Name: Nguyễn Duy Trọng

Student ID: 11175027

Class: Auditing 59A
Individual assignment
Course:
Contemporary Issues of Auditing

Topic 6: Compare and contrast environmental audit of

Vietnam and another country?
I. Background of environmental auditing in the world:
1. SAIs: Supreme Audit Institutions
2. INTOSAI: INTOSAI is the International Organization of Supreme Audit
Institutions. INTOSAI (http://www.intosai.org/)—the professional organization of
SAIs in countries that belong to the United Nations or its specialized agencies—
has several working groups for developing different aspects of audit practice
including:
- WG on SD goals and indicators
- WG on environmental auditing (WGEA)
- WG on extractive industry
- WG on public debt
- This organization now has 180 members worldwide

II. Environmental auditing in the world:

1. Definition of environmental auditing:
- According to Wikipedia, environmental audit is evaluating intended to identify
environmental compliance and management system implementation gaps, along
with related corrective actions.
- Within the INTOSAI, a framework definition of environmental auditing is used,
with the following elements:
Environmental auditing is not significantly different
+ Environmental auditing is in principle no different from the other types of audits
that SAIs conduct, all of which may address environmental, natural resource, and
sustainable development issues
+ Environmental auditing can encompass all types of audit: financial, compliance,
and performance audits.

 Financial audits are used to determine whether government’s financial statements

reflect its environmental costs and liabilities.
 Compliance audits are used to assess compliance with spending authorities and
with environmental laws, treaties, and policies.
 Finally, performance audits are used to determine whether a government •
 meets its environmental objectives
 is effective in producing environmental results
 operates efficiently and economically.
+ It is not uncommon for SAIs to conduct environmental audits that combine some
or all aspects of financial, compliance, and performance audits.
2. Current situation on environmental auditing in other countries
- In 2006, the WGEA conducted its fifth survey on environmental auditing. The
survey was sent to the 187 members of INTOSAI, and 119 SAIs completed it
(including SAV)
- Since 1989, according to surveys, SAIs have conducted over 2,000 environmental
audits (EAs) on various topics, such as waste management, water pollution, air
pollution, and biodiversity.

 Some recorded statistics

There are marked differences in the level of environmental auditing from region to
region. According to the fifth survey (2006), SAIs from the OLACEFS region are
the most active compared to the other INTOSAI regions—93 percent of
OLACEFS respondents conducted an environmental audit from 2003 to 2005—
SAIs from EUROSAI are also very active at 82 percent.
 Environmental Audit Trends
In general, SAIs that conducted environmental audits in the past continued to do
so. From 2003 to 2005, 68 percent of respondents (81 SAIs) conducted at least one
environmental audit—the highest percentage so far => a steady growth in
environmental auditing over the last 15 years.

https://www.environmental-
auditing.org/media/3764/eng07pu_survey5envauditresults.pdf
 Audited environmental issues
SAIs audit different environmental areas. SAIs were asked to indicate the issues
they audited during the last three years, from 2003 to 2005

 Resources used to conduct environmental audits

a. Budget
- This varies from SAI to SAI. A SAI can begin environmental auditing without
investing many resources. However, some SAIs do invest considerable resources
in environmental auditing.
- In the fifth survey, SAIs were asked to estimate how much of their annual budget
is dedicated to environmental audit. Of the 66 SAIs who responded
 24 percent dedicated more than 4 percent
 28 percent dedicated between 1 and 4 percent
 27 percent dedicated 1 percent or less
 21 percent indicated that they dedicated no money to environmental auditing.
b. Human resources
- The number of auditors conducting environmental audits in each SAI also varies
from country to country
- Survey indicated that:
 fewer than two auditors working on environmental audits (14%)
 from 2 to 10 people working on environmental audits (41%)
 or 10 or more people working on environmental audits (27%)

 Working Together: Cooperative Audits

ll ll ll ll

- Part of the mission of the WGEA is to encourage SAIs to undertake cooperative

ll ll ll ll ll ll ll ll ll ll ll ll ll

audits. Cooperative audits are useful for SAIs, particularly for environmental
ll ll ll ll ll ll ll ll ll ll

audits of transboundary issues and those related to international agreements.

