“Factors affecting the application of IFRS through the perceptions of business managers and auditors in Vietnam”

The purpose of this study is to determine the factors that influence the application of the International Financial Reporting Standards (IFRS) in Vietnam through the perceptions of business managers and auditors. Combining qualitative and quan- titative research methods based on a comprehensive analysis and aggregation of information available from various sources, the results of the questionnaire inter- views of 500 managers and auditors currently working in Vietnam are offered. The results of the study show that factors affecting the applicability of IFRS in Vietnam are: legal basis for accounting activities; characteristics of enterprises; qualification and competency of the accounting teams; and corporate governance. The study al- so finds that governance factors and socio-economic and cultural conditions have an uncertain influence on the IFRS applicability. At the same time, there is no sig- nificant difference in awareness of the ability to apply IFRS between the group of enterprise managers and auditors and groups of people with different work experi- ence. Among them, the qualifications and competencies of the accountant teams and the characteristics of enterprises are the two factors that have the strongest impact on the applicability of IFRS in Vietnam. for 87%) countries and territories applying IFRS. However, there are still seven countries such as Bolivia, China, Egypt, India, Macao SAR, United States and Vietnam that have not applied IFRS. Nevertheless, currently Vietnam is also in the process of studying and drafting to apply the system of standards prescribed by ISAB. The application of the new special accounting standards system, in accordance with the general practices and regulations of numerous countries worldwide, is affected by several factors.


INTRODUCTION
Financial reporting is a tool for providing inclusive and truthful information on the financial position and performance of enterprises that serve and meet the information needs of various economic entities. The International Financial Reporting Standards (IFRS) are prepared by the International Accounting Standards Board (ISAB) and the International Financial Reporting Interpretations Committee (IFRIC). In the trend of the global economic integration, the preparation of financial statements in accordance with IFRS has increasingly received the support of countries and territories worldwide. According to the IFRS Foundation (2018) report, there were 144/166 (accounting for 87%) countries and territories applying IFRS. However, there are still seven countries such as Bolivia, China, Egypt, India, Macao SAR, United States and Vietnam that have not applied IFRS. Nevertheless, currently Vietnam is also in the process of studying and drafting to apply the system of standards prescribed by ISAB. The application of the new special accounting standards system, in accordance with the general practices and regulations of numerous countries worldwide, is affected by several factors.

Legal basis related to accounting
The legal basis in the field of accounting is a system of legal documents issued by the State to apply the accounting work in practice. Up till now, several studies have agreed that the legal basis issued by the State affects the application and organization of accounting work. The legal system is considered a major factor affecting the national accounting system. Countries often have two different ways to form their own legal systems based on common law or code law. Nobes and Parker (1995), Dayanandan, Donker, Ivanof, and Karahan (2016) suggested that common law countries are less likely to issue detailed accounting regulations than code law countries. Therefore, legal status affected countries in Europe using IFRS. Jaggi and Low (2000) examine the impact of the legal system on financial disclosure. The results suggest that enterprises in the common law countries have better financial disclosure compared to those in the code law countries. Kolsi and Zehri (2013) and Zehri and Chouaibi (2013) reveal that in many developing countries the legal basis is one of the factors explaining their choice for the IAS/ IFRS application.
In Vietnam, Phuong and Richard (2011) and Phuong (2013) identify the existence of parallel accounting standards and accounting regime, pointing to integration of Vietnam with general international accounting practices and revealing a unified management of the State in accounting. The aforementioned characteristics of the accounting system in Vietnam have shaped factors affecting the application of accounting standards. Hung (2016) also indicates that the legal basis is one of four factors affecting the application of accounting standards in Vietnam. The results of this study are based on the analysis of a survey of 250 people who worked as accountants at enterprises and were studying at Hanoi Industrial University in 2015.
Qualitative studies of Thinh (2019) and Khue and Oanh (2019) identify the legal system as one of the factors affecting IFRS application in Vietnam. From the above analysis, the authors make the following hypothesis: H1: The legal basis has a positive influence on the application of IFRS in Vietnam.

