Research On International Congverence Of Vietnamese Accounting Standards

The globalization of capital markets, specifically investors’demands for comparable and transparent information, has created pressure to converge National Accounting Standards (NAS) with International Accounting Standards/International Financial Reporting Standards (IAS/IFRS). There are many countries in the world which have developed their own accounting standards based on IAS/IFRS whereas others have just fully or partly-adopted the international standards. Adopting IAS/IFRS either in full or through the national standards will help a country achieve better standards with more comprehensive disclosure. The aim of this study examines measures for assessing the level of convergence between Vietnamese Accounting Standards (VAS) and IAS/IFRS. These following research issues addressed in this study include:The first part is "Methods measure international convergence of accounting standards". Based on the reviewing of extant literature, the author summarised and introduced the existed measuring methods of formal convergence, including Euclidean distance, Jaccard’s coefficients and Spearman correlation coefficient. The author proposed outline of measuring Vietnam’s accounting standards convergence, and suggestions on related methods and methodology.The second part is "The experience of China and other countries in convergence to IAS/IFRS". The objective of this part is examining the experience of China and other nations in the development and the international convergence of accounting standards.The third part is "Development status of Vietnamese accounting system". The Vietnamese accounting system during1986-1995was a selective system, with some elements of the French, Soviet and American influence. The accounting legal frameworks have since1996continued to be improved towards providing a transparent system to meet the requirements of the socialist-oriented market economy. The VAS issued by the MOF, which is in line with IAS/IFRS, with modifications to suit Vietnam’s conditions and requirements. However, a comparison between VAS and IAS/IFRS was made by PricewaterhouseCoopers (2008) to highlight the gap between VAS and IAS/IFRS.The fourth part is "Measurement of formal convergence of VAS with IAS/IFRS" The purpose of this study is to measure the formal convergence between VAS and IAS/IFRS using a fuzzy-based approach. Author assess the extent of convergence of between VAS and IAS/IFRS from the perspective of a single standard, cluster of standards, and the standards as a whole. The levels of standards convergence are clustered into four categories:full convergence, substantial convergence, substantial difference, and complete difference. Results indicated that the level of convergence between two sets of standards only achieves mid-level convergence.The fifth part is "Proposed roadmap convergence with IAS/IFRS in Vietnam". The author have proposed roadmap for convergence between VAS and IAS/IFRS may span over many years and be composed of many different phases; each phase is outlined as follows:Phase1:Continue to review and improve the content of the accounting standards issued, amendment and additional the points are not consistent with IAS/IFRS. Phase2:Continue to promulgate the new accounting standards based on IAS/IFRS was issued by the IASB. Phase3:Make the use of IAS/IFRS mandatory for listed companies, financial institutions, and other large enterprises. Unlisted companies will continue to apply existing accounting standards. Phase4:Require small and medium enterprises to adopt IAS/IFRS by2020.The main contributions of this dissertation are as follows:Firstly, author have proposed a fuzzy-based clustering analysis approach to measure of the formal convergence of VAS with IAS/IFRS. The overall convergence level of VAS with IAS/IFRS achieves a modest level of65.72%. Secondly, proposed roadmap toward IAS/IFRS adoption in Vietnam. Thirdly, The findings of this study help policy makers to improve VAS to meet the international standards. The results of this study are therefore useful to the regulators, users and preparers of financial statements as well as professional associations.