Monday, July 23 2018


Viet Nam beset by double standards

Update: September, 18/2012 - 10:24

HCM CITY(VNS)— Improved accounting, auditing and governance standards would help improve the running of investors' operations, said participants at a conference held yesterday in HCM City.

According to Dang Thai Hung, director of Accounting and Policy Department of the Ministry of Finance, the Viet Nam Accounting Standards do not match the new development in the country's economy, particularly since the stock market began operation in 2000.

Currently, businesses that have high standards for management apply international financial reporting standards, while others use Vietnamese ones.

There should be harmony between the two standards so that investors can make comparisons between companies, in terms of turnover, asset value, reserves and profits, said Andy Ho, managing director of VinaCapital.

He cited the case of a major European company planning to acquire a food company in Viet Nam. The company needs these factors for evaluation.

He also complained about recent information in the media about several banks' financial reports that did not match the analyses of experts. That had also caused concerns for investors.

Figures in financial reports without adequate explanations were of no use, he said.

There should be specific guidelines from authorities on the disclosure of information that could affect the company and its prices.

The announcement of business targets should be accompanied with who is specifically responsible for the realised targets.

Participants at the event also raised the issue of corporate governance, which is important in protecting assets and optimising shareholder benefits.

Current internal auditing to ensure transparency, which is regulated by the Ministry of Finance and covers State-owned enterprises, should be applied to businesses in all economic sectors, they said.

Bui Hoang Hai, deputy director of the Securities Issuance Department under the State Securities Commission of Viet Nam, said one of its most important tasks was to protect the benefits of investors via policies to ensure timely information that is released with transparency.

This highlights the role of accounting and auditing standards as well as corporate governance.

During the seminar, the report "Putting Investors at the Heart of the Financial System," carried out by the auditing and consulting firm Grant Thornton Viet Nam and ACCA (the Association of Chartered Certified Accountants), was released.

The report is based on insights gained from a series of roundtable discussions in different markets held by the two groups.

The report reveals that investors want publicly listed companies to provide more forecasts as well as information to help analysts create and evaluate forecasts.

Investors also see the potential for the development of integrated reporting to help fill some of the information gaps.

Integrated reporting that more closely aligns risk management with performance and the provision of clear environmental, social and governance reports could also enhance investor confidence in the management's ability to perform in the future.

The report also shows that while investors believe their needs are too often overlooked, they also acknowledge that they need to play a greater role in the development of new accounting standards. — VNS

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