The study evaluated the effect of International Public Sector Accounting Standard (IPSAS) on transparency and accountability of government ministries in River state, Nigeria. The effect of IPSAS adoption on transparency, accountability and good governance in the selected ministries were critically examined. The study which adopted survey design collected data using five point likert-scale questionnaires which was administered on sample of 100 juniors, intermediate, senior and professional accountants, auditors (internal and external) and cash officers of the selected ministries in Rivers State. The data was analysed using descriptive statistics. The hypotheses formulated were tested using regression analysis techniques at 5% level of significance. The result of the study showed that adoption of IPSAS increases the level of accountability, transparency and good governance in the selected ministries. This implied that the economy of State will be better off if IPSAS is fully adopted and implemented. Having seen IPSAS as the agents of the needed change in Nigeria, the study recommends that Nigerian government should enact an enabling law to back up the adoption and implementation of IPSAS and more importantly institute appropriate sanctions to ensure full compliance.



This chapter introduces the adoption of International Public Sector Accounting Standard (IPSAS) and its effect on transparency and accountability. It also emphasizes on the research objectives, question and hypothesis of the study. The significance of the study, scope and definition of terms are discussed at the end of the chapter.

1.1 Background to the study                                              

Responsibility in the depth of mistrust and dishonesty in dealing with the public fund is a serious issue that bedevilled the Nigerian public sector. Most subsequent administrations at the Federal, State and Local governments always lay priority on the problem of corruption, misappropriation, and non-accountability. Despite various rules and appropriate organizations that exist in Nigeria, there has been a critical growth in the number of reported issues of all kinds of misappropriation of public funds and properties.

As an explanation of improving the desire for greater transparency and accountability in the management of public finances, most administrations all over the world have determined to restore their government financial management systems and processes. It was in acknowledgement of this challenge that the International Federation of Accountant (IFAC) through “International Public Sector Accounting Standard Board” (IPSASB) came up with "International Public Sector Accounting Standard" (IPSAS) of public affairs in the country.

The Public sector is that aspect of the national economy providing fundamental goods or services that cannot be provided by the private sector. It consists of the local and national government, their agencies and their chartered bodies. The Public sector is also known to be one of the largest sectors of any economy.

Public Sector Accounting is the systematic process of recording, communicating, summarizing, analyzing and interpreting the financial statement and statistics of Government in aggregate and details. It deals with the receipts, custody, disbursement and rendering of stewardship on public funds entrusted”. (Adams, 2004). The main aim of the government is not to make a profit but render essential services to her citizen. Public sector accounting is also known as government accounting. It is defined as a composite

International Public Sector Accounting (IPSAS) are a set of accounting principles administered by the IPSAS Board for the public sector entities around the world to use in the preparation of financial statements (IPSAS Handbook 2015). The International Public Sector Accounting Standard Board (IPSASB) helps to enhance public sector financial reporting worldwide through the advancement of IPSASB, international accrual-based accounting standards, for use by government and other public sector entities around the world. The IPSASB recent activities are directed on the betterment of international public sector accounting standards for financial reporting by government and other public entities.

The implementation of the international public sector accounting standards was to be effective from January 2nd-16th  2016 as said by the accountant-general of the federation, general Ahmed Idris. He stated that if Nigeria implemented IPSAS, then the country would benefit from being rated “like any other advanced economy, like any other advanced player in the global economy. It will make information open and transparent”, he noted.

In current eras, countries of the world have established standards of financial reporting in their individual countries. Cross-border transactions have brought about ever-increasing international trade, commerce and increased collaboration among countries of the world (Ijeoma & Oghogbomeh, 2014). Due to this growth, there is a larger need for improved uniformity, comparability and transparency in the standards guiding financial statement of public entities, so that such statements would remain germane and convene the same information to users across the world.

