MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH CITY - By LE TRAN HANH PHUONG FACTORS AFFECT THE ADOPTION OF THE INTERNATIONAL ACCOUNTING STANDARDS (IAS/IFRS) IN VIETNAM – RESEARCH ON NATIONAL AND COMPANY LEVEL MAJOR: ACCOUNTING CODE: 9340301 SUMMARY OF PHD THESIS PROFESSIONAL ADVISOR Asso.Prof., PhD HA XUAN THACH HO CHI MINH CITY - 2019 Thesis is prepared at: University of Economics Ho Chi Minh City Professional advisor: Asso.Prof., PhD Ha Xuan Thach Critic 1: Critic 2: Critic 3: The thesis will be presented to the Thesis committee at: At …, the day month The thesis can be found in Library: year INTRODUCTION Research ideal In the bias of market globalization, international accounting and securities organizations have begun the harmonization of accounting standards to promote investment, increase economic integration between nations and area It is inevitable of using “common accounting language” to help ensuring transparency, clarity, comparability across the world, and greater utility to facilitate analysts, managers, and investors in making decisions Most countries have adopted The International Accounting Standards (IAS/IFRS), but Vietnam has not yet announced a specific schedule or commitment on the adoption of IAS/IFRS The Ministry of Finance have been building a roadmap for accounting and auditing in Vietnam to 2020 in harmonization with international standards The updating and promulgation of new accounting standards and regulations related to accounting systems show that the efforts of the Ministry of Finance to prepare for the implementation of adoption IAS/IFRS in the future to be favorable and consistent (Tran Quoc Thinh, 2016) It is imperative for Vietnamese enterprises to adopt The International Accounting Standards (IAS/IFRS) in order to increase the competition in the world market The Ministry of Finance has planned to adopt some simple and appropriate IAS/IFRS for piloting in several large companies (LVC) and units with public interests The process of adoption The International Accounting Standards should be researched carefully and the appropriate roadmap for each type of enterprise in the economy International studies have researched the adoption of IAS/IFRS from various perspectives provides a fairly comprehensive picture of the level of harmonization between national accounting standards and the International Accounting Standards (Ho Xuan Thuy, 2016) The study focused mainly on developed countries, while studies on developing countries with characteristics similar to Vietnam are still relatively limited The in-country studies focused on the convergence of VAS with IAS/IFRS, benefits and challenges in adoption IAS/IFRS, assessing the potential and proposing directions for adoption IAS/IFRS in Vietnam The empirical studies on the factors that affect the adoption of IAS/IFRS in Vietnam are necessary but have not been properly addressed Researches in both the macro and micro factors that affects the adoption of IAS/IFRS have been done in few countries, especially it is so limited in Vietnam Two problems need to be focused: in the national level, is Vietnam eligible for IAS/IFRS adoption? If Vietnam decides to adop IAS/IFRS, can the enterprise do? This has prompted the author to research the factors affect the adoption of IAS/IFRS in Vietnam - national and company research Thus, providing a synchronous and timely solution from the Government State management, associations and professional organizations, training institutions and enterprises The subject has a great scientific and practical significance to provide solution that is appropriate to the current Vietnamese characteristics - both nationally and company Therefore, the author decided to implement the topic “Factors affect the adoption of The International Accounting Standards (IAS/IFRS) in Vietnam – Research on national and company level” Research objectives and Research questions - Research objectives: The general objective of this thesis is to identify and measure the factors affect the adoption of The International Accounting Standards (IAS/IFRS) in Vietnam – Research on national and company level In order to solve the general objective, the thesis needs to address two main objectives: + Identify and measure the macro factors that affect the adoption of The International Accounting Standards (IAS/IFRS) – Research on national level + Identify and measure the macro factors that affect the adoption of The International Accounting Standards (IAS/IFRS) in Vietnam – Research on company level - Research questions: (1) What are macro factors that affect of the adoption of The International Accounting Standards (IAS/IFRS) at national level and How are these factors affected? (2) What are micro factors that affect of the adoption of The International Accounting Standards (IAS/IFRS) in Vietnam at company level and How are these factors affected? To clarify the content of the research question (2), the author raises two questions: (2a) What are micro factors on the adoption of IAS/IFRS in listed large companies in Vietnam and How are these factors affected? (2b) What are micro factors on the adoption of IAS/IFRS in unlisted large companies in Vietnam and How are these factors affected? - Research subjects and scopes Research subjects: Factors affect the adoption of The International Accounting Standards (IAS/IFRS) in Vietnam – Research on national and company level - Research scopes: + Space research: A thesis research on macro factors affecting the adoption of IAS/IFRS at the national level The data is collected from the list of published IAS/IFRS countries on www.iasplus.com/country/country.htm A thesis research on micro factors affecting the adoption of IAS/IFRS in Vietnam at the company level The data is collected from the audited financial