Determinants of Corporate Accounting System Effectiveness in Vietnam: Evidence on The Mediating Role of Firm Size

International Journal of Social Science and Education Research Studies ISSN(print): 2770-2782, ISSN(online): 2770-2790 Volume 05 Issue 11 November 2025 DOI: https://doi.org/10.55677/ijssers/V05I11Y2025-04, Impact Factor: 7.573 Page No : 1014-1026 1014 Available at: www.ijssers.org Determinants of Corporate Accounting System Effectiveness in Vietnam: Evidence on The Mediating Role of Firm Size An Pham Thi1, Phuong Ngoc Nguyen2, Trang Pham Thi Thu3* 1,2,3 University of Hai Duong ABSTRACT Published Online: November 25, 2025 In the context of global economic integration and the Fourth Industrial Revolution, the effective implementation of accounting systems is a critical factor that enhances financial management capacity and competitiveness among Vietnamese enterprises, particularly during the adoption of International Financial Reporting Standards (IFRS). This study employs a mixed-method approach combining qualitative and quantitative techniques. A total of 350 valid survey responses from enterprises were analyzed using Cronbach’s Alpha, Exploratory Factor Analysis (EFA), Confirmatory Factor Analysis (CFA), and Structural Equation Modeling (SEM) to assess accounting system effectiveness. The findings reveal that Accounting Technology, Accountant Competence, and Compliance with Accounting Standards exert significant positive effects on accounting system effectiveness. In contrast, Financial Resources and Organizational Culture influence system effectiveness primarily through firm size rather than direct effects. These results highlight that technological capability, professional competence, and regulatory compliance are the most decisive factors in improving accounting system performance. Based on the results, the study recommends that enterprises strengthen technological investment and digital transformation in accounting, enhance accountant training and international certification programs, and accelerate IFRS implementation. KEYWORDS: accounting system, SEM, firm size, Vietnam 1. INTRODUCTION In the context of globalization and international economic integration, financial transparency and accountability have increasingly become mandatory requirements for enterprises. The corporate accounting system (CAS), with its functions of recording, processing, and providing financial information, is an internal management tool and a conduit connecting firms with stakeholders, including investors, regulators, and business partners. In Vietnam, corporate accounting systems face opportunities and challenges alongside the development of the capital market and the demands of integration. The emergence of new technologies such as enterprise resource planning (ERP), artificial intelligence (AI), and blockchain has been reshaping accounting operations, improving accuracy, timeliness, and processing efficiency. Corresponding Author: An Pham Thi *Cite this Article: An Pham Thi, Phuong Ngoc Nguyen, Trang Pham Thi Thu (2025). Determinants of Corporate Accounting System Effectiveness in Vietnam: Evidence on The Mediating Role of Firm Size. International Journal of Social Science and Education Research Studies, 5(11), 1014-1026 At the same time, the requirement to implement International Financial Reporting Standards (IFRS) in parallel with Vietnamese Accounting Standards (VAS) poses significant challenges, particularly for small and medium-sized enterprises, in standardizing processes and sustaining the effectiveness of the accounting system. International studies indicate that the effectiveness of the corporate accounting system is influenced by several determinants, including (1) the degree of technology adoption, (2) the competence and skills of accounting personnel, (3) compliance with accounting standards, (4) financial resources, and (5) organizational culture. The literature also recognizes the role of firm size; in this study, firm size is conceptualized as a mediating variable that transmits the effects of these determinants to CAS effectiveness. However, in Vietnam, there remains a paucity of research that simultaneously evaluates these factors using Structural Equation Modeling (SEM). Building on this context, the present study focuses on assessing the effectiveness of corporate accounting systems in Vietnamese enterprises with the following specific objectives: 1. Assess the effectiveness of corporate accounting systems in Vietnam. An Pham Thi et al, Determinants of Corporate Accounting System Effectiveness in Vietnam: Evidence on The Mediating Role of Firm Size 1015 Available at: www.ijssers.org 2. Identify the principal determinants and estimate the magnitude of their effects. 