August, 2016


I sincerely wish to state that this research work on the topic “The impact of the adoption of International Public Sector Accounting Standard (IPSAS) on the quality of public sector accounting in Nigeria. A case study of Federal Secretariat, Bauchi”. Was written by me under the guidance of Mr. Akpan E.O of the department of Accountancy, Federal Polytechnic, Bauchi.


This is to certify that this work recorded in this report was carried out by Markus Sunday, FPTB/HND/ACC/14/105775 of the department of Accountancy, Federal Polytechnic Bauchi under the supervision of:

Mr. Akpan, E.O                                              _______________                  ___________

Supervisor                                                       Signature                                 Date

Approval Page

This is to certify that this project has been read and approved by the undersigned as meeting the requirements of the Department of Accountancy under the School of Business Studies, Federal Polytechnic, Bauchi.

Mr. Akpan, E.O                                              _______________                  ___________

Supervisor                                                       Signature                                 Date



Mal. Abdulmuhyi M. Auwal                          _______________                  ___________

H.O.D                                                             Signature                                 Date



______________________                            _______________                  ___________

External Examiner                                          Signature                                 Date




I dedicate this work to God Almighty, in His infinity mercy He saw me through my years of study gracefully. I also dedicate this work my beloved parents Mr. /Mrs. Markus Yakubu Sabo for enormous support and unending care towards my studies.

This work is also, dedicate to all those who struggle along with me to see that I have succeeded.


I wish to acknowledge my Supervisor Mr. Akpan E. O for constructive criticism and corrections towards the success of this project work. Only God will reward you well for the work you’ve done.

I also acknowledge the good work of all my lecturers for a good training I have received at the course of study.

To my fellow students, I am sincerely grateful for being there. I thank family and friends too for standing by me.

I am also indebted to the Staff of Federal Secretariat Bauchi for the kind gesture and corporation extended to me towards this work.


 Please acknowledge the effort of   MARKUS SUNDAY    for providing free project material to general public by  sending thank you mail to . it will help him to do more.



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         

CHAPTER ONE: Introduction


  • 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?
    • 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.
    • 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.

CHAPTER TWO: Literature Review


2.1 Introduction

According to Onwubuariri [2012], the Federal Executive Council of Nigeria in July 2010 approved the adoption of the international Financial Reporting Standards [IFRS] and international Public Sector Accounting Standards [IPSAS] for private and public sectors. The adoption is aimed at improving the quality of the country’s accounting and financial reporting system in consonance with global standards. IPSAS are a set of accounting standards issued by the IPSAS board for use by the public sector entities around the world in preparation of financial statements. These standards are based on International Financial Reporting Standards [IFRS].

According to Obinna (2015), the Federal government of Nigeria is targeting the proposed implementation of the standards to revamp the accounting and reporting of government transactions. He said, it is expected that the implementation of IPSAS Accrual accounting will be in 2016, while the adoption of the accrual IPSAS will be in January, 2016. This will mark a turning point in accounting and reporting of the government financial transactions. The adoption of Accrual basis of accounting in an IPSAS environment will facilitate a complete, true and fair view of financial transactions and promote transparency and accountability in financial reporting by public sector entities, he added.

IPSAS emphasizes the accountability of government to citizens, voters and the public [IFRS, 2015]. The promotion of accountability through greater transparency, which accountants traditionally will “foil disclosure”, is an explicitly stated goal of IPSAS. Nweze[2013], explained that IPSAS is good development and an international best practice which has been embraced in most developed countries. He also noted that there is nothing wrong with Nigeria taking a queue in making sure that public entities in the country fully adopt IPSAS.

Otunla [2014], said that to fully and positively implement the decision of the Federal Executive Council [FEC] which approved that the country should adopt the provisions of the IFRS and IPSAS for private and public sectors respectively, the Federation Account Allocation Committee (FAAC) at it’s meeting held on the 13th June, 2011 sets up a technical subcommittee to provide a roadmap for the implementation of IPSAS in the three tiers of Government in Nigeria. The subcommittee had membership from the three tiers of government. The approval of the adoption was to ensure that Nigeria remains relevant in the comity of nations and operates a uniform system of Accounting. The setting up of the technical subcommittee was to successfully draw up the process for the adoption of IPSAS.

