Exploring firm-level drivers of international financial reporting standards adoption readiness in an emerging economy: evidence from Vietnamese listed and unlisted companies

Abstract

This study explores firm-level determinants influencing the adoption readiness of International Financial Reporting Standards (IFRS) in Vietnam. Rather than the binary treatment used in earlier studies, we evaluate readiness across firms’ technical systems, procedures and staff capabilities. Drawing on 2024 financial statements, annual reports, and a survey of managers and accounting professionals from 324 listed and unlisted companies, we find that IFRS readiness is generally low, with most firms scoring below the midpoint. Firms that are larger, have foreign ownership, engage in exports, are audited by Big 4 firms, or are publicly listed tend to be better prepared. In contrast, state ownership is associated with weaker readiness. Leverage, industry type, and return on equity show no clear effect. These results support institutional theory by highlighting the influence of external institutional forces, such as regulatory requirements, international investors and audit quality. They also align with positive accounting theory by illustrating how firm-level economic motivations shape adoption behavior. The study contributes to IFRS research in emerging markets by linking theoretical perspectives with firm-level evidence to identify the key drivers of adoption readiness. It further provides insights for regulators and policymakers, particularly in supporting state-owned enterprises, to facilitate a successful IFRS transition.