Factors Affecting IFRS Adoption in Listed Companies: Evidence from Vietnam

Abstract

This study examines the factors influencing the adoption of IFRS among listed enterprises in Vietnam. The main aim is to pinpoint the significant factors that influence IFRS implementation and evaluate the degree of their effect on its application. The choice of this topic is based on the increasing significance of IFRS in promoting transparency and comparability in financial reporting, especially in developing economies such as Vietnam. This study focuses on Vietnam’s publicly listed companies, examining key determinants such as firm size (SIZE), profitability (PROFIT), audit quality (AUD), foreign loans (LOA), and the Board of Directors' shareholding percentage (SO). To achieve the research objectives, a hybrid research approach was utilized, combining both qualitative and quantitative methods. The quantitative analysis was conducted using SPSS software, allowing for an in-depth assessment of the relationship between these variables and IFRS adoption. The findings suggest that all the identified factors contribute positively to the adoption of IFRS. In particular, the shareholding percentage held by the Board of Directors surfaced as a vital factor, with companies that have a greater share held by the Board demonstrating a stronger inclination to adopt IFRS. In light of these findings, the study proposes strategies to improve the implementation of IFRS in Vietnam, in accordance with the Ministry of Finance’s roadmap for IFRS adoption. These findings add value to the ongoing conversation about enhancing financial reporting standards in emerging markets