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Table of Contents

Title page        –           –           –           –           –           –           –           –           –           i

Declaration      –           –           –           –           –           –           –           –           –           ii

Certification    –           –           –           –           –           –           –           –           –           iii

Approval page –           –           –           –           –           –           –           –           –           iv

Dedication      –           –           –           –           –           –           –           –           –           v

Acknowledgement      –           –           –           –           –           –           –           –           vi

Table of Contents       –           –           –           –           –           –           –           –           vii

Abstract          –           –           –           –           –           –           –           –           –           xi

CHAPTER ONE: Introduction

1.1 Background to the study  –           –           –           –           –           –           –           1

1.2 Statement of research Problem     –           –           –           –           –           –           3

1.3 Research Questions           –           –           –           –           –           –           –           4

1.4 Objectives of the study     –           –          –           –           –           –           –           4

1.5 Statement of research hypothesis –           –           –           –           –           –           5

1.6 Significance of the study  –           –           –           –           –           –           –           5

1.6.1 Theoretical Significance –           –           –           –           –           –           6

1.6.2 Practical Significance     –           –           –           –           –           –           –           6

1.7 Scope of the study            –           –           –           –           –           –           –           –           6

1.7.1 Geographical/Organizational Scope       –           –           –           –           –           7

1.7.2 Time Scope        –           –           –           –           –           –           –           –           7

1.8 Definition of terms           –           –           –           –           –           –           –           7

1.9 Historical Background of the case study  –           –           –           –           –           8

1.10 Plan/Organization of the study   –           –           –           –           –           –           9

1.11 Summary –           –           –           –           –           –           –           –           –           10

CHAPTER TWO: Literature Review

2.1 Introduction          –           –           –           –           –           –           –           –           11

2.2 Overview of Public Sector Accounting    –           –           –           –           –           12

2.3 Objectives of Public Sector          –           –           –           –           –           –           14

2.4 .1 The International Public Sector Accounting Standards           –           –           16

2.4.2   International Public Sector Accounting Standards Issued     –           –           16

2.5.1 The International Public Sector Accounting Standard Board   –           –           25

2.5.2 Aims and Objectives of IPSASB          –           –           –           –           –           27

2.6.1 Accrual Basis of IPSAS            –           –           –           –           –           –           –           27

2.6.2 Cash Basis of IPSAS     –           –           –           –           –           –           –           28

2.7 Adoption of IPSAS by Nigeria    –           –           –           –           –           –           29

2.8 Challenges facing the full adoption of IPSAS in Nigeria            –           –           –           31

2.9.1 Benefits of Adopting IPSAS in Nigeria            –           –           –           –           –           33

2.9.2 Benefits of the Adoption by other countries     –           –           –           –           35

2.10 Summary –           –           –           –           –           –           –           –           –           35

CHAPTER THREE: Research Methodology

3.1 Introduction          –           –           –           –           –           –           –           –           36

3.2 Research Design   –           –           –           –           –           –           –           –           36

3.3 Population of the study    –           –           –           –           –           –           –           37

3.4 Sample and Sampling Technique  –           –           –           –           –           –           37

3.4.1 Sample size        –           –           –           –           –           –           –           –           38

3.4.2 Sampling Techniques     –           –           –           –           –           –           –           38

3.5 Method of data collection            –           –           –           –           –           –           –           39

3.5.1 Primary Sources of data –           –           –           –           –           –           –           39

3.5.2 Secondary sources of data         –           –           –           –           –           –           39

3.5.3 Instruments of data collection   –           –           –           –           –           –           39

3.5.4 Administration of Instrument    –           –           –           –           –           –           40

3.5.5 Description of Questionnaire     –           –           –           –           –           –           40

3.6 Variables and measurements         –           –           –           –           –           –           41

3.7 Methods of data analysis  –           –           –           –           –           –           –           41

3.7.1 Non-Inferential technique          –           –           –           –           –           –           42

3.7.2 Inferential technique      –           –           –           –           –           –           –           42

3.8 Summary   –           –           –           –           –           –           –           –           –           43

CHAPTER FOUR: Data Presentation, Analysis and Interpretation

4.1 Introduction          –           –           –           –           –           –           –           –           44

