Adopting International Financial Reporting Standards (IFRS) necessitates a transformative mentality from leaders

Adopting International Financial Reporting Standards (IFRS) necessitates a transformative mentality from leaders

The Vietnamese government and business community are taking significant strides towards adopting International Financial Reporting Standards (IFRS), aiming to increase transparency, standardize financial information, and improve access to international capital markets.

On October 16, the Vietnam Federation of Accountants and Auditors (VAA), PwC Vietnam, and the Institute of Chartered Accountants in England and Wales (ICAEW) signed a cooperation agreement to facilitate the implementation of IFRS. This collaboration is part of a broader effort to align Vietnam's financial systems with international best practices.

The Ministry of Finance (MoF) is building a regulatory framework to support businesses in applying IFRS. This includes providing support for businesses to enter the IFRS application roadmap, as well as coordinating with professional associations and international organizations such as ACCA and the ICAEW to organize free training courses and improve the capacity of accountants, auditors, and business leaders.

Trinh Duc Vinh, a prominent figure in the financial sector, emphasized that IFRS are not a barrier but an opportunity. They can increase transparency, standardize financial information, improve access to capital, and affirm a business's position in the international market.

Nguyen Thi Thuy, training manager of Auditcare & Partners Vietnam (ACV), gave a vivid assessment of the current status of IFRS adoption in domestic businesses. She highlighted that IFRS requires businesses to standardize data systems, upgrade technology, restructure processes, and train personnel.

The high import-export turnover of $786 billion, equivalent to 165% of Vietnam's GDP, reflects the deep integration of the Vietnamese economy into the global trade chain. Last year, Vietnam's GDP was approximately $470 billion.

The roadmap for Vietnamese enterprises to adopt IFRS involves a gradual alignment with international standards as part of broader financial reforms. The benefits of adopting IFRS for Vietnamese enterprises include enhanced business transparency, increased access to global capital markets, and improved risk governance.

The MoF and relevant ministries are actively drafting regulatory decrees to align financial systems, including firms operating in international financial centers (IFCs) in Ho Chi Minh City and Da Nang, with international best practices. Practical support for foreign-invested enterprises to comply with IFRS is available from specialized service firms offering accounting, tax compliance, and consolidated financial reporting services in both Vietnamese Accounting Standards (VAS) and IFRS.

In summary, the Vietnamese government's policy framework and supporting services facilitate a phased adoption of IFRS by enterprises, promoting transparency and capital access. This transition is linked closely with broader reforms including tax policy modernization and development of international financial centers, designed to integrate Vietnam more deeply with the global financial system.

As 160 countries and territories worldwide have already adopted IFRS, the application of IFRS is no longer a desire but an inevitable requirement for Vietnamese enterprises looking to compete on the global stage. The online roundtable discussion "IFRS - Solutions and roadmap for Vietnamese enterprises" underscored the importance of this shift and the opportunities it presents for Vietnam's businesses.

Businesses in Vietnam can enhance their access to international capital markets and improve their position in the global market by adhering to the International Financial Reporting Standards (IFRS), as emphasized by Trinh Duc Vinh. To facilitate this, the Ministry of Finance (MoF) is building a regulatory framework and providing support for businesses to enter the IFRS application roadmap, as well as organizing free training courses in collaboration with professional associations and international organizations such as ACCA and the ICAEW to develop the skills of accountants, auditors, and business leaders. This is part of a broader effort to align Vietnam's financial systems with international best practices, including those in the areas of business, finance, and education-and-self-development.

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