BỘ GIÁO DỰC VÀ ĐÀO TẠO ĐẠI HỌC KINH TẾ THÀNH PHÓ HÒ CHÍ MINH BẤO CÁO TỔNG KỂT ĐÈ TÀI NGHIÊN cứu KHOA HỌC THAM GIA XÉT GIẢI THƯỞNG ‘’NHÀ NGHIÊN cứu TRẺ UEH” NĂM 2024 PROMOTING THE WILLINGNESS TO APPLY IFRS OF VIETNAMESE ENTERPRISES IN THE CONTEXT OF INTERNATIONAL INTEGRATION Thuộc nhóm chuyên ngành : Ke toán TP. Hồ Chí Minh, tháng 02/2024 TABLE OF CONTENTS ABSTRACT. The necessity of the research. Subject and Scope of the study.
Research Data and Methodology. xi Chapter 1 : LITERATURE REVIEW.1 Overview of foreign research.1 Research on the roles and influences of IFRS adoption.2 Research on the benefits, costs and challenges of applying IFRS and Fair value.3 Research on factors affecting intention and willingness to apply IFRS.2 Overview of domestic research.1 Research on the roles and influences of IFRS adoption.2 Research on the benefits, costs and challenges of applying IFRS and Fair value.3 Research on factors affecting intention and willingness to apply IFRS.1 Review of previous studies. 21 Conclusion of chapter 1. 22 Chapter 2 : THEORETICAL FRAMEWORK.1 Overview of International Financial Reporting Standards (IFRS).1 The history of formation and development of IFRS.2 Current status of IFRS adoption around the world.3 Current status of IFRS adoption in Vietnam.4 Benefits and challenges of IFRS adoption.1 Benefits of IFRS adoption.2 Challenges of IFRS adoption.2 Overview of Fair value Measurement.1 The role of fair value and applicable objects in International Accounting Standards.2 The history of formation and development of fair value in the Vietnamese corporate accounting system.3 Regulation of Fair value in the current Vietnamese corporate accounting system 41 2.1 Intention to apply IFRS.2 Willingness to apply IFRS.3 Readiness to apply Fair value.1 Theory of Planned Behavior.2 Corporate Governance Theories.4 Decision usefulness theory of accounting.5 Typical Previous Models relate to intention and willingness to apply IFRS.6 Factors affecting the the intention and willingness to adopt IFRS.1 Identify factors affecting the intention and willingness to adopt IFRS.2 Formulate research hypotheses.2 Proposed research model.
71 Conclusion of chapter 2. 72 Chapter 3 : RESEARCH METHODOLOGY.2 Formulate scales for variables.3 Quantitative research methods.1 Quantitative research design.3 Data analysis method.1 Evaluation of the measurement model.2 Assessment of the structural model. 83 Conclusion of Chapter 3.85 Chapter 4 : EMPIRICAL RESULTS AND DISCUSSION.2 Measurement model evaluation.1 Internal consistency reliability.3 Structural model assessment.2 Statistical significance and relevance of path coefficients.3 The coefficient of determination (R Square).4 The effect size (f Square).5 The model’s predictive relevance (Ọ Square).6 The effect size (q Square).7 The role of the mediating variable.4 Summary of research results and discussion.1 Summary of research results.1 Summary of the results ofsupported hypotheses.2 Summary of the results of rejected hypotheses. 102 Conclusion of Chapter 4.
104 Chapter 5 : CONCLUSIONS AND RECOMMENDATIONS.4 Limitations and recommendations for future research.2 Recommendations for future research. 118 Conclusion of Chapter 5. 130 iv LIST OF TABLES Tabic 1-1: Summary of factors affecting the application of IFRS.21 Table 2-1: Analysis the application of IFRS Accounting Standards in the 167 identified jurisdictions by region of the world.27 Table 2-2: Timeline for the IFRS Roadmap approved by Decision No.30 Table 2-3: Definition of fair value in standards and circulars. 41 Table 2-4: Scope of application of fair value in initial measurement in Vietnames Accounting Regulations.42 Table 3-2: Characteristics of variables in the research model.80 Table 4-1: Statistical results of survey sample information.