statement of large companies in Vietnam (LVC) as of 31/12/2016 The basis for the author to select the research space is LVC because, according to experience from the countries and basing on the roadmap of the Ministry of Finance, the IAS/IFRS adoption in the early years usually takes place at listed companies, LVC The reason is that the resources of LVC when adopt IAS/IFRS have more advantages in terms of finance, human resources, technology, professional level Next, the author researched the micro factors that has affected the adoption of IAS/IFRS into two groups of LVC in the economy: LVC are listed on the Stock Exchange; LVC are unlisted + Period research: data is collected in 2016 + Research Limitation: • The thesis has not focused in the content of each IAS/IFRS • The thesis has not investigated the decision to adopt IAS/IFRS to the national accounting system • The thesis has not researched on SMEs in Vietnam Research methodology The author uses mixture of qualitative and quantitative methods in this thesis The thesis used a combination of research methodologies to solve the objectives in the order that the qualitative methodology was first adopted and then quantitative methods to re-examine the research model: - The qualitative research helps identify the factors that affect the adoption of IAS/IFRS in Vietnam Through the literature review processing, the author used the GT method for in-depth interviews with experts Expert survey helped to identify the macro and micro factors affecting IAS/IFRS adoption in Vietnam at national and company level, provide hypothesis and research model - The quantitative methods help to measure the impact of these factors on the adoption of IAS/IFRS in Vietnam - national and company research The author collects primary and secondary data on the logit regression model The research process of thesis as below: Research objectives Research question (1) Mixed method - The qualitative research: (GT) Through a survey of 15 experts with semi-structured questionnaires - The quantitative methods: the logit regression model from secondary data of 145 countries Research results and discussion at the national level Research question (2) Mixed method - The qualitative research: (GT) Through a survey of 15 experts with semi-structured questionnaires - The quantitative methods: the logit regression model from data of audited financial statements of 500 LVC Research results and discussion at the company level Conclusion and Recommendation (Source: As proposed by the author) New contributes of thesis - Theoretical implications: + Building a model of macro factors and the impaction of these factors that affect the adoption of International accounting standards (IAS/IFRS) in Vietnam Especially the country has a system of code law like Vietnam + Building a model of micro factors and the impaction of these factors that affect the adoption of International accounting standards (IAS/IFRS) in large companies of Vietnam The thesis implements new micro factors The results are references to the following relevant studies - Empirical implications: + The Vietnamese Ministry of Finance, Government management departments: Through policy implications from the research results of the thesis, The Vietnamese Ministry of Finance, Government management departments have issued policies to influence the macro factors to facilitate the adoption of The International Accounting Standards in Vietnam + The Association, the institutes, institutions, universities specialized in accounting and auditing: The thesis is research paper of micro and macro factors affecting the adoption of The International Accounting Standards in specific conditions in Vietnam This document is comparable to previous studies to develop current accounting research in the adoption of The International Accounting Standards in countries, especially developing countries with similar conditions with Vietnam + Large companies in Vietnam: Identify the micro factors affecting the adoption of The International Accounting Standards, which provide management implications; facilitate the adoption of The International Accounting Standards in accounting systems; gain benefits from the process of economic integration Thesis structure The thesis is divided in five chapters Introduction; Chapter 1– Literature review; Chapter 2–Theoretical basis; Chapter 3–Research method, Results and discussion on macro factors that affect the adoption of The International Accounting Standards in Vietnam – Research at national level; Chapter 4– Research method, Results and discussion on micro factors that affect the adoption of The International Accounting Standards in Vietnam – Research at company level; Chapter – Conclusion and Recommendation CHAPTER – LITERATURE REVIEW 1.1 Researches on The International Accounting Standards in the world 1.1.1 Studies support the adopton of IAS/IFRS to national accounting standards 1.1.1.1 Research on the benefits of adopting IAS/IFRS in countries Researches proved many benefits for countries as they adoped IAS/IFRS (Appendix 1.1): The development of global accounting and taxonomy has been used to improve the quality of information on financial statements such as comparability, transparency, timeliness and relevance Therefore, many countries intend to adopt IAS IFRS or IFRS converge with IAS/IFRS (Larson and Street, 2004; Daske and Gebhardt, 2011; Aisbitt, 2006; Mary E Barth et al, 2008; Vera P, 2014; Phan Thi Hong Duc, Nguyen Thanh Ha, Nguyen Thi Phuoc, 2016;) To attract capital and enhance business cooperation opportunities, increase competition and integrate into the world market The company significantly reduced the cost of issuing bonds, raise capital due to higher credit index (Saudagaran & Diga, 2003; Young and Guenther, 2003; Phan Thi Hong Duc, 