THE HUMAN RESOURCES OF INDEPENDENT AUDITING SITUATION AND SOLUTIONS
4. DISCUSSION AND CONCLUSION
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Issue 6: Assess the applicability of IAS 41 in Vietnam. Based on the above necessary basic conditions, experts agree with the option that Vietnam can apply IAS 41 but it takes time to complete the conditions. It is necessary to develop an appropriate roadmap to put IAS 41 into practice in accordance with domestic conditions. Thus, the majority of experts agree that Vietnam is necessary and capable of applying IAS 41, and Vietnamese Accounting Standards are also tending to amend and supplement in the direction based on Financial Reporting Standards. IFRS/
IAS, creating an accounting basis in line with international practices.
Thus, with the trend of Vietnam’s integration into the world economy, specifically by joining the WTO, signing free trade agreements (FTAs), and other international agreements, trade activities and Investment between Vietnam and other countries has been facilitated and also put pressure on standardizing accounting methods in enterprises of all fields, including agriculture.
The difference in the current accounting method for biological assets and agricultural products in Vietnam compared to other countries in the world has created barriers and challenges in the process of economic integration and development. . Therefore, it is necessary and feasible to issue a separate accounting standard in the agricultural sector based on the application of IAS 41 in Vietnam.
4.2. Solution
Firstly, Vietnam can choose to apply IAS41 in one of two ways, that is: Declaration of application of IAS41 or application of each of these IAS standards in turn. The benefits that each form of application brings is:
The declaration of application of IAS 41 will help Vietnamese accountants regularly update the changes of IAS41; At the same time, it saves costs in compiling, rebuilding or rebuilding the standard.
However, the application of IAS 41 in particular, as well as IAS/IFRS in general, is difficult to apply in Vietnam, because currently IAS/IFRS is not compatible with Vietnamese laws and accounting standards. Besides, the number of accounting staff in enterprises who can read and understand IAS/IFRS in Vietnam is not much. In addition, Vietnam’s information sharing system has not yet met the demand for the full application of IAS/IFRS.
With the approval of partial application of IAS41 standards, it will help businesses not have to spend time in reading and choosing applicable standards when preparing financial statements according to IAS/IFRS. However, the disadvantage of approving the partial application of IAS/IFRS standards is that it is not possible to promptly update the changes of IAS/IFRS; causing costs in the organization of approval. It is necessary to invest in human resources to perform this task well.
Regardless of the choice of application method, there are always certain benefits and difficulties, according to which the Department of Accounting and Auditing Regulations should consider to advise the Ministry of Finance to choose the appropriate method for Vietnam as well as the benefits brought compared to the costs spent is the most optimal.
Secondly, the application of IAS/IFRS or IAS41 requires specific and effective planning to avoid confusion for businesses and accountants. The plan needs:
- Determine a detailed application roadmap: apply to the public interest sector and foreign-invested sector first, then expand to businesses that need to attract or need to borrow foreign capital. . - Identify issues related to the application of IAS/IFRS such as information transmission system, upgrade of accounting software system to international standards, accounting qualification training, IFRS implementation training, implementation costs.
- Develop mechanisms of actions, policies and strict supervision framework to allow enterprises to apply IFRS.
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- Examine the application of IFRS in the business after the application deployment plan.
Third, regardless of the choice to apply IAS41 in any form, the problem of solving the problem involves training the accounting team, the team of auditors and other staff. They must have an understanding of IAS to be able to implement and apply in the organization the Financial Reporting system, as well as check the information on these reports.
Fourth, although the number of enterprises operating in the agricultural sector is not much, in the future, this number will certainly increase. Therefore, during the period when the Ministry of Finance is studying and revising the system of 26 accounting standards in 2001, it is possible to combine research, development and issuance of additional accounting standards on agriculture.
That can help these businesses account for biological assets and agricultural products at their fair value instead of the current cost. It is necessary to combine guidelines for recording and measuring the value of biological assets in their life cycle (with 3 main stages of formation, growth and degradation) in the most complete and favorable way.
Fifth, it is necessary to promote the convergence of the IFRS system, which refers to the use of fair value as a key measurement basis. It enhances the appropriateness of the information presented in the financial statements.
At the same time, Vietnam needs to have regulations on measurement of fair value in which, the fair value is the “output value” of the asset or liability instead of VAS 01. Currently, VAS 01 only provides the original price principle. The use of historical cost as the primary measure can achieve reliability but reduce the relevance of the information provided by the financial statements.
In the near future, the study and building of the theoretical basis and the conditions and methods of applying the “Principle of Fair Value” will become an issue that needs to be seriously considered and implemented by Vietnam.
Sixth, in order to promptly respond to the development and innovation of the economy, it is necessary to promulgate early five standards that affect objects and transactions arising in economic life, including: Share-based Payment (IFRS 02); Exploration for and Evaluation of Mineral Resources (IFRS 06), Financial Instruments (IFRS 7; IFRS 9), Financial Instruments (IAS 20), Impairment of Assets (IAS 36). Some standards also need to be promulgated in the near future such as: Assets held for sale or discontinuous business activities; Employee welfare;
Agriculture…
Seventh, Vietnam needs to gradually continue to improve the economic and legal environment in accordance with the requirements of the IAS/IFRS. For example, a financial transaction market needs to be “transparent” and “active” so that fair value can be used as a basis for measuring asset values....
CONCLUSION
Currently, Vietnamese accounting standards still have many points that are not completely in harmony with international accounting standards. The main difference between VAS and IAS/
IFRS is the difference in the basis of asset measurement on the basis of fair value and the issue of information disclosure. The harmony between VAS and IAS/IFRS has direct causes and causes
of social, economic and legal factors. In general, between VAS and IAS/IFRS, Vietnam chooses the model of selective application of IAS/IFRS as a basis to build its own accounting standard system, which is a reasonable choice. In the coming time, to meet the requirements of international integration in accounting, in line with the country’s economic integration process, Vietnam needs to take urgent and long-term solutions including direct solutions to the system of accounting standards and solutions to the legal economic environment.
REFERENCE
1. Document on the websites of the ministry of Finance (www.mof.gov.vn), Inernatinal Accounting Standards Drafting Committee (www.iasplus.com), British Association of Certified Public Accountants (www.accaglobal.com)
2. Inernatinal Accounting Standards Drafting Committee (IASC), System of international accounting standards - IAS, International Financial Reporting Standards - IFRS
3. Cohen, Darrough M.N., Huang R., and Zach T. (2011),“Warranty Reserve: Contingent Liability, Information Signal, or Earnings Management Tool?” The Accounting Review:
March 2011, Vol. 86, No. 2, pp. 569-604.
4. Nikolai L.A, Bazley J.D, and Jones J.P. (2010), Intermediate Accounting, 11th edn, South-Western, Cengage Learning.
5. Hana BOHUŠOVÁ, Patrik SVOBODA, Danuše NERUDOVÁ (2012). Biological assets reporting: Is the increase in value caused by the biological transformation revenue?