INTRODUCTION PART
1. Research motivations
At present, although small and medium enterprises (SMEs) account for a very big
density and have a very important position for the development of economy but accounting
work at these enterprises in general has not been paid special importance. The organization
content of accounting work has not been associated to become a system under a scientific
procedure, it is implemented unsystematically according to the objective proposed by
enterprise owner or Board of Directors to cope with the management authority which is
mainly taxation authority, it is not actually bring useful accounting information for use
objects. If there is the situation above, it is because many different reasons, in which the
outstanding reason is that legal regulations on accounting for SMEs have not been studied,
promulgated firmly, systematically and suitably for operation fact of Vietnam SMEs at
present. This matter created the gap in legal term in organizing, implementing the accounting
as well as the strictness in complying with the promulgated legal documents.
Over the past time, there were many research works relating to accounting work at
SMEs but there is almost no comprehensive, general research on legal framework of
accounting applied to SMEs. Starting from the situation above, we select the subject
“Orientation of establishing and applying legal framework on accounting for SMEs in
Vietnam” as PhD. thesis.
2. Research objectives
Through some implemented research results, it is possible to see that the reality at
present about accounting work at SMEs still has many shortcomings; meanwhile, legal
documents about accounting in force have not actually been suitable for management and
operation features of SMEs, thus the arisen issues in fact have not been settled satisfactorily,
the application of these documents to reality still has many limitations. To contribute to
improving this real situation, we implement the thesis with objective: on the basis of
evaluating the real situation of application of legal documents on accounting applied to SMEs
in force in Vietnam and approach to legal framework on accounting for SMEs in some
countries, the thesis implemented the formation of legal framework on accounting generally
for these enterprises and studied the application of this legal framework efficiently.
3. Object and scope of research
Object of research: The object of research of the thesis is legal documents governing
Page 1
the accounting work of SMEs promulgated and being applied in Vietnam and legal
framework on accounting applied for SMEs in some countries as well as International
Financial Reporting Standards for SMEs.
Scope of research: the legal framework on accounting is researched under many
different levels. In this thesis, we focus on legal documents about accounting applied for
Vietnam SMEs. The survey object, measurement scales and research model verified for
typical cases are SMEs limited in Ho Chi Minh City and neighboring provinces.
4. Research methodology
To achieve the research objective, in this thesis, we use in combination between two
methods of qualitative research and quantitative research.
Qualitative research is used in this research with technique of interviewing expert
opinions representing the researchers, teachers of accounting and auditing, people who do
directly the accounting and objects using accounting information of SMEs. The result of this
research is basis for us to develop the draft survey questionnaire. From this step, the
questionnaire will be built and then carried trial survey to discover the sentences and words
which are difficult to understand or easy to cause mistake, determine the suitability of content
of questions, discover the errors of the draft and check the measurement scale as a first step,
thence create the product which is complete survey.
Quantitative research is implemented through stages: designing research sample,
collecting information from survey sample, analyzing data by processing software SPSS 20
through the steps of descriptive statistics, exploratory factor analysis and regression analysis.
First of all, the analysis of descriptive statistics helps the thesis put forth judgments about
reality of organizing accounting work at SMEs and quality of accounting information
supplied by these enterprises. Besides, we also use Independent Sample T-test to verify the
difference in judgment among object groups. During the analysis of models affecting to the
application of legal documents at Vietnam SMEs, we implemented the verification of measure
scale by reliable factor Cronbach Alpha, removed the variables having small correlation
coefficient with total variable; used EFA - Exploratory factor analysis on SPSS 20 and
removed the variables with small parameter by checking the coefficients of Factor loading
and extracted variances, evaluated the suitability of research model through coefficient KMO
(Kaiser-Meyer-Olkin). The next step is to verify Cronbach Alpha (CRA) for measurement
scales. This is statistic verification on closeness level (ability to explain a research concept) of
collection of observation variables (questions). Then, we continued to run regression model to
evaluate the suitability level of model and considered the effect of factors to the application of
Page 2
legal documents on accounting at Vietnam SMEs.
5. Contributions of the research
On scientific term
The completed thesis had contributions in scientific term as follows:
- Systematizing the issues about general argument on legal framework of accounting for
SMEs in some typical countries in the world as well as in Vietnam; analyzing the factors
affecting to the application of legal documents on accounting and accounting work at SMEs.
- Analyzing the real situation of organizing accounting work at SMEs and situation of
applying legal documents on accounting at these enterprises; at the same time, analyzing the
content and quality of accounting information supplied by SMEs, as well as information
demand of use objects.
- Forming complete legal framework on accounting for SMEs, including the system of
necessary legal documents and structure, main content of such documents.
- Contributing to developing the measurement scale of factors affecting to the application
of legal documents at SMEs in the context of developing countries like Vietnam.
On reality term
- Clarifying the real situation of accounting work at Vietnam SMEs, thereby, assisting the
authorities, boards, sectors and managers in evaluating the efficiency and feasibility of legal
documents on accounting in force for these enterprise; assisting to acknowledge more
comprehensively about accounting information supplied by SMEs as well as information
demand of use objects.
