IASB recommends Vietnam prepare infrastructure to apply IFRS

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The working session between representatives of the Accounting and Auditing Supervisory Department (AASD) of the Ministry of Finance and the International Accounting Standards Board (IASB).

At the working session with Ms. Linda Mezon-Hutter, Vice Chairwoman of the International Accounting Standards Board (IASB) on April 15, 2024, Mr. Vu Duc Chinh, Director of the Accounting and Auditing Supervisory Department (AASD) of the Ministry of Finance said that Vietnam is an open and deeply integrated economy, so the application of IFRS in Vietnam is an inevitable trend and the Vietnamese Government is pursuing the goal of bringing IFRS to Vietnam.

According to Mr. Vu Duc Chinh, applying IFRS will help businesses improve the quality of financial reporting, enhance transparency and quality of explanation; at the same time, this is also a premise to help Vietnam upgrade its stock market ranking.

However, accessing IFRS still faces many difficulties such as lack of human resources with in-depth understanding of IFRS, large initial investment costs, building habits and thinking for accountants.

Furthermore, the AASD’s representative also shared that, compared to some countries, in Vietnam, the agency issuing the accounting standards is the Ministry of Finance, not professional associations. Therefore, the standards promulgated by the Ministry of Finance will become mandatory legal documents, thereby they have higher legality than standards promulgated by professional associations such as some countries.

From information from the Vietnamese side, Ms. Linda Mezon-Hutter expressed that the IASB always wants to share information about the experience of applying IFRS to Vietnam as well as the business community.

IASB’s Vice Chairwoman recommended Vietnam need to evaluate and analyze in detail the differences between IFRS and domestic standards and regulations, and research and issue assessment documents and analyze the differences between domestic standards and IFRS for public disclosure. At the same time, relevant agencies need to determine the time to make the transformation to IFRS and estimate implementation costs, as well as build and prepare information technology infrastructure for the transformation.

According to Ms. Linda Mezon-Hutter, classifying businesses by size as Vietnam is doing is very important because not all businesses have the same capacity. In addition, Vietnam needs to maximize the use of resources from experts of big accounting and auditing companies in the world and in the region in consulting on IFRS application.

Previously, at many conferences, businesses said that implementing IFRS brings the benefits of transparency in financial health for corporate governance, business development orientation and integration into international markets. However, this work is still difficult due to the lack of quality and skilled human resources. Therefore, businesses need to be determined to transform and proactively prepare, with support from the state and consulting companies.