The effects of management characteristics on the adoption of International Financial Reporting Standards for small and medium-sized enterprises

Download This Article

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

This study aims to examine the effects of management characteristics, including perceptiveness, support, and willingness on the adoption of International Financial Reporting Standards (IFRS) for small and medium-sized enterprises (SMEs) in Vietnam. The research collects secondary data via a questionnaire from 218 responses by senior managers and financial directors of SMEs in Vietnam during the period from January 2022 to June 2022. The model’s scales are established and tested by Cronbach’s alpha, exploratory factor analysis (EFA), and confirmatory factor analysis (CFA). Then, structural equation modeling (SEM) is used to test research hypotheses. The research results confirm that the readiness to apply IFRS in SMEs in Vietnam depends greatly on the perceptiveness and support of managers of researched firms, consistent with previous studies (Moqbel et al., 2013). Upon the analysis results, the research has proposed instructive recommendations to encourage SMEs to accelerate the preparation of firms’ financial statements complying with IFRS. By doing these, firms will increase their competitive advantages and promote international integration. The study also contributes to the literature as a lesson to countries in adopting full IFRS.

Keywords: IFRS Adoption, SMEs, Managerial Support, Vietnam

Authors’ individual contribution: Conceptualization — L.S.N. and D.C.P.; Methodology — D.C.P.; Investigation — L.S.N.; Resources — L.S.N.; Writing — L.S.N. and D.C.P.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: M40, M41, M48

Received: 16.03.2023
Accepted: 26.09.2023
Published online: 28.09.2023

How to cite this paper: Nguyen, L. S., & Pham, D. C. (2023). The effects of management characteristics on the adoption of International Financial Reporting Standards for small and medium-sized enterprises. Corporate Governance and Organizational Behavior Review, 7(4), 22–29. https://doi.org/10.22495/cgobrv7i4p2