Nguyen Thi Phuong Thao

IMPACT OF GLOBALIZATION ON INTERNATIONAL ACCOUTING

HARMONIZATION: A CASE OF VIETNAM

BY

NGUYEN THI PHUONG THAO

Graduation Project Submitted to the Department of Business Studies

Help University College, in Partial Fulfillment of Requirements for

The Degree of Bachelor of Business (Accounting) Hons

JUNE 2010

ACKNOWLEDGEMENT

First and foremost, my sincere gratitude is dedicated to my supervisor – Dr. Le Van

Lien. Thanks for your strong support, guidance, intuitive comments, and also

motivation through the process of completing this thesis.

In addition, I would like to send my gratitude to the International School and HELP

University College for giving me an opportunity to conduct my study in my favorite

area.

Furthermore, I also address my appreciation to Mr. Nguyen Xuan Thuy (Vice chief

Executive of Bao Viet finance- insurance Groups) and Ms. Ho Thi Thu Phuong

(Academic Administrator of British University Vietnam) who supported my thesis

with enormous information in data collection process. My thankfulness is also

addressed to others who have helped me since the beginning of my study until I can

finish my thesis.

Finally, thanks you to all my family and friends, for your support, help, and

motivation and made it possible for me to complete this study.

Hanoi, June 2010

Nguyen Thi Phuong Thao

IMPACT OF GLOBALIZATION ON INTERNATIONAL ACCOUTING

HARMONIZATION: A CASE OF VIETNAM

BY

NGUYEN THI PHUONG THAO

JUNE 2010

Supervisor: Dr. Le Van Lien

ABSTRACT

This study provides the framework for understanding the concept of accounting

harmonization. Some of key elements relating to this concept such as: the importance

of accounting harmonization in global economy, the actor of issuance IAS, the

advantages and disadvantages of accounting harmonization, the different levels of

accounting harmonization are clarified. This study also tries to evaluate the

infrastructure of accounting system in Vietnam response to international accounting.

First of this action, the researcher evaluate the role of MOF in its efforts for making

harmonization process. This is shown by establishment of Vietnamese accounting

standards. Secondly, the researcher tries to compare some typical Vietnamese

Accounting Standards and International Accounting Standards. The purpose of

comparison is to evaluate the adoption of international accounting into Vietnamese

accounting environment. Furthermore, the researcher desires to examine the

awareness of Vietnamese accountants (including different levels) toward accounting

harmonization. This research tries to evaluate how their attitudes, their behaviors,

and their needs relating to accounting harmonization. Finally, this study tries to

evaluate actual applications and accounting treatments in some companies (different

types and sizes of companies) in accordance with accounting harmonization. This is

because once we understand and evaluate the actual picture of accounting

harmonization process in Vietnam, we can learn from the experience. This is helpful

for future research or strategic plans. From the results obtained through

questionnaires, the term of accounting harmonization is not new in Vietnam, and

Vietnam is completing its harmonization process step by step. However, awareness

of Vietnamese about this term is different from each other, and the differences

between actual applications in some companies. Thus, several recommendations and

scopes for future research might be developed by the researcher. However, because

of limitation, this study only covers some typical items of this topic.

TABLE OF CONTENT

Page

Declaration of Originality and Word Count ii

Acknowledgment iii

Abstract iv

Table of content vi

List of tables ix

List of Abbreviations

xi

CHAPTER 1 INTRODUCTION

1.1 Background of the study 1

1.2 Research objectives 2

1.3 Problem statement 4

1.4 Limitation of the study 5

1.5 Organization of the research 6

References 7

CHAPTER 2

LITERATURE REVIEW

2.1 The importance of accounting harmonization 8

2.1.1 The need for accounting harmonization 8

2.1.2 Distinguish between accounting harmonization and accounting

standardization

9

2.2 The actor of issuance IAS 10

2.3 Advantages of accounting harmonization 11

2.4 Disadvantages of accounting harmonization 13

2.5 Different levels of accounting harmonization 14

2.5.1 International level of accounting harmonization 14

2.5.2 Regional level of accounting harmonization 15

2.5.3 National level of accounting harmonization 17

2.5.3.1 Some countries in ASEAN 17

2.5.3.2 Vietnam 19

References 21

CHAPTER 3

RESEARCH METHODOLOGY

3.1 Research objectives 27

3.2 Research Methodology 28

3.2.1 Primary data 28

3.2.2 Secondary data 29

3.3 Research Instrument 30

3.3.1 Awareness of Vietnamese accountants of accounting harmonization 31

3.3.2 How companies in Vietnam response to accounting harmonization 31

3.4 Research Hypotheses 32

3.5 Data Collection 33

3.6 Sampling 34

3.6.1 Firms 34

3.6.2 Accountants 34

3.7 Response Rate 34

3.8 Interpretation of Data 35

3.9 Limitation of Research 35

References 36

CHAPTER 4 ANALYSIS OF DATA

4.1 Vietnamese accounting standards (VAS) responding 37

4.1.1 General overview 37

4.1.2 The actors 38

4.1.3 Evaluation the role of MOF in process of establishment VAS 38

4.1.4 Vietnamese accounting standards 39

4.2 Comparison between some typical VAS and IAS 41

4.2.1 VAS 02 and IAS 02 41

4.2.2 VAS 24 and IAS 07 42

4.2.3 VAS 25 and IAS 27 42

4.3 Analysis of primary data 43

4.3.1 Classification of the respondents of different job levels 43

4.3.2 Classification of the Respondents from Types of Companies 44

4.3.3 Test hypotheses 45

4.4.3.1 Awareness of Vietnamese Accountants 45

4.4.3.2 Practice of accounting treatments in some companies in

Vietnam responding to accounting harmonization

54

References 64

CHAPTER 5 CONCLUSION

5.1 Comparison between IAS and VAS 66

5.2 Awareness of Vietnamese accountants relating to accounting

harmonization

67

5.3 Accounting treatments in some companies in Vietnam 68

5.4 Recommendation 70

5.5 Scope for future research 71

BIBILIOGRAPHY 73

APPENDICES 81

LIST OF TABLES

Tables Title Page

Table 4-1 Four VAS issued and promulgated in 2001 and relating IAS 39

Table 4-2 Six VAS issued and promulgated in 2002 and relating IAS 39



Table 4-5 Four VAS issued and promulgated in 2005 and relating IAS 40

Table 4-6 Comparison between VAS 02 and IAS 02 41



Table 4-9 Classification of the respondents of Different job level 44

Table 4-10 Classification of the Respondents from Types of Companies 44

Table 4-11 Hear the term of “accounting harmonization” 46

Table 4-12 Perception of the training program for accountant to

improve their knowledge relating to international

accounting

47

Table 4-13 Perception of translating financial statements into English 48

Table 4-14 Accounting harmonization is the essential tool to develop in

global economy

50

Table 4-15 Accounting harmonization can reduce the gap amongst

different accounting systems in each country

51

Table 4-16 Accounting harmonization can take easy ability to adapt

than accounting standardization

52

Table 4-17 Accounting harmonization can encourage more global

economic activities

53

Table 4-18 Have a person can work with international accounting

standards

55

Table 4-19 Preparation cash flow statement per annual 56

Table 4-20 Having financial statements translated into English 57

Table 4-21 Duration companies have applied VAS in preparation

financial statements

58

Table 4-22 Preparation financial statements 59

Table 4-23 Application of VAS in accounting system 60

Table 4-24 Recruitment employees can prepare and understand the

financial statements in English

62

Table 4-25 Translating financial statements into English 63

LIST OF ABBREVIATIONS

Abbreviation Full Name

AFA

ASEAN Federation of Accountants

ASC Accounting Standards Council

ASEAN Association of South East Asian nations

ASPC Auditing Standards and Practices Council

BOA Board of Accountancy

EFRAG European Financial Reporting Advisory Group

EU European Union

FEE Federation des Experts Comptables Europeens

IAI Indonesian Institute of Accountants

IAS International Accounting Standards

IASB International Accounting Standards Board

ICAAT Institute of Certified Accountants and Auditors of Thailand

ICAEW Institute of Charted Accountants of England and Wales

ICPAS Institute of Certified Public Accountants of Singapore

IFAC International Federation of Accountants

IFRS International Financial Reporting Standard

ISAR International Standard of Accounting and Reporting

MOF Ministry of Finance

OECD Organization for Economic Co-operation and Development

PICPA Philippine Institute of Certified Public Accountants

VAS Vietnam accounting standards

WTO World Trade Organization

CHAPTER 1

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

In recent time, we often hear the term of “globalization”. This concept is becoming

the new trend all over the world. What is globalization? Generally, globalization is

the worldwide integration of some typical aspects (economy, technology, politic,

culture, and society) across countries to improve the collaboration amongst various

countries, and help each other on development (Sara Hamilton, 2009). In other

words, globalization leads to the in-depth influence on various aspects of modern

society. Often, when we call the term of “globalization”, we often imply the

economic globalization. As we known, accounting is the basic tool, as well as the

basic language to improve economic developments. Therefore, globalization raise the

big question: What is the most difficulty amongst typical accounting systems across

countries? Under the effect of globalization, accounting harmonization becomes a

big issue in worldwide picture. That’s why, accounting harmonization considered as

the main topic on current and heated discussion (Keegan, 1988).

Perception on accounting harmonization in rests of the world changes significantly

since more and more countries set up their accounting standards. Those standards

provide guidelines about application accounting system respond to international

accounting standards issued by the International Accounting Standards Board

(IASB). For examples: according to Jeffrey (1999) one of the top priorities of

Instituto Mexicao de Contadores Publicos (IMCP) of Mexico is to make

harmonization with International Accounting Standards (IAS); some other countries

such as Australia and countries in the European Union also have elected to adopt the

accounting standards issued by the IASB (Craig Deegan, 2009). In South East Asia,

some similar situations relating to making accounting harmonization are also

concerned. The Association of South East Asian nations (ASEAN) play the

important role to improve the economy amongst the countries of South East Asia.

This organization makes significant efforts for accounting harmonization through

ASEAN countries. This purpose is expressed through Federation of Accountants

(AFA). ASEAN tries to provide the guidelines and techniques to its members’

professional accounting bodies about application of IAS effectively. As compared to

other countries, Vietnam takes significant steps to respond the impact of

globalization on accounting harmonization. Through this study, the researcher

attempts to provide the detailed information relating to accounting harmonization in

global economy and how Vietnam to respond this issue.

1.2 RESEARCH OBJECTIVES

This study is developed to explore the impact of how Vietnam response to

accounting harmonization in global economy. Accordingly, there are several

objectives discussed in this study:

First of all, the main objective is to provide all necessary information relating to the

accounting harmonization. The question: “Why do we need to make accounting

harmonization in global economy?” will be discussed. According to this study, the

researcher provides the general introduction of IASB and the role of IASB in making

accounting harmonization process of issuance IAS. Some advantages and

disadvantages of various countries of application IAS in international accounting

environment are also mentioned. In order to help readers understand about the topic,

accounting harmonization will be divided in to three levels including international

level, regional level, and national level (gupea.ub.gu.se). The first level (international

level) will support for the overview of accounting harmonization from the world’s

perspective. The next level (regional level) will provide some detailed information

relating to methods that typical regions response to accounting harmonization. At the

last level (national level), we discuss some significant efforts of each country to

reach the accounting harmonization.

The second objective is to clarify impact of “reform process” in 1986 on accounting

environment in Vietnam. That year is considered as the important point of economic

development in Vietnam. Vietnam carried out a reform process of changing its

centrally planned economy to a socialist market-oriented economy, liberalizing the

domestic economy and integrating with outside the world (dissertations.ub.rug.nl).

The “reform process” also encourages the initial step to establish Vietnamese

Accounting Standards (VAS) in accordance with accounting harmonization. In

addition, VAS and process of issuance of VAS are discussed. Moreover, the

researcher tries to compare some typical IAS and VAS.

The third objective is obtained from the view of accountants in finance and

accounting department of some companies in Vietnam. The researcher tried to design

ten questions to explore their awareness about international accounting, and making

Vietnam accounting policy harmonization with international accounting.

Furthermore, by conducting the research, the researcher intends to discuss more

factors causing impacts on application international accounting in Vietnam in

practice rather than collecting from the available sources. Some research hypotheses

are also will be developed and tested through the process of conducting research

using chi-square test. The researcher tries to provide the completed view about the

application international accounting in Vietnam through Vietnamese accountants’

awareness, and response of some companies in Vietnam to accounting

harmonization.

1.3 PROBLEM STATEMENT

Nowadays, since the wave of global economy increases rapidly, this requires to

establish a main set of accounting environment for all countries to application

referred to IAS/IFRS. This process brings important meaning importance because

accounting harmonization is the basic tool reducing the gap across national

accounting polices. The main benefit of this process for improvement economic

integration activities amongst various countries whether those countries come from

the different parts or regions of the world.

Moreover, discussion about accounting harmonization has the special meaning for

Vietnam, since Vietnam joined World Trade Organization (WTO) on 11 January

2007(wto.org). By joining WTO, Vietnam went to the large ocean; Vietnam accepted

the competitive environment and expanding economic activities outside country.