2.2 Overview of Public Sector Accounting

According to Okoye[2004], the Public Sector is the sector of the economy established, operated and maintained by the government or its agencies, distinguished from the private sector and organized on behalf of the citizens. The public sector in Nigeria consist of the Federal, State and Local Government, such as it’s ministries, departments and agencies. This includes the Central Bank of Nigeria (CBN), Nigeria Ports Authority (NPA) etc. The primary motive of the public sector is the provision of services to its citizens and not to maximize profit. They are mostly aimed at implementing public policy through the provision of services and the redistribution of income and wealth with both activities supported mainly by compulsory tax, fees or levies to the sectors.

Ogunle ( 2004). Said the scope of services classified as being in the  public sector will vary slightly from one country to another, most will include any services that are freely available to all citizens, even those who  do not contribute to the upkeep and maintenance of those services. This means that services considered within the public sector benefits virtually everyone, even those who do not directly make use of the service.

The Institute of Chartered Accountants of Ghana (2010), defines public sector accounting as “A system or process which gathers records, classifies, summarizes and reports the financial events existing in the public or government sector and financial statements as required by accountability and financial transparency to provide information to users associated with the public institutions”. The PSA is interested in the receipts, custody and disbursements and the rendering of stewardship of public funds entrusted.

According to Ifezue, (2006). Also defines Public Sector Accounting “As the  information system that records, analyzes, classifies, summarizes and  communicates public sector entities financial and economic events, and  their impacts, in terms of both:

  1. The provision of information required by management and senior executives for planning, organizing and control and,
  2. The preparation and provision of financial statements and fiscal reports under specific accounting and reporting standards for external users”.

Onyeke, (2004); stated that common services offered by the Public Sectors include: tax, auditing, general accounting, and consulting services. Accounting firms may offer other services to their clients based on their needs. Most accountants working under the public sector accounting umbrella have a professional license, such as the Certified Public Accountant (CPA) certification. This is a universal, worldwide license that indicates that an accountant has undergone through a rigorous test in other to achieve this standard.

2.3 Objectives of Public Sector Accounting

The purpose and objectives of public sector organizations are fundamentally different from that of private sector companies in manyways. Not the least of these differences is the provision services essential to the public welfare which the private sector would either not be able to provide, or could only provide at a cost that cannot be borne by the recipients of the services. Consequently the focus of public sector financial statements should be somewhat different than those of the private sector, even while the accounting methodologies to produce them could, and advisably should, be nearly identical.

According to the definition of Public sector accounting by “Ifezue”, it is important to differentiate between the process of accounting and thepresentation of information (reporting) from the accounting system. Both are important, but they are different issues. Adoption of accrual accounting  methodologies, and IPSAS financial statements, can help determine the  need for improvements in the quantity and the quality of services that are  provided to the citizens of the adopting country, and also allow better  understanding of the financial and fiscal condition of the governments inthat country. However, IPSAS should be adopted in the context of the overall priorities of the reform process and not just on the basis of the perceived superiority of one basis of accounting over another. Accrual accounting is not an end in itself – it is a tool to improve good governance.  Most often, transition to accrual accounting addresses first the operationalneeds of the government, and then the financial and fiscal reporting needs. Accrual accounting is use in measuring the costs, effectiveness, and efficiency of service programs is the first area where the reforms will help realize both cost savings and improved governmental accountability. Once the framework is in place and used consistently by public sector management, then the quality of the accrual-based information will allow better fiscal and financial reporting. However, in many countries the opposite case is true, where external reporting requirements dictate immediate improvement in financial and fiscal reporting, and the managerial use of accrual accounting is left to be sort out at some indistinct future date.

Use of accrual accounting for management purposes and for financial statement purposes are not mutually exclusive activities, but can be implemented in parallel fashion, and should use the same accounting transactions to enter data into the accounting system for both purposes. But the resources needed for implementing both transitions simultaneously are great. The amount of coordination and management effort needed toimplement both simultaneously is often beyond the capacity of reform implementers, and cannot be supplied by external consultants alone. No matter which use of accounting is introduced first, if that transition has been done well it will simplify the adoption of accrual accounting or the other use. It is important to find the domestic resources, if they exist, that can be brought into the transition process with the expectation that they will continue to provide needed expertise, experience, and support through many years of transition.

2.4.1 The International Public Sector Accounting Standards

The international Public Sector Accounting Standard (IPSAS) are a set of Accounting standards issued by the IPSAS Board for use by public sector organizations around the world in the preparations of financial statements. These standards are based on IFRS issued by the International Accounting Standard Board.