3. Test the mediating role of firm size in the relationships between the determinants and system effectiveness using SEM. 2. THEORETICAL FRAMEWORK AND HYPOTHESIS 2.1. Theoretical framework This study synthesizes four foundational theoretical perspectives: the Technology Organization Environment framework (TOE Framework), the Resource-Based View (RBV), Legitimacy Theory, and Decision Usefulness Theory. Together, these theories provide the conceptual foundation for identifying and explaining the determinants that influence the effectiveness of corporate accounting systems. They also serve as the theoretical basis for developing the Structural Equation Model applied in this research. In addition to the core factors of technology adoption, accountants’ competence, and compliance with accounting standards, the study incorporates financial resources and organizational culture as key independent variables. Firm size is positioned as a mediating factor that conveys the effects of these determinants to system effectiveness. 2.1.1. Technology organization environment (TOE) framework The Technology Organization Environment framework, proposed by Tornatzky and Fleischer in 1990, explains the adoption and implementation of technology in organizations through the interaction of three contextual dimensions: technology readiness, organizational characteristics, and the external environment. Within the scope of this research, the TOE framework is used to explain how accounting technology enhances system effectiveness. Implementing modern accounting technologies such as enterprise resource planning systems, artificial intelligence, and blockchain is influenced by the availability of technological infrastructure, the organizational capacity to manage change, and external institutional pressures such as regulatory and market competition. Furthermore, organizational culture plays a vital role in shaping the acceptance of innovation, the discipline of data management, and the consistency of accounting processes. Financial resources are equally critical, as they determine an enterprise’s ability to invest in modern technology, training, and system maintenance, all of which directly affect the operational effectiveness of the accounting system. 2.1.2. Resource-based view (RBV) According to the Resource-Based View, as proposed by Barney in 1991, a firm’s sustainable competitive advantage is derived from its ability to acquire and utilize valuable, rare, inimitable, and non-substitutable resources. From this perspective, accountants' competence and the enterprise's scale represent vital resources that determine how effectively the accounting system operates. Financial resources are also essential to this advantage because they enable firms to invest in infrastructure, training, and innovation. Organizational culture is an intangible yet strategic asset that promotes shared values, learning orientation, and adherence to accounting integrity. These elements strengthen the firm’s internal capacity to ensure accurate, reliable, and timely financial reporting. Firm size reflects the level of these resources. It serves as a mediating variable through which technology, human capability, economic strength, and organizational culture influence the overall effectiveness of the corporate accounting system. 2.1.3. Legitimacy theory Legitimacy Theory emphasizes that organizations must act according to social norms, ethical values, and public expectations to maintain their existence and achieve sustainable development, as noted by Suchman in 1995. In the accounting field, compliance with both Vietnamese Accounting Standards and International Financial Reporting Standards is an essential mechanism for maintaining legitimacy. By adhering to recognized accounting frameworks, enterprises demonstrate transparency and responsibility, strengthening trust among investors, regulators, and the wider community. This process also depends on financial capability, as adequate resources are required to support IFRS adoption, employee training, and technology upgrades. At the same time, organizational culture reinforces legitimate behavior by encouraging ethical compliance and commitment to regulatory standards. Through these mechanisms, firms enhance their reputation and improve access to capital and international markets, supporting the accounting system's higher effectiveness. 2.1.4. Decision usefulness theory The Decision Usefulness Theory, developed by Staubus in 1961 and later articulated by the Financial Accounting Standards Board in 1978, states that the primary purpose of accounting is to provide valuable information for economic decision making. Therefore, the effectiveness of an accounting system can be evaluated through its ability to produce information that supports managerial planning, performance evaluation, and stakeholder decisions. In this research, technology adoption, accountants’ competence, compliance with standards, financial resources, and organizational culture are expected to enhance accounting information's relevance, reliability, and timeliness. When these factors operate efficiently within an organization of appropriate scale, the usefulness of financial information is maximized, and the mediating role of firm size becomes evident. A larger firm, with more structured processes and diversified resources, can better leverage these determinants to achieve high system performance and information quality. Hence, the corporate accounting system not only ensures accurate and transparent reporting but also contributes to An Pham Thi et al, Determinants of Corporate Accounting System Effectiveness in Vietnam: Evidence on The Mediating Role of Firm Size 1016 Available at: www.ijssers.org strategic decision-making and the sustainable growth of the enterprise. 