Financial statements, according to Article 3.1 of the Law on Accounting No. 88/2015/QH13, are economic and financial information systems of the accounting entities in compliance with the accounting standards and accounting system. For investors, corporate managers and regulators, financial statements contain vital information determining financial health, business status and cash flow of a corporation. Therefore, the preparation and submission of financial statements is one of the mandatory legal obligations that every corporation must perform.
However, there are many cases where personnel changes and internal problems make the preparation and issuance of financial statements unfavorable. It is the fact that there are plenty of businesses, even listed companies, that cannot issue financial statements and submit them on time, leading to consequences such as administrative penalties, suspension of transactions or delisting. Problems arise when these enterprises cannot issue financial statements on time, it is hard to clarify the responsibility of the director/general director, legal representative, chief accountant, accountant who must make and sign financial statements but do not fulfill their obligations or those who have to prepare and sign financial statements for the financial years that they are not in charge of or even do not work at the business during that fiscal period. Whether the current director/general director, legal representative, chief accountant, accountant has the right to refuse to prepare and sign the financial statements for the previous fiscal years and whether their signing on the reports is bound by joint responsibilities for the activities and transactions of the enterprise recorded in those financial statements? This is a problem that many businesses face in the process of operation and is also what worries many people holding the position of Director/ General Director, legal representative, chief accountant of enterprises, especially when they are just hired and signed labor contracts with the enterprise, not shareholders/ capital contributors.
Stemming from the above fact, the ATA Legal Services team researched, developed and published a legal topic this week with the title “Who takes responsibility when a business does not issue financial statements on time?” This topic is aimed at serving businesses and business managers in the process of administration, operation, production and business.
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