The Impact of the Use of Independent Auditing on Credit Accessibility: The Case of Vietnamese SMEs
Main Article Content
Abstract
Vietnamese small and medium size enterprises (SMEs) are deemed the “backbone” of the economy; they are a key driver for the achievement of sustainable economic development. Access to finance, however, has been consistently identified as a major problem facing many Vietnamese SMEs. That has caused serious setbacks in the sustainable development of Vietnamese SMEs, and has adversely affected their profitability. This raises the question of whether independent auditing of financial statements can be influential in the credit allocation process. The current study developed a model of the influence of independent auditing on credit accessibility by employing a qualitative method to identify the impact of independent auditing on credit accessibility in Vietnamese SMEs. The results of this study reveal that the use of external auditing is one of the key criteria to accessing credit in Vietnamese SMEs.
Keywords:
Vietnamese SMEs, independent auditing, accounting, credit accessibility.
References
[1] Asian Development Bank, Asian SME financial monitor, 2013, viewed 5 March 2014, http://www.adb.org/publications/asia-sme-finance-monitor-2013
[2] Association of Chartered Certified Accountants, Accountants for business, small business: A global agenda, 2010, viewed 20 January 2013, http://www.accaglobal.com/content/dam/acca/global/PDF-technical/small-business/pol-afb-sbaga.pdf.
[3] Deloitte Access Economics, “Access to capital for small and medium sized enterprises”, 2013, viewed on 20th March 2014, www.nswbusinesschamber.com.au/.../FINAL-Thinking-Business-Access-...
[4] Darberg Global Development Advisors, Report on support to SMEs in developing countries through financial intermediaries, 2011, viewed 25 March 2013, http://www.eib.org/attachments/dalberg_sme-briefing-paper.pdf.
[5] Certified Professional Accountants, SME access to finance: Recent experiences of SMEs in accessing finance, 2012 (b), viewed 20th May 2014, www.cpaaustralia.com.au/.../professional.../sme-access-to finance
[6] Triodos-Facets, Country report Vietnam: Policy review, private sector development, 2013, viewed 5th November 2013, http:// www.triodosfacnets.nl.
[7] International Finance Corporation 2013, Small and Medium Enterprise Finance: New Findings: Trends and G - 20/ Global Partnership for Financial Inclusion Progress, viewed 18th January 2014, www.ifc.org/.../IF../Financial%20Markets/Publications/?...PI...
[8] Organisation for Economic Cooperation and Development, Financing SMEs and entrepreneurs 2014, an OECD scoreboard, 2014, viewed 10th August 2015, www.oecd.org › ... › SMEs and entrepreneurship
[9] Vietnam Government Office, Decree No 56/ND-CP on 30th June 2009 for SMEs development and promotion, 2009, viewed 4th May 2012, http://www.kenfoxlaw.com/resources/legal-documents/governmental-decrees/2424-vbpl-sp-21986.html
[10] World Bank, Vietnam Overview, 2015, viewed 27th February 2015, http://www.worldbank.org/en/country/vietnam/overview.
[11] Ministry of Planning and Investment, White paper on small and medium sized enterprises in Vietnam 2011, Hanoi: Statistical Publisher, 2012, viewed 18 September 2013, www.economica.vn/ChangePages.aspx?IDKey...c=0&f=1.
[12] General Statistical Office, The enterprises in Vietnam 9 years at the beginning of century 21, Statistic Publisher: Hanoi, 2010.
[13] Do, S. & Pham, T., Policies for developing small and medium enterprises in Vietnam, 2007, viewed 27th May 2013, http://www.pecc.org/images/stories/publications/SME-2007-10-Policies_for_Developing_Small_and_Medium_Enterprises_in_Vietnam-Do-Pham.pdf
[14] Central Institute for Economic Management, Firm-level competitiveness and technology in Vietnam: Evidence from a survey in 2012, 2013, viewed 25 April 2014, http://www.ciem.org.vn/en/hoptacquocte/duanciem/tracuu.aspx?nam=2013&id=38&mn=2
[15] Central Institute for Economic Management, Vietnam competitive report, 2010, viewed 16th June 2012, http:www.isc.hbs.edu/pdf/Vietnam Competitive Report 2010Eng.pdf.
