Thi Le Hang Nguyen

Type of the article: Research Article

Abstract
In developing economies with weak institutional enforcement, the dependability of financial reporting remains a significant issue for investors and regulators. This study examines the relationship between audit committee attributes and the quality of financial reporting among non-financial publicly listed companies in Vietnam, an emerging economy where the Vietnamese government officially established audit committees as a new governance structure through Enterprise Law No. 59/2020/QH14, which replaces the mostly ceremonial Supervisory Board model. A balanced panel dataset comprising 455 firm-year observations from companies listed on the Ho Chi Minh Stock Exchange and Hanoi Stock Exchange between 2018 and 2022 is utilized. A binary logistic regression model is employed to assess whether the presence and effectiveness of audit committees improve financial reporting quality, indicated by the receipt of unqualified audit opinions and the timely disclosure of financial statements. The results show a strong positive link between having an audit committee and the quality of financial reporting (odds ratio = 23.415, p < 0.001). This means that companies with a formal audit committee are about 23 times more likely to have better reporting quality. In addition, the chairperson’s professional expertise (odds ratio = 1.477, p < 0.05) and the frequency of audit committee meetings (odds ratio = 1.156, p < 0.05) both have a big effect on better reporting outcomes. These findings suggest that governance effectiveness, rather than mere formal adoption, is the primary determinant of reporting quality in weak institutional environments.