In practice, many enterprises refuse shareholders’ requests for an audit. So, in which cases can a shareholder’s request for an independent audit be lawfully rejected? Let NPLaw help you understand the legal issues relating to shareholders requesting an independent audit.
I. Introduction to issues related to shareholders requesting an independent audit
In the context of modern corporate governance, financial transparency is a core factor determining the confidence of investors and shareholders. One of the most important legal instruments enabling shareholders to supervise a company’s financial activities is the right of shareholders to request an independent audit. Such a right not only helps clarify the accuracy and honesty of financial statements but also serves as a mechanism to prevent and detect risks and violations in corporate management.
In practice in Vietnam, many internal disputes within joint stock companies arise from doubts regarding financial transparency, profit distribution, or related-party transactions. In such cases, a shareholder’s request for an independent audit becomes an effective legal tool to protect their lawful rights and interests.
A full understanding of the legal issues relating to shareholders requesting an independent audit is necessary for shareholders to properly and effectively exercise their rights in accordance with the law.
II. Understanding shareholders requesting an independent audit
1. What is an independent audit and what is its significance for shareholders requesting an independent audit?
To fully understand shareholders’ rights, it is first necessary to clarify the concept of an independent audit. Pursuant to Clause 1, Article 5 of the 2011 Law on Independent Audit, independent audit means the examination and expression of opinions by practicing auditors and independent audit firms regarding financial statements and financial information of the audited entity in accordance with auditing standards.
A shareholder’s request for an independent audit is not merely about verifying accounting figures but also about ensuring objectivity and independence from the company’s management apparatus. Independent auditing enables shareholders to access reliable financial information and minimizes information asymmetry between shareholders and the management board. Therefore, independent auditing is an important legal and practical basis for shareholders to verify the truthfulness and reasonableness of the company’s financial situation.
2. What benefits can shareholders obtain from requesting an independent audit?
When exercising the right of shareholders requesting an independent audit, shareholders may obtain many practical benefits. First, independent auditing helps accurately determine the company’s financial situation, thereby serving as a basis for shareholders to decide on investment, divestment, or participation in corporate governance.
Second, an independent audit report serves as important evidence in cases where shareholders initiate legal action against company managers under Article 166 of the Law on Enterprise 2020 if there are violations of the duties of honesty and prudence.
Finally, independent auditing also contributes to enhancing the company’s reputation in the capital market. A shareholder’s request for an independent audit brings both legal and economic benefits, especially in protecting long-term interests.
3. How long does it take to conduct an independent audit after a shareholder’s request is made?
Current law does not provide a specific deadline for conducting an independent audit upon a shareholder’s request. The specific timeframe depends on the decision of the General Meeting of Shareholders, the Board of Directors, or the provisions of the company’s Charter.
As a matter of practice, after a valid request is approved, the company will select a qualified audit firm in accordance with the Law on Independent Audit 2011 and enter into an audit contract. The audit period usually lasts from several weeks to several months, depending on the company’s scale and the audit scope.
Therefore, the timing for conducting an independent audit depends on the company’s internal decision-making process and the agreement with the audit firm, as there is no fixed statutory timeline.
III. Legal provisions related to shareholders requesting an independent audit
1. How does the law regulate the right of shareholders to request an independent audit?
The Law on Enterprise 2020 as amended in 2025 specifically provides for shareholders’ rights as follows:
- According to Clause 2, Article 115 of the Law on Enterprise 2020 as amended in 2025 regarding the rights of ordinary shareholders, a shareholder or group of shareholders holding 5% or more of the total ordinary shares has the following rights: To examine, access, and extract permitted documents in accordance with the law; to request the convening of a General Meeting of Shareholders in certain specific cases; and to request the Supervisory Board to inspect specific matters relating to the management and operation of the company when deemed necessary.
- Clause 2, Article 116 of the Law on Enterprise 2020 as amended in 2025 regarding shareholders holding voting preference shares, Clause 2, Article 117 regarding shareholders holding dividend preference shares, and Clause 2, Article 118 regarding shareholders holding redeemable preference shares generally provide that shareholders holding preference shares (voting preference, dividend preference, redeemable preference), in addition to their specific financial or voting privileges, still enjoy all rights of ordinary shareholders unless otherwise restricted.
In addition, Clauses 5 and 6, Article 38 of the Law on Independent Audit 2011 allow users of audit reports, including shareholders, to file complaints and request explanations regarding the contents of audit reports.
Thus, the right of shareholders to request an independent audit is formed from the combination of supervisory rights and information access rights under enterprise law and audit law.
2. What is the procedure for conducting an independent audit upon a shareholder’s request?
Normally, the process begins with the shareholder submitting a written request to the Board of Directors or the Supervisory Board. If the request satisfies the ownership ratio requirements and contains lawful grounds, the matter will be considered by the General Meeting of Shareholders or decided according to the authority prescribed in the company’s Charter.
After approval, the company selects a qualified audit firm in accordance with Article 21 of the 2011 Law on Independent Audit as guided by Articles 4, 5, 6, and 7 of Circular No. 203/2012/TT-BTC to conduct the audit. The audit results will then be reported back to shareholders.
Accordingly, the independent audit process upon shareholders’ request must comply with both legal regulations and the company’s internal governance mechanisms.
3. What violations may occur during the process of shareholders requesting an independent audit?
Failure to comply with the proper independent audit process may lead to significant legal risks for both the company and its managers. Common violations include the company intentionally delaying or failing to consider valid shareholder requests, thereby preventing shareholders from exercising their rights mentioned above, or selecting an audit firm that is not legally qualified to practice.