[16] Garcia-Teruel, P.J. & Solano, P.M., “Effects of working capital management on SME profitability”, International Journal of Managerial Finance, 3 (2007) 2, 164-177, http://www.emeraldinsight.com/doi/abs/10.1108/17439130710738718.
[17] Padachi, K., Narasimhan, M.S., Durbarry, R. & Howorth, C., “An analysis of working capital structure and financing pattern of Mauritian small manufacturing firms”, Journal of Applied Finance, 14 (2008) 7, 41-62, viewed 29th April 2012, www.iupindia.in/.../IJAF_Mauritian_Small_Manufacturing_Firms_41.ht.
[18] Caballero, B.S., García-Teruel P.J. & Solano P.M., “How does working effect the profitability of Spanish SMEs”, Small Business Economics, 39 (2012), 517-529, viewed 4 April 2014, http://link.springer.com/article/10.1007%2Fs11187-011-9317-8#page-1.
[19] Canovas G.H. & Solano, P.M., “Relationship lending and SME financing in the continental European bank -based system”, Small Business Economic, 34 (2010) 465, viewed 7th May 2013, http://link.springer.com/article/10.1007%2Fs11187-008-9129-7#page-1
[20] Malesky, J.E. & Taussig, M., “Where is credit due? Legal institutions, connections, and the efficiency of bank lending in Vietnam”, The Journal of Law, Economics & Organization, 25 (2008) 2, viewed 1st May 2012, http:// jleo.exfordjournals.org.
[21] Australian Centre for Financial Studies, Lending to small and medium enterprises, Submission to financial system inquiry, 2015, viewed 10th May 2015, www.australiancentre.com.au/.../Lending%20to%20Small
[22] Beck, T. & Kunt A.D., “Small and medium size enterprises: Access to finance as a growth constraint”, Journal of International Money and Finance, 25 (2006) 6, 932-952, viewed 14th May 2012, http://www.sciencedirect.com/science/article/pii/S0378426606000926
[23] Padachi, K. & Howorth, C., Focus on working capital management practices among Mauritian SMEs: Survey evidence and empirical analysis, Cambridge Business & Economics Conference, UK, 2013, viewed 27th November 2014, https://www.kribook.com/read-doc/focus-on-working-capital-management-practices-among.
[24] Barth, J., R., Lin, D. & Yost, K., Small and medium enterprise financing in transition economies, 2011, viewed 10 June 2013, http://link.springer.com/article/10.1007%2Fs11293-010-9260-0#page-1
[25] Bryan, E.L. & Friedlob, G.T., “Financial management and capital formation in small business”, Journal of Small Business Management, 22 (1984) 3, 73-75, viewed 21th April 2013, http://search.proquest.com/docview/210779966?pq-origsite=gscholar
[26] Fazzari, S.M., Hubbard, G.R. & Petersen, B., Financing constraints and corporate investments, 1988, viewed 8th July 2013, http://www.brookings.edu/~/media/Projects/BPEA/1988-1/1988a_bpea_fazzari_hubbard_petersen_blinder_poterba.PDF.
[27] Fazzari, S.M. & Petersen, B., Working capital and fixed investment: New evidence on financing constraints, 1993, viewed 8th July 2013, http://www.artsci.wustl.edu/~fazz/rand-1993.pdf.
[28] Le V. & Havier, C., Firm performance in Vietnam: Evidence from manufacturing samll and medium enterprises, 2010, viewed 20th April 2013,http:/www.uow. edu.au/commerce/eco/wpapers.html.
