Presentation of financial statements of construction enterprises listed on the stock market of vietnam

In particular, there are few studies that clearly indicate the criteria of financial statement presentation, especially in a specific field such as the construction industry, especially

MINISTRY OF EDUCATION AND TRAINING MINISTRY OF FINANCES

FINANCIAL INSTITUTIONS

LE THI THU HUONG

PRESENTATION OF FINANCIAL STATEMENTS OF CONSTRUCTION ENTERPRISES LISTED ON THE STOCK

MARKET OF VIETNAM

Specialization : Accounting Code : 9.34.03.01

SUMMARY OF THE THESIS OF DOCTORS OF ECONOMY

HANOI - 2023

at the Academy of Finance

Scientific instructors: 1 Dr Thai Ba Cong

2 Dr Le Van Lien

Response 1:

Response 2:

Feedback 3:

Academy-level Dissertation Council, meeting at the Academy of Finance At time day month year 20

The thesis can be found at the National Library

and the Academy of Finance Library

PREAMBLE

1 Urgency of the research topic

Financial statements are the product of financial accounting, the output of the accounting information system The purpose of the financial statements is to provide useful financial information about the business to current and potential investors, lenders and other creditors in making decisions about the provision of resources to the business Financial statements are an important source of information for capital transactions of enterprises, especially in the stock market Completing the presentation of financial statements is not only meaningful in theory, but it also has important practical significance in appropriately meeting diverse information needs in the process of continuous development of economies economic On a practical level, the results of the IASB-FASB convergence project

on the development of a theoretical framework for the preparation and presentation of financial statements are the product of an actively debated issue, from the identification of defines the approach, purpose, and quality characteristics, to the principles governing the preparation and presentation of financial statements In terms of practice, international financial reporting standards are in the process of being renewed towards a high quality, global

accounting standards for the capital market

In Vietnam, since the unification of the country, the current accounting system and corporate financial statements have basically been built in the direction

of approaching international practices on the basis of Vietnam's practice, with improvements in method, quite complete and systematic However, in the current period of strong international economic and accounting integration, the usefulness

of accounting information is not limited to the national scope, quality standards and information disclosure are not limited must be approached according to international practices, the present financial statement presentation has revealed unresolved shortcomings, from specific issues such as measurement and recognition, to strengthening scientific arguments, making solid and stable basis for promulgating accounting standards and assessing the quality of financial statements Valuation basis, quality characteristics and principles of preparation of financial statements are not fully regulated, lack of uniformity, not consistent with accounting standards and international practices; presentation of financial statements is stereotyped, lacks flexibility; the reporting system, some contents and items in the financial statements are incomplete, or not consistent with accounting standards and international practices; have not mentioned or regulated the recognition and presentation of knowledge resources, corporate social

responsibility in the report These limitations have different objective and subjective causes, significantly affecting the usefulness and the international integration process of financial statement presentation

The positive effects of VAS in the previous period cannot be denied However, along with changes in domestic economic institutions as well as changes in the IFRS system in the current period, VAS has revealed many shortcomings, especially transactions of the newly developed market economy birth has not been thoroughly resolved by VAS Thereby, it can be seen that the amendment to complete and develop the legal framework on accounting in general and the legal framework on financial reporting standards in particular in Vietnam

is one of the key issues that need to be implemented as soon as possible in accordance with international financial reporting standards Currently, the Ministry of Finance as well as policy makers are also studying to change as soon

as possible in line with the trend of gradually approaching international reporting standards, but the implementation still has many limitations and obstacles need to

be resolved to overcome the shortcomings such as: legal corridor, human resources, language barriers, changes in accounting software, low social and community awareness On the other hand, in Vietnam L The accounting law is the highest legal document, followed by the decree guiding the accounting law in business fields, then the corporate accounting standard system, followed by the accounting regime and guiding circulars current accounting standards Before the accounting law No 88 was promulgated and put into effect, the Ministry of Finance also issued Circular 200/2014/TT - BTC issued on December 22, 2014 and took effect from February 5, 2015 The guidance on the corporate accounting regime has shown the great efforts of the Ministry of Finance in recent years on the legal framework on accounting to be close to international standards of accounting and international financial reporting standards according to international standards keeping up with the development of the market economy and the trend of international economic integration becoming wider and deeper TT200/2014/TT - BTC issued on December 22, 2014 took effect from February 5,

