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World Bank, Vietnam work to strengthen financial systems

Sunday, December 17, 2017, 10:47 GMT+7
World Bank, Vietnam work to strengthen financial systems
World Bank President Jim Yong Kim takes to the stage to deliver remarks at the plenary session at the IMF-World Bank annual meetings at Constitution Hall in Washington October 10, 2014. Photo: Reuters

A new World Bank report, jointly launched on Thursday with Vietnam’s Ministry of Finance, will support the development of a sound financial reporting institutional framework, by improving the understanding of high-quality corporate financial reporting and auditing.

The report, entitled 'Reports on the Observance of Standards and Codes (ROSC): Accounting and Auditing' and part of a global initiative to improve compliance with internationally recognized standards and codes, focuses on accounting and auditing standards and practices for public interest entities, as well as the institutional framework that underpins the corporate financial reporting system. 

“As part of the World Bank Group’s support for Vietnam’s Vision 2030 on Accounting and Auditing, we hope that this report will contribute to the successful implementation of the country’s long-term strategy for sustainable and inclusive development,” Ousmane Dione, World Bank country director for Vietnam, was quoted as saying on the bank's website.

Linked to complementary reforms in the financial sector, the report recommends that Vietnam’s accounting law and the law on independent auditing could benefit from simplification during the next revision process. 

It also advises that Vietnam fully adopt international financial reporting standards and related guidelines from the International Financial Reporting Interpretations Committee for public interest entities.

“We echo the report’s point of view that the benefits of IFRS adoption is undeniable. Once IFRS is adopted, the quality of corporate financial reporting will improve significantly through enhanced accountability, transparency and comparability, providing users with useful information for management, governance and investment decision-making. In addition, the IFRS adoption also promotes the international recognition of Vietnam as a full market economy, and eventually the FDI flow,” Vu Thi Mai, Vice-Minister of Finance, said.

Therefore, the Ministry of Finance is promptly working on the development of a proposal on updating Vietnam's corporate standards for submission to the government’s approval for IFRS adoption, he added.

The report recommends specific policy measures relating to statutory frameworks, accounting standards, public oversight and monitoring, accounting education, and public accountancy organizations, in order to promote transparency and investor confidence, mitigate risks stemming from financial volatility, and foster market efficiency as well as private sector-led economic growth. 

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