IPSAS aims to improve the quality of general purpose financial reporting by Public Sector organizations, tending to better informed assessments of the resource allocation decisions made by governments, thereby, increasing transparency and accountability.

2.4.2 International Public Sector Accounting Standard issues

In the words of Hayfron (2016), he said that the IPSAS Board have so far been able to issue thirty two (32) accrual and one comprehensive cash IPSAS. This is also in line with IPSAS handbook published in April, 2016.

The IPSASs issued as at April, 2016 are:

Cash basis IPSASs:

Financial Reporting Under the Cash Basis of Accounting. (Unnumbered, January 2016). It establishes requirements for the preparation and presentation of a statement of cash receipts and payments and supporting accounting policy notes. It also includes encouraged disclosures that enhance the cash basis report.

Accrual Basis of IPSASs:

IPSAS 1, Presentation of Financial Statements: sets out the overall considerations for the presenta­tion of financial statements, guidance for the structure of those statements and minimum require­ments for their content under the accrual basis of accounting.

IPSAS 2, Cash Flow Statements: requires the provision of information about the changes in cash and cash equivalents during the period from operating, investing and financing activities.

IPSAS 3, Net Surplus or Deficit for the Period, Fundamental Errors and Changes in Accounting Policies: specifies the accounting treatment for changes in accounting estimates, changes in accounting policies and the correction of fundamental errors, defines extraordinary items and requires the separate disclosure of certain items in the financial statements.

IPSAS 4, The Effects of Changes in Foreign Exchange Rates: Deals with accounting for foreign currency transactions and foreign operations. IPSAS 4 sets out the requirements for determining which exchange rate to use for the recognition of certain transactions and balances and how to recognize in the financial statements the financial effect of changes in exchange rates.

IPSAS 5, Borrowing Costs: Prescribes the accounting treatment for borrowing costs and requires either the immediate expensing of borrowing costs or, as an allowed alternative treatment, the capitalization of borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset.

IPSAS 6, Consolidated Financial Statements and Accounting for Controlled Entities: Requires all con­trolling entities to prepare consolidated financial statements which consolidate all controlled entities on a line by line basis. The Standard also contains a detailed discussion of the concept of control as it applies in the public sector and guidance on determining whether control exists for financial reporting purposes.

IPSAS 7, Accounting for Investments in Associates: Requires all investments in associate to be accounted for in the consolidated financial statements using the equity method of accounting, except when the investment is acquired and held exclusively with a view to its disposal in the near future in which case the cost method is required.

IPSAS 8, Financial Reporting of Interests in Joint Ventures: Requires proportionate consolidation to be adopted as the benchmark treatment for accounting for such joint venturers entered into by public sector entities. However, IPSAS 8 also permits – as an allowed alternative – joint ventures to be accounted for using the equity method of accounting.

IPSAS 9, Revenue from Exchange Transactions: establishes requirements for the accounting treatment of revenue from exchange transactions. Non-exchange revenue, such as taxation, is not addressed in this standard. Non-exchange revenue is to be dealt with as a separate project.

IPSAS 10, Financial Reporting in Hyperinflationary Economies: describes characteristics of an economy that indicate whether it is experiencing a period of hyperinflation and provides guidance on restating the financial statements in a hyperinflationary environment to ensure useful information is provided.

IPSAS 11, Construction Contracts: deals with both commercial and non-commercial contracts and provides guidance on the allocation of contract costs and, where applicable, contract revenue to the reporting periods in which construction work is performed.

IPSAS 12, Inventories: establishes the accounting treatment of inventories held by public sector entities and deals with inventories held for sale in an exchange transaction and certain inventories held for distribution at no or nominal charge. The IPSAS excludes from its scope work-in progress of services to be provided at no or nominal charge from recipients because they are not dealt with by IAS 2 Inventories and because they involve public sector specific issues which require further consid­eration.

IPSAS 13, Leases: This IPSAS is based on IAS 17 Leases . The IPSAS establishes requirements for financial reporting of leases and sale and leaseback transactions by public sector entities, whether as lessee or lessor. The PSC decided that because the IPSAS on Leases and the proposed IPSAS on Property, Plant and Equipment are closely related, it was preferable that the two IPSASs be released at the same time. Accordingly, the release of this IPSAS has been deferred to later in 2001.

