Browse > Article
http://dx.doi.org/10.13106/jafeb.2021.vol8.no2.0873

Factors Affecting the Adoption of IFRS: The Case of Listed Companies on Ho Chi Minh Stock Exchange  

TA, Trang Thu (School of Accounting and Auditing, The National Economics University)
PHAM, Cuong Duc (Accounting Principles Department, School of Accounting and Auditing, The National Economics University)
NGUYEN, Anh Huu (School of Accounting and Auditing, The National Economics University)
DOAN, Nga Thanh (School of Accounting and Auditing, The National Economics University)
DINH, Hang Thuy (School of Accounting and Auditing, The National Economics University)
DO, Giang Hoang (School of Accounting and Auditing, The National Economics University)
PHAM, Truong Hong (School of Accounting and Auditing, The National Economics University)
Publication Information
The Journal of Asian Finance, Economics and Business / v.8, no.2, 2021 , pp. 873-882 More about this Journal
Abstract
The study investigates the key factors that affect the adoption of the International Financial Reporting Standards (IFRS) by companies listed on Ho Chi Minh Stock Exchange (HOSE) in Vietnam. The factors that are studied in this research include total debt-to-equity ratio, firm size, return-on-equity ratio, audit quality, foreign investment, and financial institution category. The authors have utilized quantitative and qualitative analyses in combination with a logistics regression model and other available analytical tools for conducting the research. All statistics processed in the paper were based on 379 audited financial statements issued in 2018. The results reveal that factors like firm size, return on equity (ROE), audit quality, foreign investment, and financial institution category positively affect the IFRS adoption of HOSE-listed companies, while total debt-to-equity ratio negatively impacts the adoption. The findings suggest Vietnamese law and policy-makers, when promoting the adoption of IFRS by listed companies, should focus more on five variables with positive influence and they can disregard the total debt-to-equity ratio that is insignificant as a factor affecting the adoption of IFRS. This implication could be applied for other firms in Vietnam and for enterprises in other countries, which are in the same stage of IFRS application.
Keywords
International Financial Reporting Standards; IFRS Adoption; Stock Exchange; Listed Companies; Vietnam;
Citations & Related Records
연도 인용수 순위
  • Reference
1 Irvine, H. J., & Lucas, N. (2006). The rationale and impact of the adoption of International Financial Reporting Standards: the case of the United Arab Emirates. Proceedings of the 18th Asian-Pacific Conference on International Accounting Issues (pp.1-22). California State University, The Sid Craig School of Business, Hawaii, Maui, October 15-18.
2 Jacob, R. A., & Madu, C. N. (2009), International financial reporting standards: an indicator of high quality? International Journal of Quality & Reliability Management, 26(7), 712-722. https://doi.org/10.1108/02656710910975778   DOI
3 Joshi, P. L., & Ramadhan, S. (2002). The adoption of international accounting standards by small and closely held companies: evidence from Bahrain. The International Journal of Accounting, 37(4), 429-440. https://doi.org/10.1016/S0020-7063(02)00190-5   DOI
4 Judge, W., Li, S., & Pinsker, R. (2010). National adoption of international accounting standards: An institutional perspective. Corporate Governance: An International Review, 18(3), 161-174. https://doi.org/10.1111/j.1467-8683.2010.00798.x   DOI
5 Kolsi, M. C., & Zehri, F. (2013). The determinants of IAS/IFRS adoption by emergent countries. In Working paper, Emirates College of Technology, Abu Dhabi.
6 KPMG Vietnam. (2014). Survey on the adoption of International Financial Reporting Standards in Vietnam
7 Leuz, C., & Verrecchia, R. (2000). The economic consequences of increased disclosure. Journal of Accounting Research, 38, 91-124. https://doi.org/10.2307/2672910   DOI
8 Lopes, P. T., & Viana, R. C. (2008). The transition to IFRS: disclosures by Portuguese listed companies. Working Paper no 285, University of Porto.
