Research on the Capability and Benefits of Applying International Financial Reporting Standards (IFRS) in Enterprises in Vietnam

Abstract

This paper examines the impact of several factors on the capability of applying International Financial Reporting Standards (IFRS) in Vietnam, including (i) the legal framework, (ii) accountants' experience and competence, (iii) professional organizations and consultancy, and (iv) the characteristics of businesses. The study utilizes a structural equation modeling (SEM) approach to test the relationship between the feasibility of IFRS adoption and the benefits of IFRS adoption. Data was collected through surveys of 480 accountants. The results indicate that all four factors legal system, accountants' experience and skills, professional organizations, and business characteristics—positively influence the ability to apply IFRS. Furthermore, the SEM results show that the feasibility of IFRS adoption is positively correlated with the benefits of applying IFRS. The study also explores the moderating role of variables such as the position of the accountant, the accountant's qualifications, and years of experience in impacting the relationship between IFRS feasibility and the benefits of IFRS adoption. Based on these findings, the paper offers recommendations to encourage enterprises to accelerate their adoption of IFRS-based financial reporting, enhancing their competitive advantage and fostering international integration.