ll ll ll ll ll ll ll ll ll ll

Through cooperative audits, SAIs can exchange information, train each other,
ll ll ll ll ll ll ll ll ll ll

build capacity, and compare audit findings and results with other countries.
ll ll ll ll ll ll ll ll ll ll ll

- Since 2003, 22 percent of the 111 respondent SAIs have conducted cooperative
ll ll ll ll ll ll ll ll ll ll ll

audits that were not related to an international agreement. Most of the cooperative
ll ll ll ll ll ll ll ll ll ll ll ll ll

audits on topics not related to international agreements have been done in

ll ll ll ll ll ll ll ll ll ll ll ll

EUROSAI (37%). However, other regions, including OLACEFS (21%), ASOSAI

ll ll ll ll ll ll ll ll ll

(13%), and AFROSAI (17%), are also conducting cooperative audits. In addition,
ll ll ll ll ll ll ll ll ll ll ll
 SAIs do cooperate in other ways. For example, the exchange of audit information
ll ll ll ll ll ll ll ll ll ll ll ll ll

or environmental audit experiences is common for SAIs (52%).

ll ll ll ll ll ll ll ll ll

- Main challenges related to cooperative audits

ll ll ll ll ll

 lack of resources (45%)

ll ll ll

 lack of skills or experience in the SAIs (35%)

ll ll ll ll ll ll ll ll

 inadequate SAI mandate (22%) ll ll ll

 lack of partners (19%)

ll ll ll

 Barriers in Environmental Auditing ll ll ll ll

In the fifth survey, SAIs identified a number of potential barriers to conducting

ll ll ll ll ll ll ll ll ll ll ll ll

environmental auditing. The main barriers are the lack of skills or expertise within
ll ll ll ll ll ll ll ll ll ll ll ll ll

the SAI and insufficient data on the state of the environment. The followings are
ll ll ll ll ll ll ll ll ll ll ll ll ll ll

some of the other barriers that are concerned:

ll ll ll ll ll ll ll ll

Barriers encountered by SAIs in environmental auditing from 2003 to 2005

ll ll ll ll ll ll ll ll ll ll

 So, SAIs that encountered barriers were asked how they overcame them?
ll ll ll ll ll ll ll ll ll ll ll

Of the 98 SAIs that answered this question, 47 percent said that training staff was
ll ll ll ll ll ll ll ll ll ll ll ll ll ll

the main solution, and 34 percent said that working with RWGEAs was also a
ll ll ll ll ll ll ll ll ll ll ll ll ll ll

solution.
ll ll

In some cases, if information from the government was lacking, SAIs

ll ll ll ll ll ll ll ll ll ll ll

 collected environmental data from the field directly (36%),

ll ll ll ll ll ll ll ll

 developed performance indicators (19%), ll ll ll

 cooperated with research institutes and universities (19%). ll ll ll ll ll ll ll

If the country does not have sufficient norms and standards, SAIs used
ll ll ll ll ll ll ll ll ll ll ll

international organization environmental standards as criteria (29%).

ll ll ll ll ll ll ll ll

For the 31 SAIs that had never conducted environmental audits, 65 percent
ll ll ll ll ll ll ll ll ll ll ll

indicated that the main barrier is a lack of skills and expertise—identifying

ll ll ll ll ll ll ll ll ll ll ll ll
 ll training as the best way to overcome this barrier—and thirty-five percent
ll ll ll ll ll ll ll ll ll ll

ll indicated that main barrier is an inadequate SAI mandate.

ll ll ll ll ll ll ll ll

III. Environmental auditing in Viet Nam: ll ll ll ll

1. Defination:
An environmental audit is an examination of an organization, facility, or place in order to
ll ll ll ll ll ll ll ll ll ll ll ll ll ll

verify how well it meets specific audit criteria.

ll ll ll ll ll ll ll ll

Audit criteria are determined based on environmental standards, laws, regulations,

ll ll ll ll ll ll ll ll ll

national or international permissible limits, internal management systems or in

ll ll ll ll ll ll ll ll ll ll

accordance with the instructions of international organizations.

