Adoption of IPSAS and the Quality of Public Sector Financial Reporting in Nigeria

Abstract

The development of any accounting system requires consideration of the underlying purpose of that system. InNigeria, government accounting processes have been conducted within the general framework of the principlesof fund accounting but the application of these principles to financial reporting has been a major challenge. Thisstudy examined the implications of adoption of International Public Sector Accounting Standards (IPSAS) on thequality of financial reporting of public sector organisations in Nigeria. Primary source of data was employed.Chi-square test and Kruskal Wallis test were employed. Findings from the study showed that adoption of IPSASwould increase the level of reliance on the financial reporting of public sector organisations in Nigeria. Inaddition, it was found that applying IPSAS to public sector financial reporting would make the results offinancial reporting of public sector organisations comparable. It was concluded that IPSASs have the potential togive a better financial integrity assurance. The study recommended reforms in public financial management andstrengthening of Legislative capacity to balance the executive power. Therefore, the adoption of IPSAS isexpected to influence the operating procedures and reporting practices of public sector organisations in Nigeria.Keywords: Accounting System, IPSAS, Financial Integrity, Accountability, Reporting