improving organizing controls to enhance financial accounting information quality of the listed companies in the vietnam stock exchange

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CHAPTER 1- INTRODUTION
1.1 The reasons to research
In the modern economy with the development of capital market,
listed companies (LCs) and its financial information which is disclosure
public legally on the stock exchange is necessary. Investors,
governments and other stakeholders who concern about the LCs are
always considering the information on business strategy, on the financial
situation of these companies when investing in. The financial
information of LCs is audited, reviewed by audit firms and give the “true
and fair” opinion. In addition, this information is examined and
supervised by the stock exchanges (SE) and the State Securities
Commission (SSC). Therefore, investing in LCs investors feel more
secured than that in unlisted companies, but the reliability of the
information still has some doubtful notes.
According to Agrawal (2005), Brown.J (2010), the wave of
accounting scandals recently emerged in the international financial
community that raises issues about the quality of financial statements
(FS) [44,58]. Widespread disruption caused by the disclosure of
dishonest financial and accounting data that required the need to
strengthen financial accounting information quality (FAIQ) and control
board of directors (BOD) by establishing corporate governance
[54,59,74,92,104]. In Vietnam, the scandals in Bach Tuyet Cotton
Corporation and the Vinashin Group are clearly examples of the
weaknesses in corporate governance and public disclosure of financial
accounting information (FAI).
The results of the fraud information disclosures affect investors in
particular and the national economy in general lead to an urgent
requirement of control of FAIQ of LCs. Control is considered in various
aspects that ensure comprehensive control, including LCs those prepare

and present FAI - internal control (IC) and external control in which the

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national control (NC) influences the most on FAIQ which disclosured by
LCs.
Therefore, the Thesis " Improving organizing controls to enhance
financial accounting information quality of the listed companies in the
Vietnam stock exchange " is necessary.
1.2 Research objectives
The overall objective of the thesis is focusing on research and
assessing the relationships between organizing IC (OIC) and organizing
NC (ONC) FAIQ of LCs that meet higher information with requirements
from investors.
1.3 Research questions
The general research question is how comprehensive organizing
controls enhance FAIQ of LCs in the Vietnam stock exchange?
1.4 Objects and scope of research
The thesis studies organizing controls (including OIC and ONC) to
FAIQ of LCs in the Vietnam stock exchange, thereby proposing
solutions to improve organizing controls in order to develop LCs’ FAIQ.
The thesis focuses on the collected data about FAIQ from the nonfinancial LCs on Hochiminh Stock Exchange (HOSE). The research
period is from the year 2008 to the year 2012.
1.5 New contributions of the thesis
(1) The thesis used various methods and models which measure the
quality characteristics of LCs’ FAIQ.
(2) The thesis identified the positive aspects of OIC to FAIQ of
LCs.
(3) The thesis pointed out the impact of ONC to FAIQ of LCs.

(4) The thesis assessed the actual state of FAIQ of LCs in the
Vietnam stock exchange during the study period (based on an
independent audit opinion on the FS of non-financial LCs on HOSE).
(5) The thesis applied qualitative methods in determining the
relationship and the initial impact to provide the research model. The

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quantitative methods are used to test the relationship between OIC and
ONC to FAIQ of LCs (analysing by EViews software)
1.6 Outline of the thesis
The thesis consists of six chapters, including:
Chapter 1- Introduction;
Chapter 2 - General theory and literature review on organizing
controls to enhance FAIQ of LCs in the stock exchange;
Chapter 3 - Research methodology of organizing controls to FAIQ
of LCs in the Vietnam stock exchange;
Chapter 4 - Results of the research on the impacts of organizing
controls to FAIQ of LCs in the Vietnam stock exchange;
Chapter 5 - Analysing the research results and proposing solutions
to improve organizing controls to enhance FAIQ of LCs in the Vietnam
stock exchange;
Chapter 6 - Conclusions.
Concluding remarks in chapter 1
The thesis identified the object of the research, which is the impact
of OIC and ONC to FAIQ of non-financial LCs. The research scope is
non-financial LCs in the Vietnam stock exchange at HOSE, the research
period from the year 2008 to the year 2012.
The overall objective of the thesis is focusing on the research and

assessing the relationships between OIC and ONC with FAIQ of LCs
that supply investors with higher information requirements.

