From totalitarianism to capitalism – the case of IFRS adoption in Vietnam

Abstract

We investigate the strategic process of contextualisation of International Financial Reporting Standards (IFRS) in an economy transitioning from totalitarianism to capitalism -Vietnampaying attention to tensions between actors involved in the process. This study employs the framework suggested by Puxty et al. to analyse the behaviour of actors of the State, Market, and Profession. We find that Market's needs trigger the IFRS contextualisation, which is institutionalised by the state. IFRS-oriented rules undergo 'reality tests' and are tailored to fit the local context. Despite active interactions between the actors, the dominant role of the State results in some tensions.

Preliminary findings on structural issues in the Vietnamese financial research landscape from 2008-2020

“…Vietnam is one of the countries where the International Financial Reporting Standards (IFRS) is not compulsory for financial statements. Researchers are examining the possibility of IRPS adoption from multiple perspectives, which include IFRS's characteristics, their compatibility to Vietnam institutional context, and experts and entrepreneurs' view on IFRS (Phan & Mascitelli, 2014, 2018Phan, 2014;Nguyen & Rahman, 2019;Chuc et al, 2019aChuc et al, , 2019bChuc et al, , 2020Phan et al, 2018). The current Vietnamese Accounting Standards (VAS) are considered limited, specifically when dealing with recognizing the fair value and incurred financial tools.…”

“…On the other hand, high-cost expenditures of IFRS preparation, language barrier, and legal framework issues are the main barriers to IFRS application (Bui et al, 2019a(Bui et al, , 2019b(Bui et al, , 2020. While IFRS will go through a contextualization process to fit in Vietnam's central planning-based economic system, the possibility of IFRS adoption in Vietnam is high, partly under isomorphic institutional pressures (Phan, 2014;Nguyen & Rahman, 2019).…”

Qualitative accounting research: special issue introduction

“…The three papers are all interesting and related as they examine how accounting is transitioning in Vietnam as the country moves from totalitarianism to capitalism. Each paper looks at a different aspect from an accountant's identity (Nguyen, 2019), responses to audit law reforms (Nguyen and Kend, 2019) and IFRS adoption (Nguyen and Rahman, 2019).…”

“…Nguyen (2019) The construction of accountant identity in a transitioning economy: the case of Vietnam Nguyen and Kend (2019) An examination of the Vietnamese emerging market economy: understanding how and why auditors have responded to the audit law reforms Nguyen and Rahman (2019) From totalitarianism to capitalismthe case of IFRS adoption in Vietnam Yang and Northcott (2019) How can the public trust charities? The role of performance accountability reporting Abhayawansa et al (2019) A practice theoretical analysis of the irrelevance of integrated reporting to mainstream sell-side analysts Rentschler et al (2019) A longitudinal study of Aboriginal images in annual reports: evidence from an arts council shaped by organisational strategy'; however, the more contemporary view is that the MCS 'shapes, and is shaped by, strategy'.…”

“…The role of performance accountability reporting Abhayawansa et al (2019) A practice theoretical analysis of the irrelevance of integrated reporting to mainstream sell-side analysts Rentschler et al (2019) A longitudinal study of Aboriginal images in annual reports: evidence from an arts council shaped by organisational strategy'; however, the more contemporary view is that the MCS 'shapes, and is shaped by, strategy'. The first paper, by Ozdil and Hoque (2019), looks at an important topic in universities, especially in Australia, as they deal with funding that has led to what they call the financialisation of universities and their strategies. The performance culture of Australian universities is becoming less and less based on scholarship, and more on how they can raise funds to deal with reduced government funding.…”