Qualification and competency of the accounting team
The history of accounting development in other countries shows that the development of accounting relates to the level of accountants' education and professionalism (Choi & Meek, 2011). Research in many countries shows that the more accountants with the university degree, the higher their ability to apply standards. This is appropriate because the knowledge in the training course will help accountants have better awareness of accounting science, be able to apply and select suitable accounting techniques and policies to maximize the benefits of their enterprises. Doupnik and Salter (1995) and Street (2012) argue that the application of IFRS is a strategic social de-cision; therefore, the acceptance of these standards also depends on the level of experts in each country. Hegarty, Gielen, and Barros (2004) also mention certain qualification requirements (appropriately qualified individuals) when applying IFRS.
In Vietnam, Hung (2016) argues that accountants at enterprises, through qualifications, experience, capabilities and the role of chief accountants, have a significant impact on the application of accounting standards. Duc, Ha, and Phuoc (2019), based on a survey of 728 people (divided into three groups), show that the auditor group has a much higher level of acceptance and willingness to apply IFRS than the accountant group and the academic group. The reason that the academic group and accountant group think that the application of IFRS is hindered is that the qualification and competency of the accounting staff, especially at small and medium-sized enterprises, is low and uneven, mainly approaching from the perspective of accounting regimes and circulars rather than approaching from the perspective of accounting standards.
Previously, Nguyen (2013), while discussing the scale of non-financial factors affecting the application of accounting standards at small and medium-sized enterprises in Vietnam, revealed four non-financial factors that possibly affected the application of accounting standards, including the competency of accountants; documents guiding accounting practice; advice from the accounting community; and the attention of business owners. Given the above analysis, the authors put forward the following hypothesis: H2: Qualifications and competencies of the accountant teams have a positive influence on IFRS application in Vietnam.

Characteristics of enterprises
The research on the characteristics of enterprises affecting the application of accounting standards and IFRS is carried out in different ways. However, the authors mainly focus on the main characteristics of enterprises, namely: business size, business sector, and business results.
Chow and Wong-Boren (1987) and Meek, Roberts, and Gray (1995) believe that scale is considered a factor that significantly affects the application of accounting standards. Large-scale enterprises have diversified activities in various fields; the complexity of economic operations is remarkably high and, therefore, the application of accounting standards will be higher. In addition, enterprises will have more financial resources to implement these new accounting standards. Smaller enterprises, meanwhile, find that the benefits of implementing standards are not enough to offset the resources they spend. Based on 106 listed companies in Germany and Austria, Affes and Callimaci (2007) suggest that business size has a positive impact on early adopting IAS/IFRS.
Meanwhile, Wallace and Naser (1995) suggest that profitability has a significant influence on the preparation and presentation of financial statements. The reason is that enterprises with high profitability often expand the business area and look for funding to implement new business options. Therefore, the figures on faithful and accurate financial statements are always one of the criteria for partners to consider before making business decisions. From the above analysis, the authors make the following hypothesis: H3: Characteristics of enterprises have a positive influence on the application of IFRS in Vietnam.

State management of the accounting profession
In Vietnam, research by Adams and Linh (2005) shows that governing the accounting profession follows the code law, so the consistency in accounting work will be high, manifested by the existence of a unified chart of accounts and financial statement forms. At the same time, the awareness of enterprise accountants is also mainly concerned with tax declaration. This is also an obstacle to applying Anglo-Saxon model accounting standards with high professional flexibility. Hung (2016) reveals that state management agencies, through the opinions of auditing firms, tax authorities, inspectors and associations, have an impact on the application of accounting standards at Vietnamese enterprises.
Another aspect of the approach, from the perspective of state management of the auditing profession, is whether it is mandatory for enterprises to be audited and audited by Big Four or Non-Big Four, because an auditing unit has a significant influence on the decision of enterprises to select and apply accounting standards. If an enterprise is audited by one of the major auditing firms, it is usually more interested in applying accounting standards. This opinion is expressed by Hung (2016), Tran, Ha, Le, and Nguyen (2019), Phuong (2019) for Vietnam that if the financial statements (FS) of an enterprise are audited and performed by Big Four, the level of compliance and application of IFRS will be higher than those that do not require mandatory auditing or being audited by Non-Big Four.
In Bahrain, Joshi and Ramadhan (2002) conclude that most enterprises applying IFRS are audited by Big Four auditing firms.
From the above analysis, the authors make the following hypothesis: H4: State management of the accounting profession has a positive effect on the application of IFRS in Vietnam.

Corporate governance
Several studies point to the relationship between corporate governance and information disclosure and IFRS application in many countries around the world. Verriest, Gaeremynck, and Thornton (2013) indicate that the independence, function of the board of directors, the effectiveness of the committee's operations at enterprises affect the application of IFRS of listed companies in Europe in 2005. Goodwin, Ahmed, and Heaney (2009) conducted a research to see if a solid corporate governance system, especially in relation to the characteristics of the board of management and senior management, had an effect on the accuracy of the impact of accounting reported to shareholders or not. The study focuses on the relationship between corporate governance methods and accounting forecasting errors that arise when applying IFRS in Australian listed companies. Evidence shows that corporate governance mechanisms are related to the ability and importance of management forecasters.
In Vietnam, Nguyen (2013) and Hung (2016) show that the interest and investment of business owners affect the ability of enterprises to apply accounting standards, especially small and medium-sized enterprises in Vietnam. Hai, Tu, and Toan (2019) also suggest that corporate governance mechanism is one of the factors affecting the operating mechanism of auditing firms in Vietnam, thereby affecting the quality of auditing issued to customers.
H5: Corporate governance has a positive effect on the application IFRS in Vietnam.