2015 replacing Decision 15/2006/TT - BTC issued on March 20, 2006 on the accounting regime enterprise Circular 200 was introduced more openly than Decision 15, providing guidance from accounting documents to accounting books

In case enterprises do not design their own accounting books, they should use the accounting book template provided by the Ministry of Finance promulgated, attaching importance to "nature over form"… Thereby, showing that this is an important turning point marking the success that the Ministry of Finance has complied with international financial reporting standards (IFRS)

Therefore, Decision No 345/QD-BTC approving the scheme of applying international financial reporting standards in Vietnam in 3 phases:

Preparation period: from 2020 to the end of 2021

Voluntary application period: from 2022 to the end of 2025: Apply at the level of consolidated financial statements for a number of specific enterprises such

as the parent company of a State economic group, the parent company being a listed company listed, large-scale public company is an unlisted parent company; and other large-scale parent company

Compulsory application period: after 2025: Apply at the level of consolidated financial statements for enterprises in the above voluntary application group

Currently, the set of International Financial Reporting Standards (“IFRS”) includes more than 40 standards, of which a number of new standards have been issued and applied in recent years such as IFRS 9 - Financial Instruments, IFRS 15

- Revenue from customer contracts, IFRS 16 - Leases, while 26 Vietnamese Accounting Standards (“VAS”) are currently drafted and issued between 2001-

2005 Therefore, learning about the presentation of financial statements and assessing the current situation of financial statements is an important basis for completing the presentation of financial statements, which plays an extremely important role

For construction enterprises in recent years, they have contributed significantly to the economy in general Construction is considered a large material production field of the national economy According to a report of the construction industry, Vietnam is entering the restructuring phase with a slowing growth rate and increasing competitive pressure According to the General Statistics Office, in 2020 the construction industry nationwide will grow by 6.76% The growth rate of 6.76% is the lowest growth rate in the development period from 2016 to 2020 However, in the 10-year cycle, 6.76% is still higher than the industry growth in difficult years since period 2011 - 2013 In 2020, the number of newly established enterprises of the Construction industry reached 17,080 enterprises, up 0.4%; The number of enterprises returning to operation is 6,545 enterprises At the same time, the Construction industry underwent a strong purification, reflected in the number of enterprises withdrawing from the market in the short term and the number of enterprises returning to operation in 2020 was nearly equal A special highlight is that the contribution rate of the construction industry to the country's GDP in 2020 is at the highest level of 6.19% of GDP, only lower than in 2011 (6.41% of GDP) Moreover, in the context of the economy being strongly affected by the Covid epidemic, social distancing, the real estate market only increased by 0.31%,

Enterprises - listed on the stock market has undergone major changes and completed the presentation of financial statements with the aim of attracting investors on the stock exchange Most enterprises have applied and properly implemented accounting standards, the financial statements used provide information presented more transparently than those reported in accordance with VAS21 Financial Reporting Standards The basic qualitative characteristics of financial statements have partly introduced the basic qualitative character of truthfulness, and emphasized the reliability feature

However, besides the results achieved the construction enterprises Listing

on the stock market still reveals some specific limitations such as: the error situation in construction companies listed on the stock market is common in quantity Enterprises often record higher profit after CIT than audited data Only about 30% of construction enterprises recorded unchanged profits compared to the audit report; Besides, the errors due to calculation are not important because enterprises have 100% used the software, only slightly increased the number of errors from 1 to 4 in the period 2017-2021 (Report finance.vietstock.vn)

From that fact shows the great potential in the development of the construction industry and the financial and business situation of these enterprises

is more and more concerned, thereby requiring the provision of accounting information on the financial statements financial statements of construction enterprises (construction enterprises) are getting higher and higher Through the actual survey process at construction enterprises, it was found that the current quality of financial statements still has many limitations that need to be revised and supplemented, so the presentation of financial statements of construction enterprises has not been able to promote its inherent role affect the investment efficiency, the trust of the users of accounting information From there, it shows that the research, construction and completion of the financial statements presentation of construction enterprises is really necessary and meaningful both in theory and in practice