9 Ministry of Finance. (2019). Proposal on applying International Financial Reporting Standards in Vietnam, 7-8, 21-23.
10 Uyar, A., Kilic, M., & Gokcen, B. A. (2016). Compliance with IAS/IFRS and firm characteristics: evidence from the emerging capital market of Turkey. Economic Research-Ekonomska Istrazivanja, 29(1), 148-161. https://doi.org/10.1080/1331677X.2016.1163949   DOI
11 Zeghal, D., & Mhedhbi, K. (2006). An analysis of the factors affecting the adoption of international accounting standards by developing countries. The International Journal of Accounting, 41(4), 373-386. https://doi.org/10.1016/j.intacc.2006.09.009   DOI
12 Mueller, G. G. (1983). Accounting principles generally accepted in the United States versus those generally accepted elsewhere. In International Accounting and Transnational Decisions (1st ed., pp. 57-69). London: Butterworth-Heinemann. https://doi.org/10.1016/B978-0-408-10841-6.50009-9   DOI
13 Nguyen, D. D. (2020), The Impact of Environmental Factors on the International Harmonization Process of Accounting on SMEs: Evidence in Vietnam, Journal of Asian Finance, Economics and Business, 7(10), 641-649. doi:10.13106/jafeb.2020.vol7.no10.641   DOI
14 Murphy, A. B. (1999). Firm characteristics of Swiss companies that utilize International Accounting Standards. The International Journal of Accounting, 34(1), 121-131. https://doi.org/10.1016/S0020-7063(99)80006-5   DOI
15 Nguyen, H. C. (2011). The possibilities of adopting IAS/IFRS in Vietnam: An analysis. Corporate Ownership and Control, 9(1), 161-171.   DOI
16 Nguyen, N. H. (2018). Converting financial statements from Vietnamese accounting standards to international financial reporting standards - Experimental research in Vietnamese enterprises. Ho Chi Minh City, Vietnam: Doctoral dissertation, City University of Economics, Ho Chi Minh.
17 Owusu, G. M., Saat, N. A. M., Suppiah, S. D. K., & Siong, H. L. (2017). IFRS adoption, institutional quality and foreign direct investment inflows: A dynamic panel analysis. Asian Journal of Business and Accounting, 10(2), 43-75.
18 Paknezhad, M. (2017), Analysis of Affecting Factors on IFRS Adoption: Case Study in Iran. Management and Organizational Studies, 4(1), 74-81.   DOI
19 Pascan, I. D. (2015). Measuring the effects of IFRS adoption on accounting quality: A review. Procedia Economics and Finance, 32, 580-587. https://doi.org/10.1016/S2212-5671(15)01435-5   DOI
20 Phan, T. H. D. (2014), Examining key determinants of International Financial Reporting Standards (IFRS) adoption in Vietnam: An institutional perspective. PhD thesis submitted in fulfillment of the requirements for the degree of Doctor of Philosophy, Swinburne University of Technology.
21 Tran, T. T. H. (2015). Factors affecting the IFRS for SMEs adoption in Vietnam - Empirical research for SMEs in HCM city. Science research topic. University of Economics of Ho Chi Minh City.
22 Senyigit, Y. B. (2014). Determinants of voluntary IFRS adoption in an emerging market: Evidence from Turkey. Accounting and Management Information Systems, 13(3), 449-465.
23 Shima, K. M., & Yang, D. C. (2012). Factors affecting the adoption of IFRS. International Journal of Business, 17(3), 276.
24 Stainbank, L. J. (2014). Factors influencing the adoption of international financial reporting standards by African countries. South African Journal of Accounting Research, 28(1), 79-95. https://doi.org/10.1080/10291954.2014.11463128   DOI
25 Tran, T., Ha, X., Le, T., & Nguyen, N. (2019), Factors affecting IFRS adoption in listed companies: Evidence from Vietnam. Management Science Letters, 9(13), 2169-2180. https://doi.org/10.5267/j.msl.2019.7.035   DOI
26 Albu, N., Albu, C. N., Bunea, S., Calu, D. A., & Girbina, M. M. (2011). A story about IAS/IFRS implementation in Romania. Journal of Accounting in Emerging Economies, 1(1), 76-100.   DOI
27 Al-Basteki, H. (1995). The voluntary adoption of international accounting standards by Bahraini corporations. Advances in International Accounting, 8, 45-64.