IPSAS 14, Events after the Reporting Date: The IPSAS is based on IAS 10, Events After the Balance Sheet Date (revised 1999) but has been amended where necessary to reflect the public sector operating environment. The Standard establishes criteria for deciding whether the financial state­ments should be adjusted for an event occurring after the reporting date. It distinguishes between ad­justable events (those that provide evidence of conditions that existed at the reporting date) and non-adjustable events (those that are indicative of conditions that arose after the reporting date.

IPSAS 15, Financial Instruments: Disclosure and Presentation:The IPSAS is based on IAS 32 Financial Instruments: Disclosure and Presentation (Revised 1998). The Standard includes require­ments for disclosures about both on-balance sheet and off-balance sheet (statement of financial position) instruments, and the classification of financial instruments as financial assets, liabilities or equity. Some respondents noted that the IPSAS would have only limited application for public sector entities which did not hold financial assets, liabilities or equity. The PSC has included as an appendix to the IPSAS a guide to assist entities in identifying the requirements of the Standard that will apply to them.

IPSAS 16, Investment Property: Based on IAS 40 Investment Property (issued 2000) and provides guidance on identifying investment properties in the public sector. The Standard requires that investment property initially be recognized at cost and explains that where an asset is acquired at no or nominal cost, its cost is its fair value as at the date it is first recognized in the financial statements; requires that subsequent to initial recognition investment property be measured consistent with either the fair value model or the cost model; and includes transitional provisions for the initial adoption of the IPSAS.

IPSAS 17, Property, Plant and Equipment: Establishes the accounting treatment for property, plant and equipment, including the basis and timing of their initial recognition, and the determination of their ongoing carrying amounts and related depreciation. It does not require or prohibit the recognition of heritage assets.

IPSAS 18, Segment Reporting: Establishes principles for reporting financial information about distin­guishable activities of a government or other public sector entity appropriate for evaluating the entity’s past performance in achieving its objectives and for making decisions about the future alloca­tion of resources.

IPSAS 19, Provisions, Contingent Liabilities and Contingent Assets: This Standard defines provisions, contingent liabilities and contingent assets; and identifies the circumstances in which provisions should be recognized, how they should be measured and the disclosures that should be made about them. The Standard also requires that certain information be disclosed about contingent liabilities and contingent assets in the notes to the financial statements to enable users to understand their nature, timing, and amount.

IPSAS 20, Related Party Disclosures: Requires disclosure of the existence of related party relation­ships where control exists and the disclosure of information about transactions between the entity and its related parties in certain circumstances. This information is required for accountability purposes and to facilitate a better understanding of the financial position and performance of the reporting entity. The principal issues in disclosing information about related parties are identifying which parties control or significantly influence the reporting entity and determining what information should be disclosed about transactions with those parties.

IPSAS 21, Impairment of Non-Cash-Generating Assets:Prescribes the procedures that an entity applies to determine whether a non-cash-generating asset is impaired and to ensure that impairment losses are recognized. The standard also specifies when an entity would reverse an impairment loss and prescribes disclosures.

IPSAS 22, Disclosure of Financial Information about the General Government Sector: Establishes re­quirements for governments that choose to disclose information about the general government sector and that prepare their financial statements under the accrual basis of accounting.

IPSAS 23, Revenue from Non-Exchange Transactions (Taxes and Transfers), Addresses:Recognition and measurement of revenue from taxes Recognition of revenue from transfers, which include grants from other governments and international organizations, gifts and donations how conditions and restrictions on the use of transferred resources are to be reflected in the financial statements.

IPSAS 24, Presentation of Budget Information in Financial Statements: Applies to entities that adopt the accrual basis of financial reporting. It identifies disclosures to be made by governments and other public sector entities that make their approved budgets publicly available. Also, it requires public sector entities to include a comparison of budget and actual amounts in the financial reports and an explanation of any material differences between budget and actual amounts.

IPSAS 25 Employee Benefits: Sets out the reporting requirements for the four categories of employee benefits dealt with in the IASB’s IAS 19 Employee Benefits. These are short-term employee benefits, such as wages and social security contributions; post-employment benefits, including pensions and other retirement benefits; other long-term employee benefits; and termination benefits. The new IPSAS also deals with specific issues for the public sector, including the discount rate related to post-employment benefits, treatment of post-employment benefits provided through composite social security programs, and long-term disability benefits. IPSAS 25 is effective for reporting periods beginning on or after 1 January 2011.