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CHAPTER
2 - GENERAL THEORY AND LITERATURE
REVIEW ON ORGNIZING CONTROLS TO ENHANCE
FINANCIAL ACCOUNTING INFORMATION QUALITY OF
LISTED COMPANIES IN THE STOCK EXCHANGE
2.1 Organizing of information control
2.1.1 Information control
On the basis of analyzing parts of the views of researchers in
Vietnam and abroad the author proposes the concept of control as
follows: "Control is an important function of management which done at
all levels and various stages of management in a suitable manner with
the objects to achieve objectives of the entity. Control involve
measurement, evaluation controlled objects in order to gain effective
management "
Economic information is defined as signals in which received,
understood and assessed and those are useful in making economic
decisions of users. Economic information meets characteristics of
information that are needed to be controlled, measured to ensure
information reliability.
Information control regularly ensures unity and connection between
the information elements. The false and unreviewed information will
affect users.

2.1.2
Organizing of information control
According to the author, organizing of information control is the
way that links the different components in a specific system in which
combining internal control and external control to the information that
is managed.
2.2 Financial accounting information quality of listed companies
2.2.1
The criteria of financial accounting information quality
Information quality assures these characteristics satisfying needs,
meeting the different needs and standardized. The standardization of the
information quality often is to meet different needs, such as reliability,
objectivity, timeliness, relevance, understandability, comparability of the
information. Reliability is considered as the important standard of
information quality. Besides, based on the characteristics of information,

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information quality must be quantified according to the characteristics of
information and be controlled to ensure the information quality that
convey from the input to the ouput.
According to IFRS (2013), the following criteria are used to decide
FAI has: relevance, faithful representation, comparability, verifiability,
timeliness and understandability.
2.2.2
Requirements on financial accounting information quality of
listed companies
Main characteristics of the LCs include: public joint stock
companies with large scale, issuing securities, financial information

disclosure and stakeholders who interested in FAI of LCs and theirs
operations are managed by the legal system seriously.
Requirements on FAI of LCs includes:
Firstly, FAI of LCs shall be provided publicly is the official and
unique information of LS;
Secondly, FAI of LCs must ensure transparency and publicly
disclosure that required by law;
Thirdly, FAI of LCs includes multi - contents;
Fourthly, FAI of LCs (via FS ) must comply with the provisions of
SEC where listed and it is controlled and handled with violations of
information disclosure;
Fifthly, FAI of LCs must be published on time;
Last, FAI shall be provided to assure coporation’s value.
2.2.3
Roles of financial accounting information quality of listed
companies on the stock exchange
According to Robert M. Bushman and Abbie J. Smith (2003), FAI
affects investors, profitability and added value of corporations. Ensuring
information quality provides information completeness, timeliness and
faithfulness needs to combine with published information in the FS of
LCs.

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2.2.4
Main reasons that listed companies provide biased financial
accounting information
The motivation of BOD, hard financial situation, weakness IC in
LCs are main reasons.

