IFRS and the future of Vietnam's finance and accounting industry

10:27 | 30/03/2022 Society

Recently, KPMG Vietnam, Investment Newspaper and the Association of Chartered Certified Accountants (ACCA) coordinated to organize the forum "IFRS & The Future of Vietnam's Finance and Accounting Industry" to find suitable and flexible solutions for the Vietnamese business community during the transition to IFRS.  

The forum has attracted nearly 800 visitors to register online and the special participation of representatives of The Ministry of Finance, State Securities Commission of Vietnam, Association of Chartered Certified Accountants, publicly-listed business Thanh Cong - Bien Hoa Joint Stock Company, Viet Capital Bank and was sponsored by Investment Newspaper.

Recognize the significance of using the International Financial Reporting Standards (IFRS) for financial reporting.

ifrs and the future of vietnams finance and accounting industry
Representatives of the Ministry of Finance, State Securities Commission of Vietnam, Association of Chartered Certified Accountants, publicly-listed businesses and banks

During the forum, the speaker stressed the advantages of using IFRS for businesses and credit institutions when using IFRS 9. Mr. Dang Quyet Tien, Director of the Ministry of Finance's Corporate Finance Department, said: the use of the International Financial Reporting Standards (IFRS) will aid in improving the quality of financial statements produced by businesses, as well as increasing the transparency, accountability, and economic efficiency. A perspective from the banking industry, Ms. Nguyen Hong Van, Director of the Finance Department, identify that this is a step that supports credit institutions' management as well as their business activities: when businesses - customers of credit institutions - improve transparency in financial statements, credit institutions will have higher quality information sources to evaluate signals.

A perspective from business, Ms. Dang Huynh Uc My, vice president of the Board of Thanh Thanh Cong Bien Hoa Joint Stock Company, sympathized with these statements and emphasized the benefits of financial health transparency for corporate governance, business development orientation, and international market integration.

Furthermore, the presenters acknowledged that the move from Vietnamese accounting to International Financial Reporting Standards (IFRS) had a significant impact on a variety of issues, ranging from financial reporting to information technology systems. Mr. Trinh Duc Vinh, Deputy Director of bureaus, Accounting Supervisor, Controller of The Ministry of Finance, shared: IFRS application also comes with the digital transformation of businesses, so businesses need to build big data and upgrade information technology systems accordingly to be able to quickly update changes in business activities and markets.

The other representatives – Mr Ngo Quang Trung, chief executive officer of Viet Capital Bank, shared about his organization's transition to IFRS, particularly IFRS 9, beginning with internal resources, steering committees, and implementation groups; then assessing the need and requirements for consulting partners such as KPMG to coordinate in training and build data sources and information systems; and, at the same time, determining the gap between the current IFRS and the new IFRS; finally, determining the gap between the accounting activities and the future when applying IFRS 9.

To facilitate the successful implementation of IFRS in Vietnam, a roadmap and strong cooperation amongst units are required.

ifrs and the future of vietnams finance and accounting industry
The virtual forum was attended by representatives of the Ministry of Finance, State Securities Commission of Vietnam, State Bank of Vietnam and ACCA

While many businesses have the same questions, the author, who represents the policy-making and regulatory-supervisor agency, shares the future direction: the close cooperation among 3 organizations will be essential in supporting the successful application IFRS in Vietnam: Accounting-Auditing, Bussiness Finance and Tax. Therefore, while adjusting the tax law in the future, the policy-making agency will create favourable condition for listed large enterprises to apply IFRS. At the same time, the Ministry of Finance will issue a circular guiding IFRS application and clarify the legality of financial statements under IFRS. Furthermore, future circulars will clarify the rights and responsibilities of enterprises applying IFRS, relating to such as the accounting account system, financial report forms or the validity of IFRS application in Vietnam. Secondly, the ministry of finance is compiling the IFRS in Vietnamese version thanks to the contribution of IFRS experts at KPMG.

In addition, the Ministry of Finance will also cooperate with partner organizations to strengthen human resource training activities for pioneering enterprises and teaching staff at training institutions.

Contributing to training human resources with IFRS skills, The Association of Chartered Certified Accountants (ACCA) is actively disseminating the Vietnamese version of the IFRS Certificate to universities and Vietnam community of Accountants and Auditors– according to Ms. Nguyen Thuy Minh Chau, ACCA's Director in Vietnam.

In fact, the State Bank is also interested in the application of IFRS at banks and other credit institutions, and at the same time, observes and studies pioneer banks that have applied IFRS to measure and update the appropriate policy.

Speakers from the Ministry of Finance, the State Bank of Vietnam and the State Securities Commission from Hanoi drawn the conclusion : during the voluntary application period (currently until 2025), the Departments aim to apply IFRS in large corporations and state-owned enterprises, and are willing to listen to businesses to solve difficulties and to adjust financial policies accordingly. With many benefits when applying IFRS, enterprises need to have the determination to transform and actively prepare and promote this process, with the support of the state and consulting firms such as KPMG.

From the perspective of a consulting unit, KPMG always accompanies the Ministry of Finance, ministries and departments to provide suitable and flexible solutions for the business community in Vietnam in the transition to IFRS through every stage. In recent years, KPMG Vietnam has made practical activities and efforts to support the Vietnamese business community to learn and access more IFRS standards, creating a premise for the transformation of IFRS in other industries in the upcoming period through in-depth analytical articles, workshops and courses on the KPMG OnDemand application. In the near future, KPMG will also cooperate with the State Securities Commission to organize a series of workshops from April to July 2022 entitled "Pioneer in IFRS application in Vietnam - Change to lead" (““Tiên phong áp dụng IFRS tại Việt Nam – Thay đổi để dẫn đầu”) for the businesses that belong to the VN100 group, businesses operating in the industries of Consumer Goods, Real Estate - Construction, Industrial Production and Financial Services.

ACCA (Association of Chartered Certified Accountants) is the most advanced career organization for accounting and financial experts in the world. ACCA is a thriving global community of 233,000 members and looking forward to 536,000 future members, present in 178 countries and territories, including people working in a diffferent fields and professions. The organization operates with the motto that always upholds professional and ethical values. ACCA offers success opportunities for career development to people from everywhere in accountancy, finance and management. The value of these qualifications and learning opportunities will help business strategy leaders and experts develop the forward-thinking and digital skills needed to create organization and a sustainable society.