2.2. Hypothesis 2.2.1. Corporate accounting system A corporate accounting system comprises a structured set of policies, procedures, methods, and tools designed to collect, process, record, and provide financial information for managerial decision-making and reporting to stakeholders such as shareholders, investors, regulators, and business partners. An effective accounting system must meet three key criteria: accuracy, timeliness, and transparency. These dimensions determine accounting information's reliability and usefulness for internal and external users. As empirical research indicates, the quality and effectiveness of accounting information systems significantly influence managerial decision-making performance and overall organizational success. 2.2.2. Accounting technology The strong development of digital technology has profoundly influenced accounting operations. Technologies such as Enterprise Resource Planning (ERP), Artificial Intelligence (AI), and Blockchain have transformed traditional accounting processes by automating tasks, reducing errors, shortening processing time, and enabling indepth data analysis that improves management efficiency and internal control. According to the Technology–Organization– Environment framework, technological adoption represents a significant determinant of organizational performance and competitiveness. In the accounting context, studies show that technology adoption significantly enhances accounting data integrity, system efficiency, and real-time decision support (Seshadrinathan & Chandra, 2025). 2.2.3. Accountant competency Accountant competency integrates professional knowledge, practical skills, technological ability, work experience, and ethical standards. Within the knowledgebased view of the firm, human capital is regarded as the fundamental resource determining the operational success of accounting systems. In the context of globalization and digital transformation, accountants are increasingly required to meet international professional qualifications (ACCA, CPA) and adapt to new accounting technologies and standards. Recent research emphasizes that strong professional and technological competencies enable accountants to operate digital accounting systems more effectively, ensuring information accuracy and reliability (ACCA, 2020; Novak, 2025). 2.2.4. Compliance with accounting standards Compliance with accounting standards reflects how enterprises apply and adhere to Vietnamese Accounting Standards (VAS) and International Financial Reporting Standards (IFRS). Based on Legitimacy Theory, compliance enhances transparency, accountability, and credibility of financial reporting, thereby reinforcing trust among investors, regulators, and other stakeholders. For Vietnamese enterprises, aligning with IFRS promotes international comparability and facilitates capital access in global markets. Recent empirical studies in emerging economies confirm that IFRS adoption leads to higher financial reporting transparency and quality (Morshed, 2024). 2.2.5. Financial resources Financial resources denote an enterprise’s ability to mobilize and allocate funds for technological investment, staff training, and maintenance of accounting systems. They represent a critical organizational capability supporting sustainability and innovation. In digital transformation, firms with more substantial financial resources can adopt cloud accounting and advanced technologies more effectively, thereby improving productivity and decision quality. Empirical studies on small and medium-sized enterprises confirm that financial capability is a key determinant of digital accounting adoption and system performance (Mujalli, Wani, & Almgrashi, 2024; Salih et al., 2021). 2.2.6. Organizational culture Organizational culture is the system of shared values, beliefs, and practices that governs how employees interact and perform their duties. It strongly influences adopting and using accounting systems by shaping attitudes toward learning, innovation, compliance, and ethical conduct. A culture that emphasizes integrity, collaboration, and transparency facilitates technological adaptation and enhances information quality. Empirical research demonstrates that supportive organizational cultures positively affect accounting information system quality and user satisfaction, particularly during digital transformation processes (Qatawneh, 2023). 