World Bank and Vietnam work to strengthen financial systems
The report, entitled “Reports on the Observance of Standards and Codes (ROSC): Accounting and Auditing module” and part of a global initiative to improve compliance with internationally recognised standards and codes, focuses on accounting and auditing standards and practices for public interest entities, as well as the institutional framework that underpins the corporate financial reporting system.
Ousmane Dione, the World Bank Country Director for Vietnam said that he hopes that this report will contribute to the successful implementation of Vietnam’s long-term strategy for sustainable and inclusive development.
Linked to complementary reforms in the financial sector, the report recommends that Vietnam’s Accounting Law and the Law on Independent Audit could benefit from simplification during the next revision process.
It also advises Vietnam to fully adopt international financial reporting standards (IFRS) and related guidance from the International Financial Reporting Interpretations Committee for public interest entities.
Deputy Minister of Finance Vu Thi Mai said that once IFRS is adopted, the quality of corporate financial reporting will improve significantly through enhanced accountability, transparency and comparability, providing users with useful information for management, governance and investment decision making.
She added that the IFRS adoption also promotes the international recognition of Vietnam as a full market economy, and eventually the FDI flow.
Therefore, Mai stated that the Ministry of Finance is promptly working on the development of a proposal on updating Vietnam Corporate Standards for submission to the government’s approval for IFRS adoption.
The report recommends specific policy measures relating to statutory frameworks, accounting standards, public oversight and monitoring, accounting education, and public accountancy organisations, in order to promote transparency and investor confidence, mitigate risks stemming from financial volatility, and foster market efficiency as well as private sector-led economic growth.