International Public Sector Accounting Standards (IPSAS) Adoption and Financial Accountability: Evidence from Local Governments in OGUN State

Abstract

The adoption of International Public Sector Accounting Standards (IPSAS) has been viewed as a significant initiative due to the global demand for greater accountability and transparency in public sector financial management. However, its effectiveness in promoting financial accountability remains a challenge, particularly at the local government level, where citizen confidence and limited resources are crucial. In developing countries like Nigeria, persistent financial mismanagement, lack of transparency, and weak reporting systems may undermine the expected benefits of IPSAS adoption. These challenges raise concerns about whether IPSAS adoption leads to meaningful improvements in financial accountability at the local level. This study examines the impact of IPSAS adoption on financial accountability in local governments in Ogun State, Nigeria, focusing on compliance, transparency, corruption, timeliness, and accountability of financial resources. The study adopted a survey research design. The population consisted of 475 individuals, including 440 accountants, internal auditors, and account staff in all the local governments, and 35 auditors from the Office of the Auditor General for local government. A sample size of 448 was determined using the Olonite Sampling Technique. Data was collected through a validated questionnaire (Cronbach’s alpha = 0.787-0.887). Descriptive and inferential (multiple regression) statistics were used. The findings showed that IPSAS adoption significantly influences financial accountability. It significantly affects compliance (Adj. R² = 0.107; F = 6.898, p = 0.000), transparency (Adj. R² = 0.033; F = 2.682, p = 0.015), corruption (Adj. R² = 0.304; F = 22.510, p = 0.000), timeliness (Adj. R² = 0.078; F = 5.146, p = 0.000), and financial resource accountability (Adj. R² = 0.257; F = 18.070, p = 0.000). The study recommends continuous refresher training and accounting system automation to enhance IPSAS implementation in local governments.