The Relevance of International Financial Reporting Standards (IFRS) to a Developing Country : Evidence from Vietnam

This paper adopts the concept of accounting ecology proposed by Gernon and Wallace (1995) in examining the accounting environment of Vietnam to identify some of the factors that might explain the lack of support for International Financial Reporting Standards (IFRS) in that country. Drawing on the literature of international accounting convergence models, the author assesses the potential impact of IFRS adoption on the quality and comparability of Vietnam reporting practices, the capital market effects and the potential costs of switching from Vietnamese General Accepted Accounting Principles (VN GAAP) to full adoption of IFRS. The paper also highlights some of the important factors that are likely to influence the progress of the implementation of IFRS in Vietnam. The paper concludes with a discussion of scenarios for future evolution of accounting standards in Vietnam in the light of the current global movement toward implementation of IFRS