2013; Tran Quoc Thinh, 2016…) Improving business efficiency, improve the quality of management and information; Accuracy of forecasts is increasing (Ashbaugh and Pincus, 2001); Facilitate comparison between the companies operating in the same market (Whittington, 2005; Mai Thi Hoang Minh, Tran Ngoc Hung, Bui Quang Hung, 2016), Help improve the quality of accounting and internal control system of the enterprise (Christopher W Nobes and Christian Stadler, 2014) Reflecting the value of the enterprise is more reasonable Horton and Serafeim (2010) showed that adopton of IAS/IFRS increased the value of companies in the UK, France and Italy Aubert, Grudnitski (2011) identify differences in ROA of the companies by IAS/IFRS and LGAAP in Belgium, Finland, France, Italy, Netherlands, Sweden, Switzerland, and the UK Helping countries save money on drafting, promulgating technical documents and quickly integrating into IAS/IFRS (Leuz, 2003; Daske et al, 2008,); Improve the quality of human resources in accounting, auditing and finance (E T De George, Xi Li, L Shivakumar, 2016) 1.1.1.2 Research on the implications of adopting IAS/IFRS Impact on Assets and Equity: Most studies document the positive impact of adopting IAS/IFRS on assets and equity in the Corporate Financial Statements, such as: Aisbitt (2006), Hung & Subramanyam (2007), Lenormand and Touchais (2009), Joseph, Ran and Haim (2010) … However, some studies suggest that the adoption of IAS/IFRS negatively impacts equity and equity, such as Jermakowicz (2004), Marchal et al (2007), Christensen et al (2015), … Impact on Profit Management Behavior: Most studies have documented the positive impact of adopting IAS/IFRS on corporate profit-taking behavior and at the same time recording losses in a timelier manner: Barth et al, (2011), Susana C G., Cristina F G J I J., José A L Gadea (2010), … Impact on the quality of financial accounting information of countries: Chamisa (2000), Armstrong et al (2010), Shu-hsing Wu et al (2014), … However, some studies have shown that the adoption and compliance of IAS/IFRS of different businesses is different, so the quality of information on the explanations is very different such as Verriest et al (2013), Achilleas Psaroulis (2011), … Impact on stakeholders such as investors, auditors, banks Investors support the process of adopting IAS/IFRS when they are aware of the net profit earned after the adoption of IAS/IFRS (Mary E B., Wayne R L., Mark H L., 2008; Vazakides,…) IAS/IFRS adoption has a positive impact on banks by increasing the quality of information after the introduction of IAS/IFRS or the increase in auditing quality (Kishan, 2014) Impact on debt markets of countries: in particular capital structure and cost of debt of the company (Tran Thi Thanh Hai, 2015; Naranjo et al., 2014; Florou and Kosi, 2015; ) 1.1.2 Studies does not support the adop of IAS/IFRS Each nation's environmental difference is a barrier to the adoption of IAS/IFRS: lack of political will, rooted in local culture, and strong national will (Larson and Street, 2004; Callao et al., 2007; Phan Thi Hong Duc, Nguyen Thanh Ha, Nguyen Thi Phuoc, 2016; ) Difficulties of the enterprise when adop IAS/IFRS due to complex nature of the standard, lack of guidance when adopting reality, close link between financial statement and tax, frequent changes of IAS/IFRS, lack of knowledge of employee (Larson and Street, 2004; Ihab A and Nedal S., 2013; ) Cost-benefit analysis for changing reporting regimes is controlled by environmental factors Conversion costs are a concern (Hail et al., 2010, Le Van Tan, 2016;) Difficulties from resources for IAS/IFRS adoption, especially in developing countries: Human resources and accounting systems in developed countries are not strong enough to adop IAS/IFRS (Lasmin, 2011); It is difficult to adopt the ability to evaluate and judge professionally (Cătălina F P., 2016); it is not synchronized, lack of current legal guidance if IAS/IFRS adoption (Dao Thi Loan, 2016) Protecting Investors: IAS/IFRS adoption accepts that regulators are concerned about uncontrolled accounting information, not protection of investors (Ehoff and Dahli, 2014; Ball, 2006; ) Costs for IAS/IFRS adoption: adoption IAS/IFRS in company requires time, effort and cost similar to previous standards building or even more (Ashbaugh and Pincus, 2001; Bae et al., 2008; Callao et al., 2007; ) IT system: Companies need to build IT systems when adopting IAS/IFRS to support the processing, collection and presentation of financial information from department and outside (Pham Quoc Thuan, 2016) 1.2 A review of factors affecting the adoption of IAS/IFRS 1.2.1 Macro factors affect the adoption of IAS/IFRS The adoption of IAS/IFRS in the country is not the same due to macro factors: culture, economy, capital markets, education, foreign operations, law, politics … In the process of formation and development, countries and regions have established and shaped their own characteristics These traits can basically come from the business, legal, and cultural environment It is the factors from the environment which have influenced the accounting system of countries and created certain differences, forming diversity and richness in international accounting (Tymothy and Hector, 2007; Alia and Branson, 2010, Nguyen Thi Thu Phuong, 2014; ) Diversity in national accounting comes from the economy (Cooke and Wallace, 1990; Larson, 1993; Tran Quoc Thinh, 2016;.), politicial (Kossentini and Othman, 2011; Baker et al., 2007; ), law (Kantor et al., 1995) And taxes, business, occupation, and environmental factors are always intertwined and intertwined (Choi and Meek, 2011; Kim and David, 2009; ) 1.2.2 Micro factors affect the adoption of IAS/IFRS Most studies of micro factors affect the adoption of IAS/IFRS in enterprises