Digital transformation is one of the undeniable trends of the modern business world, and Vietnam is no exception. In this context, the application of International Financial Reporting Standards (IFRS) becomes more complicated for businesses, as they face many new challenges and opportunities from digital transformation.

The Impact of Digital Transformation on the Auditing and Accounting Industry

In today’s digital age, the auditing and accounting industry is witnessing a clear trend of digital transformation. According to a report by the National Association of Accountants, about 80% of auditing firms are integrating digital technology into their work processes, from using accounting software to implementing artificial intelligence-based solutions to analyze financial data. The study also shows that the application of digital technology in the auditing and accounting industry not only helps improve work efficiency but also increases transparency and trust in the process of confirming financial information.

At the same time, digital transformation also opens up new opportunities, such as remote auditing services and the development of blockchain technology to ensure the security and transparency of accounting data. In this context, businesses and auditing organizations are increasingly realizing the importance of integrating digital technology into their operations to stay ahead of the competition and meet the needs of the ever-evolving market.

Read more: Vietnamese enterprises prepare for IFRS financial statement conversion: Time is running out?

IFRS Conversion Trends in the Digital Transformation Era

In the digital transformation era, the conversion from Vietnamese Accounting Standards (VAS) to International Financial Reporting Standards (IFRS) is becoming a notable trend among businesses in Vietnam. According to a report by the Ministry of Finance of Vietnam, by the end of 2023, more than 70% of large and medium-sized enterprises in Vietnam had converted or were preparing to convert from VAS to IFRS.

Specifically, large enterprises such as Vinamilk, Viettel and VNPT have completed the conversion process, thereby creating a new standard of transparency and consistency in financial reporting. In addition, this conversion is not only a need from businesses but also a requirement from the market and international investors as they expect accurate and comparable financial information.

In addition, businesses also find that using IFRS not only helps them seize opportunities in the global business environment but also creates long-term benefits, including improved financial risk management and increased trust from investors and banks.

The impact of digital transformation on IFRS conversion

Impact on financial reporting accounting processes

First, automated accounting processes. Digital transformation offers the opportunity to automate repetitive accounting processes, from data entry to report generation. According to Deloitte’s report, the use of modern accounting tools and software helps optimize this process, minimize errors and increase transparency in financial reporting. For example, the application of RPA (Robotic Process Automation) technology in the accounting process helps automate tasks such as data entry and checking, minimizing dependence on manual work and increasing efficiency.

Second, effective data management. Digital transformation also places higher demands on data management, including organizing and storing data in a systematic and easily accessible manner. According to PwC research, the use of modern data management systems helps ensure transparency and reliability in accounting and financial reporting processes. By using technologies such as cloud storage and distributed databases, businesses can manage and retrieve data more effectively, thereby minimizing the risk of errors and improving the quality of financial reports.

Impact on data management

The impact of digital transformation on data management in the transition from Vietnamese Accounting Standards (VAS) to International Financial Reporting Standards (IFRS) is undeniable. This places higher demands on data management, including organizing and storing data in a systematic and easily accessible manner. According to Deloitte’s report, the use of modern accounting tools and software helps optimize this process, minimize errors and increase transparency in financial reports. According to PwC, the use of modern data management systems helps ensure transparency and trust in accounting and financial reporting processes, thanks to the use of cloud storage technology and distributed databases.

However, data management also poses security challenges. Data security is a factor that cannot be ignored, especially in the context of increasing cybersecurity risks. According to a Verizon report, in 2021, the rate of cyber attacks with data loss increased by nearly 30% compared to the previous year, especially in the financial sector. This requires businesses to invest in advanced security measures such as data encryption, access control and continuous system monitoring to protect important information and ensure compliance with data security regulations.

Impact on training and human resource development

In the process of converting from VAS to IFRS, training employees on information technology becomes more important than ever. According to PwC research, digital transformation requires employees to have knowledge and skills in information technology. Training and coaching become extremely important to improve employees’ capacity in using modern accounting tools and software. According to Deloitte’s report, in some businesses, the implementation of IFRS training courses has doubled, from 25% to 50%, within the past year.

At the same time, digital transformation also creates opportunities to improve data and information management capacity. According to McKinsey’s report, the effective use of data and information can help businesses optimize business processes and create competitive opportunities. Therefore, improving data management capacity becomes a top priority in the transformation process. According to Gartner research, 80% of businesses plan to increase their investment in data management and analytics capabilities in the coming years to capture new business opportunities and optimize operational performance.

Digital transformation is not only a trend but also a necessary requirement for businesses to continue to develop and compete in today’s digital age. To successfully convert from VAS to IFRS, businesses need to adapt to changes and take advantage of the opportunities that digital transformation brings.