- Research result will be valid scientific arguments for researchers and legislative
authorities to refer during the construction of complete legal framework on accounting for
SMEs; at the same time, the thesis put forth significant suggestions to help the process of
deploying, applying legal documents on accounting to reality at SMEs quickly and efficiently.
6. Structure of the research
The structure of thesis in addition to the introduction part introducing the context of
research, objective, scope and object of research, summarizing the research method as well as new
contributions of the thesis; main content part of the thesis is presented in 5 chapters as follows:
Chapter 1: Overview on research situation relating to the thesis.
Chapter 2: Theory basis on legal framework on accounting for SMEs
Page 3
Chapter 3: Research methodology
Chapter 4: Research result and orientation solutions for forming and applying legal
framework on accounting for Vietnam SMEs.
Chapter 5: Conclusion and recommendation.
Final part of the thesis is works of author relating to the thesis, list of reference and
enclosed appendixes.
CHAPTER 1: OVERVIEW ON RESEARCH SITUATION RELATING TO
THE THESIS.
1.1. Overview on researches relating to legal framework on accounting for enterprise
announced in the world
In this part, we carried out summary examination of researches relating to legal
framework governing the accounting work at enterprises in general, attached special
importance to the researches relating to legal framework on accounting for SMEs announced
on prestigious magazines, thesis, valuable research works in many countries in the world.
1.2. Overview on researches relating to legal framework on accounting for enterprises in
Vietnam
To grasp the research situation relating to the issues being mentioned by the thesis and
aim at finding out the research slit, we studied the overview on announced researches relating
to legal framework governing the accounting work at enterprises in genera and SMEs in
particular.
1.3. Comment on implemented researches and issues to be further researched
1.3.1. For works abroad
In general, the contents of research works which we studied in scope of existing
database mainly relate to the issue of applying International Financial Reporting Standards to
the countries and their impacts, or analyze some factors affecting to the process of
promulgating the standards,… These researches often attach to the countries with developed
market, or attach to socio-economic specific features, specific politics and culture of the
country researched by the author. Therefore, the result of these researches is only suitable for
some certain countries, the research condition and result of some researches are quite far from
Vietnam. Relating to legal framework on accounting for SMEs, the researches focus mainly
on issues of applying accounting standards for SMEs in countries, specifically, they are
conditions for applying IFRS international standards for SMEs, impact of applying
International Financial Reporting Standards on accounting system of each country as well as
Page 4
the process of integrating into international accounting of the countries. Quite many
researches focus on the countries having accounting system developed at high level. For
conversion market like Vietnam, the quantity of researches on legal framework on accounting
for SMEs was not announced much. In the researches we summarized, it is possible to see
that the subject cared much by researchers is the issue of applying legal documents; this thing
proves that putting legal documents into reality is a very important stage so that these
documents promote the effect, bring socio-economic efficiency for enterprises, objects using
the information in particular and entire society in general. Besides, one of the main functions
of accounting is to provide information and products of accounting which are reports to
provide useful information to use object. Therefore, the research to determine clearly the
object of using accounting information of SMEs and their demand on information has very
important significance in the process of researching, setting up legal framework on accounting
for these enterprises. For this reason, the researches on this subject also account for considerable
quantity.
On research method, many works were implemented very meticulously such as
research works of Jill Collis & Robin Jarvis on way of enterprise owner - manager of small
enterprises in UK using accounting information have sample size to 2288 enterprises, with
close theory basis, carefully analyzed collection data, the research result had high persuasion
nature (Jill Collis & Robin Jarvis, 2000); or research of author group of Daniel Zeghal and
Karim Mhedhbi about factors affecting to the application of international standards in
developing countries surveyed at very wide scope in 64 countries belonging to developing
countries; therefore, the conclusion given from this research is very reliable and has reference
value for many researches later (Daniel Zeghal & Karim Mhedhbi, 2006). However, in some
researches, the basis for author putting forth these judgments was only based on argument,
analysis and subjective judgment of author; thus the persuasion nature of the article was not
high (such as the article of Wayne Lonergan, 2003). Or some authors mainly used methods of
comparison, analysis, explanation, thus the objectiveness and persuasion nature of the article
were still limited (such as the article of Fennell David, 2005).
Although there are some points not suitable for socio-economic features of Vietnam,
or many researches were implemented in the legal environment condition not compatible to
Vietnam, through researches of foreign authors, we can withdraw some experience lesions for
Vietnam in researching, forming legal framework on accounting applied for enterprises in
general and SMEs in particular. Many results gained from research works (such as interest
and obstruction as applying international standards, process of promulgating standards,
Page 5
participation of people doing accounting work during the promulgation of legal documents,
factors affecting to the process of applying accounting standards…) are very worthy for
regulators caring during the promulgation of legal documents on accounting, especially the
issue of researching, promulgating the system of accounting standards for SMEs as well as
development itinerary of national accounting system in accordance with integration tendency of
international accounting.