[29] Rand, J., “Credit constraints and determinants of the cost of capital in Vietnamese manufacturing”, Small Business Economics, 29 (2007) 1, 1-13, viewed 29th October 2013, < http://link.springer.com/article/10.1007%2Fs11187-005-1161-2#.
[30] Bryman, A. & Bell, E., Business research methods, 3rd edn, Oxford University Press: New York, 2011.
[31] Zikmund, W., Babi, B., Carr, J. & Griffin, M., Business Research Methods, 8th edn, South-Western Cengage Learning: Ohio US, 2010.
[2] Association of Chartered Certified Accountants, Accountants for business, small business: A global agenda, 2010, viewed 20 January 2013, http://www.accaglobal.com/content/dam/acca/global/PDF-technical/small-business/pol-afb-sbaga.pdf.
[3] Deloitte Access Economics, “Access to capital for small and medium sized enterprises”, 2013, viewed on 20th March 2014, www.nswbusinesschamber.com.au/.../FINAL-Thinking-Business-Access-...
[4] Darberg Global Development Advisors, Report on support to SMEs in developing countries through financial intermediaries, 2011, viewed 25 March 2013, http://www.eib.org/attachments/dalberg_sme-briefing-paper.pdf.
[5] Certified Professional Accountants, SME access to finance: Recent experiences of SMEs in accessing finance, 2012 (b), viewed 20th May 2014, www.cpaaustralia.com.au/.../professional.../sme-access-to finance
[6] Triodos-Facets, Country report Vietnam: Policy review, private sector development, 2013, viewed 5th November 2013, http:// www.triodosfacnets.nl.
[7] International Finance Corporation 2013, Small and Medium Enterprise Finance: New Findings: Trends and G - 20/ Global Partnership for Financial Inclusion Progress, viewed 18th January 2014, www.ifc.org/.../IF../Financial%20Markets/Publications/?...PI...
[8] Organisation for Economic Cooperation and Development, Financing SMEs and entrepreneurs 2014, an OECD scoreboard, 2014, viewed 10th August 2015, www.oecd.org › ... › SMEs and entrepreneurship
[9] Vietnam Government Office, Decree No 56/ND-CP on 30th June 2009 for SMEs development and promotion, 2009, viewed 4th May 2012, http://www.kenfoxlaw.com/resources/legal-documents/governmental-decrees/2424-vbpl-sp-21986.html
[10] World Bank, Vietnam Overview, 2015, viewed 27th February 2015, http://www.worldbank.org/en/country/vietnam/overview.
[11] Ministry of Planning and Investment, White paper on small and medium sized enterprises in Vietnam 2011, Hanoi: Statistical Publisher, 2012, viewed 18 September 2013, www.economica.vn/ChangePages.aspx?IDKey...c=0&f=1.
[12] General Statistical Office, The enterprises in Vietnam 9 years at the beginning of century 21, Statistic Publisher: Hanoi, 2010.
[13] Do, S. & Pham, T., Policies for developing small and medium enterprises in Vietnam, 2007, viewed 27th May 2013, http://www.pecc.org/images/stories/publications/SME-2007-10-Policies_for_Developing_Small_and_Medium_Enterprises_in_Vietnam-Do-Pham.pdf
[14] Central Institute for Economic Management, Firm-level competitiveness and technology in Vietnam: Evidence from a survey in 2012, 2013, viewed 25 April 2014, http://www.ciem.org.vn/en/hoptacquocte/duanciem/tracuu.aspx?nam=2013&id=38&mn=2
[15] Central Institute for Economic Management, Vietnam competitive report, 2010, viewed 16th June 2012, http:www.isc.hbs.edu/pdf/Vietnam Competitive Report 2010Eng.pdf.
[16] Garcia-Teruel, P.J. & Solano, P.M., “Effects of working capital management on SME profitability”, International Journal of Managerial Finance, 3 (2007) 2, 164-177, http://www.emeraldinsight.com/doi/abs/10.1108/17439130710738718.
