Clarification of "Internal Audit Committee Member" under Securities Law 2019 and its Relation to the Audit Committee under Enterprise Law 2020
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The Ministry of Finance clarifies that the "internal audit committee member" referenced in Article 4.45(a) of the Securities Law 2019 corresponds to a member of the Audit Committee attached to the Board of Directors under Article 137.1(b) of the Enterprise Law 2020 - meaning a governance-level body, not operational-level dedicated internal audit staff. Dedicated staff within the internal audit department (operational level) are not "insiders" under the Securities Law and therefore do not have disclosure obligations for insider transactions. Internal audit matters are governed by Decree 05/2019/ND-CP dated 22 January 2019 on internal audit.
Q&A: Internal Audit Committee Member under Securities Law 2019
Question: A joint-stock company has a dedicated internal audit department (operational level) reporting to an Audit Committee (Board of Directors level). Question: Does "internal audit committee member" in Article 4.45(a) of the Securities Law 2019 refer to Audit Committee members (governance level) or to dedicated operational staff?
Legal Basis
Article 134.1, Enterprise Law 2014 (model 2): "...shall have an internal audit committee (Ban kiểm toán nội bộ) attached to the Board of Directors..."
Article 137.1(b), Enterprise Law 2020 (renamed): "...shall have an Audit Committee (Ủy ban kiểm toán) attached to the Board of Directors..."
The renaming from "internal audit committee" (2014 law) to "Audit Committee" (2020 law) was intended to avoid confusion with operational-level internal audit departments.
Article 4.45(a), Securities Law 2019 - Insider definition: "...member of the internal audit committee (Ban kiểm toán nội bộ); company secretary; corporate governance officer..."
Official Conclusion
"Internal audit committee member" under the Securities Law 2019 = member of the Audit Committee attached to the Board of Directors under the Enterprise Law 2020.
Dedicated operational internal audit staff: Not insiders under the Securities Law; no insider trading disclosure obligations.
Internal Audit Governance
Internal audit matters are governed by Decree 05/2019/ND-CP dated 22 January 2019 on internal audit.