The impact of audit reputation with the mediating role of financial instrument disclosure on bank performance in Vietnam

Abstract

This research examines the impact of audit reputation on the financial performance of banks in Vietnam, focusing on the mediating role of financial instrument disclosure (FID). Using data from 21 Vietnamese banks over a 15-year period (2010-2024), the analysis applies regression techniques alongside Sobel-Goodman and Bootstrap tests to assess the mediating role of FID. Preliminary results suggest audit reputation positively influences FID, enhancing transparency and stakeholder confidence. Moreover, FID is found to mediate the relationship between audit reputation and bank performance, highlighting its role in linking audit practices with financial outcomes. In addition, educational attainment and listing status contribute to the financial performance of banks, which is consistent with the signaling theory. The study highlights the urgent need for Vietnam to establish accounting standards for FID. Banks, in turn, need to improve the audit reputation through using Big Four and implement appropriate accounting policies for FID to further contribute to the financial performance.