Hanoi (VNS/VNA) -More than half of companies in Vietnam have been adopting internationalfinancial reporting standards to meet investors’ expectations and improve theircorporate governance, a survey showed.

The survey was carried outbetween July 20 and August 15, 2020. It was a joint effort of the Ho Chi MinhStock Exchange (HoSE), audit firm Deloitte Vietnam, the State SecuritiesCommission (SSC), the Ministry of Finance, the Association of CharteredCertified Accountants (ACCA) and Deloitte’s clients.

The survey results will beofficially released in late October.

According to the InternationalAccounting Standards Board (IASB), IFRS are used by listed companies in morethan 130 countries and territories. Of the figure, companies in around 90countries have fully developed IFRS-based financial reports.

Regarding the countries andterritories, where IFRS are not a must, the local governments have beenchanging the accounting system to match international practices.

The adoption of IFRS may dependon each country’s current socio-economic development and it is often applied topublic companies while non-public firms may find it optional.

Vietnam’s Ministry of Financein March has issued Decision 345/QD-BTC to encourage local companies to useIFRS when preparing their financial reports.

The survey studied the staffthat have been key to make the companies adopt IFRS. Specifically, 53 percentof the responses came from chief accountants and a third came from seniormanagers.

The survey also pointed outthat about 55 percent of the companies that have not adoptedIFRS said they would do before 2025 – the deadline for local companies towillingly adopt IFRS under Decision 345.

The sectors in whichcompanies have used IFRS or planned to do so included banking, energy andindustrials, insurance, asset management, information and technology, media andtelecommunication, the survey showed.

Foreign-invested companiesaccounted for the majority of all surveyed companies, followed by listed firms,large-cap public corporations and State-owned enterprises.

According to specialists, thenumber of companies willing to adopt IFRS in financial reporting will increasein the coming years, proving the business community is comfortable with the newrequirement. The use of IFRS in Vietnam will also mushroom as many universitieshave imported IFRS-related content into their curriculum.

In Vietnam, the use of IFRSwill boost the business transparency and creditability in the eye of investors.Local companies will have the chance to introduce their business to foreigninvestors and become more attractive in the international market.

But for foreign-invested andState-funded companies, the change in the accounting mechanism may affect theirearnings records in coming years./.