86 Table 4-2: Results of evaluating the consistency reliability of the scale. 88 Table 4-3: Outer loadings of observed variables. 89 Table 4-4: Average Variance Extracted (AVE). 90 Table 4-5: Results of evaluating the discriminant validity - Fornell Larcker.
90 Tabic 4-6: Results of evaluating the discriminant validity - HTMT.91 Table 4-7: Results of multicollinearity assessment. 91 Table 4-8: Results of evaluating the direct relationship between variables in research model. 92 Table 4-9: Result of evaluating the coefficient of determination (R Square). 93 Table 4-10: Result of assessing the effect size (f Square).93 Table 4-11: Result of evaluating the model's predictive relevance (Q Square).
94 Table 4-12: Result of assessing the effect size (q Square). 95 Tabic 4-13: Results of intciTncdiatc variable analysis. 95 V LIST OF FIGURES Figure 2-1: Model of Theory of Reasoned Action (TRA). 48 Figure 2-2: Model of Theory of Planned Behavior (TPB).
48 Figure 2-3: Model of Kim M. Shima and David c. 55 Figure 2-4: Model of Fatma Zchria and Jamel Chouaibi (2013).55 Figure 2-5: Model of Phan Thi Hong Duc, Mahesh Joshi, and Bruno Mascitelli (2017).56 Figure 2-6: Model of Yosra Mnif Sellami and Yosra Gafsi (2018). 57 Figure 2-7: Model of Bananuka et al.
57 Figure 2-8: Proposed research model. 72 Figure 3-1: Research process. 73 LIST OF ABBREVIATIONS ABBREVIATIONS DEFINITION ACCA Association of Chartered Certified Accountants CPA Certified Public Accountant EU European Union IAS International Accounting Standards IASB International Accounting Standards Board_____________ IASC International Accounting Standards Committee_________ IASCF International Accounting Standards Committee Foundation ICAW Institute of Chartered Accountants in England and Wales IFRS International Financial Reporting Starrdards___________ IMF International Monerary Fund IOSCO International Organization of Securities Commissions SMEs Small and Medium Enterprises US GAAP United Stales Generally Accepted Accounting Principles VAA Vietnam Association of Accountants and Auditors VACPA Vietnam Association of Certified Public Accountants VAS Vietnam Accounting Standards VFRS Vietnam Financial Reporting Standards_______________ vi ABSTRACT As the global economic integration progresses, investors need to compare the financial statement information of enterprises in different countries to make rational decisions and create the optimal investment portfolio. Applying a common language for financial statements by using IFRS is a necessity for enterprises.
The Decision 345/QD-BTC issued by the Ministry of Finance on March 16, 2020, which approved the Scheme on Application of Financial Reporting Standards in Vietnam, has demonstrated Vietnam’s commitment to the roadmap to apply IFRS. Therefore, the problem is to evaluate the intention and willingness to apply IFRS of Vietnamese enterprises before the IFRS application roadmap in order to facilitate their effective application. With the aim of clarifying this issue, the objective of the study is to identify and measure the influence of factors on the intention to apply IFRS in Vietnamese enterprises. The study uses a quantitative research method with a sample size of 171 enterprises in Vietnam, and uses SmartPLS software to test the research model.
The research results indicate a positive relationship between the attitude towards IFRS application and the intention to apply IFRS al enterprises, and also explain the factors that affect the attitude of willingness to apply IFRS, including: benefits, costs, management roles, motivations. Moreover, through the PLS-SEM model, the author determines that there is a relationship between the willingness to apply Fair value and the intention to apply IFRS. The research results contribute to helping enterprises have a better overview of the application of IFRS, which is the basis for suggesting policy implications, supporting enterprises and stakeholders in better planning, preparation and more effective application of IFRS. The necessity of the research As global economic integration intensifies and countries seek to enhance their business environments, the stock market and investor protection play a vital role in attracting foreign capital.
