Mức độ công bố thông tin phát triển bền vững trong mối quan hệ với chất lượng thông tin kế toán và hiệu quả hoạt động của các công ty niêm yết tại việt nam TT TIENG ANH

MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH CITY ********* NGUYEN THI THU NGUYET THE LEVEL OF SUSTAINABILITY INFORMATION DISCLOSURE IN RELATIONSHIP WITH FINANCIAL ACCOUNTING QUALITY AND BUSINESS PERFORMANCE OF LISTED COMPANIES IN VIET NAM Major: Accounting Code : 9340301 SUMMARY OF DISSERTATION Ho Chi Minh City, 2021 The thesis is conducted at: University of Economics Ho Chi Minh City Professional advisors: Dr NGUYEN THI KIM CUC Assosc.Prof., Dr HUYNH DUC LONG Reviewer 1: Reviewer 2: Reviewer 3: The thesis will be presented to the Thesis Board at the University of Economics Ho Chi Minh City at hours day month year The thesis can be founded at the library of University of Economics Ho Chi Minh City INTRODUCTION Research Background According to ethical theory, companies seek to take moral responsibility and will demonstrate their ethical behavior through charitable contributions to take benefits for society (Hoffman, 1986) Therefore, an inverse relationship may arise between financial accounting quality (FAQ) and sustainability information disclosure (Işık, Jones, & Sidorova), in the sense that firms with poor financial statements may disclosure more sustainability information (Martinez- Ferrero et al., 2015) The impact of FAQ on SID was explored by Martinez-Ferrero et al (2015) with multinational data in developed countries The results show that firms that create quality accounting information are more likely to provide better sustainability information This is really a good signal for investors and analysts However, previous studies analyze mainly in developed countries context and often focus on social responsibility information rather than sustainability-related information In addition, the impact of sustainability information on business performance is tested well in the context of developed countries, but has not been validated consistently in the context of developing countries From the above issues, the author aims to find out the impact of FAQ on the level of SID and the impact of SID on the business performance in the developing countries context – particularly Viet Nam 2 RESEARCH AND QUESTION OBJECTIVES  Research objectives: - Access the status of sustainability information disclosure (Işık et al.) of listed companies in Viet Nam - Identify and measure the impact of financial accounting quality (Earnings Management through Accruals, Accounting Conservatism, Accruals Quality) on the level of SID of listed companies in Viet Nam - Identify and measure the impact of SID in general and each aspect of economic, society, environmental information of SID on business performance of listed companies in Viet Nam  Question objectives: - What is the current situation of the SID of listed companies in Viet Nam? - How does the FAQ (Earnings Management through Accruals, Accounting Conservatism, Accruals Quality) affect the SID? - Does the level of SID in general and each aspect of economic, society, environmental of SID impact on business performance? RESEARCH SUBJECTS AND SCOPE Research subjects: The level of SID, FAQ (Earnings Management through Accruals, Accounting Conservatism, Accruals Quality) and the business performance Scope:  Place: This study was conducted only at listed companies in HOSE 3  Timing: This study collects data relating to research subjects in fiscial year 2018 RESEARCH METHODOLOGY Qualitative research method: Designing a scale to evaluate SID is based on modified GRI standard The progress is conducted through three steps - Step 1: identify the set of sustainability information indicators published by Vietnamese listed companies - Step 2: compare with the set of indicators from the GRI standard - Step 3: interview experts to design a set of sustainability information indicators according to adjusted GRI standard Quantitative research method: The author uses regression analysis techniques on Stata to answer the research questions RESEARCH CONTRIBUTIONS In term of academic: - The study has contributed to building the research model about the impact of FAQ on SID and the impact of SID on business performance of listed companies in Viet Nam - The study offers a new approach to the GRI standard, adapted to the context in Vietnam to measure the level of SID - The study proposes an overview about sustainability information In term of practicality: - For state agencies: The thesis will help state agencies know the level of application of Circular 155/2015/TT-BTC in practice So they can give solutions to improve the level of SID of listed companies - For listed companies: The research results can be used as a reference to help managers of listed companies see the positive impact of SID on the business performance, especially the two aspects of environmental and society information - For investors, analyst: The thesis provides evidence on the relationship between the FAQ and the level of SID Thereby it can be answer concerns about whether or not listed companies use sustainability information as a tool to conceal accounting’s processing techniques STRUCTURE OF THESIS In additional to introduction, the thesis structure includes chapters 5 CHAPTER 1: LITERATURE REVIEW 1.1.Previous international publications 1.1.1.Studies on the status of SID 1.1.2.Studies on the impact of FAQ on SID 1.1.3.Studies on the impact of SID on business performance 1.2.Previous publications in Viet Nam 1.2.1.Studies on the status of SID 1.2.2.Studies on the impact of FAQ on SID 1.2.3.Studies on the impact of SID on business performance 1.3 Research gaps 1.3.1 Comments on previous studies Studies on the status of SID: - In general, studies often use multinational data to evaluate and compare SID among different countries SID in developed countries is valued more highly than in developing countries (Chih et al., 2008) Sustainability information is generally assessed at a low level with studies using GRI standards (Martinez-Ferrero et al., 2015) Among them, information on the environment is most disclosed, followed by information related to the workforce, then social information and the lowest disclosure is human rights issues (Adnan et al., 2018) - In Viet Nam, the level of voluntary disclosure, CSR are assessed at low level (Pham Duc Hieu, 2015; Ta Quang Binh, 2012; Vu & Buranatrakul, 2018) Enterprises still focus on reporting mandatory financial information rather than nonfinancial information (Nguyen Thi Ngoc Bich et al.,2015) Unlike other countries, businesses often report information related to workforce and social communities Meanwhile, product and environmental information is rarely disclosed (Ho Thi Van Anh, 208; Vu & Buranatrakul, 2018) Studies on the impact of FAQ on SID - Most studies have obtained the results of FAQ, profit quality has a positive impact on sustainability information (Trinh Hiep Thien & Nguyen Xuan Hung, 2016; Choi et al., 2013; Hoang Cam Trang et al., 2019; Martinez – Ferrero et al., 2015) However, this relationship has not been tested in many studies and has been conducted mainly in the context of multinational data and developed countries To ensure better research results, specifically to better assess FAQ, this relationship should be tested in a country context (Martinez – Ferrero et al., 2015) Besides, the data that previous studies analyze are mostly multi-year and collected prior to 2015 Specifically, with data collected in Viet Nam, Hoang Cam Trang et al (2019) analyzed CSR in one year – 2010 Trinh Hiep Thien & Nguyen Xuan Hung (2016) analyzed data for years from 2010 to 2014 Studies on the impact of SID on business performance - For studies surveying data in multinationals and developed countries, the results show that sustainability information brings benefits to companies (such as increasing ROA, ROA, revenure, profit, Tobin’Q ) - For studies surveying data in developing countries, the result of this influence are still in consistent 1.4.Research gap - The gaps in research data: Almost previous studies on sustainability information have utilized data before 2016 before the effect of Circulr 155/2015/TT-BTC - The gaps in research context: Most previous studies tested data at multinational level Therefore, the measurement of FAQ is limited because of the in-consistency in level requirements in accounting in different countries So, in the current study, to overcome this limitation, the author choose to study in a country only – Viet Nam - The gap in the scale of FAQ: With studies investigating data in Viet Nam, FAQ is measured by the average of many scales So, in the current study, the author will analyze each individual scale In addition, the author uses Accounting Conservatism scale according to Khan & Watts (2009) model This is a scale based on market to determine the level of conservatism and timeliness of profits - The gap in the scale of SID: From the advantages and disadvantages of the scoring criteria, in this study, the author uses a scale from to In addition, most studies in Viet Nam mainly focus on analyzing environmental and social information So, in this study, the author will analyze sustainability information rather than CSR information - The gap in research results: Research results about the impact of SID on business performance in developing countries are still in-consistent Therefore, in this study, the author expects that the research results will prove that sustainability information will brings benefits for companies – specifically it helps to improve business performance 8 CHAPTER 2: THEORETICAL FRAMEWORK 2.1.Overview of Sustainability information 2.1.1.Sustainability information concept According to WCED report: “ Sustainability development is a development that meets current needs without affecting the need of future generations” So, sustainability information is information related to company’s sustainable and is shown through three aspects of economy, environment and society 2.1.2.Sustainability information 2.1.2.1.Economy information 2.1.2.2.Environment information 2.1.2.3.Society information 2.1.3.Format of SID 2.1.3.1.Introduction to Sustainability reporting According to GRI (2016), sustainability reporting is a tool to measure, disclose and be accountable to internal and external stakeholders for the organization’s activities towards the goal of sustainable development 2.1.3.2.The process of formation and development of the Sustainability Report 2.1.3.3.The benefit value of Sustainability Report 2.1.3.4.The challenge of Sustainability Report 2.1.3.5.Framework for making a Sustainability Report Although there are many frameworks, standards and indicators that are provided to public sustainability information, GRI is considered as a leading design guidance standard for creating Sustainable Report (Hahn & Kuhnen, 2013) 9 2.2.Overview of Financial accounting quality 2.2.1.FAQ concept FAQ is understood as the truthfulness and reasonableness of the information conveyed on the report This is also consistent with two basic characteristics to ensure the quality of financial statements according to IASB (2018) 2.2.2.The scale of FAQ 