1.2 Statement of the problem

 The reason for the lack of comparison of financial reports of home operations due to different reporting formats accounts for the adoption of IPSAS. The traditional cash basis of accounting also aids poor budget implementation, and mismanagement of public funds as well as a lack of accountability and transparency (Ibanichuka & Oyadonghan (2014). IPSAS was introduced by the International Federation of Accountants (IFAC, 2012; 2014) through one of its standard-setting boards: The International Public Sector Accounting Standard Board (IPSASB) in response to increasing calls for greater transparency and accountability in the management of public funds in the wake of the global financial crises brought about the adoption of IPSAS. (Ademola, Adegoke & Oyeleye 2017; Bello, 2001, IFAC, 2017, Schaik, 2018). Thus, the core courage for adopting IPSAS by the government as part of the financial management reforms was to reverse the existing weakness hampering accountability and transparency in the country.  In the process of adopting the cash basis, IPSAS will then move to adopt accrual-basis IPSAS. This is to reconcile to international accounting standards.

IPSAS strives to increase the integrity of general-purpose financial reporting by public sector entities, leading to better-informed assessments of the resource allocation decisions made by governments, thereby increasing transparency and accountability. Ademola et al. (2017) sustained that proper application of IPSAS did assist upright financial management practices in many countries because of its propensity to broadly divulge all material transactions and thus highlight financial misdeeds that occur within public sector organizations.

1.3 Objectives of the study 

The main aim of the study is to examine the effect of international public sector accounting adoption on transparency and accountability of government ministries in River state, Nigeria.

The specific objectives of the study are;

  1.         i.            To assess whether there is increased uniformity in government due to IPSAS adoption.
  2.       ii.            To examine the level of accountability of government financial statements.
  3.     iii.            To evaluate the level of good governance and management of the public fund.

1.4 Research question:

The research questions for this study are questioned below.

  1.         i.            How has IPSAS adoption increased uniformity in government financial statement?
  2.       ii.            To what extent has the level of accountability improved due to IPSAS adoption?
  3.     iii.            To what extent has IPSAS enhanced good governance and management of public finance in Nigeria?

Research hypotheses:

The research is to be carried out based on the following hypotheses:

Ho1: There’s no increased uniformity in government due to IPSAS adoption.

Ho2: There’s no level of accountability of government financial statement.

Ho3: IPSAS has not enhanced good governance and management of public finance in Nigeria.

1.5 Significance of the study

The findings of the studies are required to be of tremendous importance to the governments of River state, Nigeria. The government will appreciate the findings of the study of the need to adopt and sway into full enactment of International Public Sector Accounting Standards as the financial implications of its adoption will be uncovered. The government will be completely informed of the gains of full disclosure laws of IPSAS adoptions as it affects transparency, accountability, informative, and comprehensiveness of financial information.

1.6 Scope/limitations of the study

The importance of international public sector accounting standards on transparency and accountability of the Nigeria public sector with an emphasis on ministries and agencies of the River state government in Nigeria. Meanwhile, an effort will be made to confirm a genuine and reliable research report that certainly would be generally accepted, however, there may be minor restrictions to the study, such as lack of database management in the area of international public sector accounting standards as it relates to financial accountability in the public sector of River state. Besides, to be fully represented, this study needs to cover wider areas and a larger number of public entities covering the whole South-South of Nigeria, but due to financial and time constraints, the research is limited to ministries and agencies in River state. The study adopts a quantitative method of a five-point Likert scale questionnaire issued to the selected ministries of River state, Nigeria including agencies which constitutes all the Accountants and Internal Auditors of the state ministries of finance (including those posted to other ministries and other agencies of government as accounting officers and internal auditors) in River State, Nigeria.

1.7 Definition of terms

Adoption: This is the action or fact of choosing to take up, follow, or use something.

Transparency: Transparency in its literal meaning refers to the state of being easily visible throughout. The English dictionary defines transparency as the quality or state of being transparent Under the investment and finance definition, it defined as the situation that occurs when companies openly communicate important information to investors and shareholders.

Accountability: In ethics and governance, accountability is answerability, blameworthiness, liability, and the expectation of account-giving. Accountability is a noun that describes accepting responsibility, and it can be personal or very public.