Thus, accounting policy in Vietnam needs to be approached with international

accounting near by near (news.bbc.co.uk).

Within this study, the researcher provides more about understanding the issues of

Vietnam toward international accounting through some questions as follows:

Does Vietnam change accounting policy toward international accounting?

Does Vietnam have some significant efforts to make accounting

harmonization in global economy?

Is it benefit for Vietnam to reach accounting harmonization?

Does Vietnam set up Vietnam accounting standards in harmonization (VAS)

with IAS/IFRS?

What is the process to make accounting harmonization taking place in

Vietnam?

Does Vietnam need more necessary conditions in harmonization process?

Answering these questions above will help to expand understanding of current

accounting policy in Vietnam and its efforts to pursuit accounting harmonization.

1.4 LIMITATION OF THE STUDY

This study is limited to discussion on some specific of relating accounting area such

as: accounting standards, financial reports, inventories, cash flows and so on. It is

hard to cover all items of the issue here because it includes a broad range.

Furthermore, the limitations of time also make the researcher not to conduct this

study on all aspects relating to issue. Therefore, the researcher needs to select some

specific item to clarify and discuss to help the reader understand in the effective way

about all the necessary information relating to the topic in general.

1.5 ORGANIZATION OF THE RESEARCH

This study will be organized into five chapters. This is because the readers can

understand this paper on the logical way. Five chapters referred here as: introduction,

literature review, research methodology, analysis, and conclusion.

Chapter 1, with the title “Introduction” will mention the general picture about the

relating topic.

Chapter 2, with the title “Literature review” will provide all necessary information

relating to accounting harmonization. Some key factors of accounting harmonization

are the importance of accounting harmonization, the role of IASB, advantages and

disadvantages of accounting harmonization, and different levels of accounting

harmonization.

Chapter 3, with the title “Research methodology” will describe the research tools,

and data sources in conducting this study like as: primary data, secondary data, and

so on.

Chapter 4, with the title “Analysis” will analyze all the collected information (from

both of secondary and primary data) of how Vietnam responses to accounting

harmonization.

Chapter 5, with the title “Conclusion” will sum up and evaluate all the results from

this study, simultaneously propose some useful suggestions for further studies

relating to this similar issue.

CHAPTER 2

LITERATURE REVIEW

This chapter is developed to provide framework relating to accounting

harmonization. The aim of this chapter is to help the readers understand various

aspects around this term of international accounting harmonization. Accordingly, the

readers can develop their background relating to this topic.

2.1 THE IMPORTANCE OF ACCOUNTING HARMONIZATION

Belongs to this section, we approach the justifications of accounting harmonization.

In order to help the readers obtain this topic in the effective way, this section will be

divided into two subsections. The purpose of doing that is to explain of the need for

accounting harmonization. Moreover, the readers can distinguish between accounting

harmonization and accounting standardization clearly.

2.1.1 The need for accounting harmonization

The global economy developing rapidly leads to significant effects on accounting

environment. One of those effects is the barrier amongst different accounting rules in

each country when integrating global activities. This is because accounting is

considered as the language of business (Ph. Diaconu PAUL). Obviously, if different

countries flow the same accounting rules, the gap between accounting system in each

country will disappear (Craig Deegan, 2009). This issue leads to the global efforts for

establishment a set of accounting standards applied by different countries.

Accordingly, international accounting standards will open new horizon of evolution

(Anderson, 1993). Those standards will help the different financial information

between various companies become more relevant in the purpose of comparative

analyses or comparisons.

2.1.2 Distinguish between accounting harmonization and accounting

standardization.

In recent years, people always talk about international accounting. However, most of

them still confuse between accounting standardization and accounting

harmonization. Before understanding relating aspects of international accounting

harmonization, the readers need to know the basic feature of each concept.

The first concept known as accounting standardization referred to a more rigid and

narrow set of rules (Nobes and Parker, 2004). The implication under this term is

different countries need to follow the unique set of accounting rules, fundamental

principles, accounting standards without amendment and making adoption with

regulations in each country. The main advantage of using accounting standardization

is to use the consistent accounting systems amongst different countries, save time

and transfer cost. However, this also causes the main challenge for countries with

lower infrastructure of accounting policy than others.

The second concept is known as accounting harmonization. This concept includes

the similar characteristic with accounting standardization. However, accounting

harmonization is more flexible in which allows every country to establish its

accounting standards to meet its regulation based on international accounting

standards. As far as concern, accounting harmonization has to develop from the base

of accounting standardization (Weber, Cameron M., 1992) because we need the

framework of accounting standards first, and then different countries make

amendment for harmonization with international accounting standards. Based on this

fundamental advantage mentioned above, accounting harmonization is preferred by

most countries. The actor of issuance of international accounting standards, the

advantages and disadvantages of this concept, as well as the different level of

accounting harmonization will be discussed later.

2.2 THE ACTOR OF ISSUANCE IAS

International Accounting Standards Board (IASB) is considered as the independent

setting body of the International Accounting Standards (IAS) (iasb.org). The history

of IASB and the idea for accounting harmonization started from fifty years ago by

Henry Benson (Veron, 2007). Henry Benson was a former president of the Institute

of Charted Accountants of England and Wales (ICAEW). He wanted to see Canadian

Institute of Charted Accountants and the American Institute of Certified Public

Accountants approach to more intimate basis. He also repeated his implication in his

autobiography under the title Accounting for Life in 1989 (Craig Deegan, 2009).

More detailed, he identified about his ambition of making the dialogue between three

countries (United Kingdom, American, and Canada) to make them closer together

because these countries had the significant on accountancy at that time. Craig

Deegan mentioned more that three those bodies had established the International

Accounting Standards Committee (IASC) in 1973 and then created IASC

Foundation. The IASC foundation includes twenty-two trustees in which six are

appointed from North America, six from Europe, six from the Asia/Ocean region,

and four from any area (www.federalreserve.gov). International Accounting

Standards Board was developed in 2001 (en.wikipedia.org). There are fourteen

members of IASB, and any IAS need to be approved by at least a two-thirds majority

of members (Craig Deegan, 2009). IASB known as an independent standard setting

body housed in London (Jacob, RA., & Madu, C.N., 2009). From 1973 to 2000, IAS

were issued by the IASC, and also amended by IASB (www.iasplus.com). Some of

IASs has replaced with the new International Financial Reporting Standard (IFRS).

Until now, more than 100 countries have applied the accounting standards belongs to

IASB, event though each country need to conduct significant change in domestic

accounting system responding to international accounting standards.

2.3 ADVANTAGES OF ACCOUNTING HARMONIZATION

Accounting harmonization causes different advantages in global economy. However,

under the limitation of this study, the researcher tries to discuss some main

advantages around this concept. Accordingly, the readers can evaluate the usefulness

of accounting harmonization in the basic term.

According to Securities and Exchange Commission (SEC) in 2008, one of major

benefits of application IAS or IFRS is to increase comparability of financial

statements. Such comparability can reduce the misunderstanding of foreign financial

statements; hence this helps the companies save time and money (Ph. Diaconu

PAUL). Besides that, accounting harmonization serves the purpose of raising the

higher possible level. In addition, accounting harmonization is suitable with each

local economic, legal, and social condition (Choi, Frost and Meek, 1999).

Another advantage of accounting harmonization discussed here is an increase in

foreign mutual fund ownership among firms applied IAS (Covrig et al., 2007). In

other words, Samuels and Piper (1985) had the similar ideas. They also considered

that companies using IAS attracted more foreign investors (financial analyst and

foreign lenders) because investors could understand the financial statements. Once

they approached financial statements clearly, they compared the outcomes of each

investment opportunity and then made investment decisions. They often prefer

companies applied IAS for easy understanding their financial statements.

The last advantage of accounting harmonization discussed is to make higher

accounting quality. According to the examination of Barth et al, (2007), accounting

amounts come from the companies applied IAS are higher accounting quality than

others. The reason is application international accounting standard allows users to

conduct the competitive and effective analyses needed to run business easier, as well

as help the financial executives manage strong relationship with customers, outside

suppliers, and other stakeholders (O'Malley, 1993). Of course, we can see the group

of multinational companies gain the highest benefit based on this feature.

2.4 DISADVANTAGES OF ACCOUNTING HARMONIZATION

Analyses some of main disadvantages of accounting harmonization are necessary to

evaluate and complete the usefulness of this basic tool. The most fundamental of

challenges relating to harmonization are: different accounting practices in different

countries, lack of strong professional accountancy bodies in each country (especially

in some countries where accounting system is not consistent), different in political

and economic system (Nobes & Parker 2002).

In addition, the main users of accounting information come from different countries

causing obstacles for harmonization (Ira Yuta Chairas & Wirawan E.D. Radianto,

2001). For example the nature market in UK and US are the capitals markets, thus

the main users belong to these countries are the investors. In contrast, Germany and

other continental countries, the basic nature is not similar with the nature in UK and

US; hence the main users are tax authorities and government. Each type of users

requires different accounting information for relevant decision making. Therefore,

the big issue for accounting harmonization is how to satisfy all requirements of

different users across countries.

The next disadvantage comes from the different legal situation amongst various

countries. Accounting system is directly affected by legislation (Lawrence, 1996).

Accounting harmonization is difficult to suitable with all nations. Thus, each country

need to establish each accounting standards follow its regulation and legislation

based on international accounting standards. Accordingly, the process of accounting

harmonization takes time for preparation and application. The dynamic business

environment leads to the competition between countries to attract investors rapidly,

whereas process of accounting harmonization takes time. The business have to

minimize short time to focus, this will leads higher costs of harmonization.

2.5 DIFFERENT LEVELS OF ACCOUNTING HARMONIZATION

Most of professional accountancies recognize the benefits of accounting

harmonization. More than one concept of accounting harmonization, this term will be

discussed through three levels such as: international level, regional level, and

national level.

2.5.1 International level of accounting harmonization

As mentioned earlier, since 1970s, the idea of establishment IAS relating to

accounting harmonization was appeared and developed. The main setting body of

IAS is IAB. In addition, there are other several institutions joining in establishments

IAS might be listed here as: The Intergovernmental Working Group of Experts on

International Standard of Accounting and Reporting (ISAR) (en.wikipedia.org),

Organization for Economic Co-operation and Development (OEC) (www.oecd.org),

International Federation of Accountants (IFAC) (www.ifac.org).

The Intergovernmental Working Group of Experts on ISAR was established by the

UN Economic and Social Council in 1982 (www.nationsencyclopedia.com).

According to Lawrence (1996), this body made contribution on developing countries

to improve their accounting systems by enhancement accounting and financial

reporting. Then, IASB obtained information from ISAR as a consultative body in the

way to pursuing international accounting harmonization (Joshi, 1998).

Established in 1961, OECD now includes members’ 30 countries (www.biac.org).

The purpose of OECD is to promote the world trade and global activities (Angel,

Gurria – OECD secretary-general, 2010). OECD established a Committee on

International Investment and MNEs. This working group conducted some necessary

research studies to assist IASB for the purpose of accounting harmonization

(Lawrence, 1996).

IFAC was established in 1977 (Christopher Humphrey, and Anne Loft, 2007). This

institution represents for 63 accountancy bodies of 51 countries. The main concern of

IFAC is to concentrate on globalization of accounting professions relating to

accounting ethics, management accounting, and so on. Accordingly, IFAC make

some significant efforts to harmonization accounting process between its members in

align with international accounting. Therefore, this process gains advantageous

points in global economics.

2.5.2 Regional level of accounting harmonization

International accounting is very different from each religion to each religion. In other

words, each typical religion causes influences on accounting practices (Hamid, Craig

and Clarke, 1993). There are two main religions having the significant impacts on

accounting harmonization referred as: European region, and ASEAN region.

The European Union (EU) (europa.eu) was created in 1950 by a number of treaties

as: Treaty of Paris in 1951 (www.unizar.es), Treaty of Rome in 1957

(www.historiasiglo20.org), and Euratom Treaty in 1957 (www.cnduk.org). Starting

from the ideas for freedom of market, The EU founders desired to create a closer a

single market context responding to accounting harmonization in Europe (Mueller,

1997). Among several Directives of EU, two most important Directives are: the

fourth directive and the seventh directive (Ira Yuta Chairas & Wirawan E.D.

Radianto, 2001). The main content of the Fourth Directive is to deal with all

accounts of single companies and other aspects of annual accounts (Fourth

Council Directive of 25 July 1978 - 78/660/EEC). The seventh Directive deals

with all the accounting system in consolidation (Seventh Council Directive of 13

June 1983 - 83/349/EEC). Some organizations of EU joining accounting

harmonization process amongst different companies in EU involved as:

European Financial Reporting Advisory Group (EFRAG), Federation des

Experts Comptables Europeens (FEE). The important contributions of EFRAG

relating to efforts of making accounting harmonization is attention into IASB

Working Group meetings as observers, regularly meetings with IASB’s chairman,

participation in the World Standard Setters meetings organized by the IASB

(www.efrag.org). One of the most fundamental objectives of FEE is to enhance the

European Accountancy profession response to the international level of accounting

(www.fee.be).

The second region mentioned in this section is ASEAN region. ASEAN was

established on 8 August 1967 in Bangkok, Thailand (www.aseansec.org). The aim of

ASEAN is to improve economic activities in ASEAN community, and joining global

activities more effectively and efficiently. ASEAN Federation of Accountants

(AFA) was established in 1977. This is considered as the umbrella

organization including all the member countries’ national associations of

accounting bodies (Ira Yuta Chairas & Wirawan E.D. Radianto, 2001). Since

establishment, the AFA played the typical role in accounting harmonization in the

ASEAN since achievement accounting harmonization is one of the fundamental for

existence of AFA (Prem Yapa, 2004; Choi, 1979). Through AFA, ASEAN tried to

create the regional consistent accounting system based on the international

accounting, simultaneously, making appropriate changes with distinguished

regulation in each ASEAN’s member. Besides some efforts in pursuing accounting

harmonization, ASEAN dealt with some challenges. Not all members in ASEAN

have sufficient infrastructure accounting regulations and accounting institutions that

adopt with international accounting in a short time. In addition, each country in

ASEAN region is different from its awareness of the importance and the benefit of

accounting harmonization. The method of application accounting harmonization

selected in practice by ASEAN’s members is not similar, and this will cause some

obstacles (Prem Yapa, 2004).

2.5.3 National level of accounting harmonization

2.5.3.1 Some countries in ASEAN

Obviously, each country is different from its actions response to accounting

harmonization. The reason is distinguished features in each country including its

regulation, its culture, its historical background, and so on. For example, when one

typical country tries to pursue accounting harmonization, its main accountancy body

needs to select the most appropriate method of application IAS or establishment its

own accounting standards based on its policy and its accounting system. Under this

section, the researcher just summarizes some typical ASEAN countries.

We will discuss about the case of Indonesia first. Since 1957, the Indonesian Institute

of Accountants (IAI) is considered as the only organization for professional

accountants in Indonesia (www.acga-asia.org). IAI is a member of IFAC, IASB, and

AFA (Ira Yuta Chairas & Wirawan E.D. Radianto, 2001). In the Philippines, the

major institutions involved in the process of accounting harmonization are the Board

of Accountancy (BOA), the Philippine Institute of Certified Public Accountants

(PICPA), Accounting Standards Council (ASC), and Auditing Standards and

Practices Council (ASPC) (Ira Yuta Chairas & Wirawan E.D. Radianto, 2001). The

Institute of Certified Public Accountants of Singapore (ICPAS) is the national

organization of the accounting profession in Singapore (www.accountants.org.sg).

This institution shows the connections with regional and international professional

organizations (ASEAN Federation of Accountants, the Asia-Oceania Tax

Consultants' Association, and the International Federation of Accountants). Institute

of Certified Accountants and Auditors of Thailand (ICAAT) is the unique institution

for accounting profession in Thailand (www.iasplus.com). Each country mentioned

above took the necessary steps to establish its own accounting standards based on

international accounting standards with the assist of its main accounting professional

bodies. This study is developed to make the research relating to impact of accounting

harmonization on Vietnam, and how this country response to this concept. Therefore,

the detailed information about Vietnam will be discussed later.

2.5.3.2 Vietnam

In 1986, Vietnam has carried out a reform process all over aspects. To cope with

such a situation, the Vietnamese Communist Party decided to call economic is the

http://www.accountants.org.sg/

central feature (Sixth Vietnamese Communist Party, 1986). The purpose of this

reform process is to changing centrally planned economy to a socialist market-

oriented economy (Le Khuong Ninh, 2003). This process will encourage Vietnam

joining more integrating activities with outside the world. Accordingly, this process

helps Vietnam get liberating with the domestic economy, accordingly improvement

Vietnam economic. Since the reform process was carried out in Vietnam, a new

economic system has been gradually established and developed including main

characteristics: creating a multi-ownership economy, expanding enterprise

autonomy, opening and developing joint-venture business with foreign partners. All

of them lead to changes in accounting environment in Vietnam. In order to reduce

the gap and difficulties between different accounting system in global economy,

Vietnam needs to response to accounting harmonization.

The accounting applied in Vietnam (1975 – 1989) was based on the accounting

policy issued by the Ministry of Finance in 1970 (The Decision No.425 TC/CDKT,

1970). After the economic reform process carried out over 3 years, the Ministry of

Finance issued the new accounting policy in 1989 and suspended the accounting

policy issued in 1970 (The decision No.212 TC/CDKT, 1989).

The reform processes of Vietnam in 1986 defined the initial steps to change its

accounting environment. The accounting system took the first step to establish in

establishment of one consistent system applied in the whole country, and approached

to international accounting step by step. The Ministry of Finance had been aware of

the vitality of such accounting standards. This institution responded to the economy

call by development a set of Vietnamese accounting standards based on international

accounting standards. With supports from the European Union through the EURO-

TAPVIET technical assistance program, since the early 90s, Vietnam prepared for a

legal framework for the accountancy profession, including the Vietnamese

Accounting Standards (Pro. Dr. Tran Van Ta, 2001).

CHAPTER 3

RESEARCH METHODOLOGY

This chapter describes the approach of how collection data for the purpose of

meeting objective of the study (Ranjit Kumar, 2005). This part of the research is

important because the research methodology help the researcher obtain the desired

objectives. The methods and strategies used will be mentioned in this chapter, as well

as some difficulties are expressed when conduction research.

3.1 RESEARCH OBJECTIVES

Objectives of any research needs to be defined clearly before collection relevant data.

Based on the main topic of this study, some objectives are summarized as follow.

To understand the background of accounting harmonization

To discuss the important need of accounting harmonization in global

economy

To distinguish between accounting harmonization and accounting

standardization

To determine the main actor of issuance IAS

To discuss some advantages and disadvantages of accounting harmonization

To determine three different levels of accounting harmonization

To determine the impact of “reform process” in 1986 on accounting

environment in Vietnam

To determine whether Vietnamese Accounting Standards responding to

accounting harmonization

To determine the awareness of Vietnamese accountants

To discuss how companies in Vietnam response to accounting harmonization

3.2 RESEARCH METHODOLOGY

In order to support the objectives of any research, data and information collected are

very important. The data and information were collected from two sources known as

primary data and secondary data, since entire primary or secondary data is not useful

and valid for any research.

3.2.1 Primary data

Based on the desired purpose of this study, the researchers collects primary data to

support the specific objectives of this study. In addition, the results from previous

research done by others can not support for this study in the detailed information.

Primary data takes many forms including questionnaire, interviews, focus group

interviews, observations, case-studies, diaries, critical incidents, and portfolios

(brent.tvu.ac.uk).

In this study, questionnaires will be used as the most effective way to collect

information. The main advantage of using questionnaires is lower cost in comparison

with other methods. Moreover, questionnaires might help the researcher collect a lot

of relevant data supporting for this study. Another benefit of using questionnaires is

questionnaires distribution in a wide range of respondents in many ways. Each

respondent will be provided a same paper of questions. Doing that helps the

researcher can collect the data precisely and easy to comparison. The researcher

develops the questionnaire in order to obtain the objectives of this study. The small

challenge when using questionnaires referred here as the time constrain. However,

the researcher needs to mange the time for distribution surveys and receipt the

answers in the reasonable time. The data collected from questionnaires might be

good without the bias.

3.2.2 Secondary data

If the primary data provides detailed information to support and interpret the desired

objectives, the secondary data bring the general overview relating to the concept. In

addition, secondary data expresses the available infrastructure relating topic.

Accordingly, the researcher can evaluate the results and determine which objective

need to be obtained by using primary data. The secondary data includes two types of

data: internal data sources, and external data sources (www.steppingstones.ca).

Internal data sources include data collected within the company such as financial

statements, and other reports. External data sources come from outside company.

Some items belong to secondary data are magazines, books, newspapers, webpage,

and so on. The secondary data will be collected at the minimal cost, since we can

easily use library or search the internet at laboratory or at home. However, the

secondary data only help the researcher understand the framework and theories

around the topic, and is not updated information. Therefore, in order to develop the

research well, the researcher needs to combine both types of data (primary data and

secondary data).

3.3 RESEARCH INSTRUMENT

Questionnaire is the basic tool for collection relevant information in this study, since

of some benefits received from using this instrument. The questionnaire needs to be

developed with high quality because this element will cause the effects on response

rate directly, and also on the validity of data collected. The researcher tries to

develop one set of questionnaire (including nine questions) supporting the aim of

researcher through two main points. The first point is awareness of Vietnamese

accountants. The second point is how companies in Vietnam respond to accounting

harmonization. For the purpose of respondents’ convenience, the researcher wants to

obtain the relevant information in the most effective way through one set of

questionnaires (completed survey in appendix I).

In order to attract the respondents and maximize the response rate, all the questions

might be designed in simple language for easy understanding. The questions were

established as short and in easy form. Accordingly, these questions encourage the

respondents eager to fulfill all of them. The budgeted time for completeness this set

of questionnaires is about ten to fifteen minutes.

In addition, at the beginning part of the questionnaires, the title and brief explanation

are also provided to help the respondents understand the topic easily. The following

statement is always stated to keep confidentiality for the respondents:

“This survey is developed and distributed for this study’s purpose only. Any answers

or results from this survey will be strictly kept under confidence and will not be used

for any other purpose. Thanks for your cooperation.”

3.3.1Awareneess of Vietnamese accountants of accounting harmonization

In order to gather relating data relating about awareness of Vietnamese accountants

belong to accounting harmonization, the researcher collects answer form 4 questions

in questionnaires paper (question No.1. question No.2, question No.5, and question

No.8). At the top of these papers, the different job levels of accountants are also

expressed, since this information will support for the test hypothesis later. All of

these questions take easy form to fulfill in few minutes.

The questions focus on the awareness of accountants about the term of accounting

harmonization, and their degree perceptions relating this concept based on some

relevant elements. Such items are: training program for accountants to improve their

knowledge about international accounting, their ideas whether translating financial

statements into English, their extent about the benefits of accounting harmonization.

3.3.2 How companies in Vietnam respond to accounting harmonization

There are five questions supporting this idea listed here as question No. 3, question

No.4, question No.6, question No.7, and question No.9. Such questions also take

easy form, and help the respondents save time when fulfillment this set of

questionnaire. The different types of companies are also collected from information

involved for the purpose of test hypotheses.

Under this section, the questions concentrate on selected items accordance with

accounting harmonization like that: a person can work with international accounting

standards, cash flow statement, the process of translating financial statements into

English, the time of companies applied financial statements, and different company’s

accounting treatments responding to accounting harmonization.

3.4 RESEARCH HYPOTHESES

There are four test hypotheses were established under this study. The test using to

examine the hypotheses is chi-square test of a contingency table with the significant

level chosen of 5%. The purpose of chi-square test is for examination if there is

enough evidence to show the relationship between two qualitative variables, and

indicate the differences among qualitative variables (Antony Selvanathan, et.al,

2004). H0 represents null hypothesis, and H1 represents alternative hypothesis. Four

hypotheses are listed as follow.

Hypothesis 1

H0: Senior accountants are more likely to aware about the importance of accounting

harmonization than junior accountants.

H1: Junior accountants are more likely to aware about the importance of accounting

harmonization than senior accountants.

Hypothesis 2

H0: Accountants do not have similar perceptions toward the benefit of accounting

harmonization.

H1: Accountants have similar perceptions toward the benefit of accounting

harmonization

Hypothesis 3

H0: Responding to accounting harmonization, there is no relationship between types

of firm and their accounting environments.

H1: Responding to accounting harmonization, there is a relationship between types of

firm and their accounting environments.

Hypothesis 4

H0: Companies do not have similar accounting treatments responding to accounting

harmonization

H1: Companies have similar accounting treatments responding to accounting

harmonization

3.5 DATA COLLECTION

In order to collect necessary information, the researcher spent about 10 weeks to

distribute survey and receipt answers from respondents. There are 47 companies and

163 accountants completed survey including. The survey will be distributed to

companies by the researcher and collected after few minutes or later. However, not

all companies fulfill this survey because they are the large firms or they are unable to

cooperate with the researcher.

3.6 SAMPLING

Because of time constrain and limited budget, the researcher can not conduct this

survey for all companies in Vietnam. Therefore, the researcher only carries out this

survey based for the companies located in Hanoi city and it’s urban.

3.6.1 Firms

All of the companies (small, medium, and large companies) come from different

types that the researcher wants to explore. In addition, the researcher can not conduct

this survey in other regions in Vietnam. The questionnaires were distributed to

manufacturing, banking, and other type of companies.

3.6.2 Accountants

Based on these information mentioned above, the sample of accountants include

accountants who are working in the sample of companies received surveys. Those

accountants come from different levels in each typical company.

3.7 RESPONSE RATE

The response rate is at the medium level for this survey. The researcher distributes

surveys to 115 companies including 313 accountants at different level of jobs.

However, only 47 companies including 163 accountants return the survey. Hence,

the response rate for companies is 40.9% and the response rate for accountants is

52.1%.

3.8 INTERPRETATION OF DATA

The researcher interprets the primary data and secondary data by the descriptions,

comparisons and analyses. For primary data, the researcher uses the typical

interpretation for chi-square test by comparison calculated value and critical value

for the decision of reject or not reject the null hypothesis.