2.2.7. Firm size Firm size can be measured by total assets, revenue, number of employees, or shareholders’ equity. It determines the level of organizational resources, structural formalization, and capacity to implement and maintain advanced accounting systems. Larger firms generally have greater potential to invest in technology, attract skilled personnel, and ensure strict compliance with reporting standards, whereas small and medium-sized firms often face resource constraints. In accordance with the Resource-Based View, firm size is considered a determinant of sustainable competitive advantage and system performance. Previous research confirms that firm size significantly moderates the relationship between technology adoption and accounting system effectiveness (Salih et al., 2021). 2.2.8. Accounting system effectiveness The effectiveness of an accounting system refers to its ability to generate financial information that is accurate, timely, and transparent for decision-making and reporting purposes. Drawing upon the Decision Usefulness Theory, system effectiveness is measured by how well accounting An Pham Thi et al, Determinants of Corporate Accounting System Effectiveness in Vietnam: Evidence on The Mediating Role of Firm Size 1017 Available at: www.ijssers.org information supports strategic planning, managerial control, and external accountability. When accounting information is reliable and relevant, firms can enhance operational efficiency, reduce costs, and improve overall performance. Recent empirical research demonstrates a positive relationship between system quality, information quality, and organizational performance in both financial and nonfinancial dimensions (Monteiro et al., 2022). 3. METHODOLOGY 3.1. Research model Based on the literature review results and relevant theoretical foundations, the author proposes the research model illustrated in Figure 1 below. Figure 1. Research model (Source: Developed by the authors, 2025) The proposed research model consists of five independent variables, one mediating variable, and one dependent variable, as follows: - Independent Variables Accounting Technology (CN): This variable represents the degree of adoption of modern accounting technologies such as Enterprise Resource Planning (ERP), Artificial Intelligence (AI), Robotic Process Automation (RPA), and Blockchain in accounting activities. These technologies aim to improve accuracy, transparency, and efficiency in financial data processing. Accountant Competency (NL): This construct reflects the professional qualifications, knowledge, skills, experience, ethical standards, and technological adaptability of accountants. Higher competency enables accountants to operate accounting systems effectively and maintain information reliability. Compliance with Accounting Standards (TT): This variable assesses the extent to which enterprises comply with the Vietnamese Accounting Standards (VAS) and implement the roadmap for International Financial Reporting Standards (IFRS). Strong compliance enhances transparency, reliability, and comparability of financial reporting. Financial Resources (TC): Financial resources express the financial capacity of enterprises to invest in accounting technology, staff development, and system maintenance. Adequate resources ensure the continuous improvement and sustainability of accounting systems. Organizational Culture (VH): Organizational culture represents the set of shared values, norms, and behaviors that shape ethical practices, learning attitudes, and technology acceptance within the accounting function. A supportive culture enhances innovation and strengthens system performance. Mediating Variable Firm Size (QM): Firm size is the mediating variable that reflects the scale of organizational operations and available resources. It is measured by indicators such as total assets, revenue, and number of employees, which can Accounting Technology Firm Size Accountant Competency Compliance with Accounting Accounting System Effectiveness Financial Resources Organizational Culture An Pham Thi et al, Determinants of Corporate Accounting System Effectiveness in Vietnam: Evidence on The Mediating Role of Firm Size 1018 Available at: www.ijssers.org distinguish among small and medium-sized enterprises (SMEs), large enterprises, and foreign-invested firms (FDIs). Dependent Variable Accounting System Effectiveness (HQ): This dependent variable measures the effectiveness of the accounting system in providing accurate, timely, transparent, and valuable financial information for internal management and external reporting. Table 1. Summary of Measurement Constructs No. Variable No. of Indicators Theoretical Basis 1 Accounting Technology (CN) 5 Tornatzky & Fleischer (1990) 2 Accountant Competency (NL) 5 Barney (1991) 3 Compliance with Accounting Standards (TT) 4 Suchman (1995) 4 Financial Resources (TC) 5 Barney (1991) 5 Organizational Culture (VH) 5 Schein (2010) 6 Firm Size (QM) 4 Barney (1991) 7 Accounting