2.3 Organizing of quality control of financial accounting
information of listed companies
N.Klai (2011) showed that the governments and financial
institutions’controls have positive impact on FAIQ of LCs in the Tunisia
stock exchange in the period 1997-2007.
According to Alvin A.Arens (2012), the problems in preparation
and presentation the FS of Enron and WorldCom showed weaknesses in
their IC. In the U.S, the independent auditors should make an assessment
and report the effectiveness of IC related to the preparation the LCs FS.
This content is included in its audited FS of the LCs. Apply a similar to
Japan via J-SOX Act.
As the international experience, the LCs must be controlled by the
government - an legally external control in the stock market management
and the IC.
2.3.1
Identifing the content of organizing controls of financial
accounting information
Organizing controls is the way to link the different components in a
specific system, were internal and external control toward the general
goal of the managed objects such as economic information. The thesis
identifies contents of organizing controls of FAI including: Quantifying
FAIQ (control object); OIC to FAIQ of LCs; ONC (external control) to
FAIQ of LCs.
2.3.2
Quantifying financial accounting information quality of
listed companies
Quantifying FAIQ by standardizing mesurement of FS: Relevance
(R), faithful representation (F), comparability (Co), verifiability (V),
timeliness (T), understandability (U) and total assessment.

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According to the research of Ferdy van Beest (2009) [72], FAQ =
(R + F + V + U + Co + T) / 6 (2.1)
2.3.3
Organizing internal control of the quality of financial
accounting information of listed companies
Internal control is considered in systematic view of regulations and
control procedures. This mean that the approach IC can be from system
IC (consisting of three components) or the process IC (consisting of five
components).
J.Altamuro Research (2010) pointed out control procedures that
affected the FS preparation in the banking entities [84]. Organizing
internal control is a topic that related to the fraud in the preparation of FS
and accounting scandals in all countries (Angella.A (2009) [47]).
According to the research results in the report of the Treadway
Commission in 1987 in the U.S showed the absence or weakness of OIC
that is the leading cause of fraudulent financial information of
companies.
Organizing internal control of financial accounting information of
the listed companies is how to set the relationship among the
components of the IC system that included control environment,
accounting information systems and control procedures in order to
ensure reliability of information that reflected on FS.
Quantifying the organizing internal control
Organizing internal control is quantified through the average values
of the components in the system [65]: CS = (EC + AS + CP)/3 (2.2).
Each component in OIC such as control environment (EC), accounting
information systems (AS) and control procedures (CP) were quantified.

Methodology to evaluate the relationship between organizing
internal control and financial accounting information quality of
listed companies
J.Altamuro (2010) pointed out that the financial entities had a
positive effect on control procedure to prepare FS [84]. According to
N.Klai (2011), the corporation size was associated adversely to FAIQ

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[99]. The thesis uses quantitative research methods to evaluate the
relationship between OIC to FAIQ of LCs.
2.3.4
Organizing national controls of financial accounting
information quality of listed companies
Management of the stock exchanges is a part of national economic
management.
We have learnt the accounting scandals such as Enron,
Worldcom,..that mandated the U.S. issuing Sarbarnes-Oxley Act to
control the transparency of the financial situation of the LCs by
regulations of IC and independent auditors for LS [106] .
There are some experiences of control of stock market information
from the U.S, Japan, China, Malaysia, Thailand.
According N.Klai (2011), the national control and the financial
institutions control strengthened the transparency and relevance in the
preparation of FS (applicable to state companies) [99]. Most countries
have their specific supervisory systems through the SSCs, the National
Supervisory Committees and the SEs.
Alvin A.Arens (2012) has pointed out that the independent audit
opinion of the FS were the necessary requirements of the SEC to LCs

[45] .
Organizing national controls of FAI of LCs includes national
supervisory agencies and national control procedures.
National supervisory agencies
National supervisory agencies implement monitoring of FAIQ of
LCs in stock markets over the world usually include: Government,
Ministry of Finance, the State Securities Commission (SSC), the Stock
Exchange (SE), the National Supervisory Committees.
Independent audit is considered as the other hand of the government
in controlling FAIQ of LCs in stock markets.
These national supervisory agencies implement supporting
functions such as legal advice, professional advice, training for LCs in
management for FAIQ in developing countries.

