International Public Sector Accounting Standards (IPSAS) and Credibility of Financial Reporting in Nigeria Public Sector: An Improvement or A Ruse

Abstract

The objective of this work is to examine the application of IPSAS on financial reporting in Nigeria public sector and its economic benefits. The descriptive research survey method was adopted in this work while the population comprises of Fifty (50) members drew from ten (10) ministries randomly selected from all accounting departments of various ministries in Ado- Ekiti, the capital of Ekiti State, Nigeria. The primary source of data collection was employed through the use of questionnaire. The 4-point Likert scale was logically employed to quantitatively reflect order ranking while the mean scores of data analysis and Ordinary least square (OLS) were used. The results show that there is no relationship between application of IPSAS, financial reporting and its economic benefits to Nigeria. For instance, IPSAS has neither improved management and Revenue generation nor increased foreign direct investment into Nigeria. It was observed that IPSAS has no significant relationship with ability of the government or financial reporting in reducing corruption in the public sector, though, the findings show positive relationship between IPSAS and credibility of financial reporting-using accrual basis of accounting. The study concludes that adoption IPSAS has not really brought any improvement in term of its economic benefits to the government and the public; hence IPSAS is a ruse and a mere imposition on the developing countries. We recommend that government should put in place an enabling legislative framework that will aid the smooth running of IPSAS implementation in Nigeria. Government should strengthen anti- corruption agencies and engage professionals, and technocrats to drive the process to reflect stakeholders’ expectation on IPSAS and financial reporting in the public sector. Keywords: Accountability, Corruption, Financial Reporting, Public Sectors, Transparency