Decree No 39 increases the number of penalties for various violations, with the maximum penalty set at VND30 million (US$1,500) – a 50-per-cent increase compared to the old one.

For fraudulent declaration of accounting records, the fine rises from VND5-20 million ($240-970) to a range of VND10-30 million ($500-1,500). The penalty for the issuance of an invoice which does not comply with applicable regulations is now VND20-30 million ($970-1,500), a 400-per-cent increase over the previous fines. Even with these drastic increases, however, the fines remain a small fraction of the money dishonest companies can generate from non-compliant invoices.

Decree No 39 also introduces more stringent non-monetary penalties for such offenses as forging, or making a false statement in a voucher; deliberately cancelling or damaging an accounting voucher; making an account voucher in which the sheets contain conflicting content; failing to provide a source document for a financial transaction; or deliberately generating different source documents for the same transaction

Under Decree No 184, an accountant found to have committed any of these offenses faced the temporary loss of their license to practice. Under the new decree, the license can now be lost permanently.

Thus, from now on, if an accountant is found to have committed one of the above violations, he or she cannot simply ask their employer to cover the applicable fine. Instead, they will lose their professional qualification, a penalty likely to persuade accountants be less willing to bend the rules in response to pressure from management.

Decree No 39 also specifies a number of new offenses subject to fine. For example, a fine of up to VND2 million ($97) will now apply if an accounting voucher is signed by an unauthorized person, and a fine of VND5-15 million ($240-725) will apply for failing to fully sign and seal accounting records once they have been published. Current fine levels for these offenses are extremely low and unlikely to deter those who intentionally and systematically violate accountancy regulations.

Fines for accounting violations can be imposed by numerous Government bodies, from the financial inspectorate to the local People’s Committee. However each authority is limited as to the exact levels of fine which they can impose. For the Head of the Inspectorate of the Department of Finance, Decree No 39 increases this threshold by 50 per cent to VND30 million ($1,500).

Decree No 39 significantly increases the monetary sanctions for accounting violations, in some cases by 400 per cent. It has also introduced a number of new penalties, including the permanent withdrawal of professional licenses. These new penalties will probably be effective in encouraging accountants and executives to be more honest, vigilant and conscientious in their compliance with accountancy regulations. However, it remains to be seen how big an impact the new, but still very low, penalties will have on unscrupulous companies which intentionally breach other accounting regulations.