Factors affecting accrual accounting reform and transparency of performance in the public sector in Vietnam

Abstract

This study was conducted to determine the factors and their influence on accrual accounting reform in the public sector in Vietnam. Combining qualitative and quantitative research methods based on empirical surveys of 268 accountants, controllers, and auditors working in state agencies such as the Department of Finance, state treasuries and agencies receiving revenues from the state budget in 2019. This study shows that six factors influence the reform of the accounting system in the public sector in Vietnam to accrual-based: accounting staff – especially their expertise, competence, and work experience; training and support of the consulting experts; costs of the accounting reform; level of information technology application; funding and assistance from international organizations; legal environment.At the same time, the accrual-based accounting reform will have a positive impact on improving the transparency and efficiency of public sector operations in Vietnam. Among the factors affecting accounting reform, the legal environment factor is the most influential determinant, followed by the contingent of accountants. The study’s limitation is that the new experimental investigation is only conducted with a small sample size and in a short period. However, the research results are also a useful reference for those who are interested in the context that Vietnam is preparing to have strong reforms in accounting in the public sector in the coming time.

Constraints and stimuli in the implementation of public accounting reform: systematic literature review and future research agenda

“…In developing countries, authorities and regulators show resistance to adopting change, as the majority of public sector accountants are not trained and qualified for the implementation of the accrual-based IPSAS. Previous studies demonstrated that neither workers nor management have adequate financial and human resources for the implementation of the accrual-based IPSAS, which leads to the top management withholding commitment to the implementation of the accrual-based IPSAS (Ahmad and Nasseredine, 2019; Azevedo et al , 2020a, 2020b; Harun, 2007; Ismaili and Ismajli, 2020; Tetteh et al , 2021; Thanh et al , 2020; Yuliati et al , 2019). The resistance to change is one of the barriers (Al-otoom and Alrabba, 2022; Brito and Jorge, 2021; Tetteh et al , 2021) because the age of senior managers has a negative impact on accounting implementation (Neves and Gómez-Villegas, 2020) for fear of losing control over the budget authority (Adhikari et al , 2021).…”

“…However, the limited financial resource constraint is mentioned much more in studies conducted in developing countries (Ademola et al , 2020; Ahmad and Nasseredine, 2019; Azevedo et al , 2020a, 2020b). In other words, developing countries have major difficulties in getting adequate infrastructure and the human and financial resources to apply the standards (Brusca et al , 2016; Harun et al , 2021; Shehadeh, 2022; Thanh et al , 2020).…”

“…In developing countries, studies highlight that the legal systems create conflicts and barriers to implementing reforms at the level of public accounting (Adhikari et al, 2013;Brito and Jorge, 2021;Harun et al, 2021;Mbelwa et al, 2019;Mohammadrezaei et al, 2013;Nagirikandalage and Binsardi, 2015;Thanh et al, 2020). Nyahuna and Doorasamy (2021) found that weak environmental legislation spares them from developing and applying environmental management accounting systems within local government.…”