IPSAS 26 Impairment of Cash-Generating Assets: Some public sector entities (other than govern­ment business enterprises, which would already be using full IFRSs) may operate assets with the main purpose of generating a commercial return (rather than providing a public service). IPSAS 26, which is based on IAS 36 Impairment of Assets , applies to such assets. It sets out the procedures for a public sector entity to determine whether a cash-generating asset has lost future economic benefit or service potential and to ensure that impairment losses are recognized in its financial reports. Non cash-generating assets, those used primarily for service delivery, are addressed separately in IPSAS 21 Impairment of Non-Cash-Generating Assets. IPSAS 26 is effective for reporting periods beginning on or after 1 April 2009.

IPSAS 27 Agriculture: Prescribes the accounting treatment and disclosures related to agricultural activity, a matter not covered in other standards. Agricultural activity is the management by an entity of the biological transformation of living animals or plants (biological assets) for sale, or for distribu­tion at no charge or for a nominal charge or for conversion into agricultural produce or into additional biological assets. IPSAS 27 is primarily drawn from the IASB’s IAS 41 Agriculture, with limited changes dealing with public sector-specific issues. For example, IPSAS 27 addresses biological assets held for transfer or distribution at no charge or for a nominal charge to other public sector bodies or to not-for-profit organizations. IPSAS 27 also includes disclosure requirements that are aimed at enhancing consistency with the statistical basis of accounting that governs the Government Finance Statistics Manual. IPSAS 27 is effective for annual financial statements covering periods beginning on or after 1 April 2011, with earlier application encouraged.

IPSAS 28 Financial Instruments: Presentation: Draws primarily on IAS 32, establishing principles for presenting financial instruments as liabilities or equity, and for offsetting financial assets and financial liabilities.

IPSAS 29 Financial Instruments: Recognition and Measurement: Draws primarily on IAS 39, establish­ing principles for recognizing and measuring financial assets, financial liabilities, and some contracts to buy or sell non-financial items.

IPSAS 30 Financial Instruments: Disclosures: Draws on IFRS 7 and requires disclosures for the types of loans described in IPSAS 29. It enables users to evaluate: the significance of the financial instru­ments in the entity’s financial position and performance; the nature and extent of risks arising from financial instruments to which the entity is exposed; and how those risks are managed.

IPSAS 31 Intangible Assets: Covers the accounting for and disclosure of intangible assets. It is primarily drawn from IAS 38 Intangible Assets. It also contains extracts from the SIC 32 Intangible As­sets-Web Site Costs, adding application guidance and illustrations that have not yet been incorporated into the IAS. At this point, IPSAS 31 does not deal with uniquely public sector issues, such as powers and rights conferred by legislation, a constitution, or by equivalent means; the IPSASB will reconsider the applicability of the standard to these powers and rights in the context of its conceptual framework project, which is currently in progress.

IPSAS 32 Service Concession Arrangements: Grantor: Provides for the recognition, measurement, and disclosure of service concession assets and related liabilities, revenues, and expenses by the grantor. The criteria in IFRIC 12 Service Concession Arrangements for determining whether the operator controlled the asset used in a service concession arrangement are also used in IPSAS 32 to assess whether the grantor controlled the asset. IPSAS 32 also creates symmetry with IFRIC 12 on relevant accounting issues (i.e. liabilities, revenues, and expenses) from the grantor’s point of view. In addition, IPSAS 32 is consistent with SIC-29 Service Concession Arrangements: Disclosures.

IPSAS 33 First-time Adoption of Accrual Basis IPSASs: Addresses the transition from either a cash basis, or an accrual basis under another reporting framework, or a modified version of either the cash or accrual basis of accounting. Consequently, the IPSASB states that the new IPSAS is not aimed at IFRS convergence. Nevertheless, the IPSASB did consider the transitional exemptions included in IFRS 1 First-time Adoption of International Financial Reporting Standards in developing the standard.

IPSAS 34–IPSAS 38. Issued in January 2015: this series of standards are based on the ‘package of five’ standards issued by the IASB in May 2011 dealing with consolidation, joint arrangements, the equity method, separate financial statements and disclosure. However, the IPSASB made a number of amendments to the IASB’s pronouncements to tailor them for the public sector.