1.3.2. For works in Vietnam
Through the part summarized by the author, it is possible to see that most of research
works studied, evaluated the accounting regulations promulgated by the State as well as the
application of regulations into the fact of accounting work at enterprises. Besides, research
authors also mentioned many different aspects during the integration, conversion of Vietnam
accounting to international accounting, conditions for integration and conversion, reality of
integration and conversion processes as well as impact of these processes and many other
related issues. For SMEs, quite many implemented researches related to accounting activity of
these enterprises; however, the articles, research subjects and thesis only exploited some very
small aspects in the subject aspect on accounting for SMEs. However, we see that there is
absence of research aspect on process of promulgating legal framework, effect of factors to
promulgation process,… it may be due to the feature of Vietnam that legal documents on
accounting are promulgated by the State authority to ensure the requirement on management
aspect; therefore, this issue is rather sensitive and difficult to approach. In general, the authors
only introduced International Financial Reporting Standards to SMEs, compared, analyzed
and collated among standard systems, or only compared some specific standards, the ideas were
based on subjective view of authors (such as the article of authors: Chuc Anh Tu, 2010; Ha Thi
Ngoc Ha, 2013). From research result, some authors put forth general solutions with orientation
nature for the completion of legal documents; they have not had specific solutions with
feasibility.
The summary result from domestic research works which were announced may be
missing specialized works with reliable implementation method to study comprehensively
about legal framework of accounting applied for SMEs. Therefore, it is possible to affirm that
this is a weak aspect in accounting research in Vietnam; it needs to be supplemented by
researches in the coming time. However, the researches announced previously help creating
an argument and reality background so that on such basis, we can study and further build,
complete the legal framework of accounting applied for Vietnam SMEs.
Page 6
1.4. Determination of research issue
To achieve the proposed objective, the thesis determines some issues to be settled
specifically as follows:
- Analyzing real situation of organizing accounting work at SMEs and situation of
applying legal documents on accounting at these enterprises in recent time.
- Analyzing the content and quality of accounting information provided by SMEs and
surveying the information demand of different objects to orient the model of complete legal
framework on accounting to be built to ensure the supply of output information suitable for
demand of these objects.
- Studying legal framework on accounting for SMEs in some countries to have basis for
forming complete legal framework on accounting suitable for Vietnam SMEs.
- Analyzing the factors impacting on the application of legal documents to reality and
clarifying the impact level of these factors, thereby proposing the suggestion to help these
documents being applied in reality quickly and efficiently.
SUMMARY OF CHAPTER 1
Inheritance of research result of works announced in the world as well as in Vietnam
and acknowledgement of limitations, shortcomings of implemented researches have a very
important significance in determining the research objective of the thesis. With the
determined research objective, formed orientation and application of legal framework on
accounting for SMEs are aimed at improving the quality of accounting activity at these
enterprises and providing more useful information to use objects.
CHAPTER 2: THEORY BASIS ON LEGAL FRAMEWORK ON ACCOUNTING FOR
SMES
This Chapter will present some general issues such as concept, feature of SMEs, and
feature about accounting information as well as legal document system for these enterprises.
In addition, the content of this chapter will summarize basic features in regulation of
international accounting applied for SMEs and legal framework on accounting for these
enterprises in some typical countries as well as in Vietnam, thereby withdrawing important
conclusions as the basis for orientations and solutions given in the next chapter of the thesis.
The ending part of chapter will mention the background theories applied by thesis as forming
Page 7
legal framework on accounting for SMEs.
2.1. Some general issues about SMEs and legal framework on accounting applied for SMEs.
The content of this section focuses on some general issues on SMEs such as definition
and feature of SMEs, analyzes some features of SMEs governing the promulgation of legal
framework on accounting for these enterprises as well as feature about information shown on
financial statements of SMEs. Besides, we also present the overview on legal framework in
general affecting to business activity of SMEs and legal framework on accounting applied for
these enterprises. In addition, the thesis also analyzes and summarizes the factors affecting to
the application of legal documents on accounting into reality of accounting activity at SMEs
as the basis for building and verifying the research model mentioned at chapter 4.
2.2. International Financial Reporting Standards for SMEs (IFRS for SMES) and
system of legal document on accounting for SMEs in some countries and Vietnam.
At present, the countries in the world are different on knowledge and development
speed, business environment, legal environment, cultural feature…, therefore, it is
indispensable as the accounting systems of countries are different.
