Institutional pressures, legitimacy, risks, uncertainty and voluntary adoption of IFRS for SMEs in Vietnam

Trinh Hiep Thien,Nguyen Xuan Hung

doi:10.15549/jeecar.v8i4.744

Abstract

The purpose of this study was to determine the impact of institutional variables, risks, and dependence on the voluntary application of international financial reporting standards. The study used a quantitative research method based on regression analysis, with data obtained from a survey from among Vietnam's small and medium businesses. The findings confirmed that legitimacy, dependence, consistency, time, international trade, uncertainty, operational risk, financial risk, and industry all have a positive impact on the ability to voluntary application international financial reporting standards, with the exception of flexibility, which has a negative impact. The findings of the study have consequences for stakeholders in making proper policy decisions about the application of the International Financial Reporting Standards.

Highlights

As of 2021, 132 nations around the world have adopted International Financial Reporting Standards (IFRS)
We propose the following research hypothesis based on the preceding arguments: Hypothesis 1: Legitimacy has a positive impact on the voluntary adoption of IFRS
It was sent to people with knowledge of IFRS who are auditors, financial directors, or chief accountants working at a Vietnamese company with private capital that have not yet been listed, and masters students and experts with a clear understanding of international financial reporting standards

Summary

Introduction

As of 2021, 132 nations around the world have adopted International Financial Reporting Standards (IFRS). IFRS is a set of internationally recognized accounting standards drafted and developed by the International Accounting Standards Board (IASB), which provides highquality accounting information and recommends strict accounting rules. When IFRS was adopted widely over the world, the presentation of financial statements based on IFRS standards increased transparency and enhanced accounting comparability. The Ministry of Finance of the Government of Vietnam has a specific plan to adopt the IFRS in Vietnam through the revision of the Vietnamese Accounting Standards (VAS). The preparation period is from 2019 to the end of 2021, followed by a voluntary application period between 2022 and the end of 2025. Firms have to use IFRS after 2025

Objectives

Methods

Findings

Discussion

Conclusion