Factors Affecting The Voluntary Application Of International Financial Reporting Standards In Vietnam: Empirical Evidence From Listed Companies

Abstract

In the context of expanding global economic integration, the use of international financial reporting standards (IFRS) in producing and presenting financial statements is garnering widespread support and attention from nations and territories worldwide. For businesses, this is not simply a temporary solution but also a strategic one, because IFRS compliance is one of the requirements for firms to be accepted in the global business climate. To meet the needs of foreign investors and the wishes of domestic businesses while promoting international economic trade in the region and globally, Vietnam has announced a roadmap for voluntary IFRS application from 2022 to 2025 for some listed companies and other companies with needs and adequate resources. The study intends to investigate and assess some unique characteristics of the internal scope of listed businesses in Vietnam, as well as how the presence of COVID-19 influences their readiness to use IFRS voluntarily. Furthermore, the study investigates whether there is a difference in capital structure between state-owned and non-state-owned firms in terms of the voluntary intention to use IFRS. This study uses descriptive statistics, correlation analysis, and multivariate logistic regression analysis to assess the model for analyzing data obtained from the annual report and audited consolidated financial statements during the fiscal years 2021 and 2022. First, the research team reviewed previous studies. It developed a model that included the following variables: audit quality (AUQ), enterprise size, financial institution, foreign investment, foreign participation on the board of directors, foreign revenue, debt ratio, profitability ratio, and the presence of COVID in the decision to adopt IFRS voluntarily. The study team then used the analysis support tool SPSS 20 software to evaluate a sample of 428 observations of listed enterprises in Vietnam on the HOSE and HNX stock exchanges. In addition, the authors used a Chi-square test to compare the capital structure of state owned and non-state-owned firms in terms of their intention to voluntarily use IFRS. The study's findings confirm that audit quality considerations and the direct presence of foreigners on boards of directors influence listed businesses' voluntary adoption of IFRS in Vietnam. As a result of this research, the author makes policy recommendations for publicly traded companies, Vietnamese accountants, and people who rely on financial statement information.