Through considering International Financial Reporting Standards for SMEs and legal
framework governing the accounting work at SMEs in some countries, we withdraw some
noticeable points as follows: In recent years, the globalization of economic activity and quick
development of capital market arise the demand on standard set of financial statements
accepted globally (F.F. Hussain et al, 2012). International Financial Reporting Standards for
SMEs (IFRS for SMEs) were created to meet such urgent demand and at present, over 80
countries put into application or informed the application plan. Through studying, we realize
that at present, there are two tendencies: the first tendency, some countries (Brazil, South
Africa, Hong Kong, Turkey, Singapore, Malaysia, Philippine,...) put the original of IFRS for
SMEs to apply in SMEs in their countries (Hana Bohusova, 2011); The second direction was
selected by many countries (such as USA, China,..), it is to base on International Financial
Reporting Standards to build their own standards suitable for features of SMEs in their
countries. Vietnam cannot separate from such tendencies. In the condition of Vietnam SMEs
as well as what has been done for big enterprises, the most feasible direction for our country
is to select the second direction among two tendencies mentioned above because it converges
with international accounting, brings interest for developing countries, it brings to these
countries the system of standards compiled carefully as well as accounting background and
accounting principles with highest quality (Wolk et al, 1989; according to Zeghal & Mhedhbi,
2006), on the other hand, these regulations are designed, corrected again, they will be more
Page 8
suitable in the condition of Vietnam. Therefore, the current issue is to quickly deploy, step by
step build the accounting standard system for SMEs so that accounting activity at these
enterprises is implemented within complete legal framework.
2.3. Applied theories
The building of legal framework on accounting and process of putting the regulations
into reality need to base on some theories which were studied and applied so that proposals
will be feasible, bring interest to enterprises, objects using information as well as entire
society. With the research subject on building legal framework on accounting for Vietnam
SMEs, we base on some basic theories as follows: Signalling theory, decision-usefulness
theory, stakeholder theory, public - interest theory, capture theory.
SUMMARY OF CHAPTER 2
Systemization of general argument issues on SMEs and legal framework on
accounting applied for these enterprises is an important step as premise as directing towards
the objective of forming legal framework on accounting for SMEs. At the same time, it is
necessary to consider international regulations as well as regulations of different countries in
order to have comprehensive view, withdraw experience lessons during research to help legal
regulations to be feasible, suitable for the reality in Vietnam and integration tendency of
Page 9
international accounting.
CHAPTER 3: RESEARCH METHOD
This Chapter introduces analysis framework of the thesis, methods for solving the
issues and proposed research objectives.
3.1. Analysis frame of research
Objective of thesis
Qualitative method
- Feature of Vietnam SMEs
- Legal documents governing accounting work of Vietnam SMEs
Overvi ew on researc h and backgr ound theory basis
Evaluating legal framework on accounting and application of legal documents in reality
International regulations and practice on accounting for SMEs
FORMING LEGAL FRAMEWO RK ON ACCOUNTI NG APPLIED FOR SMEs
Quantitative method
Requirement on improving quality of SMEs in the condition of development and integration economy
Factors affecting to application of legal framework on accounting in reality at SMEs 3.2. Research process and method
3.2.1. Qualitative research
Qualitative research method is used in the thesis with technique of interviewing expert
idea to study the judgment of object groups about quality of accounting information provided
by SMEs, about legal document system on accounting regulated for SMEs, as well as explore
the factors affecting to the application of these legal documents in reality and viewpoint of
completing legal framework on accounting for SMEs. In order to generalize many factors
under different categories, we took the ideas of many experts representing for different object
groups: object group directly applying legal documents on accounting, object group having
professional knowledge about this matter, object group using accounting information
provided by SMEs, specifically some people who are directly doing the accounting or
management work at SMEs, researchers and teachers about accounting, cadre of enterprise
inspection department of taxation agency, staff of enterprise credit department of the bank.
Page 10
The result of this research will this research will help to discover, supplement and adjust
important factors affecting to the ability to apply the regulations in reality of accounting work
at Vietnam SMEs. At the same time, on this basis, outlining some orientations in completing
legal framework on accounting for SMEs. This is the basis for us to develop the draft of
survey questionnaire. From this step, with the built questionnaire, we carry out trial survey of some objects who are students for 2nd degree in major of finance and banking, have basic
knowledge on economics, accounting to discover the sentences which are difficult to
understand or easy to cause mistake, determine the suitability of question content, discover
the errors of the draft and check the measurement scale as a first step, thereby create the
product which is complete survey.
3.2.2. Quantitative research
Quantitative research is implemented through stages: designing research sample,
collecting information from survey sample, analyzing data by processing software SPSS 20
through steps of descriptive statistics, analysis of recovery and regression factors.
In this subject, the research sample was selected mainly in Ho Chi Minh City. The
survey questionnaires can be completed by different modes. However, due to cultural
characteristics of Vietnamese people, we mainly use the way of direct interview toward
survey object to strengthen the reliability for collected information. Besides, to overcome the
difficulty on geographical distance, the questionnaire can be sent via email for some objects at
far distance and having no condition for meeting. As designing the questionnaire, we built the
measurement scale under the type of measurement scale Likert 5 points for measuring the
consent level of survey objects with proposed ideas relating to legal framework on accounting
for SMEs in force, on accounting information provided by SMEs relating to the factors
affecting to the application of legal documents on accounting at SMEs as well as orientation
of completing these legal documents.
