Voluntary Adoption of International Financial Reporting Standards: Empirical Evidence from Listed and Unlisted Companies in Vietnam

Abstract

In the context of Vietnam's deepening integration into the global economy, the transition to and adoption of International Financial Reporting Standards (IFRS) has become not only an inevitable trend but also an urgent requirement to enhance the transparency, comparability, and quality of corporate financial reporting. IFRS adoption is expected to improve access to international capital markets, boost investor confidence, and support the restructuring of the national accounting system. This study aims to identify the factors influencing the voluntary adoption of IFRS by Vietnamese enterprises. The research utilizes both primary and secondary data collected from audited financial statements, annual reports, and interviews with chief financial officers, chief accountants, accounting staff, internal auditors, and internal controllers at 324 companies. These companies include those listed on the Ho Chi Minh City Stock Exchange (HOSE), the Hanoi Stock Exchange (HNX), and the Unlisted Public Company Market (UPCOM), which is designated for non-listed firms on HOSE or HNX. Using a binary logistic regression model, the results reveal that firm size, listing status, foreign ownership, and audits conducted by major firms such as the Big Four significantly increase the likelihood of voluntary IFRS adoption. Conversely, variables such as firm age, profitability, board size, and board independence do not exhibit a statistically significant effect. These findings align with the tenets of new institutional theory, emphasizing the influence of coercive and normative pressures, particularly those arising from international investors, listing requirements, and the technical expertise of global audit firms - in shaping corporate financial reporting practices. The study provides empirical evidence on the drivers of IFRS adoption during Vietnam’s transition phase and offers important policy implications for regulators in designing appropriate legal frameworks and technical support mechanisms to promote voluntary IFRS adoption in line with the Ministry of Finance’s roadmap.