conducted in specific countries The authors find that the adoption is mainly determined by the size of the company together with the opinion of the auditors such as: Trembley (1989), Leuz and Verrechia (2000), Affes and Callimaci (2007) Dumontier and Raffournier (1998), Odia (2016) has demonstrated the relevance of IFRS voluntary adoption to debt and performance ratios Vinícius Simmer de Lima et al (2018) given that economic efficiency in accounting convergence in a developing economy, the results indicate that the promotion of the enterprise level is an important driver of compliance with IAS/IFRS 1.2.3 Mixed studies on macro and micro factors affecting the adoption of IAS/IFRS The study of the macro and micro factors affecting the adoption of IAS/IFRS in the world is quite limited A typical case study of the combined impact of micro and macro factors at the same time in the model to the IAS/IFRS such as: Kolsi and Zehri (2013), Masoud (2014), A composite study of factors affecting the adoption of IAS/IFRS in countries at Appendix 1.1 and 1.2 1.3 Review previous studies and Identification of research gap 1.3.1 Review previous studies Most of the research focused on understanding the status of developed countries when adopting IAS/IFRS such as EU, Australia, Japan, etc These countries have financial markets and regulatory systems that have developed Recently, some of the authors investigated in depth the factors that affect the adoption of IAS/IFRS in transition economies (Rahman et al., 2005) Few studies investigate the adoption of IAS/IFRS in countries with similar economic, cultural and social characteristics Therefore, the process of adopting IAS/IFRS in Vietnam should be considered Most of the studies focused on macro factors affecting the adoption of IAS/IFRS in countries, with particular focus on developed countries The rest of the research is related to microscopic factors affecting the adoption of IAS/IFRS Research samples are usually listed companies, businesses with public interests For the past five years, the author has begun to look at the impact of micro factors on the adoption of IAS/IFRS in emerging countries However, the research is still limited, especially in relation to developing countries in the ASEAN region which have similar characteristics to Vietnam Research in Vietnam to date has not fully addressed the adoption of IAS/IFRS The authors mainly use qualitative methods from literature review, situational assessment and VAS convergence With IAS/IFRS, the difficulty in adopting IAS/IFRS in Vietnam, the need and adoption of IAS/IFRS, and the proposed approach and roadmap for Vietnam (Le Vu Truong, Dinh Minh Tuan, 2016) The authors have not demonstrated specifically how the quantitative and micro, macro factors will affect the adoption of IAS/IFRS in Vietnam This complex issue should be considered with caution Empirical factors affecting the adoption of IAS/IFRS in Vietnam are mainly focused on macro factors (Tran Quoc Thinh, 2016; Duong Hoang Ngoc Khue, Nguyen Thi Ngoc Oanh, 2016; Nguyen Thi Thu Phuong, 2014) Empirical research on micro factors affecting the adoption of IAS/IFRS in Vietnam is limited (Ha Xuan Thach, Nguyen Ngoc Hiep, 2017) Particular attention that the researches on both macro and micro factors affecting of IAS/IFRS in Vietnam was not implemented 1.3.2 Identification of research gap The above overview shows that Vietnam has to adop IAS/IFRS as an indispensable trend However, the roadmap, method of adopting IAS/IFRS in Vietnam has not been clearly defined and informed Starting from this situation, researching the factors affecting the adoption of IAS/IFRS is very necessary and has deep scientific and practical significance, thus providing an orientation to develop appropriate solutions From this perspective, the author selects and performs the topic “Factors affect the adoption of The International Accounting Standards (IAS/IFRS) in Vietnam – Research on national and company level” Conclusion chapter CHATER 2: THEORETICAL BASIS 2.1 Overview of The International Accounting Standards (IAS/IFRS) 2.1.1 Brief history of IAS/IFRS formation In the years 1973 - 2000, IAS/IFRS published accounting principles and guidelines Since 2001, IASB, IOSCO and accounting agencies around the world have formed and developed IAS (International Accounting Standards), including International Financial Reporting Standards (IFRS) 2.1.1.1 Stage formation (from 1973 to 1987) The IASC issued 26 IAS/IFRS to narrow the differences between countries' accounting by adopting the accounting standard to allow for more flexible options to suit country conditions (Deloitte Touche, 2002-2007) IASC did not respond to user information, lacking detailed regulations on financial statements Allowing multiple options does not guarantee comparability of financial statements 2.1.1.2 Adjustment period (from 1987 to 1993) In 1987, IOSCO requested the IASC to renew its accounting standards on the basis of: removing multiple options; Ensure full standards of detail as well as requirements on financial statement presentation By 1993, 10 of the 31 IASs had been adjusted Then the IASC agreed with IOSCO to develop IASCO's IAS/IFRS and recommended the stock market to be used 2.1.1.3 Development period (from 1993 to present) The development phase marks two important processes: the period 1993 - 2001 marked the IASC reengineering process for the establishment of the IASB, the period from 2001 to the present is the process of accelerating the development and adopting IAS/IFRS globally The adoption of IAS/IFRS has changed the way financial statement measurement, recording and presentation help the company to be accepted on the world stock market because of improved quality of information provided to investors, increasing the ability