System Effectiveness (HQ) 5 Staubus (1961) Source: Compiled by the author, 2025 Based on prior studies and theoretical reasoning, the following hypotheses are proposed: • H1: Accounting Technology (CN) has a positive indirect effect on Accounting System Effectiveness (HQ) through Firm Size (QM). • H2: Accountant Competency (NL) has a positive indirect effect on Accounting System Effectiveness (HQ) through Firm Size (QM). • H3: Compliance with Accounting Standards (TT) has a positive indirect effect on Accounting System Effectiveness (HQ) through Firm Size (QM). • H4: Financial Resources (TC) have a positive indirect effect on Accounting System Effectiveness (HQ) through Firm Size (QM). • H5: Organizational Culture (VH) has a positive indirect effect on Accounting System Effectiveness (HQ) through Firm Size (QM). • H6: Accounting Technology (CN) directly and positively affects Accounting System Effectiveness (HQ). • H7: Accountant Competency (NL) directly and positively affects Accounting System Effectiveness (HQ). • H8: Compliance with Accounting Standards (TT) directly and positively affects Accounting System Effectiveness (HQ). • H9: Financial Resources (TC) directly and positively affect Accounting System Effectiveness (HQ). • H10: Organizational Culture (VH) directly and positively affects Accounting System Effectiveness (HQ). 3.2. Methodology This study adopts a mixed-method research design, integrating both qualitative and quantitative approaches to enhance methodological robustness. The qualitative phase was conducted first, focusing on expert interviews with chief accountants, accounting managers, and professional accountants from enterprises listed on the Ho Chi Minh City Stock Exchange (HOSE) and the Hanoi Stock Exchange (HNX). Insights from these interviews were used to adjust, refine, and supplement the measurement scales to ensure conceptual clarity and contextual appropriateness for the Vietnamese business environment. The revised scales were then used in the subsequent quantitative phase. The quantitative phase consisted of a pilot study and a main survey. The pilot study was implemented with a small sample to verify the questionnaire's clarity, reliability, and validity, allowing for necessary revisions before official deployment. The main quantitative study was conducted on a larger scale to enable advanced statistical analysis and hypothesis testing. Data were collected using a five-point Likert scale ranging from 1 (“Strongly Disagree”) to 5 (“Strongly Agree”). The final measurement model included seven latent variables and thirty-three observed indicators: five indicators for each of the five independent and one dependent variable, and four indicators for both Compliance with Accounting Standards (TT) and Firm Size (QM). 387 responses were collected through both online and face-to-face surveys, and after data cleaning, 350 valid samples were retained for analysis. Data were gathered between March and May 2025, covering various types of enterprises, including small and medium-sized enterprises (SMEs), large domestic firms, and foreign-invested companies (FDIs). The data were analyzed using descriptive statistics to summarize sample characteristics and variable distributions. Scale reliability was assessed using Cronbach’s Alpha, and items with corrected item-total correlations below 0.3 or Cronbach’s Alpha below 0.7 were eliminated. Exploratory Factor Analysis (EFA) was employed to identify factor structures and ensure convergent validity. Following the exploratory stage, Confirmatory Factor Analysis (CFA) and Structural Equation Modeling An Pham Thi et al, Determinants of Corporate Accounting System Effectiveness in Vietnam: Evidence on The Mediating Role of Firm Size 1019 Available at: www.ijssers.org (SEM) were applied to evaluate both the measurement and structural models. SEM was chosen because it allows simultaneous estimation of direct, indirect, and mediating effects, providing a comprehensive view of the relationships among variables. The model examined the influence of five independent variables: Accounting Technology (CN), Accountant Competency (NL), Compliance with Accounting Standards (TT), Financial Resources (TC), and Organizational Culture (VH) on the dependent variable, Accounting System Effectiveness (HQ), through the mediating role of Firm Size (QM). The overall model fit was evaluated using indices such as χ²/df, CFI, TLI, RMSEA, and SRMR. According to the recommendations of Hair et al. (2019), a sample size between 200 and 300 is generally adequate for models of moderate complexity; hence, the final dataset of 350 observations satisfies the statistical requirements for SEM analysis. 