The Impact of Voluntary IFRS Application on Financial Reporting Quality: The Moderating Effect of State Ownership

Purpose: This study aims to explore how state ownership moderates the impact of voluntary IFRS application on financial reporting quality. Design/methodology/approach: This study analyzes data from 552 public companies listed on the Ho Chi Minh Stock Exchange and Ha Noi Stock Exchange during 2019-2022, employing a fixed-effects model with clustered standard errors. Findings: The findings of this study indicate that voluntary IFRS application is positively associated with financial reporting quality. Moreover, this study identifies that state ownership moderates the negative association between voluntary IFRS application and financial reporting quality. Research limitations/implications: The results imply that the relationship between voluntary IFRS application and financial reporting quality is moderated by state ownership. Policymakers should take these findings into consideration when developing or revising policies concerning financial reporting standards and practices, particularly for state-owned companies. Originality/value: This study provides insights into how state ownership influences the impact of voluntary IFRS adoption on financial reporting quality in the Vietnamese market.