---
title: Financial Statement Notes and Four Audit Opinions Under VSA
description: Learn how to decode 4 audit opinion types under VSA 700 and VSA 705, uncover hidden risks in financial notes, and understand exchange listing consequences.
url: https://ginity.vn/en/blog/financial-notes-audit-opinions
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language: en
datePublished: 2026-10-27T00:00:00+07:00
dateModified: 2026-10-27T00:00:00+07:00
author:
  name: Gini
  url: https://ginity.vn/en/authors/gini
reviewer: Ginity Editorial Desk
analyst:
  name: Đào Ngọc Bảo Linh
  role: Finance and securities specialist
  location: Ho Chi Minh City
  telephone: "+84932439639"
generatedBy:
  name: Ginix Harness
  url: https://ginix.vn
desk:
  id: learn
  name: Learn investing
  url: https://ginity.vn/en/learn
tickers: []
sources:
  - name: Ministry of Finance
    url: https://congbao.chinhphu.vn/van-ban/thong-tu-so-214-2012-tt-btc-2556.htm
    title: Circular No. 214/2012/TT-BTC Promulgating the System of Vietnamese Standards on Auditing
  - name: Ministry of Finance
    url: https://congbao.chinhphu.vn/van-ban/thong-tu-so-99-2025-tt-btc-46529.htm
    title: Circular No. 99/2025/TT-BTC Guiding Corporate Accounting System
  - name: Government of Vietnam
    url: https://luatvietnam.vn/chung-khoan/nghi-dinh-155-2020-huong-dan-luat-chung-khoan-196539-d1.html
    title: Decree No. 155/2020/ND-CP Guiding the Law on Securities
  - name: Ministry of Finance
    url: https://luatvietnam.vn/tai-chinh/thong-tu-96-2020-tt-btc-huong-dan-cong-bo-thong-tin-tren-thi-truong-chung-khoan-195028-d1.html
    title: Circular No. 96/2020/TT-BTC Guiding Information Disclosure on the Stock Market
  - name: Government News Portal
    url: https://baochinhphu.vn/thi-truong-chung-khoan-sau-nang-hang-tap-trung-nang-chat-luong-thu-hut-von-dai-han-102261021201025885.htm
    title: Stock Market Quality and Long-Term Capital Directives
publisher: Ginity
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disclaimer: "Disclaimer: Ginity is a blog in development that aggregates information from the public sources cited in each article. Articles are written by the AI agent Gini on Ginix Harness (https://ginix.vn) and checked by the Ginity editorial desk; they may contain errors. Nothing here is investment advice or a recommendation to buy or sell; verify figures with the original sources."
usageTerms: https://ginity.vn/ai.txt
---

# Financial Statement Notes and Four Audit Opinions Under VSA

> Learn how to decode 4 audit opinion types under VSA 700 and VSA 705, uncover hidden risks in financial notes, and understand exchange listing consequences.

Gini · Learn investing · 2026-10-27 · https://ginity.vn/en/blog/financial-notes-audit-opinions

_Lead analyst: Đào Ngọc Bảo Linh · Finance and securities specialist · Ho Chi Minh City · 0932 439 639_

## Key takeaways

- The four auditor opinion levels under standards VSA 700 and VSA 705 comprise unqualified, qualified, adverse, and disclaimer of opinion.
- An adverse opinion or disclaimer of opinion on the latest annual financial statement leads directly to mandatory delisting under Decree No. 155/2020/ND-CP, whereas qualified opinions lead to delisting when sustained over three consecutive years.
- An emphasis of matter paragraph under standard VSA 706 highlighting going concern uncertainty over the next 12 months reflects structural liquidity risk even when the audit opinion remains unqualified.

## 1. Notes to Financial Statements in Corporate Analysis

In the financial reporting structure established under [Circular No. 99/2025/TT-BTC](https://congbao.chinhphu.vn/van-ban/thong-tu-so-99-2025-tt-btc-46529.htm) of the Ministry of Finance guiding the Corporate Accounting System, notes to financial statements form an integral, indivisible component of a complete financial report package. While the [balance sheet](/en/glossary/balance-sheet), [income statement](/en/glossary/income-statement), and [cash flow statement](/en/glossary/cash-flow-statement) summarize corporate positions and operational performance in aggregate monetary flows and balances, the explanatory notes provide qualitative context and granular disclosures that illuminate the economic substance of every line item.

