In the context of the digital economy of 2026, transparency in financial reporting is not only a requirement from tax authorities but also a foundation for businesses to build credibility with investors and partners. However, the line between professional errors and violations of accounting regulations is sometimes very thin. Understanding Article 221 is crucial. Criminal Code It is a critical task for every chief accountant and financial manager to protect themselves and their businesses from extremely serious legal risks.
The legal nature of the crime of violating accounting regulations.
The crime of violating accounting regulations (according to Article 221 of the 2015 Penal Code, amended in 2017) is the act of intentionally acting contrary to the principles, standards, and regulations of the law on accounting, causing damage to the State or other organizations and individuals of VND 100 million or more.
It should be noted that the scope of this offense applies not only to state-owned enterprises but also to all entities obligated to maintain accounting records. Accounting Law 2015In a professional setting, it's important to distinguish between accounting violations and tax evasion. Violations of accounting regulations focus on falsifying input (documents) and output (financial statements) data, leading to inaccurate assessments of a business entity's financial capacity and cash flow.
Acts constituting the crime of violating accounting regulations
To determine whether an individual has committed an accounting violation, investigators will focus on the following seven key actions. From an accounting perspective, each action has its own specific characteristics:
Falsifying, making false statements, or colluding with or coercing others to falsify documents.
This is the most common offense. Accountants may, on their own initiative or under the direction of their superiors, create receipts, payment vouchers, or invoices that are not based on actual economic transactions. This directly constitutes a violation of accounting regulations.
- Examples include creating fictitious payroll records for employees who don't exist, or declaring higher-than-actual input material costs to siphon off cash from the company.
- Interfering with digital signatures, using AI to create false evidence, or falsifying data in ERP accounting software to generate fictitious documents are also classified as particularly dangerous acts of accounting regulation violations.
Deliberately omitting assets, capital, and funds from accounting records.
This behavior distorts the nature of the Balance Sheet. Maintaining "slush funds" or assets not officially recorded in the entity's accounting system is a direct manifestation of a violation of accounting regulations.
This leads to legal consequences, such as the misappropriation or misuse of company assets without internal control. When the value of off-book assets results in losses exceeding 100 million VND, the relevant parties will be prosecuted for violating accounting regulations.
Destroying or intentionally damaging accounting documents before the deadline.
The Accounting Law clearly stipulates the retention period. Destroying records to conceal financial irregularities during an audit is clear evidence of a violation of accounting regulations.
Note: The retention period is 5 years for management documents; 10 years for accounting vouchers; and permanent for important reports. Deleting data on the accounting server without a proper physical backup is also considered document destruction, constituting a violation of accounting regulations.
Establish two or more financial accounting systems.
This is an act aimed at concealing actual profits. Maintaining internal records and reports to falsify information is the central act of the crime of violating accounting regulations.
Maintaining two sets of accounting records not only poses tax risks but also directly violates the Consistency and Honesty principles of Vietnamese accounting, creating loopholes for fraudulent activities that lead to accounting violations.
Confirming or reporting false financial statements.
When the figures in the financial statements are not accurately compiled from the detailed ledgers and original documents, the person preparing the report has committed an act constituting a violation of accounting regulations. Intentionally manipulating financial statements to obtain bank loans or deceive shareholders are scenarios that often lead to criminal charges.
Penalties for violations of accounting regulations
The law stipulates that the penalties for violations of accounting regulations are based on the value of the material damage caused to society.
Frame 1: Starting Penalty
A person who commits an offense by violating accounting regulations causing damage ranging from VND 100,000,000 to less than VND 300,000,000, or who has already been subject to administrative penalties but continues to violate the regulations:
- The penalty is correctional labor without imprisonment for up to 3 years.
- Or imprisonment from 1 to 5 years.
Frame 2: Aggravating circumstances
If the offense involves violations of accounting regulations falling under the following cases:
For personal gain; Organized; Sophisticated methods; Causing damage ranging from 300,000,000 VND to less than 1,000,000,000 VND:
- The penalty ranges from 3 to 12 years of imprisonment.
Frame 3: Particularly serious consequences
For offenses related to accounting violations causing losses of VND 1,000,000,000 or more:
- The offender faces a prison sentence of 10 to 20 years.
Additional penalties
Those who commit accounting violations may also be prohibited from holding accounting positions or performing accounting work for 1 to 5 years, along with the confiscation of part or all of their assets.
Crimes of concealing a crime and failing to report an accounting crime.