Comparisons of financial information, reduced uncertainty in investment, increased market efficiency, reduced investment risk and reduced capital costs, helped expand global stock markets 2.1.2 Content of IAS/IFRS IAS/IFRS was developed in the direction of capital markets and the formulation of financial statements focused on corporate relations with investors and information on the capital market State agencies still use financial statements as economic activity, financial statements for the purpose of investors IASB consists of three main parts: IFRS Framework, IAS/IFRS and IAS/IFRS Interpretation Guidelines and IAS/IFRS Interpretation Guidelines (IFRIC/SIC) developed by IFRIC public opinion and then submitted to the IASB Board for review and approval as official guidelines (IFRS Foundation, 2012) 2.2 Method and experience of adopting IAS/IFRS in countries 2.2.1 Method of adopting IAS/IFRS in countries 2.2.1.1 Method 1: Recognition of IAS/IFRS is the national accounting standard (Big Bang Approach) The Big Bang Approach is understood as the country where the companies are required to start adopting IAS/IFRS at specific times or at different times for different size of the companies Any updates and changes in IAS/IFRS will be effective for the adoption country The methodology allows for the highest level of compliance with IAS/IFRS and minimizes the risk of discrepancies when preparing and presenting information on the financial instrument, saving a lot of time and energy for the countries themselves IASB, IFRS Foundation, in preparation and adoption of IAS/IFRS In Asia, countries with similar conditions with Vietnam such as the Philippines or Singapore choose this method 2.2.1.2 Method 2: Approve each IAS/IFRS (Convergence Approach) This method of permitting changes in IAS/IFRS will be considered for individual approval of each standard The country chooses to adop the IAS/IFRS at the level that it considers appropriate, thereby transferring the content of each IAS/IFRS to the national accounting standard The limitation of this approach is to reduce the comparability of the financial statements or to keep up with changes in actual business operations in the current market mechanism This is the transitional solution that the country will then move on to adopting method 11 Hypothesis H3 – Countries have capital markets are more likely to adopt IAS/IFRS Hypothesis H4 – The higher level of the educational system of country, the higher the country will adopt IAS/IFRS Hypothesis H5 – Countries have higher level of opening foreign listing are more likely to adopt IAS/IFRS Hypothesis H6 - Countries have a "common law" legal system are more likely to adopt IAS/IFRS than others Hypothesis H7 - Countries with higher democratic political systems tend to adopt IAS/IFRS 3.3 Quantitative research 3.3.1 Quantitative research procedures Quantitative research procedures has presented at Diagram 3.5 3.3.2 Model research LOGIT [IAS/IFRS =1] = α0 + α1*VH + α2*TT + α3*TV + α4*GD + α5*NN + α6*PL + α7*CT +ε (M1) Dependent variable is a dummy variable, assuming a value of if the country adopts IAS/IFRS and a value of if the country does not adopt IAS/IFRS until 2016 Independent variable: Culture VH Economic growth TT Capital markets TV Educational system GD Foreign operation NN Legal system PL Political system CT Parameters: α0, α1, α2, …, αn Error: ε 3.3.3 Determine the scale Measurement scale is presented at Appendix 3.9 3.3.4 Select sample survey The number of macro variables is 07 variables, the number of independent variables is variable The official sample size of n = 145 is consistent The author selects non-probable samples because the constraint in the secondary data collection process for information concerning the country is not favorable Samples are conveniently sampled because of the convenience of data collection and objective assurance in the data collection of non-probability sampling 3.3.5 Data collection The thesis collect data of countries from website www.iasplus.com/country/country.htm After considering the possibility of data collection, the author selected 145 countries to be classified into two groups: countries that have adoped IAS/IFRS (with or without modification) and group of countries by the end of 2016, not adop IAS/IFRS Relevant information is collected primarily from the World Bank - World Development Indicators (WDI) List of these countries presented at Appendix 3.5 Source of data collection factors presented at Appendix 3.9 3.3.6 Data analysis 3.3.6.1 Descriptive statistics analysis Descriptive statistics analysis with quantitative macro variables in the model KT, GD, NN, CT Descriptive statistics analysis with qualitative macro variables VH, TV, PL 12 3.3.6.2 Regression analysis a Univariate analysis Univariate analysis identifies the impact of each macro variable on the adoption of IAS/IFRS The thesis compares two groups: the IAS/IFRS country group and the non-IAS/IFRS country group by the end of 2016 The author proceed the Kolmogorov-Smirnov test, Mann-Whitney test and the Correlation matrix for macroeconomic variables b Multivariate analysis Multivariate analysis examines the impact of macro factors on the adoption of IAS/IFRSby logistic regression Verify the Wald to verify the regression coefficient Next, test the fit of the model through accurate level prediction testing (Classification Table) and the suitability of the model (Omnibus test) 3.4 Research Results and Discussion 3.4.1 Research Results 3.4.1.1 Results of qualitative research Expert Interview Results ➢ Step 1: Based on the literature review, the author presents seven macroscopic factors affecting the adoption of IAS/IFRS in terms of concepts, terminology, background theory, and related research (Appendix 3.2) The results of interviews show that