2.5.1The International Public Sector Accounting Standard Board (IPSASB)

The International Public Sector AccountingStandards Board (IPSASB) develops accounting standards for public sector entities referred to as International Public Sector Accounting Standards (IPSASs). TheIPSASB recognizes the significant benefits of achieving consistent and comparable financial information across jurisdictions and it believes that the IPSASs will play a  key role in enabling these benefits to be realized. The IPSASB strongly encourages governments and national standard-setters to engage in the development of its Standards by commenting on the proposals set out in Exposure Drafts.

The IPSASB issues IPSASs dealing with financial reporting under the accrual basis  of accounting and the cash basis of accounting. The accrual basis IPSASs are based  on the International Financial Reporting Standards (IFRSs) issued by the  International Accounting Standards Board (IASB) where the requirements of those  Standards are applicable to the public sector. They also deal with public sector  specific financial reporting issues that are not dealt with in IFRSs.

The IPSASB recognizes the right of governments and national standardsetters to establish accounting standards and guidelines for financial reporting in  their jurisdictions. The IPSASB encourages the adoption of IPSASs and the  harmonization of national requirements with IPSASs. Financial statements should be  described as complying with IPSASs only if they comply with all the requirements  of each applicable IPSAS. The adoption of IPSASs by governments will improve both the quality and  comparability of financial information reported by public sector entities around the  world.

2.5.2 Aims and Objectives of IPSASB

The aims and objectives of the International Public Sector Accounting Standard Board includes:

  1. Serving the public interest through developing high quality accounting standards and high quality public sector financial reporting standard and other publications.
  2. Intending to enhance the quality and transparency of public sector financial reporting by providing better information for public sector financial management and decision making.
  3. Raising awareness of IPSAS and the benefits of their adoption.

2.6.1 Accrual Basis of IPSAS

Accrual basis means a basis of accounting under which transactions and other events are recognized when they occur (and not only when cash or its equivalent is received or paid). Therefore, the transactions and events  are recorded in the accounting records and recognized in the financial  statements of the periods to which they relate. The elements recognized  under accrual accounting are assets, liabilities, net assets/equity, revenue  and expenses (IPSAS handbook, 2011).

Accrual based IPSAS is a modern model which emphasizes on efficiency, it is recommended that the public sector should introduce the set of financial statements applied in the private sector, which is made according to accrual accounting. Through accrual accounting we can maximize the effects of the process of computation enabling and public management efficiency so that this should be achieved with minimal cost for the society. According to Ijeoma (2014), the passing to the new system is not a purpose in itself but rather a change of mentality regarding the budgetary process, by passing from a rigid situation of cashed incomes and paid expenses to a situation where the emphasis is on achievements and forecasts hoping thatthis last system will lead to the increase of public management efficiency.

2.6.2 Cash basis of IPSAS

Cash basis accounting is the practice of recording revenues when cash is received and recording expenses when the expense is paid. Accrual accounting is the practice of recording revenues when they are earned and recording expenses when they are owed. It is an accounting system that doesn’t record accruals but instead recognizes income (or revenue) only when payment is received and expenses only when payment is made. There’s no match of revenue against expenses in a fixed accounting period, so comparisons of previous periods aren’t possible (IPSAS handbook, 2011).

The Cash Basis IPSAS prescribes the manner in which general purpose financial statements should be presented using the cash basis of accounting.

Information about the cash receipts, cash payments and cash balances of an entity is necessary for accountability purposes. It also provides input useful for assessments of the ability of the entity to generate adequate cash in the future and the likely sources and uses of cash. In making and evaluating decisions about the allocation of cash resources and the sustainability of the entity’s activities, users require an understanding of the timing and certainty of cash receipts and cash payments.

Compliance with the requirements and recommendations of this standard ensures comprehensive and transparent financial reporting of the cash receipts, cash payments and cash balances of the entity. It also enhances comparability with the entity’s own financial statements of previous periods and with the financial statements of other entities which adopt the cash basis of accounting.

Financial statements prepared under the cash basis provide readers with informationabout the sources of cash raised during the period, the purposes for which cash was used and the cash balances at the reporting date. The measurement focus in the financial statements is balances of cash and changes therein.  Notes to the financial statements may provide additional information about liabilities, such as payables and borrowings, and some non-cash assets, suchas receivables, investments and property, plant and equipment.