4. RESULT AND DISCUSSION Among the total of 350 surveyed enterprises, 46% operate in manufacturing, 34% in trade and services, and 20% in other sectors. In terms of business size, 42% are small and medium-sized enterprises, while 58% are large firms (Figure 1; Figure 2). Figure 2. Business Size Source: Compiled by the author, 2025 Figure 1. Industry Source: Compiled by the author, 2025 42% 58% Small and Medium Large 46% 34% 20% Manufacturing Trade and Services Others An Pham Thi et al, Determinants of Corporate Accounting System Effectiveness in Vietnam: Evidence on The Mediating Role of Firm Size 1020 Available at: www.ijssers.org 4.1. Reliability testing of measurement scales To assess internal consistency, Cronbach’s Alpha reliability analysis was performed independently for each construct. The results showed that all factors achieved acceptable reliability levels, with Cronbach’s Alpha values exceeding 0.7, meeting the recommended threshold (Nunnally & Bernstein, 1994). During this process, two items: NL1 and VH1 were removed due to low item-total correlations (< 0.3). Their exclusion improved the internal consistency of their respective constructs. After this refinement, all remaining items demonstrated satisfactory reliability, indicating that the scales were internally consistent and suitable for subsequent analyses. Following this step, the measurement system contained 31 observed indicators across seven latent variables. 4.2. Exploratory factor analysis (EFA) After confirming internal reliability, Exploratory Factor Analysis (EFA) was conducted to verify the convergent and discriminant validity of the observed indicators. The Kaiser–Meyer–Olkin (KMO) measure of sampling adequacy reached 0.782, which is considered “good” according to Kaiser (1974). Bartlett’s Test of Sphericity was significant (χ² = 6846.265, p < 0.001), confirming that the correlation matrix was suitable for factor extraction. The EFA results extracted eight factors with Eigenvalues greater than 1, consistent with the theoretical model. The cumulative variance explained was 65.896%, indicating that the factors collectively accounted for more than 65% of the total variance, demonstrating strong explanatory power. During factor rotation, three observed indicators, CN3, TC1, and TC3, were eliminated due to factor loadings below 0.5, which did not meet the criterion for convergent validity. After removing these items, the final dataset included 28 observed indicators that loaded significantly on their respective constructs, with all loadings above 0.5. The results confirm that the remaining items exhibited good internal coherence and distinctiveness across constructs. Table 1. Rotated component matrix Component 1 2 3 4 5 6 7 HQ4 ,867 HQ3 ,865 HQ2 ,814 HQ1 ,800 HQ5 ,749 QM3 ,910 QM2 ,869 QM4 ,840 QM1 ,771 TT3 ,787 TT2 ,787 TT1 ,763 TT4 ,725 VH4 ,846 VH3 ,790 VH5 ,763 VH2 ,646 An Pham Thi et al, Determinants of Corporate Accounting System Effectiveness in Vietnam: Evidence on The Mediating Role of Firm Size 1021 Available at: www.ijssers.org CN4 ,748 CN2 ,737 CN1 ,733 CN5 ,672 NL2 ,731 NL3 ,709 NL5 ,626 NL4 ,619 TC5 ,756 TC4 ,709 TC2 ,673 Source: Compiled by the authors, 2025 4.3. Confirmatory factor analysis After completing the exploratory factor analysis, the study proceeded with Confirmatory Factor Analysis (CFA) to validate the measurement model and assess the retained indicators' unidimensionality, reliability, and construct validity. The CFA results showed that the measurement model achieved a good overall fit with the collected data. Specifically, the fit indices were as follows: Chi-square (χ²) = 636.655, df = 384, χ²/df = 1.658, GFI = 0.934, CFI = 0.925, TLI = 0.925, and RMSEA = 0.043 with PCLOSE = 0.967. These results satisfy the recommended thresholds proposed by Hair et al. (2019), and Browne & Cudeck (1993), where χ²/df < 3, CFI and TLI > 0.9, and RMSEA < 0.06. The standardized factor loadings of all 28 observed indicators were greater than 0.6, confirming that each item contributes significantly to its corresponding latent construct. No cross-loading or multicollinearity issues were detected, indicating satisfactory discriminant validity. Moreover, the high internal consistency of the constructs was supported by Composite Reliability (CR) values exceeding 0.7 and Average Variance Extracted (AVE) values greater than 0.5. These findings collectively confirm that the measurement model possesses adequate reliability, convergent validity, and discriminant validity, meeting the statistical assumptions required for SEM analysis. An Pham Thi et al, Determinants of Corporate Accounting System Effectiveness in Vietnam: Evidence on The Mediating Role of Firm Size 1022 Available at: www.ijssers.org Figure 3. Confirmatory Factor Analysis Source: Compiled by the authors, 2025 4.4. Structural equation modeling After validating the measurement model, Structural Equation Modeling (SEM) was employed to test the causal relationships among the constructs and to evaluate the proposed hypotheses. The SEM results, presented in Figure 2, confirm that the model demonstrates excellent goodness-offit indices: χ² = 636.655, df = 384, χ²/df = 1.658, GFI = 0.934, CFI = 0.925, TLI = 0.925, and RMSEA = 0.043 with PCLOSE = 0.967. All values are within acceptable ranges,