ll ll ll ll ll ll ll

2. General principles of environmental audit: ll ll ll ll

a. Complete and related information about operating, organization or place to ll ll ll ll ll ll ll ll ll

be audited. ll ll

b. Having enough recources ll ll

c. Cooparation ll

d. Protocol
3. Types of EA: ll ll

e. Compliance audit: evaluating the compliance of auditee with the law, ll ll ll ll ll ll ll ll ll

regulation, criteria,.. ll ll ll

f. Liability audit: gathering the information by interviews, researchs

ll ll ll ll ll ll ll ll

g. Specialized audits: assessing risk, minimizing waste, power auditing. ll ll ll ll ll ll ll

4. 3 steps in EA:
ll ll ll

h. pre-audit
Establish project description, scope, purpose and audit criteria.
ll ll ll ll ll ll ll

i. Site-audit: establish the meeting for the director, manager and related ll ll ll ll ll ll ll ll ll

people in the auditing.

ll ll ll ll

j. Post-audit activities ll

5. Scope of environmental audit:

ll ll ll

Environmental Safety Healthy problems ll Product safety ll

problems ll problems ll problems

ll

1. Location 1. Safety 1. Worker 1. Product

2. Material policies ll exposure to ll ll safety ll

3. Production 2. Safety pollutants ll ll program ll

 process
ll process ll 2. Informatio
4. Water 3. Reportin 2. Worker n about ll

discharge
ll g exposure to ll ll users ll

problems
ll 4. Process physical ll 3. Product
5. Emissions of ll agents ll safety ll

problems
ll solving ll document
ll

6. Environment the ll 3. Labor s

al license ll problem ll environment ll

7. Annual al protection ll

monitoring
ll system ll

results
ll

4. Labor
protection ll

equipment ll

5. Medical
examination ll

results ll

6. Tools and methods for conducting environmental audits:

ll ll ll ll ll ll

- establish check list for EA. The process depends on requirements, contents.
ll ll ll ll ll ll ll ll ll ll ll

- Questions can be in simple form: answer only "yes" or "no", or in complex, detailed
ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll

form (a questionnaire can have 20-30 questions; can make many types of questionnaires
ll ll ll ll ll ll ll ll ll ll ll ll ll

appropriate questions for each of the consulted subjects).

ll ll ll ll ll ll ll ll

- Computer tools used to process questionnaires. Filming, taking photos, CDs, DVDs is
ll ll ll ll ll ll ll ll ll ll ll ll

the means of proving and serving new urban centers.

ll ll ll ll ll ll ll ll ll

- Legal ; environmental standards, standards and health, ecological standards ... are
ll ll ll ll ll ll ll ll ll ll ll

applied to assess compliance.

ll ll ll ll

- Environmental audits must be conducted at the location of the company / project's

ll ll ll ll ll ll ll ll ll ll ll ll ll

operations, so field surveys and reporting are the main activities of the NUC.
ll ll ll ll ll ll ll ll ll ll ll ll ll

7. The role of the State Audit of Vietnam in environmental protection for sustainable
ll ll ll ll ll ll ll ll ll ll ll ll

development ll

7.1 Roles of SAV

ll ll ll ll ll ll ll ll ll ll

The SAV plays the evaluating and supervising role, promptly detecting shortcomings,
ll ll ll ll ll ll ll ll ll ll

limitations, and proposing solutions to rectify shortcomings, ensure disciplines and

ll ll ll ll ll ll ll ll ll ll

transparency, improve frugality, effectiveness and efficiency in environmental resources

ll ll ll ll ll ll ll ll ll
 management and environmental protection to ensure sustainable development,
ll ll ll ll ll ll ll ll

specifically:
ll

First: Assessing the effectiveness and efficiency of the legal document system on
ll ll ll ll ll ll ll ll ll ll ll ll

environmental protection promulgated by state agencies.

ll ll ll ll ll ll ll

Second: Assess the frugality, effectiveness and efficiency of environmental protection

ll ll ll ll ll ll ll ll ll

programs, projects and activities. In addition to affirming the accuracy and truthfulness
ll ll ll ll ll ll ll ll ll ll ll ll

of the program’s financial information, the SAV thoroughly analyzes the results of
ll ll ll ll ll ll ll ll ll ll ll ll

environmental protection project according to regulations.

ll ll ll ll ll ll ll

Third: Assess violations of financial legislation and related regulations.