4.2 Responses from questionnaire      –           –           –           –           –           –           44

4.3 Demographic profile of the respondents  –           –           –           –           –           45

4.4 Descriptive Statistics        –           –           –           –           –           –           –           47

4.5 Test of hypothesis –           –           –           –           –           –           –           –           50

4.6 Discussion of results         –           –           –           –           –           –           –           51

4.7 Summary   –           –           –           –           –           –           –           –           –           52

CHAPTER FIVE: Summary, Conclusion and Recommendation

5.1 Introduction          –           –           –           –           –           –           –           –           53

5.2 Summary of findings        –           –           –           –           –           –           –           53

5.3 Conclusion            –           –           –           –           –           –           –           –           54

5.4 Recommendation  –           –           –           –           –           –           –           –           54

5.5 Limitations            –           –           –           –           –           –           –           –           54

5.6 Suggestion for further study         –           –           –           –           –           –           55

References      –           –           –           –           –           –           –           –           56

Appendix        –           –           –           –           –           –           –           –           58


The development of any accounting system requires consideration of the underlying purpose of that system. In Nigeria, government accounting processes have been conducted within the general framework of the principles of fund accounting but the application of these principles to financial reporting has been a major challenge. This study examined the impacts of adoption of International Public Sector Accounting Standards (IPSAS) on the quality of public sector organizations in Nigeria. Primary and Secondary sources of data were employed. ANOVA SPSS was employed. Findings from the study showed that adoption of IPSAS would improve the quality of financial reporting of public sector organizations in Nigeria. In addition, it was found that the adoption of the standard would help in curbing corruption and mismanagement in the public sector. It was concluded that IPSASs adoption would improve the performances of government enterprises. The study recommended that government should ensure full implementation and compliance with the standard in Public organizations. Therefore, the adoption of IPSAS is expected to influence the operating procedures and reporting practices of public sector organizations in Nigeria.

Keywords: IPSAS, Quality, Adoption, Impact, Public Sector         



  • Background to the study

The rate of change affecting the world of public sector managers show no sign of slowing down especially with  apparent shrink in geographical boundaries among nations of the world. Because of this, governments across the world are constantly searching for ways to improve their public financial management systems. Hence, it is sine qua non for public sector managers to harness the opportunities of globalization such as access to international finance, collaboration, international markets for domestic products and grants. To harness the above, it is paramount to evolve uniform standards of financial reporting unlike in the previous years when nations of the world had only been concerned in setting financial reporting standards in their own defined territories. The uniform standards will provide a framework that will guide the preparation and presentation of financial statements to ensure that such statements are comprehensive and present the same information to global users (Alan and Susan, 2007).

In 2010, the Federal Executive Council of Nigeria approved the adoption of the International public Sector Accounting Standards (IPSAS) and business-style accounting throughout the public sector. The roadmap for the adoption of IPSAS is in phases as follows; full adoption of IPSAS cash basis in 2014 and full adoption of IPSAS accrual basis with effect from 2016. The international Public sector Accounting Standards govern the accounting by public sector entities, with the exception of GovernmentBusiness Enterprises. The Public sector comprises entities or organizations that implement public policy through the provision of services and the redistribution of income and wealth, with both activities supported mainly by compulsory tax or levies on other sectors as noted by Kara (2012). Public sector accounting is a system or process which gathers, records, classifies andsummarizes as reports the financial events existing in the public or government sector as financial statements and interprets as required by accountability and financial transparency to provide information to users associated to public institutions.

Nigeria, a leading African nation with the population of over 186 millionpeople(UN, April 20, 2016)  and a foremost Organization of the Petroleum Exporting Countries (OPEC) member, with a public sector dominated economy, has identified the need to consider the value proposition of the IPSAS and implement it in order to remain relevant (Ijeoma&Oghoghomeh, 2014). However, government interventions following the global financial crisis in the private sector have increased many governments’ exposures and debt levels. Hence, decision-making is getting harder, especially if the view of what is “sustainable” is difficult to see. The focus on the private sector is huge when failure occurs and therefore accounting, audit, and reporting standards are set at a high level and rigorously enforced (Ijeoma&Oghoghomeh, 2014). Timely, clear, and open annual financial statements play a significantrole in the accountability of governments to their citizens and their elected representatives. These financial statements are prepared on a cash basis or some variation of an accrual basis of accounting. The benefits of achieving consistent and comparable financial information across jurisdictions are very important and International Public Sector Accounting Standards (IPSAS) have been established by the IPSAS Board to assist in that endeavor.