In addition, pursuant to Clause 1, Article 39 of the Law on Independent Audit 2011, the audited entity is obliged to provide complete, timely, and truthful information and documents relating to the audit content as requested by the audit firm and auditors. At the same time, Clause 2, Article 13 of the Law on Independent Audit 2011 prohibits all unlawful interference with the professional activities of auditors.
Therefore, during the independent audit process, acts such as concealing records, providing incomplete or untruthful information or documents, or exerting pressure and influence to manipulate auditors’ professional opinions are all considered violations of law and may lead to corresponding legal liability.
IV. Questions related to shareholders requesting an independent audit
1. Why can a shareholder’s request for an independent audit affect the company’s strategic decisions?
The results of an independent audit may change the perception of business efficiency, thereby affecting development strategies, investment decisions, or corporate restructuring.
Independent auditing not only examines financial statements but also reviews internal control systems, risk management, and related-party transactions. If errors, fraud, or weaknesses are discovered (for example, poor cash flow management or high liquidity risk), the management board must take immediate remedial actions.
Thus, a shareholder’s request for an independent audit is not merely a supervisory right but can also create significant impacts on the company’s strategic decisions. It arises from the very nature of independent auditing: Ensuring transparency, identifying potential risks, and requiring management to adjust operational methods in line with objective recommendations.
2. Do shareholders requesting an independent audit have the right to file complaints if the audit report is unsatisfactory?
Shareholders have the right to file complaints regarding an unsatisfactory independent audit report because they are subjects whose lawful rights and interests are directly affected by the audit results, and such a right has a clear legal basis under Vietnamese law.
Specifically, Clauses 5 and 6, Article 38 of the Law on Independent Audit 2011 provide that users of audit reports are entitled to discuss and receive written explanations regarding issues raised in the draft audit report if they consider them inappropriate; and they have the right to complain about acts of persons participating in the audit when there are grounds to believe such acts are unlawful.
Therefore, if the audit report is unsatisfactory due to violations of obligations by company managers (such as providing false information to auditors or selecting auditors lacking independence) and such acts cause damage or risk of damage to shareholders’ interests, shareholders naturally have the right to file complaints and request competent authorities to review the legal responsibilities of the relevant parties in order to protect their legitimate rights and interests.
3. What are the conditions for a shareholder to request an independent audit under the law?
According to Clause 2, Article 115 of the Law on Enterprise 2020 as amended in 2025, in order to have the right to request inspection or audit of specific issues in the management and operation of the company, a shareholder or group of shareholders must hold at least 5% of the total ordinary shares. However, such a ratio may be lower if the company’s Charter provides more favorable conditions for shareholders.
For shareholders holding voting preference shares, Clause 2, Article 116 of the Law on Enterprise 2020 as amended in 2025 provides that such a group of shareholders enjoys all rights of ordinary shareholders except the right to transfer shares. Therefore, if voting preference shareholders satisfy the ownership ratio requirement (usually 5% of the total ordinary shares unless otherwise provided by the Charter), they are fully entitled to request the Supervisory Board to conduct inspections or hire an independent auditor to clarify management violations.
For other types of shares such as dividend preference shares (Article 117 of the Law on Enterprise 2020 as amended in 2025) and redeemable preference shares (Article 118 of the Law on Enterprise 2020 as amended in 2025), although their rights to vote, attend meetings, or nominate personnel to management bodies are restricted, the law still confirms that they retain other rights similar to ordinary shareholders. It means that the right to access information and the right to supervise through requesting inspection or audit are still preserved for them.
4. Can a company refuse a shareholder’s request for an independent audit under the law? If so, what are the specific reasons?
A company is not permitted to refuse a request for an independent audit if the shareholder or group of shareholders has fully satisfied the ownership ratio requirements and complied with the proper procedures. However, in practice and based on corporate governance regulations, the company may refuse or temporarily suspend such a request in certain specific circumstances.
- First, the company has the right to refuse if the shareholder cannot prove shareholder status or does not meet the required shareholding ratio under the law or the company’s Charter.
- Second, there are reasons relating to the procedure and content of the request. If the audit request does not clearly state specific reasons, fails to identify signs of management violations, or the requested content completely overlaps with ongoing audits, the Supervisory Board may require further explanation or refuse implementation in order to avoid wasting company resources.
In addition, the company may refuse if the shareholder has breached previously signed confidentiality commitments or refuses to undertake confidentiality obligations regarding the data to be audited.
Shareholder rights are always accompanied by the obligation to protect the company’s reputation and assets; thus, any act harming common interests may serve as grounds for the company to delay compliance with the request.
5. What legal consequences may arise if the company fails to comply with a shareholder’s request for an independent audit?
In cases where a shareholder’s request for an independent audit is unreasonably refused by the company, the shareholder has the right to initiate legal proceedings to protect their lawful rights and interests under Vietnamese law.
Thus, current law has established a complete legal mechanism for shareholders to use litigation procedures to protect their supervisory rights and lawful interests when their request for an independent audit is refused without valid grounds.
V. Are you looking for a reputable legal expert to assist with issues related to shareholders requesting an independent audit?
Practice shows that shareholders requesting an independent audit requires a deep understanding of both enterprise law and audit law.
With experience in consulting and resolving internal corporate disputes, NPLaw is ready to support shareholders and enterprises in assessing the legality of requests, developing legal strategies, and effectively protecting rights and interests.
The above information is for reference purposes only. Should you require detailed advice for your specific case, please contact NPLaw Firm for immediate consultation.