Consequently, governments have imposed regulations on businesses to ensure the transparency, integrity, and timeliness of key financial information. Moreover, to increase their competitiveness, expand their operations and access foreign markets, businesses are increasingly required to prepare their financial statements in accordance with the International Financial Reporting Standards (IFRS). IFRS is a set of accounting principles that guides businesses in preparing and presenting financial statements in a consistent, transparent, and comparable manner across the world. It was issued by the International Accounting Standards Board (IASB) in June 2003.
By following the same rules, IFRS enhances the reliability of financial statements and enables stakeholders to make more informed economic decisions based on clear and timely information. Stakeholders such as banks, investors, suppliers, and regulators can use financial statements prepared under IFRS to analyze the innovation capacity, solvency, growth potential and industry trends of businesses and make funding or policy decisions accordingly (Hlel, K. et al, 2020; Nurunnabi et al, 2022). According to the IFRS Foundation's website, ifrs.org, 160 out of 168 jurisdictions, representing 98.8% of the global GDP, have committed to comply with the IFRS Accounting Standards as of 2023.
Europe is the continent with the highest number of IFRS adopters, with 44 out of 44 independent countries, followed by Africa (39 countries), America (37 countries), Asia and Oceania (35 countries) and the Middle East (13 countries). This shows that in the era of globalization, the rapid movement of domestic and foreign capital flows has a significant impact on the investment, production and business efficiency of enterprises. Therefore, a common language in accounting, especially through the preparation and presentation of financial statements and information, is very essential. Despite some opposing views and delays in implementing IFRS in some countries such as the US, China or India, the positive effects of IFRS are undeniable and have been demonstrated by various studies.
Research conducted in the past two decades on the application of IFRS in individual countries or groups of countries around the world has shown that: IFRS adoption reduces earnings management (Barth Ct al, 2011; Christensen et al, 2015; All & Maliha, 2016); IFRS application improves the quality of information on financial statements (Bartov el al, 2005; Christopher & Christian, 2014; Horton and Serafeim, 2010; Armstrong et al, 2010); IFRS application enables more timely recognition of losses (Barth et al, 2008; Chen et al, 2010; San et al, 2011; Christensen cl al, 2015); IFRS application has a positive impact on the debt markets of countries (Naranjo Ct al, 2014; Archana & Gupta, 2016; Anthony & George, viii 2017). IFRS also benefits developing countries by providing opportunities to enhance the quality of information on financial statements. For instance, Dante et al (2018) collected data from 2000 to 2016 on 2,45 8 companies from 13 emerging countries (including Argentina, Brazil, Chile, Colombia, Malaysia, Mexico, Nigeria, Pakistan, Peru, Philippines, Poland, Russia, and South Africa) and concluded that IFRS improved the quality of information on the financial statements and decreased earnings management. To integrate with the “common language" of financial statements, enhance comparability and quality of accounting information, increase investor confidence and contribute to the development of the capital market, expand cooperation and increase competitiveness in the international arena, it is imperative for Vietnam to comply with a common set of financial reporting standards.
On March 16, 2020, the Minister of Finance approved the Scheme on Application of Financial Statements Standards by Decision No. The project aims to develop roadmaps, announce and support the application of IFRS for each specific target group identified; and to promulgate and implement the Vietnamese Financial Reporting Standards (VFRS) system (Ministry of Finance, 2020). However, under the current conditions, when VFRS has not been established and IFRS has been applied by a few large enterprises in Vietnam, while the accounting staff in more than 700,000 other enterprises lack the necessary capacity to prepare financial statements according to IFRS for their business, convert the accounting system, train human resources, set up information technology infrastructure, etc., these are enormous and complex tasks. By 2025, enterprises in Vietnam (under a specific group of subjects under the provisions of Project 345) will be required to apply IFRS, but most of them are enterprises with limited resources, including specialized human resources and capital, which will pose many challenges for them.
Especially because IFRS has higher and more difficult standards than the current accounting standards, if domestic enterprises are not truly ready to apply IFRS but are still forced to do so by the authorities according to the roadmap, they may face difficulties, which may lead to superficial or dishonest application and affect the quality of financial statements according to IFRS. The question is, before the deadline set by the Ministry of Finance, will domestic enterprises be prepared to apply IFRS? To answer this question, it is necessary to study the factors influencing the willingness to apply IFRS of enterprises in the current situation.