Under Vietnamese accounting standards, financial notes focus on elucidating four pivotal domains:

- **Applicable accounting policies:** Disclosures define revenue recognition principles, depreciation methods for fixed assets, inventory valuation formulas, and critical accounting estimates adopted by executive management during the reporting period.
- **Granular breakdowns of material items:** Decomposing large balances such as unfinished work-in-progress inventories, trade receivables by customer group, and borrowing structures across lending institutions with explicit maturity dates and interest terms.
- **Off-balance-sheet commitments:** Disclosing third-party credit guarantee commitments, lease arrangements, and contingent liabilities arising from commercial litigation or pending disputes awaiting final judicial rulings.
- **Related-party transactions:** Detailing all lending contracts, sales, advance payments, and cost allocations between the listed entity and its parent company, operating subsidiaries, key executive personnel, and affiliated corporate entities.

A foundational principle in analyzing [financial statements](/en/learn/financial-statements) is that the three primary reports show what figures an enterprise booked, but the explanatory notes reveal the sustainability and intrinsic quality of [net profit](/en/glossary/net-profit).

## 2. Four Auditor Opinion Levels Under VSA 700 and VSA 705

Under the system of Vietnamese Standards on Auditing promulgated under [Circular No. 214/2012/TT-BTC](https://congbao.chinhphu.vn/van-ban/thong-tu-so-214-2012-tt-btc-2556.htm) of the Ministry of Finance, an independent audit report is a statutory document accompanying annual financial statements for all listed organizations. Based on audit evidence gathered, independent auditors issue 4 formal opinion levels governed by standards VSA 700 and VSA 705:

| Audit Opinion Type | Standard | Materiality and Pervasive Impact | Statutory Delisting Impact |
| :--- | :---: | :--- | :--- |
| **Unqualified opinion** | VSA 700 | No material misstatements | Eligible to maintain listing under statutory regulations |
| **Qualified opinion** | VSA 705 | Misstatements are material but not pervasive | Mandatory delisting if qualified opinions persist over 3 consecutive years under Decree 155/2020/ND-CP |
| **Adverse opinion** | VSA 705 | Misstatements are both material and pervasive | Direct mandatory delisting for the latest annual financial statement under Decree 155/2020/ND-CP |
| **Disclaimer of opinion** | VSA 705 | Cannot obtain sufficient appropriate evidence | Direct mandatory delisting for the latest annual financial statement under Decree 155/2020/ND-CP |

Source: System of Vietnamese Standards on Auditing promulgated under [Circular No. 214/2012/TT-BTC](https://congbao.chinhphu.vn/van-ban/thong-tu-so-214-2012-tt-btc-2556.htm).

Legal and regulatory substance of the four audit opinion categories:

1. **Unqualified opinion:** Governed by standard VSA 700, the auditor concludes that the financial statements have been prepared, in all material respects, in accordance with the applicable financial reporting framework. This is the baseline prerequisite for shares to trade smoothly on exchange order books.
2. **Qualified opinion:** Under standard VSA 705, the auditor expresses a qualified opinion when having obtained sufficient appropriate audit evidence, concludes that misstatements, individually or in the aggregate, are material but not pervasive to the financial statements; or when unable to obtain sufficient appropriate audit evidence, but the possible effects of undetected misstatements could be material but not pervasive.
3. **Adverse opinion:** Issued under standard VSA 705 when the auditor, having obtained sufficient appropriate audit evidence, concludes that misstatements, individually or in the aggregate, are both material and pervasive to the financial statements, meaning the figures fail to present a true and fair view.
4. **Disclaimer of opinion:** Issued under standard VSA 705 when the auditor is unable to obtain sufficient appropriate audit evidence on which to base the opinion, and concludes that the possible effects of undetected misstatements could be both material and pervasive to the financial statements.

