Essay About Possibility Of Vietnam Adopting Ifrs And Global Financial Markets

The Possibility of Vietnam Adopting Ifrs
Exclusive summaryAccording to the growth in global financial markets, there have been significant efforts to achieve global convergence of accounting standard by reducing differences in accounting practice (Nguyen & Gong 2012). International Financial Reporting Standards (IFRS) provides a single set of worldwide accounting standards for public companies, especially for large enterprises that have subsidiaries in different countries, to prepare and disclose their financial statements (IFRS 2014). Recently, more than 100 countries have adopted IFRS, and most of the IFRS users are benefit from IFRS guidance. However, a few countries like Vietnam are slower convergence with IFRS. This paper analyzes the possibility of Vietnam adopting IFRS. Firstly, the paper summarizes advantages of Vietnam are adopting IFRS, such as quality improvements in accounting information and investors attraction. Next describe the disadvantages of Vietnam adopting IFRS, for instance, complex and costly. Finally, this paper discusses the possibility of the adoption of IFRS in Vietnam based on comparing advantages and disadvantages. Overall, the analysis showed that the benefits obtained from IFRS adoption in Vietnam far outweigh its drawbacks. The adoption could be an excellent opportunity for Vietnam to expand their capital markets in the near future.Table of contentsAdvantages of Vietnam adopting IFRS                               1Disadvantages of Vietnam adopting IFRS                            2Suggestions for Vietnam adopting IFRS                              3References                                                      3Advantages of Vietnam adopting IFRSThere are two primary advantages that IFRS could contribute to the Vietnamese accounting system. First of all, adopting IFRS will lead to higher information quality in Vietnam accounting system. In general, the information provided by financial reports prepared under the globally accepted standard tends to be more reliable, comprehensive, and accurate (Ball 2006). This on one hand should improve the companies to access to foreign markets, and, on the other hand, should increase the efficiency of a corporation between businesses and their management. In addition, IFRS was established based on the demand of financial markets (Ball 2006). There are more disclosures and measurements required for financial reports under IFRS compared to Vietnamese accounting standards. For example, some specific treatments like the financial instrument and impairment of assets have not involved in Vietnam accounting system. Therefore, the accounting information provided by Vietnamese companies will be more detailed and understandable under IFRS. Hence, with the improvement of accounting quality, information asymmetry, and market inefficiency will be relieved among member countries. The adoption will be a great chance for Vietnam to boost their economy.