In modern democratic governance, the basic objectives used in assessing the performance of public sector organizations are financial objective, public objective and growth objective. While the financial objective is concerned with the ability of the government to meet the needs and aspirations of taxpayers, public objective focuses on meeting the demands of the citizenry (i.e. those within and outside the tax bracket), and the growth objective is tailored towards improvement in economic performance and international relations (Okoye&Oghaghomeh, 2011). The need for unified standards made the IPSAS Board to develop IPSAS for public sector financial reporting. While the commercial entities world over are moving towards IFRS, governments areharmonizing with IPSAS.

  • Statement of researchProblem

The development of any accounting system requires consideration of the fundamental purpose of that system. The nature of government accounting has the purpose of determining how much money was received and itssources, how much was spent and for what purposes and the financial obligations accrued (Ijeoma&Oghoghomeh, 2014). Profit is not the major focus, unlike the private sector, which has profit as the prime focus and determines the profit of the business over a given period. Hence, many factors influence government accounting such as the role of government in the different fields like the armed forces, health and education and the policies set by government to achieve its aspirations and goals. In Nigeria, government accounting processes have been conducted within the general framework of the principles of fund accounting but the application of these principles to financial reporting has been a major challenge. Government is significantly different from a business, and the purpose of governmental accounting differs significantly. This raised many questions relative to the quality and relevance of the reports prepared and published by public organizations especially the Federal Ministries, Departments and Agencies. Among these questions are; do the financial statements of MDAs in Nigeria reveal the true and fair view of their financial performance and position? How can the quality of financial reporting of MDAs in Nigeria be improved? How transparent and accountable are MDAs with regard to resources allocated to them?

  • Research Questions

The researcher in the course of the research work has the following questions to examine:

  1. Will the implementation of IPSAS improve the quality of financial reporting in the public sector?
  2. Will the adoption and implementation of the standard help in curbing corruption and mismanagement in the public sector?
  3. Will the implementation and adoption of IPSAS improve the performance of government enterprises?
    1. Objectives of the Study

The objectives of this study are to:

  1. To examine the implications of adoption of IPSAS on the quality and reliability of IPSAS-based financial reporting with a view to establish the relevance of IPSAS to the financial reporting of public sector organizations in Nigeria and Federal Secretariat Bauchi in particular.
  2. To ascertain the extent to which IPSAS’s adoption can help in managing corruption and mismanagement in the Federal Secretariat, Bauchi.
  3. To ascertain the contribution of adoption/application of IPSAS in enhancing comparability (Internal &external) of financial statements of public sector organizations in Nigeria.
    1. Statement of research Hypothesis

The researcher embarking on this project have in mind the following tentative generalized statements to the investigation and subsequently, serves as a guide from which conclusion can be drawn:

  • H0: The adoption and implementation of IPSAS will not help in curbing corruption and mismanagement in the public sector organizations in Nigeria.

H1: The adoption and implementation of IPSAS will help in curbing corruption and mismanagement in the public sector organizations in Nigeria.

  • H0: The adoption and implementation of IPSAS does not have the potential to improve the performance of public enterprises.

H1: The adoption and implementation of IPSAS have the potential to improve the performance of public enterprises.

  • Significance of the study

This research work will be of immense significance to the staff of Federal Secretariat Bauchi. It will go a long way in enlightening them on the concept of international public sector accounting standard (IPSAS) as well as it’s application in financial statement. This research work will as well be of benefit to students and researchers because it will widen their scope from the information contained in this research work. And lastly, it will be of help to the ministries, departments agencies in their financial control system and also it will help them in improving revenue generations and minimizes expenditures since public sector is differentiate able from private sector.

1.6.1Theoretical significance

Theoretical significance of the study shows the importance of the review research work to the public sectors in Nigeria as it examines the implications of adopting IPSAS on the quality of their financial reporting. And to the general public, this research work will guide on reliance in the financial reports of the Federal Secretariat Bauchi, prepared based on IPSAS standards.

