Discrepancies between preliminary, audited financial reports remain thorny
A disparity between preliminary reports issued by many Vietnamese businesses and their audited financial statements has persisted on the stock market for years, leading to distorted stock prices and adversely affecting investors’ interests.
For example, the net profit of major agricultural firm Loc Troi Group JSC, registered on the unlisted public company market (UPCom) as LTG, was VND16.8 billion ($671,330) in its audited consolidated financial statement, decreasing by VND249 billion from its self-reported figure.
Consequently, this triggered a substantial decline in earnings per share (EPS) to VND143 from VND2,240, and a 145-fold rise in its price-to-earnings (P/E) ratio.
This discrepancy arose due to a decline of VND315 billion ($12.58 million) in profits from LTG affiliates.

The Ministry of Finance is tightening its supervision of audit activities. Photo courtesy of Vietnam Association of Certified Public Accountans.
Similarly, Hoa Binh Construction Group, listed on the Ho Chi Minh Stock Exchange (HoSE) as HBC, experienced post-audit losses amounting to VND1.1 trillion ($44.5 million) in 2023, a VND333 billion increase from the original results.
This surge was attributed to a jump in management costs resulting from additional provisions for bad debts. In 2022, HBC saw its losses escalate from VND1.13 trillion to VND2.56 trillion for the same reason.
In addition to these two enterprises, a chorus of local firms have experienced sharp reductions in profits post-audit, such as DIC Corp (HoSE: DIG), Transimex (HoSE: TMS), Pha Lai Thermal Power JSC (HoSE: PPC).
Meanwhile, there have been cases reporting loss increases after audited financial statements or shifts from profits to losses, including LDG Investment (HoSE: LDG), Duc Long Gia Lai Group JSC (HoSE: DLG), and Van Phat Hung Corporation (HoSE: VPH).
Disparities between preliminary financial reports and audited results can be attributed to the incapability of accounting divisions and cautious perspectives, or the will of business executives.
Regardless of the reason, such disparities erode investor confidence in businesses and cast doubt on the transparency of the stock market.
At a parliamentary hearing on March 18, Minister of Finance Ho Duc Phoc reported that some auditing firms have overlooked errors in financial reports to favor businesses, resulting in state budget losses and covering up misconduct, such as the case of Saigon Commercial Bank (SCB) fraud led by Van Thinh Phat chairwoman Truong My Lan.
The finance ministry will continue tightening up supervision of auditing companies, Minister Phoc stressed, adding that it had fined 21 auditing firms and three auditors, and suspended 17 auditors in 2023.
The Ho Chi Minh People’s Court jury has asked the Ministry of Public Security to clarify the roles and responsibilities of three auditing firms that worked with Saigon Commercial Bank (SCB) and take appropriate action.
The request was made after the trial of the first phase of the case at Saigon Commercial Bank (SCB) and Van Thinh Phat Group. The auditing firms involved are EY Vietnam, Deloitte Vietnam, and KPMG Vietnam.
From 2012 to 2020, they were hired by SCB as independent auditors every year. Specifically, EY Vietnam was the auditor for this bank during 2012-2016; Deloitte Vietnam, 2017-2019; and KPMG Vietnam, 2020.
For nearly a decade, the three firms all gave full approval to SCB's financial statements and their notes did not show any abnormalities in the bank's financial situation.
In June 2021, the audit before the case was unveiled indicated that this bank had six-month pre-tax profit of more than VND450 billion ($17.8 million) and equity of nearly VND22 trillion ($869.9 million).
When the case was brought to light, SCB was placed under special control by the State Bank of Vietnam in October 2022. Re-audit results showed that as of September 30, 2022, the bank's accumulated losses were nearly VND465 trillion, while its equity was negative VND444 trillion ($17.56 billion).
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