3.9 LIMITATION OF RESEARCH

One of the limitations in this study is time constraining. The limitation of time does

not allow the researcher to explore all the relevant items of accounting

harmonization. Another limitation might come from the presentation of questions.

The questionnaires should be structured in the easier way for understanding. The last

limitation is the limitation relating language used in surveys. Most of Vietnamese

accountants are not good at English, except some senior accountants. Therefore, the

outcomes might be not evaluated at the most convenient way.

CHAPTER 4

ANALYSIS OF DATA

This chapter is designed for interpretation of data collected from working process. As

mentioned earlier, the collected information comes from two sources including

secondary data and primary data (questionnaire) conducted and distributed by the

researcher. All the results can be described at detailed information. They can help the

readers obtain the initial purposes, as well as the test hypotheses developed by the

researcher. Based on the typical features of this topic, the researcher decides to

organize this chapter into two main parts as analysis from secondary data, and

analysis from primary data. The reason for this disposition is to help the readers get

the information logically for more effective understanding. Through the analysis of

secondary data, the readers can know about the framework of current Vietnamese

accounting environment. For example: the requirement for accounting harmonization

by effects of reform process in Vietnam; the main actors playing the important role

in making accounting harmonization in Vietnam and implementation of VAS based

on IAS; comparisons between some typical VAS and IAS. Moreover, analysis from

primary data can help the readers explore the awareness of Vietnamese accountants

responding accounting harmonization, and the application of VAS in some

companies in Vietnam.

4.1 VIETNAMESE ACCOUTING STANDARDS (VAS) RESPONDING TO

ACCOUNTING HARMONIZATION

4.1.1 General overview

In general, accounting standard is a set of principles for guidelines of recording

journal entries and preparation financial statements. Establishment of VAS based on

the similar purpose. VAS is a set of regulations and guidelines relating to

fundamental principles, contents, methods and procedures for recording accounting

transactions and disclosure of financial statements. Accordingly, users can evaluate

the financial situation and operating results of each company in the way of true and

fair view.

4.1.2 The actors

Vietnamese Accounting Standards (VAS) was issued and promulgated under the

direction of Ministry of Finance (MOF) under the Decision No. 38/2000QD-BTC

(2000). According to Article 1 belongs to this decision defined that VAS developed

on the basic of IAS and IFAC (International Federation of Accountants). Therefore,

the nature of VAS started from IAS. This described that Vietnam had the effective

effort to make its accounting standards harmonization with international accounting.

4.1.3 Evaluation the role of MOF in process of establishment VAS

Before establishment of VAS, all accounting methods were applied in Vietnam in

accordance with Vietnamese Accounting system (Francis B. Narayan. et al., 2000).

The accounting Policy Department of MOF developed 10 draft Accounting

Standards in process of finalization. Those drafts based on the Vietnamese regulation

and considered IAS as the base with minimized adjustments. Therefore, VAS reflects

the characteristic of IAS and becomes the basic tool to make Vietnamese accounting

system in accordance with international accounting. Until now, MOF issued 26 VAS

into 5 series in 2001, 2002, 2003, and 2005. The detailed information and relating

Decision of MOF will be presented in Appendix.

4.1.4 Vietnamese Accounting Standards

Under this part of chapter, the researcher listed all 26 Vietnamese Accounting

Standards relating to International Accounting Standards. All of these standards are

summarized into 5 tables as follow. Thus, the readers can have the general overview

of VAS. References of working process are retrieved from two sources as follow:

Source 1: website http://www.accountancy.com.pk/reference_ias.asp?id=16

Source 2: Tran Van Ta. Et al., 2002. Vietnamese Standards on Accounting, Finance

Publisher. [Vol 1-5]

Table 4-1: Four VAS issued and promulgated in 2001 and relating IAS

No. VAS IAS

1 VAS 02: Inventories IAS 02: Inventories

2 VAS 03: Tangible fixed assets IAS 16: Property, Plant, and Equipment

3 VAS 04: Intangible fixed assets IAS 38: Intangible assets

4 VAS 04: Revenues and other

incomes

IAS 18: Revenue

Table 4-2: Six VAS issued and promulgated in 2002 and relating IAS

No. VAS IAS

1 VAS 01: Framework Framework

2 VAS 06: Leases IAS 17: Leases

3 VAS 10: Effects of changes in

foreign exchange rates

IAS 21: Effects of changes in foreign

exchange rates

4 VAS 15: Construction contract IAS 11: Construction contract

5 VAS 16: Borrowing costs IAS 23: Borrowing costs

6 VAS 24: Cash Flow Statement IAS 07: Cash Flow Statement


No. VAS IAS

1 VAS 05: Investment Property IAS 40: Investment Property

2 VAS 07: accounting for

investment in Associates

IAS 28: accounting for investment in

Associates

3 VAS 08: Financial reporting of

interests in Joint Ventures

IAS 31: Financial reporting of interests in

Joint Ventures

4 VAS 21: Presentation of Financial

statements

IAS 01: Presentation of Financial

statements

5 VAS 25: Consolidated Financial

Statement and accounting for

investments in subsidiaries

IAS 27: Consolidated Financial Statement

and accounting for investments in

subsidiaries

6 VAS 26: Related Party Disclosure IAS 24: Related Party Disclosure


No. VAS IAS

1 VAS 17: Income taxes IAS 12: Income taxes

2 VAS 22: Disclosure in Financial

Statement of Banks and similar

Financial Institutions

IAS 30: Disclosure in Financial

Statement of Banks and similar Financial

Institutions

3 VAS 23: Events after the Balance

sheet date

IAS 10: Events after the Balance sheet

date

4 VAS 27: Interim Financial

Reporting

IAS 34: Interim Financial Reporting

5 VAS 28: Segment reporting IAS 14: Segment reporting

6 VAS 29: Changes in accounting

policies, Accounting Estimates

and errors

IAS 08: Changes in accounting policies,

Accounting Estimates and errors

Table 4-5: Four VAS issued and promulgated in 2005 and relating IAS

No. VAS IAS

1 VAS 11: Business Combination IAS 22: Business Combination

2 VAS 18: Provision, Contingent

Liabilities and Contingent Assets

IAS 37: Provision, Contingent Liabilities

and Contingent Assets

3 VAS 19: Insurance contracts

4 VAS 30: Earnings per share IAS 33: Earnings per share

4.2 COMPARISION BETWEEN SOME TYPICAL VAS AND IAS

4.2.1 VAS 02 and IAS 02

In general, VAS 02 is similar with IAS 02 since the content of VAS 02 established

based on the detailed information of IAS 02. Table 4-6 is supported for this

explanation. Some basic characteristics between two accounting standards are

summarized by the researcher to help the readers obtain their understanding easily.

Table 4-6: Comparison between VAS 02 and IAS 02

Items VAS 02 IAS 02

Name Inventories Inventories

Objective Description accounting

treatments for inventories

Defining accounting transactions

of inventories

Fundamental

principles

Inventories are determined at

cost. In the case of lower net

realizable value, inventories

are determined at net

realizable value

The costs of inventories are

recognized at the lower of cost

and net realizable value

Measurements Similar measurements based

on IAS 02

Including costs of purchase, costs

of conversion and other costs

incurred to make inventories for

use

Methods Similar methods based on IAS

02

4 methods: specific

identification; weighted average;

first-in, first-out; last-in, first-out

(Source 1: Tran Van Ta. Et al., 2002. Vietnamese Standards on Accounting, Finance

Publisher. [Vol 1](pp 139-150)

(Source 2: http://www.ilkerbulat.com/Icerik/File/IlkerStudy-IAS2-INVENTORIES.pdf)

4.2.2 VAS 24 and IAS 07

As discussed earlier, the content of VAS 24 reflects the content of IAS 07, and some

points of two accounting standards are illustrated in table 4-7. Readers can base on

some basic points for the purpose of comparison between VAS 24 and IAS 07.


Items VAS 24 IAS 07

Name Cash Flow Statement Cash Flow Statement

Objective Description principles and

procedures of preparation and

presentation of cash flow

statement

Presentation historical changes in

cash and cash equivalents

Presentation Reporting cash flows during

the financial period classified

by operating, investing, and

Including three activities:

operating, investing, and

http://www.ilkerbulat.com/Icerik/File/IlkerStudy-IAS2-INVENTORIES.pdf

financing activities financing activities

Methods for

operating

activities

Direct method and indirect

method

Direct method and indirect

method



(Source 2: http://www.iasplus.com/standard/ias07.htm)

4.2.3 VAS 25 and IAS 27

Consolidated financial statement is the new concept for Vietnamese accounting

environment in recent years. The detailed information relating to consolidated

financial statements were established under the VAS 25. This accounting standard is

set up based on the IAS 27; however VAS 25 is suitable with Vietnamese regulation.

Some key points between two accounting standards are discussed in table below.


Items VAS 25 IAS 27

Name Consolidated Financial

Statement and accounting for


Consolidated Financial Statement

and accounting for investments in

subsidiaries

Objective Description the principles and

methods of preparation and

presentation the consolidated

financial statements

Preparation and presentation the

consolidated financial statements

Providing accounting for


Key concepts Control; a subsidiary, a

parent, a group, consolidated

financial statements, minority

interest

Control; a subsidiary, a parent,

consolidated financial statements

Presentation Consolidated financial

statements should be

presented by a parent

Consolidated financial

statements should consolidate

all subsidiaries, foreign and

Consolidated financial statements

presented by a parent in which it

consolidates its investments in

subsidiaries

The consolidated accounts

including all of the parent's

domestic subsidiaries, both domestic and

foreign

Procedures Intra-group transactions

(sales, expense), and intra-

group balances relating

unrealized profit/loss should

be eliminated

Intra-group events relating to

transactions, income, and

expenses should be eliminated



(Source 2: http://www.iasplus.com/standard/ias27.htm)

4.3 ANALYSIS PRIMARY DATA

4.3.1 Classification of the respondents of different job levels

From the information of respondent, the sample size of accountants is 163

respondents. This survey was distributed for approximately 313 accountants;

therefore the response rate is 52.1%. According to table 4-9, the information of the

sample shows that the majority of the sample is junior accountants (81%), whereas

the senior accountants make up 19%.

Table 4-9 Classification of the respondents of Different job level

Different job

level

Number of

Respondents

Percentage of Total

Senior

accountants

31 19.0

Junior

accountants

132 81.0

Total 163 100.0

(Sources: Primary data)

4.3.2 Classification of the Respondents from Types of Companies

There are 115 companies that received this survey; however 47 of them were

returned this survey. Thus, the response rate is 40.9%. Table 4-10 provides the

detailed information relating to different types of companies from the sample. The

majority of the respondents (46.8%) fall within the banking category. Two remain

types of companies are 29.8% (others), and 23.4% (manufacturing).

Table 4-10 Classification of the Respondents from Types of Companies

Types of companies Number of respondents Percentage of Total

Manufacturing 11 23.4

Banking 22 46.8

Others 14 29.8

total 47 100.0


4.3.3 Test Hypotheses

There are four hypothesis tested for the purpose of testing the awareness of

Vietnamese accountants about the importance of accounting harmonization, and

testing practice of accounting treatments in some companies in Vietnam responding

to accounting harmonization.

4.4.3.1 Awareness of Vietnamese Accountants

Hypothesis 1

H0: Senior accountants are more likely to aware about the importance of accounting

harmonization than junior accountants.

H1: Junior accountants are more likely to aware about the importance of accounting

harmonization than senior accountants.

Hypothesis 1 is tested by three statements relating to the importance of accounting

harmonization. The detailed outcomes are analyzed as follow.

From table 4-11, the majority of respondents (71.1%) show that accountant

always/often heard the term of accounting harmonization. The remaining percentage

(28.9%) describe that they sometimes hear the term of accounting harmonization. It

is observed that among 71.1% respondents, 55.8% are junior accountant, and 15.3%

are senior accountants. In addition, 5.5% senior accountants and 27.6% junior

accountants always hear the term of accounting harmonization; 9.8% senior

accountants and 28.2% junior accountants often hear the term of accounting

harmonization. On the other hand, 3.7% of senior accountants and 25.2% of junior

accountants sometimes hear the term of accounting harmonization.

The calculated value (C.V.) of chi square test from table 4-11 is 3.244. The critical

value relating to degree of freedom (2) and significant level (α = 0.05) is 5.99147.

Therefore, the null hypothesis (H0) is not rejected since the calculated value is lower

than critical value. It is implicated that senior accountants are more likely to aware

about the term of accounting harmonization than junior accountants.

Table 4-11 Hear the term of “accounting harmonization”

Statements

Different job level

Total Senior Junior

Always hear the term of accounting

harmonization

9

(5.5%)

45

(27.6%)

54

(33.1%)

Often hear the term of accounting

harmonization

16

(9.8%)

46

(28.2%)

62

(38.0%)

Sometimes hear the term of accounting

harmonization

6

(3.7%)

41

(25.2%)

47

(28.9%)

Total 31

(19.0%)

132

(81.0%)

163

(100.0%)


According to table 4-12, there is 43.0% respondents think that training program for

accountants to improve their knowledge relating to international accounting is very

useful, whereas 33.1% of respondent think such program is useful. There is only

23.9% of respondents think that program is not useful. Moreover, 17.2% senior

accountants and 58.9% junior accountants consider that program is very useful or

useful. In contrast, 1.8% senior accountants and 22.1% junior accountants think that

training program is not useful.

