The Impact of IFRS Adoption Policy on Earnings Management: Empirical Evidence from Listed Firms in Vietnam

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DOI: https://doi.org/10.28924/2291-8639-24-2026-64
Published: Mar 12, 2026
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Loan Nguyen Thi Thanh, Hung Dang Ngoc, The Impact of IFRS Adoption Policy on Earnings Management: Empirical Evidence from Listed Firms in Vietnam, Int. J. Anal. Appl., 24 (2026), 64.

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Loan Nguyen Thi Thanh, Hung Dang Ngoc

Abstract

This study aims to assess the impact of adopting International Financial Reporting Standards (IFRS) on earnings management (EM) behavior among Vietnamese firms. Utilizing a dataset comprising 10,207 firm-year observations from listed companies during the 2016–2024 period, the study employs various quantitative methods, including Difference-in-Differences (DiD) regression, Random Effects (RE) panel regression, and Propensity Score Matching (PSM) to address potential sample selection bias. The empirical findings indicate that IFRS adoption has a statistically significant positive impact on EM behavior. This result suggests that in a transitional institutional environment, IFRS may not yet be effective in curbing EM practices and may even create opportunities for firms to exploit gaps in accounting transitions for earnings manipulation in line with managerial objectives. Notably, when examining the moderating role of audit quality, the study finds that the effect of IFRS on EM significantly depends on the quality of auditing. For firms audited by Big Four firms, the IFRS-induced increase in EM is statistically insignificant. Conversely, among firms audited by non-Big Four auditors, IFRS adoption significantly increases the level of EM. The findings contribute to the academic literature on IFRS and EM and offer practical policy implications for regulators in promoting IFRS adoption in Vietnam.

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