Adoption and Implementation in Nigeria

International Public Sector Accounting Standards (IPSAS) Adoption and Implementation in Nigeria: Issues and Prospects.
Globalization has brought about ever-increasing collaboration, international trade, and commerce among the countries of the world. Specifically, it is characterized by an intensification of cross-border trade, increased financial and foreign direct investment flows, promoted by rapid liberalization, and advances in information technologies (Ajayi, 2001) and (Danas, 2001). Globalization spawns a historical revolution and inevitably influences the accounting sector. As a result, the harmonization of accounting systems meets with success under globalization. It is therefore glaring that to operate in the modern-day world economy and to realize the full gains of international listing; no individual country can act alone in its financial reporting standards.
Hence, the need for the development of unified accounting standards that would remain acceptable and comprehensible to users across the globe. International Public Sector Accounting Standards (IPSAS) is at present the focal point of the global revolution in Public sector accounting in response to calls for greater harmonization and comparability of financial accounting information through global best practices. IPSAS according to IFAC, 2017 are high-quality global accrual-based accounting standards that enable governments to produce high-quality financial information that leads to better decision making and builds accountability and trust with citizens.
IPSAS are the public sector equivalent of International Financial Reporting Standards (IFRS). IFRS has been credited with providing a more transparent and accurate financial overview of listed companies around the world, using accruals accounting as opposed to cash accounting. The move towards using IPSAS in the public sector has the potential to radically change the practice of accounting and financial reporting in the sector, just as IFRS has accomplished with listed companies.
IPSAS ensures high standards that catalyze the preparation of sound and transparent financial statements. This in turn improves operational performance, accountability, and efficient allocation of resources. Adeboye (2011) noted that IPSAS ensures good financial practices with the capability of disclosing financial irregularities swiftly within the public sector irrespective of the size of such a public institution. This is possible because IPSAS provides a self-regulated internal control system.
The adoption of IPSAS is fast gaining momentum across the world. For instance, Australia and New Zealand have already converted from IFRS to IPSAS type standards for the public sector. South-East Asia and South America, statements of support for IPSAS have also encouraged a trend of adoption across developing countries. Moreover, Africa has been at the forefront of IPSAS adoption, with several countries intending to formally adopt the standards as part of financial management reform programs Some of the African countries that have adopted IPSAS include Rwanda, Tanzania, Uganda, Zambia, Algeria, Ghana, Nigeria, South Africa, Liberia, Morocco, and Mauritania.
In 2010, Nigeria, the giant of Africa with a population of over 150 million people and a foremost member of the Organization of the Petroleum Exporting Countries (OPEC) approved the adoption of the IPSAS to enhance transparency and accountability in the preparation and presentation of financial statements in the public sector. This is done with the hope of curbing the growing corruption that has beleaguered government organizations in Nigeria. For instance, the recent crisis of inefficiency of
Power Holding Company of Nigeria Plc, Nigeria Ports Authority Plc, and the Nigerian Police force which was due to financial malpractices and concealment of material facts orchestrated by cash basis of accounting.
Despite Nigeria’s commitment to the improvement of financial reporting and accountability, there is more to be done in terms of best practice. Some government agencies have failed to move to IPSAS as required (Premium Times, 2016) and Nigeria’s Accountant General has conceded that the country needs to build accountancy capacity to cope with the demands of IPSAS implementation (World Stage, 2017). Furthermore, Akhidime (2012) concluded that the quality of financial reporting and accountability in Nigeria’s public sector leaves a lot of room for improvement. Moreover, there are also on-going challenges in terms of the internal audit function in some entities.
Therefore this study seeks to ascertain the extent of IPSAS adoption and implementation in Nigeria, examine critically the factors influencing its adoption and also evaluate the benefits and challenges associated with IPSAS adoption and implementation.