Factors affecting the application of IFRS through the perceptions of business managers and auditors in Vietnam

Abstract

The purpose of this study is to determine the factors that influence the application of the International Financial Reporting Standards (IFRS) in Vietnam through the perceptions of business managers and auditors. Combining qualitative and quantitative research methods based on a comprehensive analysis and aggregation of information available from various sources, the results of the questionnaire interviews of 500 managers and auditors currently working in Vietnam are offered. The results of the study show that factors affecting the applicability of IFRS in Vietnam are: legal basis for accounting activities; characteristics of enterprises; qualification and competency of the accounting teams; and corporate governance. The study also finds that governance factors and socio-economic and cultural conditions have an uncertain influence on the IFRS applicability. At the same time, there is no significant difference in awareness of the ability to apply IFRS between the group of enterprise managers and auditors and groups of people with different work experience. Among them, the qualifications and competencies of the accountant teams and the characteristics of enterprises are the two factors that have the strongest impact on the applicability of IFRS in Vietnam.

Analysis of factors affecting the adoption of IFRS in an emerging economy

“…Unlike the results of the above study [ 36 ], find that the accounting regime - the legal basis for accounting activities in Vietnam - is a factor that has a positive impact on the application of IFRS. It is easy to see that in Vietnam, due to the influence of history, all accounting activities of enterprises must comply with the accounting regimes and guiding circulars of the State.…”

“…An accountant's qualifications and experience significantly affect compliance with accounting regulations and, therefore, IFRS adoption [ 36 , 77 ]. find that the higher the qualification of the accounting team, the easier it is to grasp the standards and the less difficult it is to put the measures into practice than less qualified people [ 84 ].…”

“…The higher the level and awareness of the managers, the more promoting the adoption of IFRS and vice versa [ 87 ]. provides evidence that corporate governance factors improve compliance with IFRS requirements [ 36 , 85 ]. argue that managers' perceptions positively impact the IFRS application.…”

“…Over the past, several studies referred to the application of IFRS in Vietnam [ 34 , 35 ]. examine the impact of factors belonging to the enterprise on applying IFRS [ 36 ]. identify factors affecting the application of IFRS in Vietnam in the eyes of business managers and auditors [ 37 ].…”

The impact of IFRS adoption on Saudi Arabia

“…Vietnam's financial practices and reporting mechanisms have been greatly influenced by the varying financial standards of France, China and the USA (Bui, 2011). Doan et al (2020) researched the willingness of accountants in Vietnam to adopt IFRS concerning their perceived adoption benefits. Bananuka et al (2019) and Phan et al (2018) have examined the effectiveness of the audit committee's and isomorphous force and management's willingness to adopt IFRS in Uganda.…”