One point worth noting is the responsibility of those involved. According to regulations, anyone who, without prior agreement, conceals the commission of a crime related to accounting regulations (in cases of very serious or exceptionally serious offenses) may be prosecuted for the crime of concealing a crime under Article 389 of the Penal Code.
Similarly, failing to report a crime while aware that it is being prepared or has already been committed also carries the risk of prosecution for the crime of failing to report a crime under Article 390 of the Penal Code. This places stringent demands on the integrity of internal auditors and subordinate staff in the accounting department.
Analyzing the differences between accounting and tax errors.
Why do authorities separate the crime of violating accounting regulations from the crime of tax evasion? Because of its dangerous nature to the economic order.
- Tax evasion: Focusing solely on financial obligations to the State.
- Accounting violations: Concern for the integrity of economic data. An accountant may pay all taxes but still commit an accounting violation if they falsify documents to siphon off company funds or deceive investors about the company's debt situation.
Reference: Full-service accounting.
Legal risk review and prevention process
To avoid inadvertently committing accounting violations, the entity needs to strictly follow the following review process:
- Verify the validity of electronic documents: In 2026, verifying the tax authority code on electronic invoices will be mandatory. Absolutely do not approve invoices from "phantom businesses" or those without actual goods or services.
- Periodic Reconciliation: Perform monthly reconciliation between the general ledger, subsidiary ledgers, and bank statements. Any discrepancies must be explained in writing and signed by all relevant parties.
- Multi-layered storage and security: Establish a process for backing up accounting data on both cloud and physical hard drives. The loss of accounting data without justifiable reason could be interpreted as destruction of documents to conceal a breach.
- Establishing a safe internal whistleblowing culture: Businesses should have mechanisms in place that allow employees to report coercive data manipulation without fear of retaliation, in order to prevent early violations of accounting regulations.
- Legal advice when in doubt: When serious irregularities are detected, the chief accountant should proactively consult a lawyer to find solutions or confess to receive leniency from the law.
Businesses should proactively seek advice and hire chief accountant We utilize reputable independent auditing, accounting, and tax firms such as MAN – Master Accountant Network to conduct in-depth reviews. By partnering with businesses, we not only benefit the chief accountant but also the tax and auditing teams, helping businesses achieve transparency and maximize benefits.
Conclusion
Serious violations of accounting regulations serve as a wake-up call regarding professional ethics and legal responsibility. The maximum penalty for particularly serious violations of accounting regulations is up to 20 years in prison. Honesty, accuracy, and respect for the law are mandatory requirements for every accountant to uphold their professional integrity and avoid unnecessary legal troubles related to accounting violations.
If you have concerns about the validity of your current documentation system or need a structured internal control roadmap, don't let small mistakes accumulate into major consequences.
Contact MAN – Master Accountant Network for advice and support in reviewing your accounting records!
Contact information MAN – Master Accountant Network
- Address: No. 19A, Street 43, Tan Thuan Ward, Ho Chi Minh City
- Mobile/Zalo: 0903 963 163 – 0903 428 622
- Email: man@man.net.vn
Content production by: Mr. Le Hoang Tuyen – Founder & CEO MAN – Master Accountant Network, Vietnamese CPA Auditor with over 30 years of experience in Accounting, Auditing and Financial Consulting.
Questions and answers about accounting rule violations
Yes. According to the Accounting Law and the Criminal Code, accountants have the right and obligation to refuse to carry out illegal instructions. If you know that an instruction is wrong (such as creating fictitious invoices or omitting assets from the accounting records) and still carry it out, you will be considered an accomplice in the crime of violating accounting regulations.
Not necessarily. The crime of violating accounting regulations requires intentional fault. If the error occurs due to professional mistakes or objective factors without the intention of fraud or distorting the financial nature, this act is usually only subject to administrative penalties according to Decree 41/2018/ND-CP.
The key difference lies in the amount of damage. If the violation causes damage of 100,000,000 VND or more, it officially constitutes a crime of violating accounting regulations and is subject to criminal prosecution. If it is below this amount, individuals are usually only fined between 5 million and 40 million VND, depending on the offense.
If it can be proven that the incident was objective and that efforts were made to recover according to proper procedures, then no crime is committed. However, if data is intentionally deleted or backups are not performed as required in order to destroy evidence during an inspection, this act will be classified as the crime of illegally destroying accounting documents. If I act on the director's instructions, am I committing a crime?
Are unintentional errors in accounting considered criminal offenses?
When does an accounting violation become a criminal offense?
Is it a crime for an accountant to lose data due to a computer malfunction?
