In the context of international economic integration, providing information to make markets and economies transparent through accounting and auditing activities is increasingly important. The practice of accounting and auditing is also constantly changing, especially in the conversion of IFRS financial statements. In that context, Vietnamese accounting and auditing standards are also in the process of being perfected and adjusted accordingly.

The current situation of auditing and accounting when converting IFRS financial statements

Up to now, Vietnam has implemented the 2015 revised Accounting Law, the Law on Independent Auditing, corporate accounting standards, 5 public accounting standards, etc. Thereby creating a complete and appropriate legal environment for accounting and auditing, implementing reasonable accounting and auditing principles to support the development of financial activities in different fields; ensure that accounting and auditing activities contribute effectively to the economic and financial activities of enterprises, organizations and accounting units

In state management activities, the role and capacity of state management of accounting and auditing are increasingly enhanced. The management and supervision of accounting and auditing activities are increasingly promoted. Enterprises ensure compliance with accounting and auditing laws as well as take necessary measures to meet the requirements of converting IFRS financial statements in the future.

Challenges of auditing and accounting when converting to IFRS financial statements

In today’s digital era, technology creates new opportunities and new strategies. Reality has proven that human resources in the field of Financial Management and Accounting in Vietnam are not only lacking in quantity but also of low quality. Statistics from the Vietnam Association of Certified Public Accountants show that up to 2/3 of accounting and auditing graduates do not meet the needs of employers in many aspects.

Businesses all share that the complexity of IFRS and the huge differences between the two sets of standards are the biggest challenges for the auditing department in the process of converting to IFRS. At the same time, IAS/IFRS standards are frequently updated, revised and supplemented, causing many difficulties for auditors in monitoring and applying them. These difficulties are almost unforeseeable for businesses and lead to a lack of preparation in the accounting and auditing team.

Applying IFRS requires flexibility in using many accounting estimates based on the subjective bias of the executive manager. In addition, auditors do not have many specific instructions from the authorities, so they often spend a lot of time and effort explaining unusual differences in reported figures.

Read more: Challenges and trends in IFRS conversion of auditors

IFRS financial reporting conversion solutions for the auditing industry

In the immediate future, businesses need to build large databases to meet the increasing number of transaction data; apply Blockchain technology to analyze and process data, ensure security and safety. At the same time, binding regulations that limit the digital transformation process need to be reviewed for adjustment or removal. In addition, businesses need to focus on information security and safety associated with network security against the threat of criminal attacks to ensure high security of accounting and auditing data.

Businesses providing accounting and auditing services need to properly apply the policies and regulations of the State. At the same time, invest in developing a team of skilled employees with in-depth expertise and integration capabilities. Strengthen training to develop effective soft skills, active teamwork and proficient use of digital technology according to market needs. For accountants and auditors, international languages ​​are indispensable means, professional certificates such as ACCA, CMA, CIA can help Vietnamese accountants and auditors expand their scope of activities, improve the competitiveness of human resources in the field of accounting and auditing in Vietnam.

Auditing enterprises need to strengthen and expand international cooperation activities. Strengthen relationships, seek the help of international professional organizations on accounting, auditing and non-governmental organizations in research, exchange of experiences on accounting, auditing and in supporting projects to innovate the management model of accounting and auditing professions, as well as professional techniques associated with the application of IFRS conversion.

In addition, changing perceptions about the impact of IFRS on accounting and auditing activities is essential. The process of changing the accounting and auditing field in Vietnam is an inevitable trend, because accounting standards are increasingly diverse and rich. The important thing is that the progress from the help individuals, businesses, and organizations operating in the domestic accounting field develop, grasp and change promptly to improve labor productivity and work quality.

Read more: Chuẩn mực Báo cáo tài chính quốc tế IFRS: Nước đã đến chân

In the IFRS financial reporting conversion, each individual working in the field of accounting and auditing needs to be aware of the importance of the conversion to apply it appropriately to the trend, save human resources and achieve efficiency in work.