experts agree (100%) on the seven macroeconomic factors affecting the adoption of IAS/IFRS, including: Culture, Economic Growth, Capital Markets, Education, Foreign affairs, Law, Politics ➢ Step 2: The results of statistical analysis from the expert opinion on the measure of factors affecting the adoption of IAS/IFRS are presented in Appendix 3.7 ➢ Step 3: Finally, the author interviews with open-ended questions to add to the macroeconomic factors that affect the adoption of IAS/IFRS and factor scales (Appendix 3.6) less than 20% The author considers the possibility of collecting data in the next quantitative study is not feasible Therefore, the author does not add new macro factors proposed by experts in the official survey ➢ Step 4: Macro factors selection and scale entered into expert survey Results from expert survey Survey results show that 100% of experts agree with the macroeconomic factors and scale in the survey In addition, experts not add a factor or scale (Appendix 3.9) In conclusion, by the end of qualitative research, the author identifies factors that influence the adoption of IAS/IFRS: Culture, Economic Growth, Education, Politics, Law, Activity offshore and capital markets 3.4.1.2 Results of quantitative research Descriptive statistics of the macroeconomic variables Economic growth have the average 518,726.3424 million USD with a minimum of 581,48 million USD (Dominican Republic) and a maximum of 18.624.475 million USD (USA) Educational system (GD) is presented by literacy rate Countries have a literacy rate of 85.9% on average The average of Gastel index of Political system variable (CT) is 3.39 which means that the countries in samples are characterized by a medium 13 level of political freedom Foreign listing variable (NN) is determined by the FDI/GDP ratio of 145 countries in 2016 that showing the average of this ratio in the sample 3.78% 6.9% of countries in our samples have Anglo-Saxon culture, 113 countriesdon’t have capital markets (77.9%) and 17 countries have the common law (11.7%) Univariate analysis: a Kolmogorov-Simirnov test Kolmogorov-Simirnov test shows that the data is not normal because the value of Sig < 0.05 b Mann-Whitney test The results show that VH, GD, CT have difference between the two groups (Sig.< 0.05) The average indicates that the countries in which have adopted IAS/IFRS is characterized by Anglo-Saxon culture, a high level of education and a democratic political system than those of non-IAS/IFRS countries These factors such as TT, TV, NN and PL did not significantly differ between the two groups c Correlation matrix for macroeconomic variables Correlation of independent variables with dependent variable IAS/IFRS shows that TV, NN and PL variables have Sig> 0.05 which means that the three variables are excluded from the model (M1) Sig value of TV – GD is 0.042 < 0.05, so two variables are correlated Similarly, Sig value of PL - VH, TT is less than 0.05 Therefore, that is suitable to eliminate the TV, NN and PL variable In conclusion, based on the Univariate analysis for macroeconomic variables, it can be concluded that countries adopt IAS/IFRS are characterized by a highly democratic, highly educated and Anglo-Saxon culture Multivariate analysis The thesis uses logistic regression for the model (M1), the dependent variable is the dummy variable which will receive the value if the country adoped the IAS/IFRS until the end of 2016 or the value if the country did not adop IAS/IFRS The remaining independent variables matched the model (M1) after performing correlation testing: VH, TT, GD and CT The results of logistic regression are shown in Table 3.4 Logistic regression of the model (M1) is estimated as: Ln (p/(1-p)) = -0.188 + 2.13 * VH + 0.016 * TT + 0.037 * GD – 0.279 * CT a Test of regression coefficients (Waldtest) The Wald test shows that the VH, TT, GD, CT variables in the model (M1) have Sig value less than 0.05 It means that the relationship between the dependent variable IAS/IFRS and the independent variable is statistically significant with a confidence level of over 95% Therefore, the VH, TT, GD, CT variables are relevant and significant for the model (M1) b The influence of the variables In the variables affecting the ability to IAS/IFRS adoption in countries, the VH variable has the strongest influence, and the remaining ones are GD, TT and CT with the lowest effect c The level of accurate forecasting of the model - Classification Table The correct forecasting rate for the entire model of 87.6% This ratio is high indicating that the model's prediction level is quite accurate - The suitability of the model (Omnibus test) 14 Omnibus Test has Sig value < 0.05 So, the model shows that the correlation between IAS/IFRS variable and independent variables is statistically significant with a confidence interval greater than 95% In other hands, (M1) was suitable - The level of interpretation of the model (-2 Log likelihood) The value of -2 Log likelihood in Table 3.7 shows the level of explanation of the model (M2) is 86.029 The smaller the number is, the better the pattern is The -2-log likelihood value is low, so it has good explanations with the overall model (M1) 3.4.2 Discussion The results show that TV, NN and PL variables have no significant impact on the adoption of IAS/IFRS Countries adopting IAS/IFRS not rely on the existence of capital markets, foreign operations and law VH, GD, TT and CT have a significant impact on the decision to adop IAS/IFRS Meaning that the countries adopting IAS/IFRS to AngloSaxon countries, on the basis of economic growth, development education, and democratic political system Conclusion chapter CHAPTER 4: RESEARCH METHOD, RESULTS AND DISCUSSION ON MICRO FACTORS THAT AFFECT THE ADOPTION OF THE INTERNATIONAL ACCOUNTING STANDARDS IN