Political, economic and cultural conditions
In terms of political factors related to the role of the State, Nobes and Parker (1995) suggest that the political institutions in which the State intervenes more or less in the economy and has a strong impact on the international accounting convergence process. This factor shows the influence on the development orientation and strategy associated with the process of international integration. Therefore, countries that are proactive in international integration have a tendency to apply more quickly, while some countries are cautious in the direction, so the application is limited (Thinh, 2019). Phuong and Richard (2011) argue that the process of forming Vietnamese accounting standards reflects the will of the Vietnamese State in the process of global economic integration to achieve political and economic goals. The promulgation of succession standards stems from the pressure to be accepted as a member of the WTO.
In terms of economic factors, Nobes and Parker (1995) argue that the accounting system evolves in line with the development of the national economy. The author cites Australia's accounting system that was previously relatively close to that of the UK due to its past colonial ties but is increasingly separate due to the increased trade transactions among Australia and the United States and Southeast Asian countries. From the growth perspective, the economy provides incentives for countries to adopt IFRS. Arpan and Radebaugh (1985) consider economic development as a basic variable profoundly affecting the development of accounting and other functions in society. This is in agreement with the research of Zeghal and Mhedhbi (2006), specifically in countries that have high economic growth and where the social functions of accounting for measurement purposes become more important. The size and complexity of business transactions and economic activity require a high quality accounting system.
Cultural factors have influenced the application of international standards in various countries. Therefore, countries that have a tendency to be cautious, avoid uncertainties, control by law and prudence will be less likely to immediately apply international accounting standards that will follow a roadmap. However, countries that have flexibility, the development of accounting profession, and ensuring disclosure will tend to adapt quickly and be easier to apply (Thinh, 2019). According to Nobes and Parker (1995), countries affected by the same cultural values often apply the same accounting standards. Thereby, Chamisa (2000), Zeghal and Mhedhbi (2006) proposed that the application of IFRS would be easier for developing countries with the Anglo-Saxon culture.
H6: Economic, political and cultural conditions have a positive influence on the application of IFRS in Vietnam.

AIMS
This study is conducted to achieve these objectives: 1) Overview of studies related to the factors affecting IFRS application.
2) Presentation of research models, research hypotheses and contents, including: research design, analysis of research results on factors affecting IFRS application through the perception of managers and auditors in Vietnam.
3) Conclusions and recommendations from the research findings, pointing to the limitations and future research directions.

Research model
As mentioned above, from several previously published studies, the authors give the model used for research ( Figure 1).

Data collection
To examine the research hypotheses, the research team gathered data from interviews with managers and auditors currently working at a number of enterprises in Vietnam in different provinces. Data collection was conducted by direct questionnaire distribution, emailing and respondents answered by filling out an independent form or the response form via Google Drive. The results were analyzed by SPSS software; the scales were tested to determine reliability. The model was then established to examine the research hypotheses.

Scale
The study compiled a questionnaire with 32 ob-

Sample size
The authors sent survey questionnaires to 1,000 people representing two groups: business managers (720 respondents) and auditors (280 respondents). The survey time started in February 2019.
By the end of December 2019, the authors had collected 545 votes of managers and 230 votes of auditors. As a result, after eliminating invalid answers, 500 questionnaires were processed and analyzed, including 200 responses of auditors and 300 responses of managers. Compared to the initial calculation with the questionnaire content consisting of 37 observations, the minimum number of needed samples is 37 x 5 = 185, the number of questionnaires put into processing is appropriate. Because according to Bollen (1989), the appropriate ratio for selecting a sample size with the number of parameters in the variable measurement analysis must be 5 : 1.

Method of analysis
The authors performed model verification by the SPSS 20 software in combination with the AMOS 20 through the following steps: • Testing the scales: The scales were verified via three techniques: Cronbach's Alpha confidence coefficient, exploratory factor analysis (EFA), and confirmatory factor analysis (CFA).
• Model testing: The proposed research model and the research hypotheses were tested by the structural equation analysis (SEM) using the AMOS 20 software.

RESULTS
Based on the survey results of 500 managers and auditors as mentioned above, the authors analyzed the degree of influence of each specific factor on the basis of the initial theoretical model. The result is presented below.

