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MINISTRY OF EDUCATION AND TRAINING
UNIVERSITY OF ECONOMICS HO CHI MINH CITY
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DUONG HOANG NGOC KHUE
MEASURING THE LEVEL OF NON-FINANCIAL
INFORMATION DISCLOSURE AND FACTORS AFFECTING
THE LEVEL OF NON-FINANCIAL INFORMATION
DISCLOSURE OF COMPANIES LISTED ON THE STOCK
EXCHANGE IN VIETNAM
Major: Accounting
Code: 9340301
SUMMARY OF THE DISSERTATION
HO CHI MINH CITY – 2019
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The dissertation is prepared at:
University of Economics Ho Chi Minh City
Professional advisor:
Asso.Prof., PhD Ha Xuan Thach
Critic 1:
Critic 2:
Critic 3:
The thesis will be presented to the Thesis committee at at
University of Economics Ho Chi Minh City on
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INTRODUCTION
1. Research ideal
Accounting information includes financial and nonfinancial information. We
do not deny the significant role of financial information of companies in the investors’
decision making. However, in a developing society, the intense production of
enterprises leads to negative environmental impacts, labour exploitation to maximize
profit, regardless of adverse effects on the development of sustainable economy.
Therefore, since the 1990s, organizations created the concept of sustainable
development, thus the awareness of companies and stakeholders has improved in
terms of not only financial information but also nonfinancial information, which
includes information about environment, society, corporate governance, and other
nonfinancial information, changed from encouraging voluntary disclosure to
mandatory disclosure some types of nonfinancial information such as social and
environmental information. For example, when starting a project, besides providing
financial information like financial position, cash flow, payback period, profit, etc.,
companies must also disclose nonfinancial information of the project to stakeholders
such as its negative impacts on the environment, solutions for the pollution,
remuneration policy and unemployment resolutions for the local workforce. Only this
way, companies will provide overall and sufficient information to investors so that
they can make economic decisions.
Investors, especially international ones, are paying much attention to
nonfinancial information to have an insight in the value, prestige, and sustainability of
businesses. If companies do not attempt to lessen their negative impacts on the
environment and society, they will not be possible to get and retain professional
investors. Besides analyzing traditional financial indicators to make business
decisions, investors also analyze nonfinancial factors including environment, society
and corporate governance information for the decision making of investors.
Nonfinancial information disclosure has been applied for a long time in
developed nations worldwide in several forms with the guidelines like the Global
Reporting Initiative (GRI), a framework of the Carbon Disclosure Project, or other
guidelines. Nonfinancial information, which plays an important role in accounting
information system, has the potential to add significant value (Fraser, 2012), the
nonfinancial information disclosure makes companies develop more sustainably,
enable the value of enterprises to be recognized by the society and enhance the
competitiveness of companies worldwide.
In Vietnam, companies mostly pay attention to financial information, and some
types of nonfinancial information which present in the notes of financial statements
are used to explain and support for financial information, not the nonfinancial
information about the environment, society, etc. However, some companies listed on
the stock exchange are aware of the important role of nonfinancial information
disclosure according to international standards like the G4 guideline of Global
Initiative Organization (GRI4) such as Vinamilk joint stock company, Hau Giang
pharmaceutical joint stock company, Imexpharm pharmaceutical joint stock
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company… As a results, these companies are greatly trusted by both national and
international investors and their value is internationally recognized.
Vietnam has been a member of many organizations worldwide like WTO,
AFTA, AEC…, so there is a greater need for economic integration to attract foreign
investors. Moreover, when sustainable development are becoming more and more
competitive, Vietnamese accounting reports also need to disclose mandatory
nonfinancial information, especially social and environmental information, etc.
Therefore, in the year 2015, the Ministry of Finance issued Circular No.
155/2015/TT-BTC regarding information disclosure on securities market. The circular
155 requires listed companies to report on their impacts on the environment and
society. After a year of the implementation, companies which disclose nonfinancial
information according to the G4 guideline apply easily the circular 155/BTC. While
the others apply the circular 115/BTC inadequately and eliminate some indexes due to
the lack of information about gathering, processing and disclosing.
As a result, research on nonfinancial information disclosure are gaining more
attention. Around the world, there are several research on the level of nonfinancial
information disclosure and factors affecting this level, like Mobus (2005), Levine and
Smith (2011), Babaloo (2012), Skouloudis and et al (2013), Behbahani and et ah
(2013a, 2013b), Karim and et al (2013), Ioannou và Sarefeim (2014), Khan and et al
(2014), Ghasempour Grewal and et al (2015), Christensen and et al (2015), Kaya
(2016), Mihajlov and Spasic (2016), Rezaee và Tuo (2017), Manes-Rossi and et al
(2018), Gulin and et al (2018), Sierra-Garcia and et al (2018), Szadziewska and et al
(2018)… Nonetheless, in Vietnam, the kind of the research topic only has some
studies such as the research of Ta Quang Binh (2012, 2014), Pham Duc Hieu and Do
Thi Huong Lan (2015). Therefore, it is necessary to choose the topic “Measuring the
level of nonfinancial information disclosure and factors affecting the level of
nonfinancial information of companies listed on the stock exchange in Vietnam” as
the research topic for the dissertation.
2. Research objectives and questions
2.1 Research objectives
The dissertation is designed to achieve the following specific objectives:
+ Firstly, measuring the level of non-financial information disclosure of
companies listed on the Vietnamese stock exchange in accordance with Vietnamese
regulations, and according to GRI4 regulations of the internation.
+ Secondly, identifying the factors and measuring the impact of each factor on
the level of non-financial information disclosure of companies listed on the
Vietnamese stock exchange.
2.2 Research questions
3. Research Methodology
The author uses mixture of qualitative and quantitative methods in the dissertation.
The research process of the dissertation as below:
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Figure 1: Research framework of the dissertation.
4. Research subjects and scopes
Reseach subjects: Non-financial Information.
Using results
of the first
research
objective
Results
(Answer the
second research
question)
Results
The level of non-financial information disclosure
in accordance with Vietnamese and GRI4
regulations (Answer the first research question)
Using results of the
second research objective
Using results of the first
research objective
Identifying the factors and measuring the
impact of each factor on the level of non-
financial information disclosure (Answer the
second research question)
Regression method
Descriptive statistics method
General Research Objectives
Measuring the level of non-financial information disclosure of companies listed
on the Vietnamese stock exchange in accordance with Vietnamese and
international regulations. And study on the factors affecting the level of non-
financial information disclosure.
The first specific objective: Measuring the
level of non-financial information disclosure of
companies listed on the Vietnamese stock exchange
in accordance with Vietnamese and GRI4
regulations
Qualitative research
(Expert method)
Identifying factors for the research
model.
The second specific objective: identifying the
factors and measuring the impact of each factor on
the level of non-financial information disclosure of
companies listed on the Vietnamese stock exchange.
Unweighted index method
Descriptive statistics method
Quantitative Method