Stemming from the awareness of completing the legal framework on

accounting, the author chooses the topic " Presentation of financial statements of

construction companies listed on the Vietnamese stock market " as the topic of

his doctoral thesis

2 Research overview

2.1 Research on financial statements of construction enterprises

The above financial statements are constructed by the five main elements of financial statements For example, there are three main elements in the Balance Sheet namely Assets, Liabilities and Equity There are two main elements in the

income statement, such as revenue and expenses

2.2 Research on the content and form of financial statements

Research on the content and form of financial statements presented on the content of financial statements; Research on the form of the financial statements From the above study, it can be seen that the research on the content of financial statements has received much attention so far, however, there are few in-depth studies on the form of financial statements This is a challenge as well as an opportunity for the topic to deeply evaluate the content and presentation of financial statements of construction companies listed on the stock market today

2.3 Research on separate financial statements, consolidated financial statements

According to the author, the elements of financial statements related to determining the financial position in financial statements include assets, liabilities and owners In particular, the factors related to determining business results in the comprehensive income statement are income, expenses and profit

2.4 Research on financial statements of enterprises on the stock market

After studying the works, the author draws the following conclusions:

+ Research content: Most of the studies go into analyzing and evaluating each element in the financial statements In which, there is the element of analyzing capital, owners or introducing the principles of calculating the price of indicators such as non-controlling shareholder interests, profits, etc From that, a group of solutions are proposed to complete the submission presentation of financial statements, the process of preparing financial statements In particular, there are few studies that clearly indicate the criteria of financial statement presentation, especially in a specific field such as the construction industry, especially there is no research that goes into the presentation of financial statements of construction companies listed on the stock market

Research works have focused on evaluating the presentation of financial statements, accounting principles and the application of international accounting standards for each country, assessing the status of consolidated and individual financial statements, etc then propose groups of solutions to complete the financial statement system

+ Subjects of research: For new research works that only focus on research

in favor of consolidated financial statements or separate financial statements, little in-depth research is needed to analyze financial statements on the financial statements of the consolidated enterprise X or the independent enterprise X of the enterprise listing on the stock market

+ Scope of research: The research work on financial statements is still general, scattered with few specialized works on industries and fields such as

manufacturing, services, and construction, but only concentrated in one Group There is no thesis that directly studies the presentation of financial statements at construction companies listed on the stock market

+ Research method: The research method will be associated with the research objective of the topic Most of the studies use qualitative and quantitative methods associated with each method, which are reading and analyzing information, survey, and interview With the research going into the factors affecting the quantitative method with SPSS software will be used more focus

Identifying research gaps: From the review and evaluation of domestic and

foreign researches related to the topic that the author has studied in combination with research on trends of countries around the world, the author The authors found that the implementation of financial statements of construction enterprises listed on the stock market has not been profound so far, especially research on the

"form" of financial statements of construction enterprises is still a "gap" that has not been mentioned

Research orientation of the author: From the point of view of inheriting

and continuing to develop previous studies, the thesis will continue to study the financial statements of construction enterprises listed on the stock market to be evaluated, analyzed, and analyzed in terms of content and information presentation of financial statements of construction enterprises listed on the stock market On the basis of assessing the advantages and disadvantages to create a premise for the completion of financial statements of construction enterprises

listed on the stock market

Thus, it can be seen that the gap in the presentation of financial statements

of construction enterprises listed on the stock market is the elements of financial statements and the form of financial statements The studies have not mentioned or resolved the differences between construction enterprises and other enterprises such as production and business situation, capital, production costs, and labor costs From the overview of the research works, this thesis inherits the previous studies, contributing to solving the above-mentioned very important issues

3 Research objectives of the topic

Research topic on the theory and assessment of the current situation of presenting financial statements, pointing out the limitations and causes of the presentation of financial statements; propose solutions to present financial statements made in accordance with current regulations, thereby improving the quality of financial statements of construction enterprises listed on the stock market

3.2 Detail goal

- Firstly, systematically study the theoretical basis for the presentation of

financial statements of companies listed on the Vietnamese stock market, including: concepts, theories of presentation of financial statements, content and form of presentation Financial statements and lessons for Vietnam

