In the context of the rapidly transforming digital economy of 2026, driven by big data and artificial intelligence, mastering financial regulations is a prerequisite for sustainable business growth and avoiding unnecessary legal risks. One of the most important legal documents that any accountant, auditor, or business owner must understand is... Decree 174/2016/ND-CP.
Issued to guide the implementation of several provisions of the 2015 Accounting Law, Decree 174/2016/ND-CP serves as a guiding principle for all activities, from document preparation and bookkeeping to organizational structure and long-term document archiving. This article will provide a detailed, updated look at the most crucial information and an in-depth analysis of the implementation of Decree 174/2016/ND-CP in the current digital governance era.
Overview of Decree 174/2016/ND-CP and its scope of application
Decree 174/2016/ND-CP was issued by the Government on December 30, 2016, and officially came into effect at the beginning of 2017. Even until 2026, despite market fluctuations and the introduction of supplementary circulars, the core value of Decree 174/2016/ND-CP in establishing standards for accounting systems in Vietnam remains unchanged.
The scope of Decree 174/2016/ND-CP is very broad, covering almost all economic entities. The subjects of application include:
- State agencies, public service units, and organizations that utilize public funds.
- Businesses of all economic sectors (Joint-stock companies, Limited liability companies, Private enterprises).
- Large-scale cooperatives, household businesses, and individual businesses.
- Foreign organizations operating in Vietnam have accounting tasks.
This confirms that, regardless of the size of the business, compliance with the principles outlined in Decree 174/2016/ND-CP is a mandatory legal obligation. Misinterpretation or misapplication of these regulations can lead to serious tax risks, and even criminal liability for the business leader.
Regulations on Accounting Documents and Digital Signatures
According to the spirit of Decree 174/2016/ND-CP, the legal validity of a document is only recognized when it fully meets the basic requirements stipulated in the Accounting Law and is specifically guided by this decree.
Mandatory content of documents according to Decree 174/2016/ND-CP
All generated documents must contain the following: Document name, number, date of issue, name and address of the issuing/receiving entity, summary of economic content, quantity, unit price, total amount, and especially the signatures of the responsible parties. According to Decree 174/2016/ND-CP, documents lacking sufficient signatures or with forged signatures are completely invalid.
Electronic documents and digital signatures
Article 5 of Decree 174/2016/ND-CP clearly stipulates the requirements for electronic documents. In the context of the 2026 technology era, the security of digital signatures is extremely important. Businesses need to be aware of the conditions under which electronic documents are considered legally valid accounting documents:
- Data integrity, integrity, and security must be ensured throughout the storage process.
- It must be accessible, exportable, and usable in its complete form when control is required.
- If an electronic document has multiple pages, the digital signature must be authenticated across the entire document to prevent unauthorized modification of its content.
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Handling emergencies
In reality, tax audits reveal that many businesses are often confused when faced with the loss of accounting documents. Decree 174/2016/ND-CP imposes very strict requirements: When accounting documents are found to be lost, burned, or destroyed due to objective reasons, the entity must immediately draw up a report, determine the cause, and notify the relevant authorities (Tax Authority, Police). If the documents relate to accounts receivable, accounts payable, or budget revenue and expenditure, a delay in reporting as required by Decree 174/2016/ND-CP could lead to the business being assessed tax based on risk.
Retention period for accounting documents: Classification for effective management.
Archiving accounting documents is one of the most important aspects of financial management. Failure to archive documents within the timeframe stipulated in Decree 174/2016/ND-CP is currently the most common violation. According to Articles 12 to 14, the archiving periods are divided into three groups:
Minimum storage period of 5 years (Article 12)
These are typically documents that support operational functions and are not directly used for accounting entries or financial reporting. For example, receipts, payment vouchers, and inventory receipts/delivery notes have been recorded in the unit's accounting books but are not kept in the accounting department's records. However, according to the regulations in Decree 174/2016/ND-CP, businesses must still carefully preserve them for reference when needed.
Minimum storage period of 10 years (Article 13)
This is a group of important business documents and records, including:
- Accounting documents used directly for recording transactions and preparing financial statements (invoices, tax returns).
- Detailed accounting ledger, annual summary accounting ledger.
- The annual financial report has been approved.
- Documents related to audits and inspections by government agencies.
