Factors Affecting Adoption International Financial Reporting Standards in an Emerging Economy: Empirical Evidence in Vietnam

Abstract

This article explores the factors that influence the adoption of  international financial reporting standards in an emerging economy like Vietnam. The research model was tested by surveying 280 employees and managers of large enterprises in 2 cities, Hanoi and Ho Chi Minh, using the structure equation modeling (SEM) analysis technique. The study results show that four factors, namely economic growth, political, cultural, and legal, enterprise size and capital sources, perceptions of enterprise owners, and qualifications of accountants are positively related to adopting international financial reporting standards in Vietnam. Additionally, the model test results show that adopting international financial reporting standards is related to the benefits of adopting international financial reporting standards at enterprises in Vietnam. The research results proposed several implications for improving the adoption of international financial reporting standards in Vietnamese enterprises.