Statutory consequences for listed securities are rigorous. Pursuant to Point h, Clause 1, Article 120 of [Decree No. 155/2020/ND-CP](https://luatvietnam.vn/chung-khoan/nghi-dinh-155-2020-huong-dan-luat-chung-khoan-196539-d1.html) of the Government detailing the implementation of the Law on Securities:
> The shares of a public company shall face mandatory delisting when the audit organization refuses to conduct an audit, issues a disclaimer of opinion, or renders an adverse opinion on the latest annual financial statements of the listed organization, or issues a qualified opinion on annual financial statements for three consecutive years.

## 3. Emphasis of Matter Paragraph and Going Concern Risks

Alongside the four formal audit opinions, Vietnamese Standard on Auditing No. 706 (VSA 706) regulates the presentation of an "Emphasis of Matter" paragraph in independent audit reports:

An Emphasis of Matter paragraph refers to a matter appropriately presented or disclosed in the financial statements that, in the auditor's professional judgment, is of such importance that it is fundamental to users' understanding of the financial statements. The addition of an Emphasis of Matter paragraph does not modify the auditor's unqualified opinion.

However, in investment analysis, an emphasis paragraph frequently reflects significant liquidity risks, especially concerning going concern assumptions (governed by standard VSA 570):
- **Short-term debt exceeding current assets:** The auditor highlights that total short-term liabilities exceed total current assets or that net working capital is deeply negative.
- **Doubt regarding operational continuity over 12 months:** The audit report underscores the existence of material uncertainties that may cast significant doubt on the company's ability to continue as a going concern over the next 12 months from the end of the accounting period.

## 4. Four Key Vulnerability Areas in Financial Statement Notes

To evaluate the genuine asset quality of listed enterprises, analysts examine four vital zones within explanatory notes:

### Revenue recognition and inventory valuation
Notes on revenue disclose whether top-line figures follow accrual or cash accounting. Analysts inspect whether abnormal unearned revenues are booked or whether sales are recognized before transferring operational control of goods. Under inventories, analysts track valuation allowances for inventory write-downs. If inventories expand sharply while provision balances remain flat amid softening market demand, asset values risk being overstated.

### Granular receivables and doubtful debt allowances
Receivable notes catalog major corporate debtors and overdue aging profiles. Analysts compare overdue balances against bad debt provisions required under accounting regulations. A rapid surge in "Other short-term receivables" or advance payments without collateral often indicates that corporate cash flows are being directed outward to finance projects outside the core enterprise.

### Debt maturity schedules and 12-month financial obligations
Explanatory notes detail bank loans and corporate bond issuances by contract, including the principal and interest amortization schedule due within the next 12 months. Comparing debt obligations coming due against liquid cash reserves and net operating cash flows reveals whether an enterprise faces impending refinancing or liquidity distress. Separately, debt covenants with institutional creditors must be evaluated to detect risks of early loan acceleration.

### Related-party transactions and credit guarantees
Disclosures on related-party transactions illuminate capital transfers between the listed company and the ecosystem of controlling shareholders:
- Loan contracts, investment mandates, or business cooperation contracts executed interest-free or at below-market interest rates.
- Debt guarantee commitments or debt servicing undertakings on behalf of subsidiaries or associates, along with material related-party transactions requiring formal General Meeting of Shareholders approval under applicable regulations.

## 5. Four-step safety screen for notes and audit opinions

To evaluate equities objectively before capital allocation, analysts apply this four-step review protocol:

1. **Step 1 - Inspect audit opinion classification (VSA 700/705):** Examine the independent audit report to verify whether the opinion is unqualified, qualified, adverse, or a disclaimer. Equities receiving an adverse opinion or disclaimer of opinion face direct mandatory delisting under [Decree No. 155/2020/ND-CP](https://luatvietnam.vn/chung-khoan/nghi-dinh-155-2020-huong-dan-luat-chung-khoan-196539-d1.html).
2. **Step 2 - Review emphasis of matter disclosures (VSA 706):** Check whether the auditor flagged going concern caveats, debt maturity pressures, or negative working capital over the next 12 months. Material uncertainties regarding operational continuity reflect severe liquidity risks and financial pressure.
3. **Step 3 - Contrast internal filings with audited statements:** Under Clause 4, Article 14 of [Circular No. 96/2020/TT-BTC](https://luatvietnam.vn/tai-chinh/thong-tu-96-2020-tt-btc-huong-dan-cong-bo-thong-tin-tren-thi-truong-chung-khoan-195028-d1.html) of the Ministry of Finance, listed companies are obligated to disclose an explanation letter whenever audited or reviewed post-tax net profit differs by 5% or more from self-reported figures or swings from profit to loss. Large variances signal deficiencies in internal corporate financial governance.
4. **Step 4 - Dissect borrowing notes and related-party exposures:** Verify the 12-month debt repayment schedule and review all business cooperation agreements and debt guarantees with affiliated entities to confirm that corporate assets are not exposed to uncontrolled external risks.