- Second, analyze the current situation of presenting financial statements of

construction companies listed on the stock market, in which to evaluate the presentation of financial statements of consolidated construction enterprises and independent construction enterprises From there, evaluate the achieved results as well as the shortcomings and analyze the causes and limitations of existence In order to have a basis to analyze the current situation and detect remaining problems and limitations, the study uses survey tables in combination with the implementation of actual surveys at a number of typical units to assess the progress of the project present financial statements of independent construction enterprises and consolidated construction enterprises in these units From those survey results, the author will make assessments on the advantages and disadvantages of presenting financial statements of construction companies listed

on the stock market

- Thirdly, on the basis of the shortcomings and causes leading to the existence

of the presentation of financial statements of construction enterprises listed on the stock market, the topic will propose scientific and reasonable solutions to help the units improve and further improve the presentation of financial statements of construction enterprises listed on the stock market, with the ultimate aim of improving the quality of information of construction enterprises listed on the stock

market in the current period

4 Objects and scope of the study

4.1 Research subjects

The study focuses on the presentation of financial statement elements in construction enterprises listed on the Vietnamese stock market

4.2 Research scope

Scope of research content: The study focuses on the elements of financial

statements and the presentation of financial statements, including separate

financial statements and consolidated financial statements In which, the topic

focuses on analyzing and evaluating the presentation of financial statements of construction enterprises listed on the stock market in terms of assets, liabilities, and equity; revenue, expenses, cash and cash flows and presentation of financial statements of construction enterprises listed on the stock market

Scope of time: The thesis researches, surveys, collects data, presents

financial statements of construction enterprises in the period from 2019,

2020, 2021

Scope of research space: The thesis will select independent construction

enterprises and consolidated construction enterprises listed on the stock market at the two largest stock exchanges of Vietnam, Hose and HNX, to study and evaluate the current situation presenting financial statements of construction enterprises listed on the stock market In this thesis, the author will focus on researching and presenting financial statements of construction companies listed on the stock market of both independent construction enterprises and consolidated construction enterprises

Scope of survey subjects: The thesis conducted a survey of the opinions of

55 construction enterprises on 2 stock exchanges Specifically

Survey of 22 enterprises/30 enterprises listed on the stock exchange

Survey of 33 enterprises / 55 enterprises on HNX listed on the stock exchange

Representative case studies are enterprises: Licogi 14 Joint Stock Company; Construction Joint Stock Company No 5; Long Giang Urban Development and Investment Joint Stock Company; CII Bridge and Road Investment Joint Stock Company

For the consolidated financial statements are the following companies: Song

Da Joint Stock Company 5.05; Coteccons Construction Joint Stock Company; Licogi Joint Stock Company 14

For separate financial statements are companies: Construction Joint Stock Company No 5; Construction Joint Stock Company No 9, Construction Company

No 1; BCE Binh Duong Construction and Traffic Joint Stock Company

In order to evaluate the current situation presented in the financial statements

of construction companies listed on the stock market, the thesis has used survey methods, in-depth interview methods and case study methods

5 Research Methods

When researching the thesis, we used the following research methodologies:

- Historical - logical approach: look at history to consider and see the nature

of things and phenomena in the studies of financial statements, studies of financial statements of consolidated construction enterprises, independent construction enterprises through which generalize the researched issues and research results to avoid duplication, and at the same time, build on the existing research to develop

or propose new achievements

- Systemic - structured approach: Financial statements reflect the financial position of an enterprise by synthesizing economic and financial transactions of the same economic nature into elements of financial statements This system consists of elements (factors) that are closely related and have dialectical effects

on each other The study of financial statement presentation should fully consider the elements of financial statement presentation, including:

Factors directly related to the determination of financial position: Assets, Liabilities and Equity

Factors directly related to financial statements to assess business situation and results: Revenue, other income and expenses

- Practical approach: Designing financial statements for the purpose of providing information about the financial position, business situation and cash flows of an enterprise, meeting the management requirements of business owners and agencies The state and the useful needs of users in making economic decisions, so when researching, it is necessary to be based on reality so that the financial statements are suitable for construction enterprises and the actual situation of construction enterprises today