To serve the research works, the author collected the data with size of survey sample
of 500 enterprises and 300 objects using information in the research area. The survey table
after interviewing will be gathered, checked preliminarily the information on survey note to
eliminate the unreasonable notes. These may be noted containing much information which
does not have answer or the question is contradictory, or marks more than 1 selection for the
questions with only one answer, the number of valid answer samples is 391 for enterprise and
157 for object using information.
After this preliminary checking step, we will enter the information from survey notes
to computer. Before carrying out treatment and analysis, the data needs to be coded and
cleaned. Cleaning the data is aimed at discovering the errors which may happen, they are
Page 11
blanks (due to error during the collection of data or error due to entering the data) or answer
note is unreasonable (such as answers have data not being in designed measurement scale).
We process the data through following analysis: descriptive statistics, evaluation on reliability
of measurement scale, exploratory factor analysis and regression analysis. Specifically: using
descriptive statistics to analyze judgment of survey objects about accounting information
provided by SMEs as well as evaluation on legal document system in force applied for these
documents. This tool is also used at the maximum as considering the idea of objects about
orientation of completing legal framework on accounting in force for SMEs. Besides, the
thesis also uses Independent Sample T-test (verification of equality on average value of 2
general issues from information of 2 independent samples) to check the difference in
judgment between object group playing the role of creating information (accountant) and
object group using accounting information (banking credit staff, staff of enterprise checking
office of taxation… During the analysis of model of factors affecting to the application of
legal documents at Vietnam SMEs, we implemented the verification of measurement scale by
Cronbach Alpha reliability coefficient, eliminated the variables with small correlation
coefficient of total variable; used EFA - Exploratory factor analysis on SPSS 20 and
eliminated the variables with small parameters by checking Factor loading and extracted
variance; evaluated the suitability of research model through KMO coefficient (Kaiser-
Meyer-Olkin). In this research, factor analysis is applied to summarize the observation
variables into some certain factors measuring the different aspects of research concept. The
standards of applying and selecting variables for EFA analysis including: Bartlett standard
and KMO coefficient used for evaluating the suitability of EFA, EFA is considered as being
suitable as 0.5 ≤ KMO ≤ 1 and sig <0.05 (Nguyen Dinh Tho, 2011). The standards of
extracting factor include Eigenvalue index (representing the variance volume explained by
factors) and Cumulative index (total extraction variance shows exploratory factor analysis,
percentage of gaining and percentage of losing). According to Gerbing & Anderson (1988),
the factors having Eigenvalue < 1 will does not have effect of summarizing information better
than original variable (implicit variable in measurement scales as implementing EFA).
Therefore, the factors are only extracted at Eigenvalue > 1 and accepted as total extraction
variance ≥ 50% (Nguyen Dinh Tho, 2011). Standard of factor loadings coefficient shows
correlation between variables and factors, it is used to evaluate the significance level of EFA.
According to Hair et al. (2006), Factor loadings > 0.3 is considered as reaching minimum
level, Factor loadings > 0.4 is considered as being important, Factor loadings > 0.5 is
considered as having reality significance. In addition, the difference on factor loadings
coefficient of an observation variable among factors must be greater than or equal to 0.3 to
ensure the discrimination value among factors (Nguyen Dinh Tho, 2011). The result of this
process helps us rearrange the measurement scale, reduce observation variable set and
Page 12
consider how much percentage of the model the selected factors can explain.
The next step is to verify Cronbach Alpha (CRA) for measurement scales. Cronbach
Alpha is statistics verification about closeness level (ability to explain for a research concept)
of collection of observation variables (questions) through Cronbach Alpha coefficient. Some
researchers believed that Cronbach Alpha coefficient having value from 0.6 and more was
acceptable measurement scale in term of reliability (Nunnally & Bernstein, 1994, according to
Nguyen Dinh Tho, 2011). However, Cronbach Alpha did not show which variable should be
eliminated and which variable should be retained. For such reason, besides Cronbach Alpha
coefficient, people also used item - total correlation and variables with item - total correlation
smaller than 0.3 will be eliminated. Like this, through running CRA, we can consider whether
the measurement scale of concept in the model has acceptable reliability or not; and with
these steps, the thesis determined the model of factors affecting to the application of legal
documents on accounting at Vietnam SMEs.
After determining the model of factors through steps described above, we carried out
analysis of multiple regression (MLR) to evaluate the suitability of model with research data,
at the same time, considering the relationship and effect level of these factors for the
application of legal framework on accounting at SMEs.
SUMMARY OF CHAPTER 3
To achieve the research objective, the thesis built the analysis framework and
coordinated synchronously many different research methods on the basis of solid background
theory. The research result created from applied methods will be the basis for putting forth the
orientations for forming legal framework on accounting for SMEs and researching, applying
into reality of accounting work at SMEs to improve accounting activity at these enterprises
and provide more useful information to use objects.