2.7 Adoption of IPSAS by Nigeria

Nigeria like developed countries and other developing countries is expected to adopt the International Public Sector Accounting Standards (IPSAS) and it’s in the process of adopting the standards. Adopting the standard would be good for the country as the standard would help in improving the country’s accounting and financial reporting system making it comparable with global standards, Onwubuariri (2012). The Federal executive council in July 2010 gave full approval for the adoption of IPSAS for the public sector and the Federal Government made the pronouncement for the adoption of IPSAS on 3rdSeptember, 2011 which is expected to take place in 2013.

According to Ngama (2012), he noted that Nigeria is in the process of adopting the standards (IPSAS) because it would be suitable for Nigeria and that the delay is because the country wants to develop a chart of account and general financial statement that will meet the international best practices required by IPSAS. The Institute of Charted Accountants of Nigeria also endorses the Adoption of IPSAS by Nigeria public Sector as a basis for financial reporting because of the transparency and accountability element in the reporting system.

Nigeria is to adopt the first part of the standard which is the cash basis in 2013 but this was not possible due to some inherent challenges of IPSAS Adoption. Though adopting the cash basis is not an easy task as no country in the world can boast of full adoption of the cash basis because the key requirement to produce consolidated financial statement for all controlled entities is not an easy task and also to consolidate governments business entities, Ministries and Parastatals is also time consuming. This is why many countries start the adoption of IPSAS with the accrual basis first.

For Nigeria, the cash basis was adopted in 2014 and accrual basis is in January 2016. The sub-committee to work out the modalities for the adoption of IPSAS by thethree tiers of Government had organized workshop, field trips and seminars on IPSAS in all the six – geo political zones of the country to ensure its reality.

According to Nongo (2014) who is a member of FAAC, he noted that the subcommittee has even gone far as reviewing the current book-keeping system, accounting and reporting system and chat of account currently used by the three tiers of government. The committee started their interactive session with the political leaders, key officers in Federal ministries, permanent secretaries state governors, relevant commissioners within the 36 State and Local Governments. This is to enable the committee to obtain information on all aspects of their budgeting. Book – keeping and financial accounting reporting system.

In other to enhance effective adoption and implementation of IPSAS in Nigeria the Sub –Committee of FAAC have developed the following for all government – establishments

in Nigeria.

  • Uniform National Chart of Account and User manual for the chat
  • Uniform accounting policies
  • Uniform budget templates that align with IPSAS cash basis
  • Format of general purpose financial statements for both cash accrual basis of IPSAS.

2.8 Challenges facing the fulladoption of IPSAS in Nigeria

However, all efforts at adopting IPSAS in the Nigeria public sectors earlier has yielded no success due to some apparent challenges facing the country. It was due to these challenges of course that January 2013 being the target date for IPSAS adoption in Nigeria could not succeed, thereby causing an extension of adoption date to January, 2016 for accrual basis IPSAS and 2014 for the cash basis.

The Nigeria public sector is characterized by determinates that create high level of reluctance in accepting changes especially on financial matters because of their corrupt attitudes. Furthermore the cost of implementing the standard is a big task as it would involve the cost of training personnel, writing of new accounting manuals, installation ofadequate Information and communication technology software for the program both at the Federal, State and Local government.

Another major challenges is that the economics system is so porous that adherence to the local accounting standard is a problem let alone an international standard which would expose all activities to world. Also the constitution would have to be amended, so as to be able to inculcate the new standard or the standard needed for the preparation of public sector financial statement (Nkoyo, 2012). In Nigeria, the amendment of our constitution is always a long process and time consuming. Presently there are inadequate staffs to at the various government establishments to handle IPSAS implementation (Adegite, 2010). As such there no need for training and retraining of staffs for the IPSAS project to be successful.

More specifically therefore, the key challenges facing the adoption of IPSAS in Nigeria as pointed out by John C (2016) In a paper entitled “IPSAS Adoption in Nigeria are as follows”.

  • Resistance: It is obvious that not all government administrative machineries such as ministries, parastatals and extra – ministerial departments are supporting IPSAS adoption in Nigeria. Without two thought in mind, this resistance is due to the obvious fact that IPSAS being a principle based standard which will help to unravel all forms of financial malpractices existing in the public sector, hence it’s a treat to these stakeholder in the public sectors.
  • Apparent complexities: The use of common languages to bring across culture and government in the public sector remains a key challenge. Some terminologies used in IPSAS may not apply to country’s financial reporting system due to some uniqueness. This however calls for thorough GAAP analysis.
  • Implementation cost: As part of the effort toward IPSAS adoption, accounting manual need to written to be able to incorporate IPSAS terminologies and other finance officers in the public sector need to be educated and trained on the application of IPSAS. All these cost good amount of money which may not be readily available or where available but mix-applied by public officers.
  • Lack of Qualified Accountant in the Public Sector: Most of the public sector and government agencies lack the necessary accounting personnel to adequately carryout the changes in IPSAS as opposed to the financial reporting frame work currently existing in Nigeria.