VIETNAM – RESEARCH AT COMPANY LEVEL 4.1 Selection of research methods 4.1.1 Determine the research method The author solves the second research objective of the thesis through the exploratory research methodology in order to overcome the disadvantages of quantitative research methods and qualitative research methods (Figure 4.1) 4.1.2 Research process The process of studying the mixture goes through four steps, which are described in detail in Figure 4.2 Step 1: Document overview, defining theoretical foundations and theoretical background for the study Step 2: Qualitative research methods The research was designed as a natural exploration, exploring ideas for further consultation and further exploring the micro-factors that affect the adoption of IAS/IFRS in the corporate context, particularly in typical context of large companies in Vietnam The interviewer as presented in 3.1.2 Step 3: Quantitative research methods Micro factors determinants were identified after qualitative research, the authors tested and quantified the relationship between these variables through logit regression tools and models Data collected through audited finance statement of LVC (Appendix 4.1) The topic examines the impact of micro factors on two major LVC, including listed group and unlisted group Step 4: Research results, Discussion and policy implications Charter 4.2: Process of micro factors affecting IAS / IFRS adoption in LVC STUDY OVERVIEW IAS / IFRS, micro factors affecting the adoption of IAS/IFRS in LVC THEORY IAS/IFRS, processes and methods of adopting IAS/IFRS, micro factors affect the adoption of IAS / IFRS in company level, background theory 15 QUALITATIVE RESEARCH - Purpose: determine the impact factors - Research Methodology: GT (Grounded Theory) - Research tools: Survey - Data collection tools: semi-structured questions - Beneficiaries: Representative of the standard issuing body and policy; Director of the auditing enterprise, representative of the association and professional organization; Corporate Director, researcher, expert teaching in the field of accounting and auditing - Sample: n = 15 Regression correlation Model testing and research hypothesis Expected Factor Adjusted Micro Factor QUANTITATIVE RESEARCH - Purpose: Measurement of microscopic factors affecting the adoption of IAS/IFRS, verification and quantification of factors - Data collected: secondary data - Analytical tools: statistical analysis, regression analysis - Sampling method: Select non-probability sample by convenient method - Sample size: n = 500 RESULTS OF RESEARCH, DISCUSSION AND IMPLEMENTATION - The results of the micro-factors test, compared with the previous study - Discussion, implication 4.2 The qualitative research 4.2.1 Qualitative research process 4.2.1.1 Setting up the survey Step 1: Expert Interviews for the survey (Appendix 3.2) Step 2: Survey of Experts (Appendix 3.3) 4.2.1.2 Study sample selection The sample selection process is described in detail in section 3.2.1.2 4.2.1.3 Data collection The data collection tool is the Survey Sphere (Appendix 3.3) 4.2.1.4 Analysis of data Step 1: Analyze data for expert interviews Step 2: Analyze data for expert survey The author analyzed the data from the survey of 15 penguin statistical methods described Micro factors that not achieve more than 20% consensus will be analyzed and discarded from the expected model The author chooses the most consensus scale or scale that can best capture the data 4.2.2 The research model expected The results of the survey are the basis for the addition of three new microelements to the research model in Figure 4.4 16 4.2.3 Research hypothesis Hypothesis H8 – Companies that were listed on foreign markets are more likely to adopt IAS/IFRS than others Hypothesis H9 – The companies have the higher the debt-to-equity ratio, the more likely to adopt IAS/IFRS Hypothesis H10 – The larger the company's foreign investment is, the more likely to adopt IAS/IFRS Hypothesis H11 – Companies have foreign loans are likely to adopt IAS/IFRS Hypothesis H12 – Companies have the higher levels of foreign participation in management, they are more likely to adopt IAS/IFRS 4.3 Quantitative research 4.3.1 Quantitative research procedures Quantitative research procedures are presented in Figure 4.5 4.3.2 The research model Logistic regression of the model (M2) is estimated as: LOGIT [IAS/IFRS =1] = β0 + β1 * NYN + β2 * TLN + β3 * DTN + β4 * VVN + β5 * QLN + β6 * CLK + β7 * QMD + β7 * ROE + ε (M2) Dependent variable is a dummy variable, assuming a value of if the LVC adopts IAS/IFRS and a value of if the LVC does not adopt IAS/IFRS until 2016 Independent variable: Foreign listing NYN Debt ratio TLN Foreign investment DTN Foreign loans VVN Foreign management QLN Audit quality CLK Company size QMD Return on Equity ROE Parameters: α0, α1, α2, …, αn Error: ε 4.3.3 Determine the scale Measurement scale is presented at Appendix 4.1 4.3.4 Select sample survey The sampling method is the same as in 3.3.4 The number of micro variables included in the analysis is 08 variables, the number of variables depends on one variable The sample size is n = 500, consistent with the sample size The author selects non-probable samples because the process of collecting secondary data on LVC is not favorable, especially audited financial statements of LVC are not listed on the stock exchange Samples were selected according to convenient sampling method as it facilitated the data collection and assurance of objectivity in the data collection process of the non-probable sampling method Large format in Vietnam diversified fields, industries, types of business are randomly selected on www.vnr500.com.vn The research sample is divided into groups: Group is 250 LVC whose shares are listed on the Stock Exchange; Group is 250 large