CHAPTER 4: RESEARCH RESULT AND ORIENTATION SOLUTIONS FOR
FORMING AND APPLYING LEGAL FRAMEWORK ON ACCOUNTING FOR
VIETNAM SMES.
This Chapter reflects multi-directional angle of view of object groups about quantity
as well as quality of accounting information provided by SMEs, evaluation of related parties
about legal framework on accounting in force applied to SMEs and application in reality of
accounting work to create the accounting information in service of the demand of use objects,
analyzes factors affecting to the application of legal documents on accounting in reality of
Page 13
Vietnam SMEs, presents the viewpoint and orientation of forming and applying legal
framework on accounting for SMEs in Vietnam, support solutions aimed at applying legal
framework on accounting for these enterprises efficiently.
4.1. Research result
4.1.1. Evaluating achievement and shortcomings of legal documents on accounting for SMEs
in force and issue of applying these documents in reality of accounting work at Vietnam SMEs
- On accounting information provided by SMEs
Research result shows that survey objects in general agree partly with the judgments
(because average point level according to Likert measurement scale is over 3, from 3 to 4), in
which, the higher agreement level is for the idea “SMEs supply the information quickly,
timely” or “information ensures the quantity in accordance with the regulation”, the
agreement level is the lowest agreement level for the idea that “accounting information
provided by SMEs is regularly used for making decision”, this thing also reflects correctly the
real situation at present, it seems that financial statement of SMEs is not considered as main
information source, reliable basis for making economic condition. The interesting information
found from survey result is that financial statement under the decision 15/2006/QD-BTC is
believed to provide the information more suitable than the statements under decision
48/2006/QD-BTC (average agreement level is 3.54 vs 3.39). This thing explains why in fact,
many SMEs still register the use of accounting regime under the decision 15/2006/QD-BTC
while there is dedicated accounting regime for SMEs.
- On legal documents on accounting in force applied for SMEs
At present, the accounting work at SMEs is governed by accounting law, accounting
standards and accounting regime as well as related guidance decrees and circulars. This
survey focuses on three most important document levels namely law, standard and accounting
regime. Gained result after processing statistics is as follows:
Most of answerers agreed with the idea that Accounting Law has many backward
contents and the current accounting standard system is not suitable and difficult to apply for
SMEs.
Most of ideas rather agreed with the viewpoint that formation of complete legal
framework on accounting is urgent demand at present, it is necessary to supplement into
accounting law the contents for SMEs or the viewpoint on promulgating separately a set of
Page 14
accounting standards for these enterprises also receive many agreement ideas.
The survey objects also agreed with the direction on building account system under
open direction, form of financial statements is flexible, suitable for scale of enterprise.
4.1.2. Analyzing factors affecting to the application of legal documents on accounting at
Vietnam SMEs
After the process of analyzing, the thesis withdrew the research model, it was adjusted
to remain 5 factors affecting to the application of legal framework on accounting at Vietnam
SMEs, including: factor 1 with measurement scales relating to accounting infrastructure and
actual experience of accountants, thus we still consider the factor as “Accounting
infrastructure”, Factor 2 is “Document system itself”; Factor 3 is “Accountant”; Factor 4 is
“Compliance compulsoriness” and finally, it is factor relating to “Interest - cost relation”
Accounting infrastructure Document system itself
Application of legal documents in reality of accounting work at SMEs Accountant Interest - cost relation
Compliance compulsoriness
Figure 4.2 - Adjusted research model
After building the model of factors affecting to the application of legal documents in
reality of accounting work at Vietnam SMEs, we carried out the verification of this research
model through analysis of multiple regression model (MLR) to evaluate the suitability of the
model, consider the impact level of these factors to the application of legal documents.
Considering the regression density table, we see that these factors impact on same direction to
Y, these variables have statistic significance (because sig. = .000), do not violate the
phenomenon of multicollinearity, that means the factors do not have correlation to each other.
Besides, based on magnitude of Beta coefficient, it is possible to realize that factor 1 -
Accounting infrastructure is the most important factor, impacts the most strongly on the
application of legal documents on accounting at SMEs; next, it is factor 4 about compliance
compulsoriness of these regulations. The impact level of remaining factors is factor 3 -
Page 15
Accountant, factor 5 - Interest - cost relation and finally, factor 2 - Legal document system
itself has the lowest effect. This verification result shows the effect level of factors to the
application of legal documents on accounting at Vietnam SMEs, this is the result having very
important significance in putting forth the solutions to help legal documents on accounting to
be applied in reality.
4.2. Viewpoint and direction of forming and applying legal framework on accounting
applied for SMEs in Vietnam
4.2.1. Viewpoint
The viewpoint of thesis as forming legal framework on accounting for Vietnam SMEs
in the coming time includes:
Firstly, inheriting selectively the current legal framework for enterprise in general as
the background for building completely the legal framework on accounting for SMEs.
Secondly, approaching international regulations and practices to modernize legal
framework to improve the integration nature on accounting.
Thirdly, being suitable for specific characteristics on scale, knowledge and management
requirement of SMEs so that proposed solutions are realistic and complied strictly.