The calculated value (C.V.) of chi square test obtained from table 4-12 is 15.302.

The critical value relating to degree of freedom (2) and significant level (α = 0.05) is

5.99147. Therefore, the null hypothesis (H0) is rejected since the calculated value is

higher than critical value. Junior accountants are more likely to aware about the

training program for accountants relating to international accounting than senior

accountants.

Table 4-12 Perception of the training program for accountant to improve their

knowledge relating to international accounting

Perception available

Different job level

Total Senior Junior

Training program is very useful 23

(14.1%)

47

(28.9%)

70

(43.0%)

Training program is useful 5

(3.1%)

49

(30.0%)

54

(33.1%)

Training program is not useful 3

(1.8%)

36

(22.1%)

39

(23.9%)

Total 31

(19.0%)

132

(81.0%)

163

(100.0%)


Table 4-13 shows that the majority of respondents (43.0%) think that translating

financial statements into English is necessary, whereas 28.8% of respondents think

that translating financial statements into English is very necessary and only 28.2%

think doing that is not necessary. The majority percentage of junior accountants

(31.4%) and senior accountants (11.6%) also fall within the necessary category.

There is only 3.1% senior accountant think that translating financial statements into

English is not necessary, whereas 25.1% junior accountants have the similar

consideration.

The calculated value (C.V.) of chi square test under table 4-13 is 5.508. The critical


Therefore, the null hypothesis (H0) is not rejected since the calculated value is less

than critical value. Senior accountants are more likely to aware about the translating

financial statements into English than junior accountants.

Table 4-13 Perception of translating financial statements into English

Perception available

Different job level

Total Senior Junior

Translating financial statements into

English is very necessary

7

(4.3%)

40

(24.5%)

47

(28.8%)


English is necessary

19

(11.6%)

51

(31.4%)

70

(43.0%)


English is not necessary

5

(3.1%)

41

(25.1%)

46

(28.2%)

Total 31

(19.0%)

132

(81.0%)

163

(100.0%)


Hypothesis 2

H0: Accountants do not have similar perceptions toward the benefit of accounting

harmonization.

H1: Accountants have similar perceptions toward the benefit of accounting

harmonization

Hypothesis 2 is tested by four factors relating to different benefits of accounting

harmonization. The detailed results are described below.

As defined in table 4-14, the majority respondents (81.5%) strongly agree or agree

with the statement that accounting harmonization is the essential tool to develop in

global economy. Within this amount, 14.7% of senior accountants strongly agree or

agree with statement mentioned above, whereas 66.8% of junior accountants have

the similar perception. In contrast, 1.8% senior accountants and 4.9% junior

accountants disagree or strongly disagree with this idea. In addition, there are still

2.5% senior accountants and 9.2% junior accountants neither agree nor disagree with

this statement.



Hence, the null hypothesis (H0) is not rejected since the calculated value is lower than

critical value. This implies that accountants do not have similar perceptions toward

accounting harmonization relating to essential tool to develop in global economy.

Table 4-14 Accounting harmonization is the essential tool to develop in global

economy

Job level

Response

Total Strongly

agree Agree Neutral Disagree

Strongly

Disagree

Senior 18

(11.0%)

6

(3.7%)

4

(2.5%)

2

(1.2%)

1

(0.6%)

31

(19.0%)

Junior 100

(61.3%)

9

(5.5%)

15

(9.2%)

5

(3.1%)

3

(1.8%)

132

(81.0%)

Total 118

(72.3%)

15

(9.2%)

19

(11.7%)

7

(4.3%)

4

(2.4%)

163

(100.0)


From table 4-15, most of the respondents (63.8%) agree that accounting

harmonization can reduce the gap amongst different accounting systems in each

country (including 10.4% of senior accountants and 53.4% of junior accountants).

There are only 3.0% of respondents strongly disagreeing with this statement;

however 8.6% of respondents disagree with this advantage of accounting

harmonization (0.6% of senior accountants and 8.0% of junior accountants). There

are still respondents who give the neutral answers (8.6%); however this percentage is

not significant.

The calculated value (C.V.) of chi square test based on the detailed information in

table 4-15 is 6.016. The critical value relating to degree of freedom (4) and

significant level (α = 0.05) is 9.48773. As we consider, the calculated value is lower

than critical value, the null hypothesis (H0) is not rejected. This infers that

accountants do not have similar perceptions that accounting harmonization can

reduce the gap amongst different accounting systems in each country.

Table 4-15 Accounting harmonization can reduce the gap amongst different

accounting systems in each country

Job level

Response

Total Strongly


Strongly

Disagree

Senior 6

(3.7%)

17

(10.4%)

5

(3.1%)

1

(0.6%)

2

(1.2%)

31

(19.0%)

Junior 20

(12.3%)

87

(53.4%)

9

(5.5%)

13

(8.0%)

3

(1.8%)

132

(81.0%)

Total 26

(16.0%)

104

(63.8%)

14

(8.6%)

14

(8.6%)

5

(3.0%)

163

(100.0)


According to table 4-16, the percentages of respondents disagree that accounting

harmonization can take easy ability to adapt than accounting standards are significant

(32.5%). In addition, the respondent neither agrees nor disagrees in this test is

(38.6%). On the other hand, the percentage of respondents who strongly agree or

agree is 20.3% (including 6.8% of senior accountants and 13.5% of junior

accountants). Moreover, the majority of respondents (41.1%) falls within disagrees

or strongly disagree category (2.4% senior accountants and 38.7% junior

accountants).

The calculated value (C.V.) of chi square test obtained from table below is 15.673.

The critical value relating to degree of freedom (4) and significant level (α = 0.05) is

9.48773. Therefore, the null hypothesis (H0) is rejected since the calculated value is

higher than critical value. It is implicated that accountants have similar perceptions

toward the advantage of accounting harmonization in comparison with accounting

standardization.

Table 4-16 Accounting harmonization can take easy ability to adapt than

accounting standardization

Job level

Response

Total Strongly


Strongly

Disagree

Senior 7

(4.3%)

4

(2.5%)

16

(9.8%)

2

(1.2%)

2

(1.2%)

31

(19.0%)

Junior 10

(6.1%)

12

(7.4%)

47

(28.8%)

51

(31.3%)

12

(7.4%)

132

(81.0%)

Total 17

(10.4%)

16

(9.9%)

63

(38.6%)

53

(32.5%)

14

(8.6%)

163

(100.0)


From table 4-17, the significant percentages of respondents (86.4%) strongly agree

and agree that accounting harmonization can encourage more global economic

activities. This group is made up from 15.3% of senior accountants and 71.1% of

junior accountants. On the other hand, the category of disagree or strongly disagree

regarding this statement is only 4.9% of respondents including 1.8% of senior

accountants and 3.1% of junior accountants. The percentage of respondents neither

agree nor disagree in this test is not significant (8.5%) made up from 1.8% senior and

6.7% junior.

The calculated value (C.V.) of chi square test getting from table 4-17 is 33.369. The

critical value relating to degree of freedom (4) and significant level (α = 0.05) is

9.48773. In comparison between the calculated value and critical value, the null

hypothesis (H0) is rejected because of higher calculated value. It is inferred that

accountants have similar perceptions toward the advantage of encouraging more

global economic activities of accounting harmonization.

Table 4-17 Accounting harmonization can encourage more global economic

activities

Job level

Response

Total Strongly


Strongly

Disagree

Senior 17

(10.4%)

8

(4.9%)

3

(1.8%)

1

(0.6%)

2

(1.2%)

31

(19.0%)

Junior 18 98 11 4 1 132

(11.0%) (60.1%) (6.7%) (2.5%) (0.6%) (81.0%)

Total 35

(21.4%)

106

(65.0%)

14

(8.5%)

5

(3.1%)

3

(1.8%)

163

(100.0)


4.4.3.2 Practice of accounting treatments in some companies in Vietnam

responding to accounting harmonization

Hypothesis 3

H0: Responding to accounting harmonization, there is no relationship between types

of firm and their accounting environments.

H1: Responding to accounting harmonization, there is a relationship between types of

firm and their accounting environments.

Hypothesis 3 is tested by four elements regarding accounting environments in firms

responding to accounting harmonization. The detailed outcomes are discussed as

follow.

As clarified by table 4-18, most of companies do not have a person can work with

international accounting standards (76.6%), where as only 23.4% of companies

tested have a person can work with international accounting standards. More detailed

information, there are 8.5% of manufacturing, 10.6% of banking, and 4.3% others

belong this category of having the people work with international accounting

standards. The remaining category is made up from 14.9% of manufacturing, 36.25

of banking, and 25.5% others.



Thus, the null hypothesis (H0) is not rejected since the calculated value is less than

critical value. We can conclude that there is no relationship between types of firm

and their accounting environments relating to having a person can work with

international accounting standards responding to accounting harmonization.

Table 4-18 Have a person can work with international accounting standards

Types of companies Yes No Total

Manufacturing 4

(8.5%)

7

(14.9%)

11

(23.4%)

Banking 5

(10.6%)

17

(36.2%)

22

(46.8%)

Others 2

(4.3%)

12

(25.5%)

14

(29.8%)

Total 11

(23.4%)

36

(76.6%)

47

(100.0%)


According to table 4-19, preparation cash flow statement per annual plays an

important role in each firm because of majority respondents (87.3%) giving “yes”

answer. Belong this category; there are 17.1% manufacturing, 44.7% banking, and

25.5% others. However, there is still 12.7% of respondents tested do not have the

similar consideration (including 6.4% manufacturing, 2.1% banning, and 4.2%

others).



Hence, the null hypothesis (H0) is not rejected since the calculated value is lower than

critical value. The conclusion might be developed that there is no relationship

between types of firm and their accounting environments regarding to factor of

preparation of cash flow statement per annual responding to accounting

harmonization.

Table 4-19 Preparation cash flow statement per annual


Manufacturing 8

(17.1%)

3

(6.4%)

11

(23.4%)

Banking 21

(44.7%)

1

(2.1%)

22

(46.8%)

Others 12

(25.5%)

2

(4.2%)

14

(29.8%)

Total 41

(87.3%)

6

(12.7%)

47

(100.0%)


As showed by table 4-20, the significant percentages of respondents (70.1%) do not

have financial statements translated into English. This group is made up from 19.1%

manufacturing, 34.0% banking, and 17% others. On the other hand, 29.9% of

respondents show that they have financial statements translated into English.

According to this group, banking and others give the highest percentage of

respondent (12.8% for each), the remaining proportion of manufacturing is only

4.3%.

The calculated value (C.V.) of chi square test obtained from table 4-20 is 1.921. The


5.99147. By comparison between the calculated value and critical value, the null

hypothesis (H0) is not rejected because of lower calculated value. Hence, there is no

relationship between types of firm and their accounting environments regarding to

factor of preparation of having financial statements translated into English

responding to accounting harmonization.

Table 4-20 Having financial statements translated into English


Manufacturing 2

(4.3%)

9

(19.1%)

11

(23.4%)

Banking 6

(12.8%)

16

(34.0%)

22

(46.8%)

Others 6

(12.8%)

8

(17%)

14

(29.8%)

Total 14

(29.9%)

33

(70.1%)

47

(100.0%)


From table 4-21, we analyze the time of companies for application VAS in

preparation financial statements. Over half of respondents (55.3%) giving the answer

depend on which VAS applied including highest proportion belong banking of

25.5%. There is only 12.8% of respondents applied VAS under 5 years. In contrast,

31.9% of respondents applied VAS over 5 years made up from 8.5% of

manufacturing, 14.9% banking, and 8.5% others.

The calculated value (C.V.) of chi square test getting from table 4-21 is 0.2817. The


9.48773. Thus, the null hypothesis (H0) is not rejected since the calculated value is

lower than critical value. The conclusion is there is no relationship between types of

firm and their accounting environments regarding to element of duration companies

applied VAS in preparation financial statements.

Table 4-21 Duration companies have applied VAS in preparation financial

statements

Types of

companies

Times

Total Over 5 years Under 5 years Depend on

which VAS

applied

Manufacturing 4

(8.5%)

1

(2.1%)

6

(12.8%)

11

(23.4%)

Banking 7

(14.9%)

3

(6.4%)

12

(25.5%)

22

(46.8%)

Others 4

(8.5%)

2

(4.2%)

8

(17.0%)

14

(29.8%)

Total 15

(31.9%)

6

(12.8%)

26

(55.3%)

47

(100.0%)


Hypothesis 4

H0: Companies do not have similar accounting treatments responding to accounting

harmonization

H1: Companies have similar accounting treatments responding to accounting

harmonization

Hypothesis 4 is tested based on four different accounting treatments in each firm

relating to accounting harmonization. The detailed results are considered below.

As we can see on table 4-22, most of proportions of respondents (91.6%) think that a

preparation financial statement is important and fairly important. Belong to this

group, highest percentage of respondents (44.7%) falls within banking, whereas the

percentage of manufacturing is 19.2%, and the percentage of others is 27.7%. The

proportion of companies think that preparation of financial statements is not

important only accounted of 8.4% including 4.2% of manufacturing, the same

percentage (2.1%) for banking and others.

