INTERNATIONAL PUBLIC SECTOR ACCOUNTING STANDARDS AND FINANCIAL REPORTING QUALITY OF PUBLIC SECTOR IN NIGERIA

Abstract

Financial reporting quality enhances accountability, openness and transparency in public sector, and builds trust in governance. Evidence from literature showed that poor quality of reporting in Nigeria public sector has contributed to mismanagement of funds, corruption and poor execution of projects. Research has shown that International Public Sector Accounting Standards have not been fully integrated into the transactions of government agencies. Government agencies are fundamentally different from business entities, and the goal of government accounting is essentially different. This created a number of concerns about the quality and usefulness of financial reports prepared and disseminated by public organisations. This study investigated the impact of IPSAS adoption on financial reporting quality in Nigerian public sector. The study adopted survey research design. The study population consisted of 190 civil servants and 129 sample size. The data for the study were collected through a validated and structured questionnaire. Data were analysed using descriptive and inferential (multiple regression) statistics. Findings showed that internal control mechanism (), IPSAS adoption environment (0.334; p-value= 0.000), transparency and accountability (0.231; p-value = 0.006) had positive and significant impacts on FRQ in Ogun state ministries. However, audit committee had positive but insignificant impact (). The F-statistic of 4.712 (p = 0.001) implied that IPSAS adoption metrics jointly possess greater influence on FRQ of public sectors in Ogun State, Nigeria. Hence, the model is adjudged the best fit. More so, the constant term of 2.252 with p-value of 0.000 indicated that FRQ in Ogun state public sector had been in existence prior to IPSAS adoption. The study concluded that implementing IPSAS has considerably improved the quality of financial reporting in the Nigerian public sector. It is recommended that public entities should critically focus on the audit committee's independence, the development of public sector employees' skills, and the implementation of audit committee recommendations.