with PwC’s involvement in the Evergrande case in China. Since March 2024, Beijing authorities have been investigating PwC’s role in auditing Evergrande, following allegations of massive fraud involving tens of billions of USD. The Enron scandal previously led to the collapse of the renowned audit firm Arthur Andersen in 2001, reducing the Big 5 audit firms to the Big 4.

Some large audit firms are known for paying high salaries and bonuses to their employees. In 2023, Ernst & Young Vietnam reported nearly 1.376 trillion VND in revenue, up nearly 23% from 2022, and paid over 703 billion VND in salaries and bonuses. EY audits many major organizations such as Vingroup, Bao Viet, Prudential, Dat Xanh, Techcombank, Vietinbank, MB, and HDBank. EY also audited SCB from 2012 to 2016.

Recently, many audit firms have distanced themselves from scandal-plagued enterprises. In the case of the nearly 4.3 trillion VND capital inflation at FLC Faros (ROS), which is set for trial on July 22, many are questioning the role and responsibility of auditors in verifying the ownership capital.

Manh Ha