Evidence of the Covid-19 Pandemic Impact on Firm Performance and Financial Statement Fraudulence of Firms Listed on Stock Markets in Vietnam
- 10.2991/aebmr.k.211119.050How to use a DOI?
- Adjusted M-score model; Covid-19 pandemic; financial statements fraud
Past studies on the topic were conducted in normal economical contexts, which have not been affected by a disastrous pandemic like the Covid-19, which has been freezing the economy, breaking global supply chains and productions. Under the special circumstance, the operating results of many businesses are affected, so businesses can cheat on financial statements to create an unreal sound financial position to retain investors; or it is possible that the enterprise creates a worse financial situation, blaming external circumstances to create a reserve fund to compensate for the operation of the following years. Covid-19, therefore, is an opportunity to provide evidence of the pandemic’s impact on financial reporting fraud in relation to business characteristics.
This research examines the impact of the pandemic on businesses’ financial performance such as revenue growth, operating cash flows as well as on the financial statement fraud.
The Covid-19 pandemic has affected the lives and economies of the whole world. Social distancing, supply chain and production disruptions make it difficult for listed companies, so managers may have to commit frauds on financial statements to achieve business targets, personal goals of managers as well as to reassure investors.
Research design, approach, and method:
This study uses the financial statements of companies listed on Vietnam’s stock markets for the 2014-2020 periods. The firm-year sample are then divided into fraud and non-fraud sample based on the threshold suggested by Beneish (1999) and Roxas (2011). Statistical testing is performed using R software to test the difference, model testing for panel data, logit regression and test the sensitivity of the model.
This research finds that Covid-19 has not affected businesses’ financial performance and that Covid-19 reduces the fraudulent behavior on financial statements.
This research results set light on the impacts of a particular pandemic on firm performance. The market participants and professional accountants might use this research useful in assessing risks of material misstatement on information provided by enterprises.
- © 2021 The Authors. Published by Atlantis Press International B.V.
- Open Access
- This is an open access article under the CC BY-NC license.
Cite this article
TY - CONF AU - Vu Huu DUC AU - Hoang Trong HIEP AU - Le Vu Ngoc THANH PY - 2021 DA - 2021/12/07 TI - Evidence of the Covid-19 Pandemic Impact on Firm Performance and Financial Statement Fraudulence of Firms Listed on Stock Markets in Vietnam BT - Proceedings of the International Conference on Emerging Challenges: Business Transformation and Circular Economy (ICECH 2021) PB - Atlantis Press SP - 559 EP - 570 SN - 2352-5428 UR - https://doi.org/10.2991/aebmr.k.211119.050 DO - 10.2991/aebmr.k.211119.050 ID - DUC2021 ER -