1.6.2 Practical Significance

The practical significance if this research work is that it proffers solutions to corruption and mismanagement arising from the Public Sector. It is equally significant as it figure out some solutions to the lingering problems faced by the Public Sectors and in the presentation of their financial statements.

1.7 Scope of the Study

This research work on the “impact of the adoption of IPSAS on the quality of Public Sector in Nigeria” is focused on the adoption of cash and accrual basis of IPSAS. The IPSASB develops IPSAS’s, which apply to the accruals basis of accounting and those that apply to the cash basis of accounting. This study is focused on the impact of the application of IPSAS based cash and accruals basis of accounting to the financial reporting of Federal Ministries, Departments and Agencies [MDA’S] under the Federal Secretariat, Bauchi, Nigeria.

1.7.1    Geographical/organizational scope

The economy is a large component with a lot of diverse and sometimes complex parts. This research work only looked at a particular part of the economy i.e. the public sector.

This study will not cover all the fact that make up the public sector, but shall focus only on the International Public Sector Accounting Standards its benefits and its impacts on the Nigerian Public Sector Accounting.

1.7.2Time Scope

As this project is on the impact of adopting IPSAS on the quality of Public Sector Accounting in Nigeria, the information that will be collected is from 2012 to 2016. This study is only limited to this period of time.

1.8 Definition of Terms

  1. IPSAS:International Public Sector Accounting Standard.
  2. IPSASB: International Public Sector Accounting Standard Board.
  3. Impact:This is the measure of tangible and intangible effects of one thing’s or entity’s action orinfluence upon another.
  4. Adoption:This is the choosing and making that to be one’s own even when it is not originally for him.
  5. Quality:A measure of excellence or a state of being free from defects, deficiencies and significantvariations.
  6. Public Sector:The part of the National economy providing basics goods and services that are eithernot, or cannot be provided by Public Sector.
  7. Cash Basis:A basis of accounting under which income is recorded when cash is received and expensesare recorded when cash is paid.
  8. Accruals Basis:A basis of accounting under which revenue is recognized or recorded when earned and expenses are recognized when incurred.
  9. IFRS:International Financial reporting Standards
  10. MDA’s:Ministries Departments and Agencies

1.9 Historical Background of the Case Study

What is known today as Bauchi State was created in 1976 from the then North Eastern State of Nigeria. Bauchi State is one of the states in Northern Nigeria that spans two distinctive vegetation zone, namely the Sudan and the Sahel savannah. During the colonial era up to independence, it formed part of the Bauchi Plateau of the then Northern region, until the 1976, then comprising present Bauchi and Gombe States it included 16 local government areas. The number of local government areas in the then Bauchi state was increased to 20 and then to 23. However, in 1997 when Gombe was created out of Bauchi and additional local government was created in the country, Bauchi State was left with 20 Local governments.

Following the creation of more States on 3rd February 1976, Bauchi State came into being with Bauchi town as the administrative headquarters and at the same time, instant arrangement was made for assumption of office of the first military government of the state under colonel Bello Khalid, and the appointment of the executive council. Federal ministries and Federal secretariat were established along with extra-ministerial departments. Some agencies, departments and ministries in the secretariat includes; NAFDAC, Special Control Unit against Money Laundering, Federal Ministry of Communication etc.

The concept of the adoption and implementation of International Public Sector Accounting Standard in Nigeria and then in Bauchi stare came into being in 2012.

1.10     Plan/Organization of the Study

The study is divided into five (5) chapters and organized as follows:

Chapter one form the introduction part, this is where the main theme of the research is given. It comprises of the statement of the problem, objectives of the study, research questions and hypothesis, significance of the study, scope of the study and organization of the study.

Chapter two is the literature review of International Public Sector Accounting Standard, it’s benefits and challenges of adoption.

Chapter three forms the research methodology which includes sources of data, research design, population of the study, sample and sampling techniques, method of data analysis and model specification.

Chapter four identifies the data presentation, analysis of the study collected, from the area study will be presented and interpreted.

Chapter five includes summary about the findings, conclusion and recommendations.

1.11 Summary

In summary this chapter covers the introductory area of the study like the background to the study, statement of research problem and also developed research question with the objective of the study. The chapter also gives an insight to the scope and significance of the study. It also highlights the plans/organization of the study.


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