2.2.2.1.Earnings Management through Accruals Earnings Managemet through Accruals is the way that company adjusts accrual profits without real economic consequences (Dechow et al., 1995) This may be change earnings based on accruals but don’t affect the future cash flows 2.2.2.2.Accounting Conservatism According to IASB (2018), neutrality is supported by prudence Conservatism is to make decisions in terms of uncertainty The conservatism principle is the general concept of recognizing expenses and liabilities as soon as possible when there is uncertainty about the outcome, but to only recognize revenues and assets when they are assured of being received Thus, given a choice between several outcomes where the probabilities of occurrence are equally likely, you should recognize that transaction resulting in the lower amount of profit, or at least the deferral of a profit Similarly, if a choice of outcomes with similar probabilities of occurrence will impact the value of an asset, recognize the transaction resulting in a lower recorded asset valuation 10 2.2.2.3.Accrual Quality Accruals quality show the level of accruals Accruals quality indicates the degree of difference between operating income and operating cash flow It helps to better predict future cash flows 2.3.Overview of Business Performance 2.3.1.The business performance Business performance is economic, political and social benefits that company must achieve during its operations 2.3.2.The scale of Business Performance Many scales are used to measure business performance, such as ROA, ROE, ROS, EPS, Tobin’sQ 2.4.Background theories 2.4.1.Legitimacy theory With the implication of legitimacy theory, to meet the expectations of the society towards sustainability development, enterprises providing good financial accounting information will publish many sustainability information From this point of view, this theory is used in explaining the impact of FAQ on SID in the studies of Francis et al (2008), Prior et al (2008), McDermott (2011), Kim et al (2012), Martinez – Ferrero et al (2015) In addition, corporations – social created entities – must prove their legitimacy if they want to operate in long term Each consequences of the illegitimacy can affect the risk level and future cash flow, and then impact their business (Bachoo et al., 2013) Therefore, this theory is also used to explain the impact of SID on business performance 11 2.4.2 Stakeholders theory If traditional financial statements meet shareholders’ information needs, sustainability report provides information for many users Therefore, the cause of sustainable report development is the pressure from stakeholders to enterprises publics more than information about society, enviroment and ethical issues (Vormedal & Ruud, 2009) As such, it can be assumed that under pressure from stakeholders, companies must explain in detail about their performance related to their business Therefore, according to Roberts (1992), this theory is used to explain the impact of SID on business performance 2.4.3.Signalling theory Signalling theory shows that in asymmetric information situations, one side will try to transfer its information to the other (Cambell, 2003) Corporate sustainability can be viewed as a asymmetric information To reduce this asymmetric, company will seek to report their sustainability activities Furthermore, to overcome competitors, when a company wants to signal that “they are a good business”, he will publish much more their sustainability information And the more companies propose their sustainability information, the more they receive many benefits such as brand name, reputation or financial assessiblility This has really helped them improve their performance (Ameer & Othman, 2012; Bachoo et al.,2013; Cheng et al., 2016; Kasbun et al.,2017) Thus this theory is used to explain the impact of SID on business performance 12 2.5.Hypotheses development 2.5.1.Hypothesis development 2.5.1.1.Hypotheses related to the impact of FAQ on SID H1: Earnings management through accruals has a negative effect on SID H2: Accounting Conservatism has a positive effect on SID H3: Accruals quality has a negative effect on SID 2.5.1.2.Hypothese related to the impact of SID on business performance H4: SID has a positive effect on business performance H5: SID in economic aspect has a positive effect on business performance H6: SID in environment aspect has a positive effect on business performance H7: SID in society economic aspect has a positive effect on business performance 2.5.2.The research model 13 CHAPTER 3: RESEARCH METHODOLOGY 3.1.Research process 3.2.Constructs of research concepts 3.2.1.The level of SID In this thesis, the author uses content analysis techniques to measure the level of SID The scale to evaluate SID is based on modified GRI standard The author use a 4-level-scale: - Point 0: in case of listed companies have not provided disclosure of information - Point 1: in case of listed companies have provided basic disclosure of information - Point 2: in case of listed companies have provided complete disclosure of information - Point 3: in case of listed companies have provided advance disclosure of information 3.2.2.FAQ 3.2.2.1.Earnings management through accruals To measure earnings management through accruals, the author uses Dechow et al (1995) model 3.2.2.2.Accounting conservatism To measure accounting conservatism, the author uses Khan & Watts (2009) models 3.2.2.3.Accruals quality 14 To measure accuals quality, the author uses Francis et al (2005) model 3.2.3.Business performance The author uses two methods to measure business