ll ll ll ll ll ll ll ll ll

Fourth: Enhance openness and transparency in relation to accountability in management

ll ll ll ll ll ll ll ll ll ll

and the use of natural resources and environmental protection.

ll ll ll ll ll ll ll ll ll

Fifth: The State Audit focuses on reviewing and evaluating the reliability of the
ll ll ll ll ll ll ll ll ll ll ll ll

information presented in the progress report on the performance of environmental

ll ll ll ll ll ll ll ll ll ll ll

protection to ensure the sustainable development of the Government’s control system.

ll ll ll ll ll ll ll ll ll ll ll

Sixth: Publicize audit results, request authorized state management agencies to sanction
ll ll ll ll ll ll ll ll ll ll

according to regulations, review personal liability and organizations for wrongdoings,

ll ll ll ll ll ll ll ll ll ll

transfer investigating auditing findings showing serious signs of environmental

ll ll ll ll ll ll ll ll ll

protection by agencies and units to the police so as to take strict measures to ensure the
ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll

deterrence according to regulations.

ll ll ll ll

ll ll 1.2 Responsibilities of SAV

ll ll ll ll

The division was entrusted with the following tasks; consulting and assisting the Auditor
ll ll ll ll ll ll ll ll ll ll ll ll

General of the State Audit Office regarding the development of Environmental Audit at
ll ll ll ll ll ll ll ll ll ll ll ll ll

State Audit Office (forming policies, planning, strategies, procedures, guidance, training,
ll ll ll ll ll ll ll ll ll ll

international cooperation, etc.); conduct performance audit on environment and related

ll ll ll ll ll ll ll ll ll ll

topics in order to assess the economy, efficiency, and effectiveness in

ll ll ll ll ll ll ll ll ll ll ll ll

(1) managing investment resources towards environment,

ll ll ll ll ll

ll (2) environmental policies and projects,

ll ll ll ll ll

(3) international cooperation audit followed cooperation agreements.

ll ll ll ll ll ll ll

Environmental audit is designed as an independent division with separate personnel and ll ll ll ll ll ll ll ll ll ll ll

is tasked with performance audit and international cooperation regarding environmental

ll ll ll ll ll ll ll ll ll ll

audit..
ll
8. Environmental Audit at State Audit Office of Vietnam Opportunities and Challenges ll ll ll ll ll ll ll ll ll ll

8.1 opportunities
ll

An environment, clear or polluted, always directly affects the lives of all communities
ll ll ll ll ll ll ll ll ll ll ll ll

and societies within it not only in the present but also in the future.. Environmental audit
ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll

forms and develops as a new type of audit area as a result of the needs for reviewing and
ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll

controlling the utilization and management of funds invested into the environment
ll ll ll ll ll ll ll ll ll ll ll

activities. Benefits from implementing environmental audit includes: assessing whether

ll ll ll ll ll ll ll ll ll

(i) Ensuring environment management systems are compliant with regulations,

ll ll ll ll ll ll ll

policies, and required standards;

ll ll ll ll

(ii) ll ll risks associated with environmental causes are measured and reduced;
ll ll ll ll ll ll ll ll

(iii) company’s awareness of environmental impacts are based on its investigated

ll ll ll ll ll ll ll ll ll ll ll

ll information; ll

(iv) stakeholders’ awareness related to environmental and economical issues are ll ll ll ll ll ll ll ll

enhanced;
ll ll

(v) llresources and investment funds are effectively utilised. ll ll ll ll ll ll

8.2. challenges. ll

(i) In Vietnam, there is still no specific legal framework to assign environment audit
ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll

function to State Audit Office. Public awareness and opinion on this audit area is still
ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll

limited, especially of government authorities related to environment matters;

ll ll ll ll ll ll ll ll ll

(ii) Technically, environmental audit is the combination of financial statements audit,

ll ll ll ll ll ll ll ll ll ll ll ll ll

compliance audit and performance audit. Environmental audit is a higher form of

ll ll ll ll ll ll ll ll ll ll ll ll

performance audit. However, since its inception, the development in the area of
ll ll ll ll ll ll ll ll ll ll ll ll

