Factors affecting the financial reporting quality in Vietnamese enterprises: A perspective from Contingency Theory

Abstract

This research aimed to identify factors that affect the financial reporting quality (FRQ) in Vietnamese enterprises, in which the affecting factors are based on the Contingency Theory. Data were collected through an email survey combined with a direct, and the survey period was from January to June 2020. We focussed on surveying CFOs, chief accountants, and accountants who had at least three years of working experience. The research sample consisted of 235 enterprises with headquarters in Ha Noi, Ho Chi Minh, and Da Nang (the three largest cities in Vietnam), in which there were 92 small enterprises, 69 medium enterprises, 74 large enterprises; 26 businesses that have adopted the international financial reporting standards (IFRS) as their accounting framework for the preparation of their financial reporting, and 109 businesses that have not applied IFRS. The research model and hypotheses have been tested by Multiple Linear Regression (MLR) with the support of SPSS statistical software. The research results indicate that there are four factors significantly affecting the FRQ: Administrator support; Accountant competency; Internal Control effectiveness and IFRS application. The study contributes to perfect FRQ’s direct method measures, highlighting the role of the Contingency Theory in creating a basic that helps to interpret the relationship of contextual factors and FRQ.