The calculated value (C.V.) of chi square test based on detailed information in table

4-22 is 10.07. The critical value relating to degree of freedom (4) and significant

level (α = 0.05) is 9.48773. Therefore, the null hypothesis (H0) is rejected because the

calculated value is higher than critical value. The implication is considered that

companies have similar accounting treatments regarding element of preparation

financial statements responding to accounting harmonization.

Table 4-22 Preparation financial statements

Types of companies Important Fairly

important

Not

important

Total

Manufacturing 6

(12.8%)

3

(6.4%)

2

(4.2%)

11

(23.4%)

Banking 15

(31.9%)

6

(12.8%)

1

(2.1%)

22

(46.8%)

Others 3

(6.4%)

10

(21.3%)

1

(2.1%)

14

(29.8%)

Total 24

(51.1%)

19

(40.5%)

4

(8.4%)

47

(100.0%)


As defined by table 4-23, most of companies (76.7%) consider application of VAS in

accounting system is important. This category includes 36.2% banking, 21.3%

others, and 19.2% manufacturing. In addition, the respondents giving the answer

regard this element is fairly important accounted of 14.9% with highest percentage of

6.4% for banking or others, whereas the remaining percentage of 2.1% is belong

manufacturing. On the other hand, only 8.4% of respondents consider that

application of VAS in accounting system is not important; however this proportion is

not significant.

The calculated value (C.V.) of chi square test based from table 4-23 is 0.8012. The


9.48773. The null hypothesis (H0) is not rejected because of lower calculated value.

Thus, companies do not have similar accounting treatments relating to element of

application of VAS in accounting system responding to accounting harmonization.

Table 4-23 Application of VAS in accounting system


important

Not

important

Total

Manufacturing 9

(19.2%)

1

(2.1%)

1

(2.1%)

11

(23.4%)

Banking 17

(36.2%)

3

(6.4%)

2

(4.2%)

22

(46.8%)

Others 10

(21.3%)

3

(6.4%)

1

(2.1%)

14

(29.8%)

Total 36

(76.7%)

7

(14.9%)

4

(8.4%)

47

(100.0%)


As defined by table 4-24, most of companies (80.9%) consider that recruitment

employees can prepare and understand the financial statements in English are fairly

important and important. Based on this amount, 17% of respondents belong to

manufacturing, 44.7% of respondents belong to banking, and 19.2% of respondents

belong to others. On the other hand, there is only 19.1% of companies consider this

factor is not important. This proportion is made up from 6.4% manufacturing, 2.1%

banking, and 10.6% others.


value relating to degree of freedom (4) and significant level (α = 0.05) is 9.48773. By

comparison between calculated value and critical value, we can conclude that the

null hypothesis (H0) is not rejected because of lower calculated value. This is implied

that companies do not have similar accounting treatments relating to factor of

recruitment employees can prepare and understand the financial statements in

English.

Table 4-24 Recruitment employees can prepare and understand the financial

statements in English


important

Not

important

Total

Manufacturing 3

(6.4%)

5

(10.6%)

3

(6.4%)

11

(23.4%)

Banking 7

(14.9%)

14

(29.8%)

1

(2.1%)

22

(46.8%)

Others 1

(2.1%)

8

(17.1%)

5

(10.6%)

14

(29.8%)

Total 11

(23.4%)

27

(57.5%)

9

(19.1%)

47

(100.0%)


Based on detailed information in table 4-25, the majority of respondents (36.2%)

think that translating financial statements into English are important including 27.7%

banking, 6.4% manufacturing, and 2.1% others. The numbers of respondents think

that this factor is fairly important accounted 29.8% with the highest percentage

(12.8%) belongs to other types of company. In contrast, the proportion of

respondents who think that translating financial statements into English not

important accounted 34.0% (14.9% of other types of company, 10.6% of

manufacturing, and 8.5% of banking).



Therefore, the null hypothesis (H0) is rejected since the calculated value is higher

than critical value. The implication can be developed as companies have similar

accounting treatments regarding element of translating financial statements into

English

Table 4-25 Translating financial statements into English


important

Not

important

Total

Manufacturing 3

(6.4%)

3

(6.4%)

5

(10.6%)

11

(23.4%)

Banking 13

(27.7%)

5

(10.6%)

4

(8.5%)

22

(46.8%)

Others 1

(2.1%)

6

(12.8%)

7

(14.9%)

14

(29.8%)

Total 17

(36.2%)

14

(29.8%)

16

(34.0%)

47

(100.0%)


CHAPTER 5

CONCLUSION

This chapter concentrates on discussion of the results collected in the previous

chapter. As far as concern, recommendation and scope for future research also

clarified.

5.1 COMPARISION BETWEEN IAS AND VAS

As discussed earlier, VAS is developed on the basic of IAS and IFAC. Until now,

MOF established and amended 26 VAS. These standards reflect fundamental

characteristics of IAS; however, they are amended under the Vietnamese policy and

regulation. Therefore, VAS is considered as the most persuasive proof of accounting

harmonization process in Vietnam. Through comparisons three selected VAS

(No.02, No.24, and No.25) and IAS (No.02, No.07, and No.27); we can conclude

that the nature of VAS is IAS. Vietnam now has the solid infrastructure of

accounting environment to pursue global activities; especially Vietnam is the

member of regional organization, and international organization. Accordingly, the

researcher desires to discuss awareness of Vietnamese accountants relating to

accounting harmonization, as well as practical applications accounting treatments in

some companies in Vietnam. The reason for doing this study might be logical. As we

know, VAS is only the result of efforts by MOF for harmonization process in paper.

More detailed, the researcher tries to evaluate the practical applications, rather than

looking at theoretical paper. The purpose of this study is to explore harmonization

process in practice, and provide the precaution for future research in relating topic.

5.2 AWARNESS OF VIETNAMESE ACCOUNTANTS RELATING TO

ACCOUNTING HARMONIZATION

The exploration of Vietnamese accountants’ awareness about accounting

harmonization is developed through two test hypotheses. Hypothesis 1 is tested for

awareness about the importance of harmonization of senior accountants and junior

accountants. This hypothesis is tested by three questions. Based on results, most

senior accountants are more likely to aware about the importance of accounting

harmonization than junior accountants. More specific, they often hear the term of

accounting harmonization and think that translating financial statements into English

is necessary than junior accountants. This is because senior accountants have more

working experience than junior accountants. In addition, they employ more

opportunities to approach international accounting, and they realize that financial

statements in English can attract more foreign investors than others, and increase

company’s competitive abilities in global environment. However, most of junior

accountants think that training program for accountant to improve their knowledge

relating to international accounting is useful. This is because they just start their

career in accounting area in few years, thus they want to improve their knowledge

toward international accounting.

Hypothesis 2 is tested for different perceptions of accountants toward the benefit of

accounting harmonization. This hypothesis is tested through four relevant factors in

question No.8. Both of senior and junior accountants have similar perceptions toward

benefit of accounting harmonization referred as accounting harmonization can take

easy ability to adapt than accounting standardization, and accounting harmonization

can encourage more global economic activities. This is because each country is

distinguished by its culture and regulation. Two factors will cause the significant

impacts on applied accounting system in each country. Accounting harmonization

can eliminate this problem because it allows each country to make appropriate

amendments. Therefore, most of countries prefer accounting harmonization than

accounting standardization. On the other hand, accountants do not have similar

perceptions toward benefit of accounting harmonization referred as accounting

harmonization is the essential tool to develop in global economy, and accounting

harmonization can reduce the gap amongst different accounting systems in each

country. They might think that benefit of accounting harmonization at the different

levels. For example, accounting harmonization can reduce the gap between different

accounting systems; nevertheless the extent of gap is different from each country.

Therefore, accountants’ perceptions relating this element are logically different.

Besides that, most of people think of the importance of accounting harmonization.

However, not of all agree that it is the essential tool to develop in global economy.

The reason might be remaining elements also being essential tool to develop in

global economy.

5.3 ACCOUNTING TREATMENTS IN SOME COMPANIES IN VIETNAM

Practice of accounting treatments in some companies in Vietnam responding to

accounting harmonization is tested through 2 hypotheses. One is for accounting

environment, and the other one is for accounting treatments. Under four relevant

factors of accounting environment, we can conclude that there is no relationship

between types of firm and their accounting environment. Whatever those companies

come from different types and different sizes, they employ a person can work with

international accounting standards; they also have the cash flow statement per

annual. In addition, those companies have financial statements translated into

English, and apply VAS in preparation financial statements. Most of different

companies realize the in-depth impacts of global economy, and think that accounting

harmonization is one of the most powerful tools to eliminate obstacles. Therefore,

most of them have the employees can work with international accounting standards.

This is because the companies can expand their operation oversea. For the similar

purpose mentioned above, most of managers of companies tested have the financial

statements in English. Obviously, foreign investors only invest into companies

whether they can understand their financial situations. That’s why the company can

take advantage if they using both of financial statements in Vietnamese and in

English. Besides that, English is the official language in over the world. Thus,

companies have financial statements in English are favorable by investors than

others. Another relevant element is cash flow. This term is the new concept of

Vietnam. Through cash flow statements, financial users can know the liquidity of

each company. This will support more in decision making by investors. Hence, most

of companies prepare cash flow statements per annual. The researcher uses VAS for

testing hypothesis because VAS reflects IAS/IFRS. The purpose of test hypothesis is

to examine how long companies applied VAS in their accounting system, and to

examine whether the different types of companies causing any effects on this

element. The conclusion is drawn that there is no relationship between types of firms

and their application of VAS. This result might be important because this will

support for the future plan if Vietnam want to define strategies to approach

international accounting standards near by near.

Hypothesis 4 is tested for accounting treatments used by companies in Vietnam.

Companies have the similar accounting treatments responding to accounting

harmonization referred to preparation financial statements, and translating financial

statements into English. As we known, financial statements are considers as

framework of each companies. Investors base on these documents to understand the

company’s financial situation. In addition, most of managers recognize that attracting

foreign investors is very necessary in global economy. Therefore, most of them focus

on financial statements and translating these documents into English. On the other

hand, companies do not have similar accounting treatments responding to accounting

harmonization referred to application of VAS in accounting system, and recruitment

employees can prepare and understand the financial statements in English. The

different treatments might come from different types of company. For example, the

large companies (multinational companies) prefer to recruit a person can work with

international accounting well, and good at English because its extent operation.

Application VAS is very important; however the extent of perception is different

from each company to company.

5.4 RECOMMENDATION

By comparisons between some typical VAS and IAS, we can conclude that Vietnam

has a good infrastructure for accounting harmonization process. This is considered as

the initial base for researcher to conduct this study. More detailed, the researcher

desires to evaluate actual results than looking at the paper. Evaluations for supporting

this issue are discussed through two elements referred as awareness of Vietnamese

accountants, and different application of accounting policy in some firms in Vietnam.

The researcher hopes that this study will provide some useful guiltiness to reduce the

gap between Vietnamese accounting and international accounting. Based on the

results and discussions, the researcher tries to make some recommendations. Most

senior accountants are more likely to aware about the importance of accounting

harmonization than junior accountants. Therefore, companies should organize some

training programs to improve junior accountants’ knowledge. Companies also can

give their employees opportunities to continue study oversea with the commitment

working for companies after finishing their courses. Vietnamese accountants are

different from their perceptions toward benefit of accounting harmonization;

however they recognize that companies can take strong points when they approach

accounting harmonization. In addition, there is no relationship between types of

firms and their accounting environments. However, they are not similar in

accounting treatments responding to accounting harmonization. The recommendation

is drawn here as each company should base on its perception toward its mission and

operation should create the most appropriate strategy for its applied financial system.

5.5 SCOPE FOR FUTURE RESEARCH

Based on results collected from this study, some scope for future research will be

mentioned below:

To explore more factors relating to accounting harmonization such as: public

interest of accounting, ethics in accounting, effect of gender in accounting,

and effect of diversity on accounting.

To analyze more regulation and culture in Vietnam to develop accounting

harmonization process more efficiently.

To provide guidelines for accounting policy and accounting application in

each firm to response accounting harmonization effectively.

To discuss about more MOF’s role in its efforts of developing harmonization

process in Vietnam.

To discuss the advantages and disadvantages of accounting harmonization in

Vietnam.

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Appendix I

The survey topic is relating to “Impact of globalization on international accounting

harmonization: a case of Vietnam” explain the request of accounting harmonization

in global economy. The objective of this questionnaire is to explore the awareness of

Vietnamese accountants about the importance of accounting harmonization, and the

applied accounting system in some companies in Vietnam responding to accounting

harmonization.

This survey is developed and distributed for this study‟s purpose only. Any answers

or results from this survey will be strictly kept under confidence and will not be used

for any other purpose. Thanks for your cooperation.

Information of the Respondent

The job Level: senior accountant junior accountant

Type of company: Manufacturing Banking Others

1. Have you ever heard the term of “accounting harmonization”? (H1)

Always Often

Sometimes

2. What do you think of your company have a regular training program for

accountant to improve their knowledge relating to international accounting?