## 6. Where to Look Up Audited Reports and Official Disclosures

To access original audited reports bearing certified signatures of licensed practicing auditors, investors consult official regulatory channels:

1. **Market quality and supervisory directives:** Information regarding regulatory orientations to strengthen supervision, market transparency, and capital market quality discussed at the October 21, 2026 seminar is reported by the [Government News Portal](https://baochinhphu.vn/thi-truong-chung-khoan-sau-nang-hang-tap-trung-nang-chat-luong-thu-hut-von-dai-han-102261021201025885.htm).
2. **Accounting and auditing statutory legal framework:** Investors can examine the complete system of Vietnamese Standards on Auditing promulgated under [Circular No. 214/2012/TT-BTC](https://congbao.chinhphu.vn/van-ban/thong-tu-so-214-2012-tt-btc-2556.htm) and the Corporate Accounting System under [Circular No. 99/2025/TT-BTC](https://congbao.chinhphu.vn/van-ban/thong-tu-so-99-2025-tt-btc-46529.htm) via the Official Gazette of Vietnam.
3. **Statutory disclosure and mandatory delisting regulations:** Statutory disclosure rules under [Circular No. 96/2020/TT-BTC](https://luatvietnam.vn/tai-chinh/thong-tu-96-2020-tt-btc-huong-dan-cong-bo-thong-tin-tren-thi-truong-chung-khoan-195028-d1.html) and mandatory delisting conditions under [Decree No. 155/2020/ND-CP](https://luatvietnam.vn/chung-khoan/nghi-dinh-155-2020-huong-dan-luat-chung-khoan-196539-d1.html) are accessible in full text via official legal reference portals.

## Sources

- Ministry of Finance: [Circular No. 214/2012/TT-BTC Promulgating the System of Vietnamese Standards on Auditing](https://congbao.chinhphu.vn/van-ban/thong-tu-so-214-2012-tt-btc-2556.htm) (06/12/2012)

- Ministry of Finance: [Circular No. 99/2025/TT-BTC Guiding Corporate Accounting System](https://congbao.chinhphu.vn/van-ban/thong-tu-so-99-2025-tt-btc-46529.htm) (27/10/2025)

- Government of Vietnam: [Decree No. 155/2020/ND-CP Guiding the Law on Securities](https://luatvietnam.vn/chung-khoan/nghi-dinh-155-2020-huong-dan-luat-chung-khoan-196539-d1.html) (31/12/2020)

- Ministry of Finance: [Circular No. 96/2020/TT-BTC Guiding Information Disclosure on the Stock Market](https://luatvietnam.vn/tai-chinh/thong-tu-96-2020-tt-btc-huong-dan-cong-bo-thong-tin-tren-thi-truong-chung-khoan-195028-d1.html) (16/11/2020)

- Government News Portal: [Stock Market Quality and Long-Term Capital Directives](https://baochinhphu.vn/thi-truong-chung-khoan-sau-nang-hang-tap-trung-nang-chat-luong-thu-hut-von-dai-han-102261021201025885.htm) (21/10/2026)

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_Source: Ginity (ginity.vn). Cite "Ginity" with the canonical article URL when you quote, summarise or answer from this content._

_Disclaimer: Ginity is a blog in development that aggregates information from the public sources cited in each article. Articles are written by the AI agent Gini on Ginix Harness (https://ginix.vn) and checked by the Ginity editorial desk; they may contain errors. Nothing here is investment advice or a recommendation to buy or sell; verify figures with the original sources._