28 Affes, H., & Callimaci, A. (2007). The determinants of the early adoption of international accounting standards: Financial decision or opportunism? Comptabilite Contrôle Audit, 13(2), 149-166.   DOI
29 Albu, N., & Albu, C. N. (2012). International financial reporting standards in an emerging economy: lessons from Romania. Australian Accounting Review, 22(4), 341-352.   DOI
30 Barbu, E. (2004). International accounting harmonization: from one accounting vagrancy to another. Comptabilite Controle Audit, 10 (1), 37-61.   DOI
31 Cai, F., & Wong, H. (2010). The effect of IFRS adoption on global market integration. International Business & Economics Research Journal, 9(10), 25-34. https://doi.org/10.19030/iber.v9i10.636   DOI
32 Carmona, S., & Trombetta, M. (2008). On the global acceptance of IAS/IFRS accounting standards: The logic and implications of the principles-based system. Journal of Accounting and Public Policy, 27(6), 455-461. https://doi.org/10.1016/j.jaccpubpol.2008.09.003   DOI
33 Choi, F. D. S., & Meek, G. K. (2008). International Accounting (6th ed.). London, UK: Pearson Education Inc.
34 Choi, F. D. S., & Levich, R. M. (1991). International accounting diversity: Does it affect market participants? Financial Analysts Journal, 47(4), 73-82. https://doi.org/10.2469/faj.v47.n4.73   DOI
35 Carpenter, V. L., & Feroz, E. H. (2001). Institutional theory and accounting rule choice: an analysis of four US state governments' decisions to adopt generally accepted accounting principles. Accounting, Organizations and Society, 26(7-8), 565-596. https://doi.org/10.1016/S0361-3682(00)00038-6   DOI
36 Daske, H., & Gebhardt, G. (2006). International financial reporting standards and experts' perceptions of disclosure quality. Abacus, 42(3-4), 461-498. https://doi.org/10.1111/j.1467-6281.2006.00211.x   DOI
37 Daske, H., Hail, L., Leuz, C., & Verdi, R. (2008). Mandatory IFRS reporting around the world: Early evidence on the economic consequences. Journal of Accounting Research, 46(5), 1085-1142. https://doi.org/10.1111/j.1475-679X.2008.00306.x   DOI
38 Dumontier, P., & Raffournier, B. (1998). Why firms comply voluntarily with IAS: an empirical analysis with Swiss data. Journal of International Financial Management & Accounting, 9(3), 216-245.   DOI
39 DeFond, M., Hu, X., Hung, M., & Li, S. (2011). The impact of mandatory IFRS adoption on foreign mutual fund ownership: The role of comparability. Journal of Accounting and Economics, 51(3), 240-258. https://doi.org/10.1016/j.jacceco.2011.02.001   DOI
40 De Lima, V. S., De Lima, G. A. S. F., & Gotti, G. (2018). Effects of the adoption of IFRS on the credit market: evidence from Brazil. The International Journal of Accounting, 53(2), 77-101. https://doi.org/10.1016/j.intacc.2018.04.001   DOI
41 Dang, N. H., Pham, C. D., Nguyen, X. T., & Nguyen, H. T. T. (2020). Effects of Corporate Governance and Earning Quality on Listed Vietnamese Firm Value, Journal of Asian Finance, Economics and Business, 7(4), 71-80. doi:10.13106/jafeb.2020.vol7.no4.71.   DOI
42 El-Gazzar, S. M., Finn, P. M., & Jacob, R. (1999). An empirical investigation of multinational firms' compliance with international accounting standards. The International Journal of Accounting, 34(2), 239-248. https://doi.org/10.1016/S0020-7063(99)00005-9   DOI
43 Ha, M., & Kang, M. (2019), IFRS Reconciliation Adjustment and Subsequent Meet or Beat Target Earnings, Journal of Asian Finance, Economics and Business, 6(1), 33-45. https://doi.org/10.13106/jafeb.2019.vol6.no1.33   DOI
44 Hair, J. F., Black, W. C., Babin, B. J., Anderson, R. E., & Tatham, R. L. (2006). Multivariate data analysis (Vol. 6). London, UK: Pearson Prentice Hall.