performance - The first method is based on accounting principles and is measured based on ROA - The second method is based on market view and is measured based on Tobin’s Q 3.2.4.Control variables 3.2.4.1.SID control variables SID control variables include size, industry, age and ROA 3.2.4.2.Business performance control variables Business variables include size, leverage and operating cash flow 3.3.Qualitative research methods 3.3.1 Qualitative research process 3.3.2.Data collection source 3.3.3.Method to analyze qualitative data 3.4.Quantitative research methods 3.4.1.Data collection source The author uses secondary data to test research hypotheses Variables in model include FAQ, SID and business performance - SID is collected from Sustainability report or annual Report - FAQ and business performance are collected from Thomson Reuters resources 15 3.4.2.Sample frame The sample was selected from companies listed on Viet Nam stock market, Ho Chi Minh City The author analyzes data in 2018 3.4.3.Method to analyze quatitative data The author applies regression analysis techniques with supports of Stata software to answer the research questions 16 CHAPTER 4: DATA ANALYSIS AND DISCUSSION 4.1.Qualitative research results 4.1.1.State By using content analysis techniques, the results show that a total of 52 different indicators related to sustainability information from 262 list company’s reports There are 12 economic indicators, 14 environment indicators and 26 society indicators Thus, society indicators is reported the most 4.1.2.State The results show that: the number of sustainability information indicators extracted from Vietnamese listed companies is 52, which account for approximately 65% of GRI indicators Compare with the GRI, these have a similarity of 42 indicators (equivalent 52,5%) In which, economic indicator is 9, environment indicator is 12 and society indicator is 21 4.1.3.State After interviewing experts, the author designed a scale to evaluate sustainability information based on modified GRI standard The final indicators include 32 indicators, including economic indicators, 12 environment indicators and 18 social indicators 4.2.Quatitative research results 4.2.1.The result of SID of Vietnamese listed companies 4.2.1.1.General information about companies in the sample 4.2.1.2.Report format 4.2.1.3.The level of SID followed by industry 4.2.1.4.The level of SID followed by GRI and Circular 155/2015/TT-BTC 17 4.2.2.Testing result of the impact of FAQ on SID 4.2.3.Testing result of the impact of SID on business performance 4.2.4.Testing result of economic, environment and society information on business performance 4.3.Discuss research results - For Hypotheses 1, 2, 3: in the three scales representing FAQ, testing results show that there is no statistic evidence about the impact of earnings management through accruals, accruals quality on SID However, accounting conservatism has a positive effect on SID at the 99% confidence level In addition, firm size, industry and ROA positively affect SID at the 99% confidence level In term of the industry factor, the result is contrary to the studies of Reverte (2009), da Silva Monteiro & AibarGuzman (2010), Fermandez-Feijoo et al (2014), Kuzey & Uyar (2017) This means that companies from sensitive sectors such as raw materials, real estate construction and utility services tend to disclose less sustainability information than other sectors - For hypotheses 4: the results show that SID has positive effect on business performance at the 95% confidence level This proves that the higher SID is, the better company receives positive effect on their performance according to both accounting data (Iden & Eikebrokk) and market data (TBQ) - For hypotheses 5: The results show that there is no influence on business performance from economic information This is similar to the studies of Aras et al (2010); Lima Crisostomo et al (2011) 18 - For hypotheses 6, 7: The results show that environment and society information have a positive effect on business performance This proves that the more environment and society information are displayed, the more companies get positive effect on their performance according to both accounting data (Iden & Eikebrokk) and market data (TBQ) 19 CHAPTER 5: CONCLUSIONS AND IMPLICATIONS 5.1.Conclusions - With the aim of assessing the status of SID from Vietnamese listed companies: the results show that many listed companies not display suficient information about sustainability in annual reports and provide a low disclosure, at 0,823 (under basic level) Circular 155/2015/TT-BTC is the framework that most companies use to publish sustainability information (accounting for 90,05%) The number of companies using GRI is low (accounting for 9,05%) Economic information is disclosed at the highest level with an average score of 1,065 That proves that listed Vietnamese companies are still focusing on economic information disclosure rather than information related to environment and society Companies from industries, raw materials, real estate construction and utility services propose disclosure of SID lower than others (including healthcare, energy and consumer good) Companies from sensitive sectors account for a large proportion of the sample (69.5%) and they publish at a low level - With the aim of finding the effect of FAQ through earnings management accruals, accounting conservatism and accruals quality on SID: the results not prove the relationship between FAQ based on accruals and SID Maybe sustainability information have not yet been developed in Viet Nam and it has not receive