If your company has just crossed into audit territory – a new foreign-investment license, a bank loan covenant, or an investor demanding audited statements – the first independent audit can feel intimidating. The good news: a first audit is rarely about clever accounting. It is about whether your records support your numbers. This guide shows what auditors actually check, how to organize documents before fieldwork, and how to avoid the delays that make a first audit painful.

Why the first audit is different from later ones

In a recurring audit, last year’s balances were already examined, so the auditor starts from a trusted base. In a first-time engagement, the opening balances are unaudited. The auditor must gain comfort over them from scratch, which means more questions, more sampling, and more supporting documents. Expect scrutiny of how your fixed assets, inventory, and retained earnings were built up over prior years – not just this year’s movements.

What triggers a mandatory audit in Vietnam

Under the Law on Independent Audit, certain entities must have annual financial statements audited. These commonly include foreign-invested enterprises, credit institutions, insurance companies, listed companies, and other public-interest entities. If you are unsure whether the requirement applies to you, confirm it early with your auditor or a licensed audit firm – discovering the obligation after year-end creates avoidable time pressure.

Organize your documentation before fieldwork

Financial records and reconciliations

Before the auditor arrives, reconcile every major balance to an independent source. Bank balances to bank confirmations or statements. Receivables and payables to supplier and customer confirmations or subledgers. Inventory to a physical count. Fixed assets to a register with invoices. A clean reconciliation file removes most follow-up questions.

Legal and contractual documents

Prepare the business registration certificate, investment license, charter, board resolutions, major contracts, loan agreements, and lease agreements. Auditors read these to understand rights, obligations, and related parties. Missing contracts slow down the review of revenue and liabilities.

Opening balances

Because it is a first audit, gather evidence for opening figures: prior-year trial balance, asset purchase invoices, depreciation schedules, and any prior tax filings. The more you can trace opening balances to source documents, the smoother the engagement.

A real scenario

A manufacturing SME received its first audit after taking a bank loan. Fieldwork stalled for two weeks because inventory had never been counted at year-end and the fixed-asset register did not match the ledger. Once the company performed a full count and rebuilt the asset register from invoices, the audit closed quickly. The lesson: the bottleneck was documentation discipline, not accounting complexity.

Common mistakes and how to fix them

• No year-end inventory count. Fix: schedule a physical count on or near the balance-sheet date and keep count sheets signed by staff.
• Cash and bank not reconciled monthly. Fix: reconcile every account monthly and keep the reconciliation with the statement attached.
• Revenue recognized on invoice date regardless of delivery. Fix: match revenue to when goods or services are actually delivered, and keep delivery evidence.
• Related-party transactions not disclosed. Fix: list all transactions with owners, directors, and affiliated companies before fieldwork.
• Treating the auditor as an adversary. Fix: assign one internal contact who can answer questions fast; responsiveness shortens the audit more than anything else.

Audit readiness checklist

• Confirm whether the audit is legally required and agree the deadline early.
• Close the books and produce a final trial balance.
• Reconcile bank, receivables, payables, inventory, and fixed assets.
• Perform and document a year-end physical inventory count.
• Prepare a fixed-asset register tied to purchase invoices.
• Compile legal documents, contracts, and loan agreements.
• List related parties and their transactions.
• Assemble evidence for opening balances.
• Nominate one internal coordinator for auditor requests.

Conclusion and next step

A first audit rewards preparation, not perfection. Start at least a month before fieldwork by reconciling your balances and gathering source documents. Your concrete next step: build a single shared folder that mirrors the checklist above, and fill it before the auditor requests anything. That one habit prevents most first-audit delays.

Frequently asked questions

How long does a first audit take?

It varies with company size and record quality. Well-prepared small companies often complete fieldwork in one to two weeks; poor documentation can extend it significantly. Preparation is the biggest driver of speed.

Can we still fix errors during the audit?

Yes. Auditors expect adjustments. Correcting genuine errors before the report is finalized is normal and better than leaving misstatements uncorrected.

What if our opening balances have no supporting documents?

Tell the auditor early. They can apply alternative procedures, but unsupported opening balances may affect the audit opinion, so it is better to reconstruct evidence where possible.

Do we need to count inventory if amounts are small?

If inventory is immaterial, the auditor may reduce procedures, but a count is still the cleanest evidence. Discuss materiality with your auditor rather than assuming.

References

• Law on Independent Audit of Vietnam (No. 67/2011/QH12).
• Circular 200/2014/TT-BTC on the enterprise accounting regime, issued by the Ministry of Finance.