Descriptive statistics of the research sample
SPSS 20 software is used to conduct analysis in the study. Among the 500 managers and auditors, the information about the research sample (500 people) is detailed in Table 1.

Testing Cronbach's Alpha coefficients
The scale Legal basis for accounting activities Cronbach's Alpha test results of the scales shown in Table 2 indicate that these scales all have Cronbach's Alpha coefficient > 0.6 and the total correlation coefficient > 0.3. Thus, the original 32 observed variables remain unchanged in the proposed model for use in the next EFA analysis.

Exploratory factor analysis (EFA)
and confirmatory factor analysis (CFA)

EFA analysis of scales
Based on the survey results, after conducting exploratory factor analysis on data using the SPSS 16 software and removing variables with a factor loading coefficient less than 0.5, the final results of exploratory factor analysis are shown in Table 3.
The above results show that KMO coefficient > 0.5, Batlett test has p-value equal to 0.000 < 0.05, av-

The results of confirmatory factor analysis (CFA)
The model has 443 degrees of freedom; CFA shows the value of p = .000; GFI value is 0.929, RMSEA = 0.028 is small; Chi-Square/df = 1,399 (less than 2); TFI = 0.954, CFI = 0.959 are greater than 0.9. Thus the analysis results indicate that the data is accepted with the proposed model.   Table 4 shows that the CR reliability is greater than 0.7, the total average variance extracted is greater than 50%, so it can be concluded that the components in the scale functional quality achieve reliability and convergence. After analyzing the correlation coefficients between the pairs of factors, the study obtains the results with the highest value of 0.48, which are all quite small and do not exceed 0.85, so the factors meet the conditions of discriminant value.

Testing the research model
SEM is used to test the existing model and research hypotheses. The estimated results of the research model show that: The testing model has 458 degrees of freedom (p = 0.00), and the indicators show that the model is suitable for the data collected from the market (chi-square/df = 1.837 < 2; GFI = 0.905; CFI = 0.910, TLI = 0.903 and RMSEA = 0.041).
The main parameter estimation results reveal that both relationships are statistically significant (p < 5%). Therefore, the relationship between concepts has reached theoretical expectations. Note: *** p < 0.01.

Relationship Estimate
The parameters estimated (standardized) are statistically significant (p < 5%), except for ESC and STA. Based on the weighted regression results between the concepts, it can be seen that: • The legal basis for accounting activities (LEG), corporate governance (COR), characteristics of enterprises (ENT), qualifications and competen- Among these four factors, the most significant impact is on the qualifications and competencies of accounting teams, followed by the characteristics of enterprises, corporate governance, and legal basis for accounting activities.
• The economic, cultural and social conditions (ECS) have a positive impact, and the state management of the accounting profession (STA) has a negative impact on the applicability of IFRS in Vietnam. However, both concepts have no statistical significance because p > 5%.

Testing research hypotheses
The hypotheses of the research model are tested as follows (see Table 7).

Testing the difference in the awareness of the IFRS applicability
Using the nonparametric audit technique through Independent Samples, T-Test and One-Way ANOVA analysis, the following results were obtained: Regarding the difference between the groups of business managers and auditors in the awareness of the IFRS applicability, most people think that the IFRS applicability in Vietnam is relatively high, with an average score from 4.24-4.30 to 5. However, based on Table 8 and given that Sig = 0.877 > 0.05, there is no significant difference between the two survey groups.
Regarding the difference in perceptions of the IFRS applicability in Vietnam, based on the work experience of the interviewees, the results shown in Table 9 indicate that Sig = 0.269 > 0.05, so there is no reason to claim about the difference among the groups of interviewees divided by work experience.

CONCLUSION
The research determines factors positively impact the application of IFRS in Vietnam, namely: the legal basis, the qualifications and competencies of the accounting teams, the characteristics of enterprises and corporate governance. Among them, the one that has the strongest impact and affects the current IFRS application is the qualifications and competencies of the accounting teams, followed by the characteristics of enterprises, such as the business size, business sector and enterprises audited by Big Four. Corporate governance is also a factor that affects the applicability of IFRS at enterprises, especially the views of the owners, the operation of the board of directors and the board of management of companies.  This study is conducted using the convenience sample method, so the results are of the authors' subjectivity, reducing the objectivity and generalization. Therefore, future research should consider the use of a probability sampling method, since it provides a higher degree of representation and increases the sample size for more accurate and generalized analysis. The research was conducted in Vietnam merely and covered a small period of recent years, so its results provided only short-term conclusions and recommendations. Further research can expand the scope of the survey both in space and time for a more inclusive and comprehensive assessment.