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National control procedures
In order to promote the role of control, national supervisory
agencies implement control procedures such as monitoring, checking,
inspecting and penalizing. All procedures are controlled by the laws and
by laws documents. ONC influences strongly through the system of
national securities laws. LCs who disclosed misstatement may be
administrative sanction or criminal.
Organizing national controls of FAIQ of LCs in the stock exchange
includes supervisory agencies monitoring FAI and control procedures of
these agencies that regulate and handle violations of disclosure FAI.
The relationship between the state and FAI which prposed by
N.Klai (2011), the author establishes the relationship between NC of
FAIQ of LCs in Vietnam's stock market. Based on, the thesis builds the

research model and the research hypotheses to quantify external control
factors those namely SC to FAIQ through LCs FS. This organizing
control includes national supervisory agencies and national control
procedures.
Concluding remarks in chapter 2
Chapter 2 synthesis these general theories of organizing of
information control, FAIQ of LCs.
Chapter 2 has overview the theories of control of FAIQ that include
FAIQ (controlled information), ICO and NCO.

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3

CHAPTER 3 – RESEARCH METHODOLOGY OF ORGANIZING
CONTROLS TO FINANCIAL ACCOUNTING INFORMATION
QUALITY OF LISTED COMPANIES IN THE VIETNAM STOCK
EXCHANGE
3.1 Sources of research data
The thesis uses two data sources in the research process: secondary
data and primary data.
3.2 Qualitative research methodology
3.2.1 Desk research
The thesis uses qualitative method in the initial research stage to
find the previous models, methodologies and results. These are basis for
the thesis.
3.2.2 Real-life situation research
The author conducted the situation on FAIQ of LCs in the Vietnam
stock exchange.

3.2.3 In–depth interview of experts
The author performed in-depth interviews with the experts who
have experiences in the field of auditing, accounting, stock exchange,
management of stock market in order to build the model, the model
variables, as well as building the research questionnaires (Appendix 02).
3.2.4 Summarise and analysis
The author analysed and identified the background theories of the
thesis and synthesized of specialists' opinions.
3.3 Quantitative research methodology
3.3.1
Develop research hypotheses and research model
These results from qualitative research methodology help to build
the research hypotheses and model of the relationship between
organizing controls (IC and NO) and FAIQ of LCs.
OIC affect FAIQ of LCs
H0: OIC not affect FAIQ of LCs
H1: OIC affect FAIQ of LCs
FAQ = β0 + β1.EC + β2. AS + β3.CP + β4.Year + β5.Capital +β6.

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Where : FAQ: Quality of financial accounting information of LCs
EC: Control enviroment
AS: Accounting information system
CP: Control procedures
Year: Operating years
Capital: Capital
HOSE: Listed times in HOSE
ONC affect FAIQ of LCs

H0: National supervisory agencies not affect FAIQ of LCs
H1: National supervisory agencies affect FAIQ of LC
FAQ = β0 + β1.S + β2.SP + β3.Year + β4.Capital +β5. HOSE
Where: S: Affecting of national supervisory agencies
SP: Affecting of supporting functions from agencies
Year: Operating years
Capital:Capital
HOSE: Listed times in HOSE
3.3.2 Research questionnaires
3.3.2.1 Constructing research questionnaires
Research questionnaires was constructed (Apendix 03). This has been
sent to 266 companies (out of 282 companies) of non-financial LCs in
HOSE (the statistics in the year 2012 accordingly) and received 69
responses (26%).
3.3.2.2 Collectting data from the questionnaires
Code of data: Coding data on each questionnaire.
Declaration data: Enter data into the excel table (Appendix 05, 08,
09)
3.3.3 Descriptive statistics analysis
Analysis of descriptive statistics by Eviews software.
3.3.4 Regression correlated method
The thesis used EViews software to test the relationship of
organizing controls and FAIQ of LCs.

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Concluding remarks in chapter 3
Chapter 3 summarised research process, research data collection,
research methodology used in the thesis.