- Documents relating to completed investment projects. According to Decree 174/2016/ND-CP, destroying these documents before the 10-year deadline is a serious violation of the law.
Permanent storage group (Article 14)
Typically, large corporations will permanently store annual financial statements or records related to long-term asset ownership in accordance with Decree 174/2016/ND-CP.
Procedure for destroying expired accounting documents (Article 16)
Many accountants mistakenly believe that once an invoice expires, it can be immediately sold for scrap or destroyed. However, Decree 174/2016/ND-CP stipulates a very strict process:
- Establish a council for the destruction of accounting documents.
- Inventory, classify, and catalog the documents to be destroyed.
- Prepare a record of the destruction of accounting documents with the full signatures of all members of the Council. Failure to follow this procedure is also considered a violation of the management rules of Decree 174/2016/ND-CP.
Organizational structure of the accounting department and standards for the Chief Accountant
The organizational structure of the accounting department is a key factor in ensuring that businesses operate in accordance with the law. Decree 174/2016/ND-CP provides very specific regulations on the roles and responsibilities of the head of the accounting department.
Standards for Chief Accountant
To be officially appointed, the Chief Accountant must meet the stringent standards outlined in Decree 174/2016/ND-CP:
- They must possess full legal capacity and good moral character.
- Qualifications: Minimum qualification is an intermediate-level accounting certificate for units at the commune/ward level; minimum qualification is a university degree for central or provincial-level units or large-scale enterprises.
- Training certificate: Must possess a Chief Accountant certificate as prescribed by the Ministry of Finance.
- Experience: At least 2 years of practical experience for those with a university degree and 3 years for those with a vocational/college degree.
Reference: Hire a chief accountant
Cases where individuals are strictly prohibited from working as accountants.
To ensure objectivity and prevent corruption, Decree 174/2016/ND-CP lists individuals who are prohibited from working as accountants, including: those currently under criminal investigation, those prohibited from practicing the profession by court judgments, and the parents, spouses, and children of the head of the unit (for certain types of accounting units). Violating this provision of Decree 174/2016/ND-CP will result in the cancellation of financial reports signed by that person.
Units of Measurement and Accounting System: Consistency in Reporting
Decree 174/2016/ND-CP stipulates:
- Currency: The standard unit is the Vietnamese Dong (VNĐ). For transactions in foreign currency, accountants must simultaneously track both the original currency and the converted value at the actual exchange rate at the time of the transaction or the average exchange rate as guided by the Ministry of Finance and Decree 174/2016/NĐ-CP.
- Units of measurement and time: Official Vietnamese units of measurement (meters, kilograms, man-hours, etc.) must be used. If other international units of measurement are used, equivalent conversions must be performed to ensure comparability.
Prohibited acts and penalties according to Decree 174/2016/ND-CP
The strictness of accounting law is clearly demonstrated through the list of prohibited acts and accompanying penalties. Decree 174/2016/ND-CP absolutely prohibits the following acts:
- Maintaining two sets of accounting records: This is the most serious offense, aimed at tax evasion or financial fraud.
- Document forgery: Creating fictitious invoices or expense documents that do not exist.
- Unauthorized destruction of documents: Deliberately damaging or destroying documents that have not yet expired in order to conceal evidence of wrongdoing.
- Collusion and bribery: Acts of connivance between accountants and third parties to illegally obtain company assets.
Conclude
Decree 174/2016/ND-CP is not just a document outlining dry administrative procedures; it is a shield protecting the financial transparency of businesses. With increasingly stringent international auditing standards and tax inspections, strict adherence to Decree 174/2016/ND-CP will help businesses:
- Avoid risks and administrative penalties.
- Improve the accuracy of financial information for management purposes.
- Build a professional and trustworthy image with investors and partners.
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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.
Frequently Asked Questions about Decree 174/2016/ND-CP
You must create a report of lost documents, with confirmation from the seller, and immediately notify the directly supervising tax authority for guidance on how to handle the situation, avoiding the disallowance of expenses during tax settlement.
Absolutely not. Decree 174/2016/ND-CP requires that signatures on paper documents must be fresh signatures (signed directly with a pen). Pre-engraved signatures have no legal validity in accounting. What should I do if I lose the input invoices that have already been declared for tax purposes?
Regarding the regulations on signatures on documents, is it permissible to use pre-engraved signatures?
