The internal self-review process prior to an inspection is an important step that enables enterprises to proactively examine their legal, accounting, tax, and internal operational records in order to identify errors at an early stage, minimize risks of sanctions, and better prepare for inspections and examinations conducted by competent State authorities.
I. Why do many enterprises only conduct internal reviews after receiving an inspection decision?
In practice, many enterprises only begin reviewing their records, supporting documents, and internal procedures after receiving an inspection decision from a competent State authority. It often stems from a subjective belief that their business operations are controlled or from a lack of awareness of the legal risks that may arise during the course of business operations.
Furthermore, many enterprises have not established effective internal control mechanisms or compliance management systems. As a result, errors relating to taxation, labor, social insurance, invoices, accounting, or business eligibility conditions are often only discovered when competent authorities conduct an actual inspection.
Another common reason is that enterprises may perceive internal reviews as time-consuming, costly, and disruptive to business operations. In reality, however, conducting a proactive review at an early stage often significantly reduces the risk of administrative sanctions, tax reassessments, or serious legal disputes arising during the inspection process.
II. Concept of the internal self-review process prior to an inspection
1. What is the internal self-review process prior to an inspection?
The internal self-review process prior to an inspection is a process by which an enterprise proactively examines, assesses, and reconciles its records, supporting documents, management activities, and compliance with legal obligations in order to identify errors or potential risks before a competent authority conducts an inspection. Such a process typically includes reviewing:
- Tax records;
- Invoices and accounting documents;
- Contracts;
- Labor records;
- Social insurance records;
- Business eligibility conditions;
- Internal corporate records and other related legal documents.
Periodic reviews enable enterprises to proactively remedy violations and prepare adequate documents for future inspections and examinations.
2. Which entities should conduct an internal self-review prior to an inspection?
Most enterprises, business households, and organizations engaged in commercial activities should conduct an internal self-review prior to an inspection, particularly:
- Enterprises with substantial revenue or unusually rapid growth;
- Companies using a significant volume of input and output invoices;
- Enterprises engaged in related-party transactions or transactions involving foreign elements;
- Companies operating in conditional business sectors;
- Enterprises frequently applying for tax refunds;
- Organizations experiencing significant changes in labor, finance, or shareholder structure.
In addition, enterprises preparing for tax finalization, corporate restructuring, capital raising activities, or those potentially subject to specialized inspections should conduct legal reviews as early as possible.
3. What is the significance of conducting a self-review prior to an inspection?
Conducting a self-review before an inspection enables enterprises to proactively identify and address legal risks before violations are discovered by competent authorities. Through such a process, enterprises may:
- Detect errors relating to taxation, accounting, or labor matters;
- Promptly submit supplementary declarations or rectify violations;
- Standardize legal records and supporting documents;
- Reduce the risk of administrative sanctions or tax reassessments;
- Minimize adverse impacts on business operations and corporate reputation.
Furthermore, regular reviews improve compliance management capabilities, enhance transparency, and establish a solid legal foundation for long-term investment, cooperation, and business development.
III. Legal regulations relating to the internal self-review process prior to an inspection
1. Is conducting a self-review prior to an inspection mandatory under Vietnamese law?
Currently, Vietnamese law does not require all enterprises to establish a separate and formalized “internal self-review process prior to an inspection”. However, various legal provisions indirectly impose obligations on enterprises to conduct self-checks and assume responsibility for the accuracy of their records, supporting documents, and declarations.
Specifically, under Clause 1, Article 12 of the Law on Tax Administration 2025, taxpayers are obligated to:
- Declare taxes accurately, truthfully, and completely;
- Self-assess the amount of tax payable;
- Submit tax dossiers within the prescribed deadlines;
- Assume legal responsibility for the accuracy of tax records.
In addition, Clause 4, Article 6 of the Accounting Law 2015 provides that accounting entities must fully, truthfully, and promptly reflect financial information and are responsible for the contents of their accounting records.
2. What legal framework governs internal self-review activities prior to an inspection?
Internal self-review activities are indirectly governed by various legal instruments depending on the enterprise’s field of operation. Main legal grounds include:
- The Inspection Law 2025, which regulates principles, procedures, and powers of inspection authorities;
- The Law on Tax Administration 2025, which prescribes obligations relating to tax declarations, record retention, and document provision;
- The Accounting Law 2015, which regulates accounting documents, accounting books, and document retention requirements;
- The Law on Enterprise 2020, which governs corporate management responsibilities and record-keeping obligations;
- Decrees governing administrative sanctions in the fields of taxation, accounting, labor, and investment.
Moreover, foreign-invested enterprises, public companies, and businesses operating in conditional business sectors may also be subject to specialized regulations concerning internal control systems and compliance governance.
3. What are the basic steps of an internal self-review process prior to an inspection?
- Step 1: Collection and systematization of dossiers
The enterprise reviews all relevant documents, including:
- Corporate legal documents;
- Tax dossiers;
- Invoices and supporting documents;
- Accounting books and records;
- Contracts;
- Labor and social insurance records;
- Investment dossiers and specialized licenses.
- Step 2: Verification of legal compliance obligations
The enterprise reviews its compliance with obligations relating to tax declarations, tax payments, social insurance contributions, labor matters, and business eligibility conditions in accordance with applicable laws.