Qualitative research methodologies used in the thesis include desk
research, real-life situation research, in-depth interview, synthesis and
analysis methods.
Quantitative research methodologies applied in the thesis include
survey, descriptive statistics analysis and correlated regression method
by EViews software.

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4

CHAPTER 4 - RESULTS OF THE RESEARCH ON THE
IMPACT OF ORGANIZING CONTROLS TO FINANCIAL
ACCOUNTING INFORMATION QUALITY OF LISTED
COMPANIES IN THE VIETNAM STOCK EXCHANGE
4.1 The overview of the Hochiminh Stock Exchanges and
requirements for financial accounting information quality of listed
companies
HOSE is the largest stock exchange in Vietnam. There were 294
LCs at December 31, 2012.
LCs diclosure their audited financial statements which complied
with Circular No 52/2012/TT-BTC dated April 05, 2012.
4.2 The actual state of quality control of financial accounting
information of non-financial companies listed in the Vietnam stock
exchange
4.2.1
General evaluation of the quality of financial accounting
information of non-financial companies listed on the Vietnam stock
exchange

Evaluating the quality of FAI of LCs in Vietnam stock exchange
that had been done by the independent audit reports of the FS of LCs of
the period 2008 to 2012 and through auditor's opinions (Appendix 04).
4.2.2
Quantifying financial accounting information the quality of
non-financial companies listed on the Vietnam stock exchange
Survey data of FAIQ of non-financial LCs in HOSE had been
collected and synthesized in Appendix 05. The collected data was
analyzed by EViews software and the analysed results showed: FAIQ of
surveyed non - financial LCs in HOSE are moderate level with the mean
4.07 (as good quality) and Std.deviation 0.567, domain evaluation data
of 2.5 - 5.

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4.3 Organizing controls of financial accounting information quality
of listed non-financial companies in the Vietnam stock exchange
4.3.1
General evaluation of control of financial accounting
information quality of non-financial companies listed in the Vietnam
stock exchange
Through actual survey on the periodically information quality of FS
of LCs in the Vietnam stock exchange today pointed out some problems
including: (1) published FS’s information none incompletely and not
complied with regulations and accounting standards; (2) haved
significant difference before and after auditted; (3) violated the
requirement to disclosure timeliness.
4.3.2
Organizing internal control of financial accounting

information quality of non-financial listed companies in the Vietnam
stock exchange
Based on collected data of OIC of non - financial LCs in HOSE, the
statistical analysis showed that OIC was highly appreciated.
Using EViews software to process collected data through the survey,
the result showed the correlation between ICO and FAIQ of nonfinancial LCs in HOSE.
Effection of ICO to FAIQ: FAQ = 0,916 + 0,364.EC +0,113. AS +
0,238.CP + 0,076.Year -0,012.Capital - 0,08. HOSE (Probability greater
than 95% and the control environment affected FAIQ).
FAQ = 0,763+ 0,738.CS + 0,092.Year - 0,009.Capital 0,092.HOSE and ICO has positive impact on FAIQ with probability
greater than 95%.
According to the results, the operating years of the LCs do not affect
FAIQ. The LCs’capital and the time listed in HOSE are not meaningful.
The relationship among control environment, accounting
information systems and control procedures to FAIQ were close when
analysing one by one.
(1) Environmental control is a important element that affected to
FAIQ (Prob. < 5% and β = 0,563).

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(2) Accounting information system prepares FS and affects to FAIQ
(Prob. < 5% and β = 0,513).
(3) Control procedures affect to FAIQ (Prob. < 5% and β = 0,584).
4.3.3
Organizing national controls of financial and accounting
information quality of non-financial listed companies in the Vietnam
stock exchange
Direct national supervied agencies includes Government, the