unlisted enterprises Bases for determining the size of large enterprises are specified by the Government in accordance with Decree 39/2018/ND-CP 4.3.5 Data collection Data is collected from audited financial statements, annual reports of major enterprises on the mass media (websites, internet, stock exchanges ), independent auditing companies, banks and financial institutions In 17 addition, the author conducts an accounting survey or a director to collect bases on whether LVC adop IAS/IFRS (Appendix 4.6) 4.3.6 Data analysis 4.3.6.1 Descriptive statistics analysis The quantitative micro-variables TLN, QMD, and ROE used statistical analysis described as mean, maximum, minimum, and std Deviation (standard deviation) Qualitative micro-variables NYN, CLK, QLN, DTN, VVN used descriptive statistical analysis as frequency and percentage 4.3.6.2 Regression analysis The thesis researched a multivariate analysis and multivariate analysis The procedures and bases for conducting regression analysis are detailed in Section 3.3.6.2 As for the model (M2), the thesis separately investigated the impact of the micro variables on groups: 250 listed LCV and 250 unlisted LVC The purpose of the thesis considered for each LVC, which micro factors have more impact, find out the reasons and propose the appropriate implications 4.4 Research Results and Discussion 4.4.1 Research Results 4.4.1.1 Results of qualitative research Expert Interview Results ➢ Step 1: On the basis of the literature review, the author presents concepts, terms, background theory and related research on 10 micro elements (in which the author proposes factors) The adoption of IAS/IFRS in the context of large enterprises in Vietnam Experts agree (100%) on 10 micro factors affecting the adoption of IAS/IFRS in large enterprises in Vietnam including: Foreign listing, Leverage, Investment of the house Foreign Investor Relations, Foreign Participation in Management, Audit Quality, Business Scale, Profitability, Accounting Level, Accounting Linkage and Taxation Step 2: Results of statistical analysis from expert interviews on the 10 micro-scale measurement measures affecting the adoption of IAS/IFRS in large Vietnamese enterprises are presented in Appendix 4.3 Expert view when determining the 10 factors ➢ Step 3: The author uses an open-ended questionnaire to supplement micro-factors and measurement scales to adopt IAS/IFRS in large Vietnamese enterprises Experts propose four new micro elements: Support from the administrator; Enterprise Information System; Auditors' opinions; Profit management The expert proposes the scale of four micro variables as Likert scale of points The results of expert interviews on the addition of microscopic factors and scales to the adoption of IAS/IFRS in large enterprises in Vietnam (Appendix 4.2) show that the percentage of experts agree is very low (less than 20%) At the same time, the author considers the possibility of collecting data in the next quantitative research step is not feasible Therefore, the author does not add four new elements proposed by experts in the official survey ➢ Step 4: Select the microscope factor and the scale entered in the expert survey (Appendix 4.3) 18 Results from the Expert Survey (Appendix 4.4) include eight micro factors impacting the adoption of IAS/IFRS in large enterprises in Vietnam: Foreign Listing, Leverage, Foreign Investment, Loan Foreign Participation in Management, Audit Quality, Business Scale and Profitability 4.4.1.2 Results of quantitative research a Descriptive statistics In the sample of 500 LVC, most of them are multi-business, so the author does not analyze the structure of the industry Company size (QMD) of 500 LVC at 31/12/2016 has an average value of VND 2,198,630,802,760 in which LVC has the largest assets of VND 72,996,452,507,836 and LVC has the lowest assets of VND 52,763,469,601 Debt ratio (TLN) has an average value of 14.22% The lowest debt ratio was 0% and the highest debt ratio was 185.59% The average value of Return on Equity (ROE) is 8.87% In 2016, the performance of some LVC is not good with the lowest ROE of -519.43%, while the highest ROE is 238.53% Among the 500 LVC, 398 LVC were audited by Big4 (79.6%) This is a good signal for the credibility and transparency of information on the financial statements of LVC when disclosed outside However, up to now, there are no LVC listed on the international financial market There are many reasons that limit the potential of domestic enterprises when entering the international financial market This proves that NYN is a constant (only a value of 0), so this variable is excluded from the model (M2) Detailed descriptive statistics of large enterprises of micro factors: QMD, TLN and ROE: Large listed companies have higher average size than large unlisted enterprises However, the size gap between the largest and the smallest is much larger than the LVC listed on the Standard Deviation The average debt ratio of large listed companies is much larger than the large unlisted group (5,515%), while the standard deviation is also higher Long-term loans represent a large proportion of the total capital of large listed companies Table 4.4 Descriptive statistics analysis for groups of LVC: CLK, NH, DTN, VVN The group of listed companies outperforms the large unlisted group with the large number of large enterprises audited by the Big4, with the greater participation of foreign managers in the Board and attract more foreign investment Large corporate listings are audited by Big4 more than making the published financial statements get more trust from investors Hence, large listed companies receive more foreign investment than large unlisted company b Univariate analysis Kolmogorov-Simirnov test All independent variables in the model (M2) have Sig value = (