Fourthly, ensuring the balance, harmony between interest and cost in researching,
promulgating and putting into application of legal framework on accounting for SMEs.
4.2.2. Orientation of forming
To propose the solutions aimed at forming legal framework on accounting for SMEs
which need outlining suitable orientations. Based on argument withdrawn from overview
argument, operation reality of SMEs and legal regulations on accounting in force, we
determine basic orientation for forming legal framework on accounting applied for Vietnam
SMEs. This is a big and rather complex issue; thus, it is necessary to establish suitable steps.
This process needs to be divided into 2 periods, short-term period is from now to 2020 and
long-term period is from 2020 upwards. The selection of this stage is suitable for reality of
Vietnam SMEs, with existing resource of legislation authority, at the same time, suitable for
itinerary of implementing the commitment with International Federation of Accountant of the
Ministry of Finance on the objective of integrating internationally completely in the field of
accounting in 2020 as well accounting development strategy approved by the government on
Page 16
18/03/2013.
Short-term period (from now to 2020):
In this period, legal framework is built under the integration direction applied jointly
for enterprises under every type and different scales but there are specific separate regulations
for SMEs so that these enterprises can apply favorably and easily.
Long-term period (from 2020 upwards):
The formation of legal framework on accounting for SMEs in this next period will
inherit the results completed in previous period to promote the synchrony and unity. Core
content of this period is to build separate legal framework for SMEs under the direction of
connecting big enterprises in order to suitable for the change on scale during development of
SMEs to help these enterprises organize the implementation of accounting work specifically,
explicitly and improve the compliance.
4.3. Solution for forming and applying legal framework on accounting for Vietnam SMEs
4.3.1. Solution group relating to orientation of forming legal framework on accounting for
SMEs
The enterprise has the role of business subject of the economy, thus the promulgation
of solid legal background for the enterprise is the best way to improve the operation efficiency
of enterprise, thence improve the economy - society of Vietnam. The governing laws during
the operation of SMEs are mainly Corporate Law, Investment Law, Taxation Law and
Accounting Law. The completion of these laws will help to create clear and favorable
business environment for enterprise.
Besides, to help the accounting activity at SMEs happen favorably, the issue is that
management authorities need to design and build a system of complete legal documents and a
mechanism ensuring efficient application of them, in which attaching special importance to
completing the system of accounting standards, accounting regimes and related guidance
circulars. On the other hand, we believe that it is necessary to improve the process of
promulgating these legal documents so that legal framework on accounting for SMEs has
high quality and is applied efficiently in reality.
It is possible to summarize under the form of diagram of legal framework on
Page 17
accounting applied for Vietnam enterprises, in which there are SMEs after building as follows:
Accounting Law
Accounting standard system
Corporate accounting regime
Financial Reporting
governing
Standards applied
Financ
for enterprise
ial
flexible
Report
Financial statement subsystem applied for enterprise (including consolidated financial statements)
ing
System
governing
Financial Reporting Standards applied for SMEs
Financial statement subsystem applied for SMEs
4.3.1. Solution group for applying legal framework on accounting for SMEs
4.3.2.1. Improving issues relating to legal document system
The scope of this solution group include the issues on connotation of legal documents
on accounting applied for SMEs, including compliance compulsoriness of these documents as
well as consideration, settlement of interest - cost relation as applying such legal documents.
4.3.2.2. For accountant
Human is one of the decisive factors during the application of legal documents in
accounting activity of enterprises in general and small and medium enterprises in particular.
To apply legal framework on accounting at SMEs fully and efficiently, an important issue
which needs care for these enterprises is the work of training and improving the professional
knowledge of accounting division, improving the responsibility spirit of each individual
participating in accounting work in the unit.
4.3.2.3. Completing accounting infrastructure
Accounting infrastructure is catalyst promoting the process of applying legal
documents in reality, helping the accounting activity happen favorably and efficiently. The
scope of this solution mentions about the issues such as informaticizing the accounting work,
using accounting software at SMEs, issue of developing occupation opportunity, training
Page 18
work,…
SUMMARY OF CHAPTER 4
To form legal framework on accounting for SMEs in conformity to the reality and
have high feasibility, the issue of studying, judging of related parties about accounting
information provided by SMEs at present as well as the ability this information meets the
demand of use objects is very necessary; on such basis, together with basis given in previous
chapters, the thesis puts forth the viewpoint, orientation and solutions for forming and
applying legal framework on accounting for SMEs in Vietnam. In addition, the thesis
analyzed the effect factors as well as effect level of each factor to the application of legal
documents on accounting in reality of accounting work at Vietnam SMEs.