Ministry of Finance, the SSC, the National Supervisory Committee, SEs.
Besides, other agencies do not participate in the controlling process but
significantly effect in filed of management of audit quality of FS of LCs
that are the Vietnam State Audit Office, the Vietnam Association of
Certified Public Accountants (VACPA).
Quantifying organizing national control of financial accounting
information quality
National supervied agencies:
According to the descriptive statistics analysis, the role of the
National Supervisory Committee is minimum (with mean of 3,681 and
1.131 Std.deviation), the influence of HOSE is the maximum (with the
mean of 4.521 and 0.608 std.deviation) and followed HOSE that is SSC
(with the median of 4.362 and std.deviation of 0.727).
Thus, the results of the analysis showed that the influence of
national supervied agencies to FAIQ of LCs in Vietnam stock exchange
is quite high with the median of 4.139 and 0.684 std.deviation.
According to statistics, the supporting functions of national
supervied agencies have equal influence and therefore, the impact of
these to FAIQ of LCs is 4.304 median and 0.596 std.devation.
National control procedures:
In 69 responses there is 15 respondants comment that the current
penalties for management of FAI is not serious (rate of 21.7%).
Quantifying the impact of ONC to FAIQ
According to the analysis results showed that has strong impact on
ONC (through national supervisory agencies) to FAIQ of LCs with the

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coefficient β = 0.359 (for the impact of national supervisory agencies)

and the coefficient β = 0.132 (for the supporting functions). The impact
of their supporting functions do not affect the FAIQ (due to the over
influence of national supervisory agencies). Other variables of size and
listed time in HOSE are not meaningful to FAIQ of LCs.
Concluding remarks in chapter 4
Chapter 4 summaries of the actual state of FAIQ and control of
FAIQ of non-financial LCs in the period 2008 - 2012 in HOSE (the List
of sub-sectors in 2012) by which assessing the independent audit opinion
of FS of non-financial LCs.
Chapter 4 presents the results of the survey (obtained 69 responses
representing 266 non-financial of LCs in HOSE under the List of subsectors in 2012) including: Descriptive analyzing of standardization of
FAI, the impact of OIC and ONC to FAIQ of non financial LCs in
Vietnam stock exchange.
The estimated results on EViews software shows the results of the
correlation between OIC and ONC to FAIQ of non financial LCs in
Vietnam stock exchange.

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5

CHAPTER 5 – ANALYSING THE RESEARCH RESULTS AND
PROPOSING SOLUTIONS TO IMPROVE ORGANIZING
CONTROLS TO ENHANCE QUALITY OF FINANCIAL
ACCOUNTING INFORMATION OF LISTED COMPANIES IN
THE VIETNAM STOCK EXCHANGE
5.1 Ananlysing the research results
5.1.1
The quality of financial accounting information of listed

companies in the Vietnam stock exchange
By examining the FS of LCs in HOSE in the period of 2008 - 2012,
the author finds that FAI diclosured is only at the minimum information
required of the FS. LCs which were focused solely on accounting
information, not on financial information.
Survey results from 69 companies representing 266 non-financial
LCs in HOSE showed: Information of going on concern ability of LCs is
the most important. The additional information is considered as the
second most important.
LCs has not been fully complied with currently accounting
regulations and accounting standards in which providing FAI via FS
(that expressed in qualified opinion of auditors). Thus, selecting and
appling accounting policies which are appropriate for current accounting
regulations and accounting standards, are important to ensure the quality
of accounting data (according to the survey).
In fact, many audited FS diclosured publicly still have misstatemnet
among the accounting data periods and others. According to the research
findings, the opinion of the independent auditors on economic decisions
influence has been highly appreciated.
Based on the survey results, Notes for Statement of financial
position and Income Statement clearly presented has been highly
appreciated. Contents of the notes to the FS are supplemented in
accordance with international guidance.
The survey data showed that the requirements of compared
information with the previous year, retroactively adjusted prior figures