[17] Padachi, K., Narasimhan, M.S., Durbarry, R. & Howorth, C., “An analysis of working capital structure and financing pattern of Mauritian small manufacturing firms”, Journal of Applied Finance, 14 (2008) 7, 41-62, viewed 29th April 2012, www.iupindia.in/.../IJAF_Mauritian_Small_Manufacturing_Firms_41.ht.
[18] Caballero, B.S., García-Teruel P.J. & Solano P.M., “How does working effect the profitability of Spanish SMEs”, Small Business Economics, 39 (2012), 517-529, viewed 4 April 2014, http://link.springer.com/article/10.1007%2Fs11187-011-9317-8#page-1.
[19] Canovas G.H. & Solano, P.M., “Relationship lending and SME financing in the continental European bank -based system”, Small Business Economic, 34 (2010) 465, viewed 7th May 2013, http://link.springer.com/article/10.1007%2Fs11187-008-9129-7#page-1
[20] Malesky, J.E. & Taussig, M., “Where is credit due? Legal institutions, connections, and the efficiency of bank lending in Vietnam”, The Journal of Law, Economics & Organization, 25 (2008) 2, viewed 1st May 2012, http:// jleo.exfordjournals.org.
[21] Australian Centre for Financial Studies, Lending to small and medium enterprises, Submission to financial system inquiry, 2015, viewed 10th May 2015, www.australiancentre.com.au/.../Lending%20to%20Small
[22] Beck, T. & Kunt A.D., “Small and medium size enterprises: Access to finance as a growth constraint”, Journal of International Money and Finance, 25 (2006) 6, 932-952, viewed 14th May 2012, http://www.sciencedirect.com/science/article/pii/S0378426606000926
[23] Padachi, K. & Howorth, C., Focus on working capital management practices among Mauritian SMEs: Survey evidence and empirical analysis, Cambridge Business & Economics Conference, UK, 2013, viewed 27th November 2014, https://www.kribook.com/read-doc/focus-on-working-capital-management-practices-among.
[24] Barth, J., R., Lin, D. & Yost, K., Small and medium enterprise financing in transition economies, 2011, viewed 10 June 2013, http://link.springer.com/article/10.1007%2Fs11293-010-9260-0#page-1
[25] Bryan, E.L. & Friedlob, G.T., “Financial management and capital formation in small business”, Journal of Small Business Management, 22 (1984) 3, 73-75, viewed 21th April 2013, http://search.proquest.com/docview/210779966?pq-origsite=gscholar
[26] Fazzari, S.M., Hubbard, G.R. & Petersen, B., Financing constraints and corporate investments, 1988, viewed 8th July 2013, http://www.brookings.edu/~/media/Projects/BPEA/1988-1/1988a_bpea_fazzari_hubbard_petersen_blinder_poterba.PDF.
[27] Fazzari, S.M. & Petersen, B., Working capital and fixed investment: New evidence on financing constraints, 1993, viewed 8th July 2013, http://www.artsci.wustl.edu/~fazz/rand-1993.pdf.
[28] Le V. & Havier, C., Firm performance in Vietnam: Evidence from manufacturing samll and medium enterprises, 2010, viewed 20th April 2013,http:/www.uow. edu.au/commerce/eco/wpapers.html.
[29] Rand, J., “Credit constraints and determinants of the cost of capital in Vietnamese manufacturing”, Small Business Economics, 29 (2007) 1, 1-13, viewed 29th October 2013, < http://link.springer.com/article/10.1007%2Fs11187-005-1161-2#.
[30] Bryman, A. & Bell, E., Business research methods, 3rd edn, Oxford University Press: New York, 2011.
[31] Zikmund, W., Babi, B., Carr, J. & Griffin, M., Business Research Methods, 8th edn, South-Western Cengage Learning: Ohio US, 2010.