(H1)

Very useful Useful

Not useful

3. Does your company have a person can work with international accounting

standards? (H2)

Yes No

4. Does your company prepare cash flow statement per annual? (H2)

Yes No

5. What do you think of translating financial statements into English? (H1)

Very necessary Necessary

Not necessary

6. Does your company translate financial statements into English? (H2)

Yes No

7. How long has company applied VAS in preparation financial statements?

(H2)

under 5 years

over 5 years

depend on which VAS applied

8. To what extent, do you agree with the following statements? (H3)

Strongly

disagree

Disagree Neutral Agree Strongly

agree

Accounting

harmonization is the

essential tool to develop

in global economy

Accounting

harmonization can reduce

the gap amongst different

accounting systems in

each country

Accounting

harmonization can take

easy ability to adapt than

accounting

standardization

Accounting

harmonization can

encourage more global

economic activities

9. What is your company’s accounting treatment responding accounting

harmonization? (H4)

Very

important

Important Fairly

important

Not very

important

Not

important

Preparing

financial

statements

Application of

VAS in

accounting

system

Recruitment

employees can

prepare and

understand the

financial

statements in

English

Translating

financial

statements into

English

THANK YOU

Appendix II

MEMBERS OF THE STEERING COMMITTEE ON DEVELOPMENT OF

THE VIETNAMESE STANDARDS ON ACCOUNTING

(Per the Minister of Finance Decision No.19/1999/QD-BTC of February 12, 1999)

The Vietnamese Accounting Standards Steering Committee (VASC) is chaired

by Mr. Tran Van Ta – Vice Minister of Finance – and membered by the following:

1. Mr. Bui Van Mai - Director of MOF Department of Accounting

Policies – Vice Chairman

2. Mr. Pham Dinh Soan - Deputy Director of General Department of State

Capital and Assets Management (Currently,

Director of MOF Department of Enterprise Finance)

– Vice Chairman

3. Mr. Nguyen Van Dau - Deputy Director of General Department of Taxation

– Vice Chairman (retired)

4. Mr. Ha Duc Tru - Deputy Director of State Treasury – Vice Chairman

5. Mr. Dang Van Thanh - Director of MOF Department of Finance Policy

(Currently, Director of State Treasury) – Vice

Chairman

6. Mr. Phan Dinh Tran - Director of General Department of Statistics’

Department of Regime Methodologies – Member

7. Mr. Dao Y - Deputy Director of SBV Department of Finance

and Accounting – Member

8. Mr. Hoang Trung Truc - Deputy Director of SSC Department of Finance and

Accounting – Member

9. Mrs. Phung Thi Doan - Deputy Director of MOF Department of

Accounting Policies – Member

10. Mr. Vuong Dinh Hue - Dean of Accountancy Department of Hanoi

University of Finance and Accountancy (Currently,

Deputy General Auditor of State Audit

Organization) – Member

11. Mr. Vu Huy Cam - Member of VAA Standing Committee – Member

12. Mr. Nguyen Quang Quynh - Dean of Accountancy Department of National

Economics University – Member

13. Mr. Pham Xuan Luc - Devision Manager of MOF Department of

Accounting Policy – VASC Secretary

MEMBERS OF VIETNAMESE ACCOUNTING STANDARDS SETTING

GROUP (VASG)

(Per the Minister of Finance Decision No.44/1999/QD-BTC of April 27, 1999)

The Vietnamese Accounting Standards Setting Group (VASG) is headed by

Mr. Bui Van Mai – Director of MOF Department of Accounting Policies and

membered by the following:

1. Mr. Dang Quoc Tuyen - Division Manager of General Department of Taxation

2. Mr. Lai Van Xuan - Devision II of General Department of State Capital

and Assets Management (Currently, MOF

Department of Enterprise Finance)

3. Mr. Pham Ngoc Dinh - Accounting Department Chief of State Treasury

4. Mr. Do Manh Han - Research Manager of State Audit Center of

Research and Training

5. Mrs. Nguyen Thi Viet Anh - MOF Department of Finance Policy

6. Ms. Nguyen Thi Quy - MOF Department of Banking and Credit Finance

7. Mr. Phan Van Hien - FDI Division Manager of MOF External Finance

Department (Currently, Department’s Deputy

Director)

8. Mr. Dang Chi Dung - VACO International Service Division Manager

(Currently, Deputy Director of VACO)

9. Mrs. Vu Thi Tho - Deputy Director of AFC Saigon (Currently,

Company Director)

10. Mrs. Tran Ho Lan - Division Manager of AASC

11. Mr. Dinh Van Hiep - Audit senior – Enterprise Audit Division of IASC

12. Mr. Nguyen Minh Tri - Audit Division Manager of A & C (Currently,

Deputy Director)

13. Mr. Nguyen Chi Trung - Arthur Andersen Vietnam

14. Mr. Mac Quang Huy - Audit senior of KPMG

15. Mrs. Tran Phuong Loan - Audit senior of PwC Vietnam

16. Mr. Hoang Duc Hung - Audit senior of Ernst & Young Vietnam

17. Mr. Hoang Van Ninh - Vice chairman of EVN Finance and Accounting

Division

18. Mr. Nguyen Phu Chuong - Chairman of Oil and Gas Corporation Finance and

Accouting Division (Currently, Corporation

inspectoriat expert)

19. Mr. Mai Huu Tho - Chairman of Vietnam Airlines Finance and

Accounting Division

20. Mr. Le Van Ton - Chief Accountant of Song Da Construction

Coporation

21. Mr. Vuong Dinh Hue - Dean of Accountancy Department of Hanoi


Deputy General Auditor of State Audit

Organization)

22. Mr. Nguyen Dinh Do - Chief Accounting Lecture – Hanoi University of

Finance and Accountancy (Currently, Dean of

Accountancy Department of Academy of Finance)

23. Mr. Doan Xuan Tien - Dean of Accountancy Department of Hanoi


Dean of Training Department of Academy of

Finance)

24. Mr. Dang Thai Hung - Deputy Director of MOF Accounting Policy

Department

25. Mr. Pham Xuan Luc - Devision Manager of MOF Accounting Policy

Department

26. Mr. Ngo Duc Chin - Audit Devision Manager (Currently, General

Devision Manager) of MOF Accounting Policy

Department

27. Mr. Dao Thai Hoa - State Accounting Policy Division Manager of MOF

Accounting Policy Department

28. Mrs. Le Thi Hoa - FDI Accouting Policy Division Manager of MOF


29. Mrs. Ha Thi Tuong Vy - State Accouting Policy Division Manager of MOF

Accounting Policy Department (Currently, Banking

and Credit Accouting Policy Devision Manager)

30. Mrs. Ha Thi Ngoc Ha - Audit Policy Division Manager of MOF


31. Mrs. Nguyen Phuong Lien - MOF Accounting Policy Department

32. Mr. Trinh Duc Vinh - MOF Accounting Policy Department

33. Mr. Nghiem Manh Hung - MOF Accounting Policy Department

34. Mrs. Pham Minh Hang - MOF Accounting Policy Department

35. Mr. Tran Dinh Cuong - Manager of Ernst & Young Vietnam

36. Mrs. Vu Thi Hong Loan - Vice chairman of General Policy Division of MOF

Department of Enterprise Finance

37. Mrs. Phan Hong Phuc - Enterprise Policy Division Manager of MOF

Department of Finance Policy

38. Mr. Nguyen Viet Loi - Dean of Accountancy Department of Academy of

Finance

39. Mr. Ngo Van Thinh - MOF Accounting Policy Department

40. Ms. Le Tuyet Nhung - MOF Accounting Policy Department

41. Mr. Vu Duc Chinh - MOF Accounting Policy Department

42. Mrs. Nguyen Thanh Nga - MOF Accounting Policy Department

43. Mrs. Le Bich Lan - Division Manager of MOF Accounting Policy

Department

44. Mrs. Tran Thi Tuyet Lan - MOF Accounting Policy Department

MINISTRY OF FINANCE

---*---

No. 38/QD-BTC

SOCIALIST REPUBLIC OF VIETNAM

Independence – Freedom – Happiness

------------------------------------------------

Hanoi, March 14, 2000

DECISION OF THE MINISTER OF FINANCE

On the issuance and publication of Vietnamese

Accounting Standards and Auditing Standards

THE MINISTER OF FINANCE

- Pursuant to the Ordinance on Accounting and Statistics dated May 10, 1988;

- Pursuant to Decree No 178/CP dated October 28, 1994 of the Government

on the assignment, authority and organization of the Ministry of Finance;

- In response to the policy of economic reforms towards a market based

mechanism and the integration process;

- Upon the proposal of the Director of Accounting Policy Department,

Director of External Department and Chief of the Office of the Ministry of Finance,

DECIDES:

Article 1: To issue and promulgate Accounting Standards and Auditing

Standards of Vietnam applicable to business and manufacturing enterprises and audit

firms in Vietnam. These Accounting and Auditing Standards shall be developed on

the basis of the following:

- International Accounting Standards, International Standards on Auditing

codified by the International Federation of Accountants (IFAC);

- In harmony with the development of Vietnam’s market based economy and

in response to the legal requirements and Vietnamese accountancy experience,

proficiency and practice;

- The Accounting and Auditing Standards of Vietnam shall be simple. Clear

and in line with the regulations on the making of legal documents in Vietnam.

Article 2: The Steering Committee on Development of Vietnamese Auditing

Standards on set up under Decision 1503/1998/QD-BTC dated October 30, 1998 and

Steering Committee for Development of Vietnamese Accounting Standards under

Decision 19/1999/QD-BTC dated February 12, 1999 of the Minister of Finance are

required to speed up implementation of their scheduled tasks to ensure all intended

Vietnamese accounting standards and auditing standards to have been issued and

published during 2003.

Article 3: A standing unit for the Steering Committee and preparation

groups/teams, the Accounting Policy Department shall be responsible for the

organization of developing, gathering comments on, and finalizing the standards for

submission to the Ministry for issuance. These units, affiliated to or controlled by the

Ministry of Finance, namely, the General Department of Taxation, State Budget

Department, Financial Policy Department, Enterprise Finance Department,

Investment Department, State Treasury and Hanoi University of Finance and

Accountancy and others concerned are to assign expertise personnel to relevant

monitoring boards and preparation groups/teams; coordinate with, provide data,

information to, and facilitate the fulfillment of assignments assumed by, the Steering

Committee and preparation groups/teams.

Article 4: This Decision shall come into effects from the date of signing. The

Chairman of The Steering Committee for Development of Vietnamese Accounting

Standards, Chairman of the Steering Committee for Development of Vietnamese

Standards on Auditing, Director of Accounting Policy Department and Heads of

relevant units affiliated to, or controlled by, the Ministry of Finance shall be

responsible for implementing this Decision.

FOR THE MINISTER OF FINANCE

VICE MINISTER

Tran Van Ta (Signed and sealed)

MINISTRY OF FINANCE

---*---

No. 489/QD-BTC



------------------------------------------------

Hanoi, May 10, 2000

DECISION

OF THE CHAIRMAN OF STEERING COMMITTEE

ON DEVELOPMENT OF VIETNAMESE ACCOUNTING STANDARDS

AND AUDITING STANDARDS

On the Issuance of Procedures of Developing, Issuing,

and Publishing Vietnamese Accounting Standards and Auditing Standards

THE CHAIRMAN OF THE COMMITTEE

- Pursuant to Accounting and Statistics Ordinance issued in conjunction with

Order No.06/LCT-HDNN dated May 20, 1998 of the Chairman of State Council and

Decree 07/CP of January 29, 1994 of the Government issuing Regulations on

Independent Auditing in the National Economy;

- Pursuant to Decision 1563/1998/QD-BTC dated October 20, 1998 of the

Minister of Finance on the establishment of the Steering Committee on Development

of Vietnamese Standards on Auditing; and

- Pursuant to Decision 19/1999/QD-BTC dated February 12, 1999 of the

Minister of Finance on the establishment of the Steering Committee on Development

of Vietnamese Accounting Standards;

For the consistency and expediency in studying developing, issuing, and

publishing the Vietnamese accounting standards and auditing standards;

DECIDES:

Article 1: To issue in conjunction with this Decision “Procedures of

Developing, Issuing, and Publishing Vietnamese Accounting Standards and Auditing

Standards”.

Article 2: This decision shall take effect from the signing date.

Article 3: The members of the Steering Committee on Development of

Vietnamese Accounting Standards and Auditing Standards and those of respective

preparation groups/teams shall be responsible for the implementation of this Decision.


VICE MINISTER


Chairman of the Steering Committee on Development

of Vietnamese Accounting Standards and Steering

Committee of Vietnamese Standards on Auditing

MINISTRY OF FINANCE

---*---



------------------------------------------------

PROCEDURES OF DEVELOPING, ISSUING, AND PUBLISHING

VIETNAMESE ACCOUNTING STANDARDS AND AUDITING

STANDARDS

(Issued in conjunction with Decision 489/QD-BTC dated May 10, 2000

of the Chairman of the Steering Committee on Development

of Vietnamese Accounting and Auditing Standards)

1. Orders of the Work

The developing and issuance of accounting standards and auditing standards

shall follow the Law on issuance of legal documents and these procedures, covering

the following steps:

1.1. Building up general principles on scope and subject of application, basis

and principles of compiling, listing, and grouping the standards;

1.2. Compiling standard by standard, holding group/team discussions and

seeking comments from experts, units of the Ministry of Finance and relevant

ministries and agencies, members of the Steering Committee, and the National

Council on Accountancy;

1.3. Upon receipt of comments and recommendations from the National

Council on Accountancy, completing the standards for submission to the Minister of

Finance for issuance and publication.