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on FS affected the accounting data in the current financial year. The

revaluation estimation and accounting claim in the financial year are
highly appreciated.
Timeliness is generally required of companies when they publish
FAI. There are urgent requirements in LCs for transparency and
necessary to investors’economic decisions.
5.1.2
Organizing internal control and the relationship between
organizing internal control and the financial accounting information
quality of listed companies in the Vietnam stock exchange
The survey results of the control environment is highly evaluated in
OIC of LCs, in which BOD’s responsibility for establishing FS and
operate IC has the highest impact. 39 out of 69 surveyed companies have
internal audit departments (the Internal audit department required by
law)
According to the survey results, the accounting system providing
FAI to ensure timely decision-making process is evaluated at the highest
level. In the integration process, the preparation of consolidated FS has
to be done by high qualified staff.
48 out of 69 companies (rate of 69.6%) have issued IC regulatory.
Most of the control procedures that effected directly to control that is
highly appreciate.
The results show that the control environment has the highest
impact, following by the control procedures and the accounting
information system has the lowest impact to FAIQ of LCs.
5.1.3
Organizing national controls and the relationship between
organizing national controls and the financial accounting information
quality of listed companies in the Vietnam stock exchange
The survey results of ONC of FAI of LCs showed that SSC give
requirements control, detect and make a report to handle violations

however there are no allowance to investigate neither likely approach
LCs. Audit firms are allowed to approach LCs by signing audit contracts
and designating by SSC. The National Supervisory Committee handles

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errors however its supervision on the entire capital market are not
perfect. The Ministry of Finance sets requirements of control of FAI of
LCs and SSC is under the Ministry of Finance.
The research results showed that the relationship between FAIQ and
ONC. Therefore, it needs to improve FAIQ through improvement of the
national supervisory agencies and their support functions. This result
indicates that if there is an absence of effective sanction regulations in
the market, FAIQ of LCs will be affected.
5.2 The solutions to improve organizing controls to enhance the
financial accounting information quality of listed companies in the
Vietnam stock market exchange
5.2.1
The need to strengthen the quality of financial accounting
information of listed companies in the Vietnam stock exchange by
improving organizing controls
These solutions aim at FAIQ of LCs in the stock exchange through
the improvement of OIC and ONC. These help to reduce the risks of
diclosured financial information in the stock exchange and thereby
minimize systematic risk.
5.2.2
The point of views of the solutions to improve organizing
controls to enhance the financial accounting information quality of
listed companies in the Vietnam stock exchange

Firstly, control to provide FAI that ensures quality to protect
investors’ benefits.
Secondly, ensurance to organize effective components of IC that
provide highly qualified FAI for the interested parties to make decisions
accurately and timeliness.
Last, ensurance that national supervisory agencies coordinate to
monitor, manage disclosure FAI of LCs.

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5.2.3
The solutions to improve organizing controls to enhance the
financial accounting information quality of listed companies in the
Vietnam stock exchange
Solutions of organizing internal control
Firstly, complete environmental control by building BOD’s
responsibility of financial reporting and internal control activities of
LCs.
LCs make regulatories clearly for registration misstatement in FS of
BOD and they are responsible to reimburse the losses to companies and
investors.
Secondly, complete control environment by maitaining effectively
internal audit departments in listed companies; reporting internal audit
activities.
LCs need to organize and maintain effective internal audit
departments complied with the law. The Internal audit department
reports the process of review of FS preparation and presentation.
Thirdly, complete control procedures through promulgating
internal control regulations effectively in which detailed control

procedures of each specific control process.
IC regulations detail control procedures for each specific control
process.
Lastly, complete accounting information system through
promulgation the process and organization of accounting works in LCs.
LCs need to build detailed accounting procedures for each position
of the Accounting department. LCs ussually review their accounting
procedures, their process of FS preparation and presentation in order to
ensure its compliance with current accounting standards and current
accounting regualations.
Solutions of organizing national controls
Solutions of accounting regulations and standards
Firstly, add and complete Vietnam accounting standards system,
which is the basis of FS preparation and add guidelines of accounting

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