manager’s attention However, research result shows that accounting conservatism has a positive effect on SID at the 99% confidence level 20 - With the aim of finding the effect on SID on business performance: the results show that sustainability information helps to increase business performance through ROA of the following year and Tobin’ Q at the 95% confidence level This is explained from the stakeholders theory In particular, when stakeholders receive necessary information about sustainability, it will help resolve the conflict and thereby help improve reputation Although economic information is displayed the most by listed companies, research results not prove the effect of economic information on business performance In contrast, environment and society information have a positive effect on business performance at the 95% confidence level 5.2.Implications 5.2.1.Theoretical implications The author’s research provides statistic data about Vietnamese listed company’s sustainability information and evaluate the level of SID The research results give more evidences for: - Support the view that firm size, ROA and industry affect the level of SID Therefore, it can be seen that the bigger companies are, the higher its business performances are, the better sustainability information is provided to stakeholders - Support the view that sustainability information brings enterprises benefits – for example enhancing their performance in developing country (Viet Nam) 5.2.2.Implication for corporate governance Research results show that although sustainability information has a positive effect on business performance, it does not affect all communication channels Thereby, listed companies must 21 focus on investing more activities related to environment and society Since then, listed companies need to increase the level of disclosure of these information on their report Because they have a significant effect on their business as long as long-term sustainable development In addition, research gives implication for manager of some particular industries consisting of raw material, real estate construction, utilities They should focus on disclosure of sustainability information 5.2.3.Implication for investors Research on the effect of accruals techniques on SID is not supported with collected data This shows that this relationship does not exist in Viet Nam Thus investors can be assured that enterprise’s motivation to disclose sustainability information does not come from using this information as a tool to conceal processing techniques 5.2.4.Implication for authorities By assessing the status of SID from Vietnamese listed companies, the research results show that: - The level of Vietnamese listed company’s SID is not uniform and consistent - The level of Vietnamese listed company’s SID is assessed at a low level, which is below basic level - Vietnamese listed companies still focus on disclosing economic information rather than environment and society information - The indicators in Appendix of Circular 155/20115/TTBTC are only 22,5 % compared to GRI 22 Therefore, the authorities must to give more solutions to help business improve the level of SID: - Issue more specific guidance about SID to create uniformity for all companies - Add information important that have economic, not been environment, society mentioned Circular 155/2015/TT-BTC - Develop a roadmap to apply GRI instead of Circular 155/TT-BTC - Give more penalties for listed companies which not disclose sustainability information under state’s requirements 5.3.Limitations and future research - First, the data is collected by author in one year – 2018 Therefore, the results are not generalizable to other periods - Second, sustainability information is collected manually - Third, this study focuses on listed companies So, many other types of business have not been investigated about SID - Fifth, research objective is to find out the relationship between economic, environment, society information and business performance So, this study does not analyze each content in three indicators - Finally, the study focus on analyzing the effect of SID on business performance of two groups of stakeholders and investors Future studies will analyze other groups through other scales that represent company’s performance AUTHOR PUBLICATIONS RELATED TO THE THESIS Tran Thi Thanh Hai & Nguyen Thi Thu Nguyet, 2021 The effect of financial statement quality on coporate dividend policy – an empirical study on the HCM stock exchange School – level scientifc research Nguyen Thi Thu Nguyet, 2019 The effect of sustainability information on business performance Accounting & Auditing journal, No 09/2020 (204), 59-63 Nguyen Thi Thu Nguyet, 2019 Overview about sustainability report Accounting & Auditing journal, No 08/2020 (203), 50-52 Tran Thi Thanh Hai & Nguyen Thi Thu Nguyet, 2018 How will the quality of SMEs financial statement change when applying IFRS for SMEs in Viet Nam? School-level scientific research  ... sustainability information on business performance Accounting & Auditing journal, No 09/2020 (204), 59-63 Nguyen Thi Thu Nguyet, 2019 Overview about sustainability report Accounting & Auditing journal,... society 2.1.2.Sustainability information 2.1.2.1.Economy information 2.1.2.2.Environment information 2.1.2.3.Society information 2.1.3.Format of SID 2.1.3.1.Introduction to Sustainability reporting... transaction resulting in a lower recorded asset valuation 10 2.2.2.3.Accrual Quality Accruals quality show the level of accruals Accruals quality indicates the degree of difference between operating income