- Step 3: Identification and assessment of risks
The enterprise identifies:
- Missing dossiers;
- Data discrepancies;
- Invoice-related risks;
- Unusual transactions;
- Potential violations that may be subject to sanctions during an inspection.
- Step 4: Remediation and completion of dossiers
The enterprise undertakes corrective actions such as:
- Filing supplementary declarations;
- Correcting inaccuracies;
- Preparing explanatory reports;
- Completing missing documents;
- Issuing internal procedures where necessary.
- Step 5: Preparation for engagement with the inspection team
The enterprise assigns responsible personnel, prepares explanatory documents, and develops a working plan for dealing with inspection authorities in order to minimize potential risks.
4. What are the legal requirements for retaining documents to support internal self-reviews prior to inspections?
Pursuant to Article 41 of the Accounting Law 2015, accounting documents must be retained completely and securely for the statutory period. Depending on the nature of the documents, the retention period may be five years, ten years, or permanent retention.
With respect to electronic invoices, Article 6 of Decree No. 123/2020/ND-CP requires invoice data to be stored in a manner that ensures integrity and accessibility throughout the storage period prescribed by accounting laws.
Proper retention not only facilitates internal self-review activities before inspections but also serves as essential evidence enabling enterprises to explain and demonstrate the legality of their business operations when subjected to inspections, examinations, or investigations by competent state authorities.
IV. Questions regarding the internal self-review process prior to an inspection
1. Can conducting an internal review before an inspection help reduce the risk of sanctions?
Conducting an internal review enables an enterprise to identify errors and compliance issues relating to taxation, accounting, labor, invoicing, or business licensing before they are discovered by competent authorities during an inspection.
In many cases, enterprises may:
- Voluntarily submit amended tax declarations;
- Remedy violations;
- Complete missing documents;
- Correct accounting or tax-related errors.
These actions may help reduce the severity of violations, lower the risk of significant administrative sanctions, and minimize potential legal consequences arising during the inspection process.
2. How should a business handle errors discovered during the internal review process?
Upon identifying any errors, an enterprise should immediately assess the legal and financial implications of the issue in order to determine the most appropriate corrective measures.
Depending on the circumstances, the enterprise may:
- Submit supplementary tax declarations;
- Correct accounting records and supporting documents;
- Supplement contracts or internal documents;
- Proactively fulfill any outstanding financial obligations;
- Prepare written explanations;
- Adopt new internal control procedures.
Timely and transparent corrective actions generally help reduce the risk of being viewed by inspection authorities as intentionally concealing violations during an official inspection.
3. Is it necessary to prepare an internal review report before an inspection?
Current laws do not require all enterprises to prepare a separate report on their internal pre-inspection review activities. However, in practice, preparing an internal report is highly advisable in order to:
- Record matters that have been reviewed;
- Summarize identified deficiencies and compliance issues;
- Monitor remediation efforts;
- Assign responsibilities for corrective actions;
- Prepare documents for working sessions with inspection authorities.
For large enterprises or companies with foreign-invested capital, such review reports also serve as important tools for risk management and compliance oversight.
4. Are employees required to cooperate during the internal review process?
During an internal review, employees in departments such as accounting, human resources, administration, legal affairs, and business operations are generally responsible for cooperating by providing documents, data, and explanations relating to their assigned duties.
In addition to obligations arising under labor regulations and internal corporate policies, full cooperation helps the enterprise:
- Verify information accurately;
- Address issues promptly;
- Minimize legal risks for both the company and the individuals involved.
In certain circumstances, intentionally concealing information or refusing to cooperate may also affect an individual's liability when competent authorities subsequently conduct inspections or investigations.
5. Can technology or software be used to support internal reviews before inspections?
Many enterprises currently utilize accounting software, data management systems, electronic invoice control solutions, and compliance management platforms to facilitate internal pre-inspection reviews.
The use of technology helps enterprises:
- Reconcile data more efficiently;
- Detect discrepancies in financial records;
- Verify invoice status;
- Monitor tax obligations;
- Manage document retention periods;
- Reduce the risk of human error.
Furthermore, data analytics tools can assist enterprises in identifying unusual transactions and preparing documents more effectively before specialized inspections.
V. Why should you consult NPLaw regarding internal pre-inspection review procedures?
Issues relating to internal pre-inspection review procedures often involve multiple areas of law simultaneously, including tax law, accounting regulations, labor law, corporate law, and internal governance requirements. If not handled properly, enterprises may face tax reassessments, administrative sanctions, or significant legal disputes during inspections.
With extensive experience in legal advisory services and supporting enterprises through numerous actual inspections and audits, NPLaw assists clients in:
- Reviewing legal documentation and compliance obligations;
- Assessing potential risks before inspections;
- Assisting with supplementary declarations and error rectification;
- Advising on dealings with inspection authorities and tax authorities;
- Developing internal control systems and corporate compliance frameworks.
Engaging legal counsel at an early stage enables enterprises to proactively mitigate risks, prepare comprehensive documentation, and better safeguard their legitimate rights and interests throughout inspections and examinations conducted by state authorities.
The above information is provided for reference purposes only. Should you require detailed advice regarding your specific circumstances, please contact NPLaw for immediate legal assistance.