CHAPTER 5: CONCLUSION AND RECOMMENDATION
5.1. Conclusion
In current condition, according to the achieved survey result, the system of legal
documents on accounting for enterprises, especially SMEs is not only insufficient but also not
synchronous, the regulations have not achieved high harmony with international practice,
have not met well the more and more implicit requirements of the market economy. This
thing leads to the fact that accounting information provided by SMEs has not been highly
evaluated, is not suitable for demand of use objects. To improve this issue, the urgent
requirement at present is to build complete legal framework on accounting applied for
Vietnam SMEs. According to the viewpoint of the thesis, as forming legal framework for
SMEs, it is necessary to inherit selectively the legal framework on accounting in force, at the
same time, approach the international practice to improve the integration on accounting and
especially, suitable for the scale, knowledge and management requirement of SMEs. This
legal framework also needs to be built on the basis of social interest theory, holding theory
and theory of related parties,… to ensure harmonious interest among the parties, balance the
cost interest for SMEs as applying. On the other hand, formation of legal framework on
accounting for SMEs is a very complex issue relating to the legal system governing the
operation of these enterprises and legal documents under many levels relating to the
organization which implements the accounting work such as Accounting Law, Accounting
standards, accounting regime, documents guiding, supporting the implementation. Therefore,
the issues must be solved in turn according to the itinerary with short-term and long-term
specific solutions. In which, the most important ones are frame legal documents including:
Accounting law, accounting standard and accounting regime to be adjusted, newly made on
the spirit of agreeing the accounting system applied for enterprises with different scales on the
Page 19
basis of legal base which has discrimination among the scale levels of enterprise as applying
in the fact; at the same time, it is necessary to improve considerably the process of
promulgating legal documents on accounting to increase the social opponent for the process
of building and completing the system of legal documents. Besides, it is necessary to
implement the supporting solution group to help the process of applying legal framework on
accounting for SMEs to be convenient and efficient, attach much importance to the factors
relating to organizing, applying legal framework on accounting, process of promulgating legal
document system, accounting infrastructure and accountant. To implement successfully and
efficiently the solutions put forth by the thesis, it is necessary to have regular care with high
responsibility spirit and incessant effort of the State management levels, occupational
organizations and SMEs themselves, at the same time, it needs to have contribution of many
individuals and organizations having responsibility, capacity and confidentiality.
5.2. Recommendation
To form legal framework on accounting applied for SMEs as well as put this legal
framework in operation reality of SMEs, this issue relates to responsibility of many
appropriate authorities and SMEs themselves. Originating from the legal framework proposed
at chapter 4, in this part, we state some implications about responsibility of each related object
such as National Assembly, Government, occupation associations, training facilities and
SMEs themselves.
5.3. Limitation of thesis and suggestion for the next research direction
In addition to the achieved result, the thesis cannot avoid some certain limitations. The
sample of research cannot represent for ideas of all SMEs, researchers, accounting
information users,… the selected sampling method is convenient method thus the quality of
research sample is not high. In addition, the responsibility nature in answering the question is
not high, it leads to the fact that although achieved survey result ensures the requirement on
statistics, we are not actually pleased.
To support the introduction of legal documents in reality of accounting work at SMEs,
the thesis carried out the research on factors affecting to this application ability. The research
result finds out the adjustment model with 5 effect factors. Therefore, there are other factors,
other observation variables affecting to the application of legal documents on accounting at
SMEs but they have not been studied comprehensively in the current research model due to
the limitation on scope of enterprise to be surveyed and limitation of some research
conditions. Based on this research result, the next researches should develop the model,
Page 20
introduce more other factors to the research model.
In the next researches, if the condition permits, we should select the sample under
probability and object subsystem; thus the summarization ability will be higher. In addition,
we should increase the dimension of sample and expand the groups of survey object;
however, this thing requires the researchers to invest more time, effort and cost. Besides, it is
necessary to study the factors affecting to the promulgation of legal framework on accounting
for SMEs although this thing is very difficult in the legal environment condition of Vietnam.
Besides, the thesis only stops at the aspect of forming general and summarized picture
about legal framework on accounting for SMEs, it does not study deeply the specific contents
under accounting standard system and accounting regime applied for these enterprises.
Therefore, this is subject aspect which can be further studied and developed at many different
Page 21
levels.
LIST OF WORKS OF THE AUTHOR
1. Vo Van Nhi & Tran Thi Thanh Hai (2013), Some ideas about quality of financial
statements of small and medium enterprises in Vietnam, Economic - Technical
Magazine, ISSN 0866 - 7802 No. (02) June 2013.
2. Tran Thi Thanh Hai (2014), Forming legal framework for small and medium
enterprises: Foreign experience and lesson for Vietnam, Development & Integration
Magazine, ISSN 1859 - 428 X No. 15 (25) 03 - 04/ 2014.
3. Tran Thi Thanh Hai (2014), Factors affecting to the ability to apply legal framework on
accounting at small and medium enterprises in Vietnam, Science & Training Magazine,
ISSN 2354 - 0567 No. 01/2014.
4. Tran Thi Thanh Hai (2014), Discussion about the issue of completing the accounting
report system applied for small and medium enterprises in Vietnam, Finance and
Page 22
Accounting Science Magazine, No. 2, 06/2014.