performance audit has been not significant (performance audit division formed in 2014,
ll ll ll ll ll ll ll ll ll ll ll ll

no guidance procedure regarding performance audit has been issued yet

ll ll ll ll ll ll ll ll ll ll

(iii) There’s no national environmental database in Vietnam; an important information

ll ll ll ll ll ll ll ll ll ll ll ll ll

source which can assist State Audit Office in performing audits and based on which
ll ll ll ll ll ll ll ll ll ll ll ll ll ll

auditors can give recommendations that can be used in upcoming years;

ll ll ll ll ll ll ll ll ll ll ll

(iv) Due to lack of professional environmental auditor, training for personal on

ll ll ll ll ll ll ll ll ll ll ll ll ll ll

knowledge and experience is limited. Besides, there is no specific procedure or method

ll ll ll ll ll ll ll ll ll ll ll ll ll

for environmental audit yet;

ll ll ll ll

Apart from time issue and clear orientation from State Audit Office; in order to overcome
ll ll ll ll ll ll ll ll ll ll ll ll ll ll

the adverse challenges when performing environmental audit, it is necessary to obtain

ll ll ll ll ll ll ll ll ll ll ll ll

technical support from member organizations and SAIs. In 2016, State Audit Office of
ll ll ll ll ll ll ll ll ll ll ll ll ll

Vietnam will be taking up environmental audits in “Reducing and adjusting to the change
ll ll ll ll ll ll ll ll ll ll ll ll ll ll

in environmental causes in 2015 project” and “Low-carbon transmission in saving energy

ll ll ll ll ll ll ll ll ll ll ll ll
 topic in Vietnam project” and Management and treatment of industrial waste water in
ll ll ll ll ll ll ll ll ll ll ll ll ll

industrialized areas
ll ll

8.3. Action plan of SAV

ll ll ll ll

In order to promote well the role of SAV to environmental protection to ensure

ll ll ll ll ll ll ll ll ll ll ll ll ll

sustainable development in the future, SAV defines the focus on the implementation of
ll ll ll ll ll ll ll ll ll ll ll ll ll

some specific contents as follows:

ll ll ll ll ll

First, formulate strategic auditing plans and annual auditing plans on the basis of
ll ll ll ll ll ll ll ll ll ll ll ll

guidelines and policies of the Party and State related to environmental protection.
ll ll ll ll ll ll ll ll ll ll ll ll

Concentrating resources to conduct audits to evaluate the delivery of SDGs related to

ll ll ll ll ll ll ll ll ll ll ll ll ll

environmental protection of the government and localities.

ll ll ll ll ll ll ll

Second, further promoting all three types of audits (performance audit, financial audit
ll ll ll ll ll ll ll ll ll ll ll

and compliance audit) so as to comprehensively assess the management, use of resources

ll ll ll ll ll ll ll ll ll ll ll ll ll

and the administrative responsibility towards environmental protection of governing

ll ll ll ll ll ll ll ll ll

authorities
ll

.Third, train, foster and improve the capacity for the team of auditors. At the same time,
ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll

auditor should pay attention to strengthening the quality control of environmental

ll ll ll ll ll ll ll ll ll ll ll

protection from the planning stage of releasing auditing reports and ensuring that the
ll ll ll ll ll ll ll ll ll ll ll ll ll

audits strictly comply procedures and standards of SAVs, in line with international
ll ll ll ll ll ll ll ll ll ll ll ll

practices.
ll

Fourth, focus on enhancing accountability and transparency of auditing reports and

ll ll ll ll ll ll ll ll ll ll

evaluating and clarifying the performance of task and

ll ll ll ll ll ll ll ll

responsibilities assigned to agencies and units. ll ll ll ll ll ll

Fifth, increase international partnerships; cooperate to participate in scientific research of

ll ll ll ll ll ll ll ll ll ll

INTOSAI, ASOSAI on environmental audit; carry out general audits on the topics of
ll ll ll ll ll ll ll ll ll ll ll ll ll

environmental audits with SAIs that have strength in environmental audit to learn from
ll ll ll ll ll ll ll ll ll ll ll ll ll

their experience; improve the implementing capacity for auditors and the efficiency of
ll ll ll ll ll ll ll ll ll ll ll ll

auditing activities.
ll ll