Effect of International Public Sector Accounting Standard (IPSAS) Adoption on Quality of Financial Reports by Federal Ministry of Finance, Budget and National Planning in Nigeria

Abstract

As a result of the limitations of the cash basis system of recording transactions in the public sector, International Public Sector Accounting Standard (IPSAS) was introduced in line with global best practices as government continues to be interested in having higher accountability and transparency in the public sector for various stake-holders. Consequently, this study investigated the effect of IPSAS adoption on quality of financial reporting by Federal Ministry of Finance, Budget and National Planning in Nigerian. The dependent variables of the study included accountability, transparency, comparability and full disclosure of financial reports while IPSAS adoption was the independent variable The study had a population and operational sample size of 967 and 312 respectively. Survey research design was adopted by the study and simple regression technique of data analysis through the aid of Statistical Packages for Social Sciences (SPSS) version 23 was adopted for the study. Data for the study was collected through questionnaires administered to accountants and auditors in Federal Ministry of Finance, Budget and National Planning in Nigeria and was rated using 5-point Likert scale. The study found that IPSAS adoption had positive and significant effect on all the dependent variables of the study in Federal Ministry of Finance, Budget and National Planning in Nigeria. The study recommended that the three tiers of government that have adopted IPSAS should continue to do so in Nigeria while those that have not started adopting IPSAS should do so. It was also recommended that government should be training and retraining its staff to reduce its challenges while adopting IPSAS in Nigeria.