2. Document Layout

Each of the accounting standards and auditing standards shall be titled,

numbered and structured in parts, sections and paragraphs, with subtitles assigned to

parts and sections, and numbers to paragraphs. Each standard consists of two parts:

General and Content of the Standards.

The “General” covers the purpose, fundamental contents, scope of

application, and definition of terms used in the standard.

Definition in each standard deals only with directly related terms that are

repeatedly used therein and should result in consistent interpretations. No definition

or explanation is provided concerning terms defined in other standards.

Items of the fundamental content shall be separately paragraphed and

consecutively numbered.

3. Established Numeration and Symbolism of the Standards

- Standards shall be arranged in the manner in which the standards on general

considerations are followed by those on specific ones and each standard is presented

in the order of accounting and auditing procedures;

- The accounting standards shall be numbered with two (02) digits, and

auditing standards three (03) digits;

- Symbols (abbreviation):

+ Vietnamese Accounting Standards: CKV in Vietnamese and VAS in

English

+ Vietnamese Standards on Auditing: CKIV in Vietnamese and VSA in

English

4. Areas and Procedures for View Exchange and Consultation

- Holding direct discussions within each preparation group/team to initially

prepared and gradually complete the exposure draft;

- Organizing open discussions for comment thereon from accountancy and

finance experts from relevant State management agencies, universities and colleges,

enterprises, audit firms, and accountancy bodies;

- Gathering and summarizing comments and recommendations from such

discussions for supplementation, revision and completion of each standard as initially

prepared;

- Distributing the exposure draft to departments and general departments

affiliated to and controlled by the Ministry of Finance for comments;

- Forwarding the document to relevant ministries and agencies, the Vietnam

Chamber of Commerce and Industry, and the Vietnam Accounting Association for

official comment;

- Submitting the document to the Steering Committee for approval;

- Submitting the document to the National Council on Accountancy for

advice; and

- Finalizing the standard for submission to the Minister of Finance for

issuance and publication.

5. Revision and supplementation

During the application of these accounting standards and auditing standards,

should revision of, or supplementation to, one or a number of the standards be

needed, such revision and supplementation shall follow this set of procedures.

6. Responsibilities of the Steering Committee Members

- Participate in initially and figuring the study of general principles with

respect to the scope and subject of application; basis and rule for preparing

accounting and auditing standards and for making a list thereof;

- Directly monitor and participate in discussions for particular standards to be

held with each group/team;

- Contribute comments for revision to completion of the exposure draft;

- Disseminate and realize the application of accounting standards and

auditing standards which have come out.

Each of the Steering Committee members shall carry out assignments as

delegated by the Committee Chairman.

7. Responsibilities of Standard Preparation Groups/teams

- Study for and prepare Vietnamese accounting and auditing standards as

initially planned by the Steering Committee;

- Hold discussions within the group/team of the draft standards;

- Refer to the Steering Committee problems, queries met with during the

development process for direction;

- Seek to obtain expertise comments and recommendations on each exposure

draft; finalize the draft standard for submission by the Steering Committee to the

Ministry of Finance for issuance.

Groups/teams and individuals shall carry out assignments as delegated by the

Committee Chairman.

This set of procedures shall be consistently followed during the study,

preparation, issuance and publication of the Vietnamese accounting standards and

auditing standards.


VICE MINISTER


Chairman of the Steering Committee on Development

of Vietnamese Accounting Standards and Steering

Committee of Vietnamese Standards on Auditing

MINISTRY OF FINANCE

----*----

SOSIALIST REPUBLIC OF VIETNAM

Independence – Freedom - Happiness

No. 149/2001/QD-BTC -------------------------------------------

Hanoi, December 31, 2001

DECISION OF THE MINISTRY OF FINANCE

On the Issuance and Promulgation of

Four (04) Vietnamese Accounting Standards (Series 1)

MINISTER OF FINANCE

- Pursuant to the Accounting and Statistics Ordinance promulgated at Order

No. 06-LCT/HDNN dated May 20, 1988 of the State Council and the Regulation on

state Accounting Organization issued in conjunction with Decree No. 25-HDBT

dated March 18, 1989 of the Council of Ministers (currently the Government);

- Pursuant to Governmental Decree No. 15/CP of March 2, 1993 providing for

the assignment, authority and responsibility for State management of the ministries

and ministry-level agencies;

- Pursuant to Governmental Decree No. 178/CP dated October 28, 1994

regulating the functions, assignment and organizational apparatus of the Ministry of

Finance;

In response to the requirement of economic and financial management reform,

improvement of the quality of account-ting information provided in the national

economy and examination and verification of accounting practice.

Upon the proposal of the Director of the Accounting Policy Department and

Chief of the Office of the Ministry of Finance.

DECIDES:

Article 1: To issue four (04) Vietnamese accounting standards (series 1) with

the numbers and titles specified:

1. Standard No. 02 – Inventories;

2. Standard No. 03 – Tangible Fixed Assets;

3. Standard No. 04 – Intangible Fixed Assets;

4. Standard No. 14 – Revenues and Other Incomes.

Article 2: Four (04) Vietnamese accounting standards issued following this

decision shall be applicable nation-wide to enterprises of all industries and economic

sectors.

Article 3: This Decision shall come into force from January 2002. Individual

accounting systems shall be amended and supplemented in accordance with the four

(04) Vietnamese accounting standards issued hereby.

Article 4: The Director of the Accounting Policy Department, Chief of the

Ministry’s Office, and heads of relevant affiliate and subsidiary units of the Ministry

of Finance shall be responsible for guiding and supervising the implementation of

this Decision.

MISISTER OF FINANCE

Nguyen Sinh Hung

(Signed and sealed)

MINISTRY OF FINANCE

----*----

COSIALIST REPUBLIC OF VIETNAM


No. 165/2002/QD-BTC -------------------------------------------



On issuance and publication of

Four (06) Vietnamese Accounting Standards (batch 2)

MINISTER OF FINANCE

- Pursuant to the Accounting and Statistics Ordinance promulgated at Order

No.06-LCT/HDNN dated May 20, 1998 of the State Council and the Regulation on

State Accounting Organization issued in conjunction with Decree No. 25-HDBT

dated March 18, 1989 of the Council of Ministers (currently the Government);

- Pursuant to Governmental Decree No. 86/2002/ND-CP of November 5, 1993

providing for the assignment, authority and responsibility for State management of

the ministries and ministry-level agencies;

- Pursuant to Governmental Decree No. 178/CP dated October 28, 1994


Finance;


improvement of the quality of accounting information provided in the national




DECIDES

Article 1. To issue six (06) Vietnamese accounting standards (Batch 2) with


1. Standard No. 01 – Framework

2. Standard No. 06 – Leases

3. Standard No. 10 – The Effects of Changes in Foreign Exchange Rates

4. Standard No. 15 – Construction Contracts

5. Standard No. 16 – Borrowing Costs

6. Standard No. 24 – Cash Flow Statements

Article 2. Six (06) Vietnamese accounting standards issued following this


sectors.

Article 3. This Decision shall come into force as of January 01, 2003.

Individual accounting regulations and systems shall be amended and supplemented

in accordance with the six (06) Vietnamese accounting standards issued hereby.

Article 4. The Director of the Accounting Policy Department, Chief of the



this Decision.

FOR THE MINISTER OF FINANCE VICE MINISTER

Tran Van Ta (signed)

MINISTRY OF FINANCE

----*----



No. 234/2003/QD-BTC -------------------------------------------




Four (06) Vietnamese Accounting Standards (Batch 3)

MINISTER OF FINANCE

- Pursuant to the Accounting Law No.03/2003/QH11 dated June 17, 2003;



the ministries and ministry-level agencies;

- Pursuant to Governmental Decree No 178/CP dated October 28, 1994


Finance;



economy and exami-nation and verification of accounting practice.

Upon the proposal of the Director of the Accounting and Auditing Policy

Department and Chief of the Office of the Ministry of Finance.

DECIDES:

Article 1: To issue six (06) Vietnamese accounting standards (Batch 3) with


1. Standard No. 05 – Investment Property;

2. Standard No. 07 – Accounting for investments in Associate;

3. Standard No. 08 – Financial Reporting of Interest in Joint Ventures;

4. Standard No. 21 – Presentation of Financial Statement;

5. Standard No. 25 – Consolidated Financial Statements and Accounting fos

Investments in Subsidiaries;

6. Standard No. 26 – Related Party Disclosures.

Article 2: Six (06) Vietnamese accounting standards issued following this


sectors.

Article 3: This Decision shall come into force after 15 days of the date

publication is made in the official gazette. Individual accounting systems shall be

amended and supplemented in accordance with the six (06) Vietnamese accounting

standards issued hereby.

Article 4: The Director of the Accounting and Auditing Policy Department,

Chief of the Ministry’s Office, and heads of relevant affiliate and subsidiary units of

the Ministry of Finance shall be responsible for guiding and supervising the

implementation of this Decision.

MINISTRY OF FINANCE

----*----



No. 12/2005/QD-BTC -------------------------------------------

Hanoi, February 15, 2005



Six (06) Vietnamese Accounting Standards (Series 4)

MINISTER OF FINANCE




the ministries and ministry level agencies;

- Pursuant to Governmental Decree No. 77/2003/ND-CP dated July 01, 2003


Finance;



economy and exami-nation and verification of accounting practice.


Chief of the Director of the Accounting Policy Department and Chief of the Office of

the Ministry of Finance.

DECIDES:

Article 1: To issue six (06) Vietnamese accounting standards (series 4) with


1. Standard No. 17 – Income Taxes;

2. Standard No. 22 – Disclosures in the Financial Statements of Banks and

similar Financial Institutions;

3. Standard No. 23 – Events After the Balance Sheet date;

4. Standard No. 27 – Interim Financial Reporting;

5. Standard No. 28 – Segment Reporting

6. Standard No. 29 – Changes in Accounting Policies, Accounting Estimates

and Errors.

Article 2: Six (06) Vietnamese accounting standards issued following this


sectors.


publication is made in the official gazette. Individual accounting systems shall be

amended and supplemented in accordance with the six (06) Vietnamese accounting





this Decision.

MINISTRY OF FINANCE

----*----



No. 100/2005/QD-BTC -------------------------------------------


DECISION


four (04) Vietnamese Accounting Standards (Series 5)

MINISTER OF FINANCE




the ministries and ministry level agencies;

- Pursuant to Governmental Decree No. 77/2003/ND-CP dated July 01, 2003


Finance;






DECIDES:

Article 1: To issue four (04) Vietnamese accounting standards (series 5) with


1. Standard No. 11 – Business combination;

2. Standard No. 18 – Provisions, contingent assets and liabilities;

3. Standard No. 19 – Insurance contract;

4. Standard No. 30 – Earning per share;

Article 2: Four (04) Vietnamese accounting standards issued following this


sectors.


publication is made in the official gazetted. Individual accounting systems shall be

amended and supplemented in accordance with the four (04) Vietnamese accounting





this Decision.

FOR THE MINISTER

VICE MINISTER

Tran Van Ta (signed and sealed)

Appendix III

Degrees

of

freedom

2

995.0 2

990.0 2

975.0 2

950.0 2

050.0 2

025.0 2

010.0 2

005.0

1 0.0000393 0.0001571 0.0009821 0.0039321 3.84146 5.02389 6.63490 7.87944

2 0.0100251 0.0201007 0.102587 0.102587 5.99147 7.37776 9.21034 10.5966

3 0.0717212 0.114832 0.215795 0351846 7.81473 9.34840 11.3449 12.8381

4 0.206990 0.297110 0.484419 0.710721 9.48773 11.1433 13.2767 14.8602

5 0.411740 0.554300 0.831211 1.145476 11.1433 12.8325 15.0863 16.7496

6 0.675727 0.872085 1.237347 1.63539 12.8325 14.4494 16.8119 18.5476

7 0.989265 1.239043 1.68987 2.16735 14.4494 16.0128 18.4753 20.2777

8 1.344419 1.646482 2.17973 2.73264 16.0128 17.5346 20.0902 21.9550

9 1.734926 2.087912 2.70039 3.32511 17.5346 19.0228 21.6660 23.5893

10 2.15585 2.55821 3.24697 3.94030 19.0228 20.4831 23.2093 25.1882

11 2.60321 3.05347 3.81575 4.57481 20.4831 21.9200 24.7250 26.7569

12 3.07382 3.57056 4.40379 5.22603 21.0261 23.3367 26.2170 28.2995

Source: C.M. Thompson, “Tables of percentage of the 2 -distribution”, Biometrika,

vol. 32. 1941. pp. 188-89. Reproduced by permission of Biometrika trustees.

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