5.2 Specific method

5.2.1 Qualitative research

- Data sources publicly disclosed on the stock market include: annual financial statements (audited), annual reports, interim financial statements, prospectus, audit reports, reports of the supervisory board, and reports Administrative Council…

- Sources of data used internally by listed construction companies: Collecting information through survey forms for chief accountants, general accountants, investors in listed construction enterprises

foreign authors

- Consult the analysis of experts in the media

- Published doctoral theses, scientific articles published in relevant journals

* Primary data source:

Primary data was collected by the author through the survey method

Survey method by survey form: it is information obtained through survey about the presentation of financial statements of enterprises listed on the stock market The author uses a pre-designed survey form to send to the units There are two types of survey questionnaires sent by the author in the thesis, including: Survey form for chief accountants, general accountants in enterprises, and survey forms for investors consultation and in-depth interviews

5.2 2 About the quantitative method

This thesis is carried out on the basis of research methodology which is dialectical materialism and historical materialism Specific methods include:

- Methods of analyzing and synthesizing information: Analyzing and

synthesizing secondary information from available domestic and international sources on the contents related to the research object The author collects, analyzes, compares and evaluates a number of studies on financial statements in companies listed on the stock market to form the basic theoretical framework of the thesis Thereby, combined with the analysis of the current situation in Vietnam

to analyze the advantages and limitations of financial statements in the stock market

- Investigative method: Based on the theoretically defined criteria system,

the author designed a questionnaire to conduct a cognitive survey and assessment from the chief accountant, general accountant, companies listed on the stock exchange, on the degree of influence of the criteria on the results of the presentation of financial statements of enterprises listed on the stock market today

The content of the survey is divided into: Presenting financial statements

of the consolidated construction company and the independent construction company on 2 main contents:

The contents of the financial statements include: Consolidated Financial Statements; Consolidated business results report; Consolidated cash flow statement; Notes to the consolidated financial statements

Format of the BCC:

For the survey survey for investors includes the following questions: Investment decision in listed construction enterprises; use the presentation of financial statements; Present quality financial statements of companies listed on the stock market; The level of confidence in the financial statements provided by the enterprise,…

Number of surveyed enterprises: survey of 55 construction enterprises on 2

stock exchanges Specifically: 22 enterprises listed on HoSE stock exchange; 33 enterprises listed on HNX;

Number of investor surveys surveying 30 securities investors on HNX and HOSE

Survey method: The author can survey by direct interview or send to

enterprises by email, post, dos.google.com

Questionnaire structure: The content of the survey questionnaires is divided into 3 parts

Part 1: General information about the research topic

Part 2: Information about surveyed subjects

Part 3: Survey questions

Proceed to send 100 survey questionnaires to relevant subjects

Regarding the survey, the thesis sends the survey to the following subjects: 1) Chief accountant, general accountant; 2) Investors; 3) NCS interview form designed with 72 questions in which:

The content of the questionnaire for each subject is as follows:

For Hanoi construction enterprises: 26 questions (Appendix 4)

For independent construction enterprises: 46 questions (Appendix 4)

For investors: 5 questions (Appendix 5)

For independent construction enterprises: 46 questions

In which, 7 general questions about the accounting regime

25 questions about the balance sheet

5 questions about the income statement

1 cash flow statement question

1 question to explain the financial statements

2 questions about environment and social responsibility

4 opinion questions

1 sentence in the form of financial statements

For consolidated enterprises: 26 questions

In it, 1 general question about the accounting regime

16 questions about the balance sheet

3 questions about the income statement

3 cash flow statement questions

1 question about notes to financial statements

1 question about opinion

1 sentence in the form of consolidated financial statements

For investors: 5 questions (Appendix 6)

- Interview method: In addition to sending survey questionnaires, the

author also conducts in-depth interviews, calls or directly observes the system of books and facilities to serve the presentation of financial statements of enterprises

Purpose: To find out the current state of presenting financial statements of

construction companies listed on the stock market

Content: Information on financial statements of the last 3 years, targets on

assets, liabilities, capital sources , form, structure, method of presenting financial