2.9.1 Benefits of adopting IPSAS in Nigeria

In an attempt to join the on-going vehicle of global standard in the public Sector and to enjoy the benefits of the standard, the Federal Executive Council (FEC) in July 2010 approved the adoption of the International Public Sector Accounting Standard (IPSAS) for the public entities in Nigeria. In a workshop organized by the sub-committee of FAAC, Ngama (2012) the Former Minister of Finance told the participants that the implementation of IPSAS in Nigeria would promote a peer – review mechanism offinancial reports among the three tiers of government. In fact, I am of the opinion that the adoption of IPSAS will serve as foundation for the preparation of quality financial statements and adequate reporting system in Nigeria Public Sector.

Also, the then Accountant General of the Federation Jonah Otunla whose office is spearheading the adoption of IPSAS stressed that the accounting system would engender economic and political benefits for the country. On the economic side, Ngama (2012)also noted that the adoption of IPSAS would provide the basis for the establishment of a harmonized budgetary system for the three tiers of government. He further stressed that the era of IPSAS would also enhance the country’s eligibility to access economic benefits from donor agencies, private sector, Financial Institutions and Worldwide Financial Institutions such as the World Bank. The preparation of the country’s financial statement using IPSAS which is an international standard would definitely encourage investors into the country. Furthermore, it would also expose the in-house corrupt practice of some of the public officers thereby deterring them from such act.

Nongo (2014) is also of the opinion that the adoption of IPSAS in the public sector accounting reporting system would enhance better service delivery in the public sector, support efficient internal control and bring into focus the performances of the agencies. It would also enhance creditability of government financial information and help build confidence of Nigerian citizens and Nigeria development partners both within and abroad. The adoption of IPSAS would also enhance access of information to the public thereby promoting the aims of freedom of information Act 2011 and facilitating the expression of individuals’ opinion on government activities. Adoption of IPSAS at the Local Government would also help to fight corruption which can be easily trace to the local government because of lack of proper accounting system stipulated by the subcommittee.

Comparability of Nigeria Financial Statement with that of other country would be carried out with ease (Oulasvirta 2012).

In June, 2016, the Federal Government released 23 conditions for States to access new bailout funds, some of which includes:

  • Comply with the International Public Sector Accounting Standards (IPSAS).
  • Develop standard IPSAS compliant software to be offered to states for use by state and local governments.

2.9.2 Benefits of the adoption by other countries

Countries like Malaysia, Peru, Russia, Philippines, Uganda, and The Zambia among many countries that have adopted and implemented IPSAS are enjoying the impact of the adoption and implementation in their countries, some of which includes:

  1. Improved accountability and transparency, that is greater detail and increased disclosure in financial statements.
  2. More credibility and reliability on their financial statements, that is independent standards up to date with latest financial development.
  3. Harmonization, comparability and consistency, that is within the UN system, with other International Organizations, and overtime.
  4. Improved governance, complete information on assets, liabilities, revenues and expenses.

2.10 Summary

This chapter discusses about the works of the IPSASB and the transition to IPSAS in Nigeria. It has also discussed about the accrual and cash basis of IPSAS which will have a significant impact on oversight tasks. Furthermore, it sheds more light on IPSAS adoption and its benefits which will lead to enhanced accountability and transparency.



CHAPTER THREE: Research Methodology


3.1 Introduction

According to Magaji (2005) research methodology can be defined as the process of arriving at a dependable solution to problem through the planned and systematic collection, analysis and interpretation of data.

This chapter states the methods which was adopted in carrying out the research work. It reflects all the methods, procedures, techniques and designs needed in conducting the research work.

According to Bandanm (2007) research methodology should wage a detailed statement of methods used in collection of data, why those methods were chosen and not others, what data were obtained and how they was analyzed.

3.2Research Design

Research design provides the glue that holds the project together. A research design is used to structure the research to show how all major parts of the researchproject work together and also tries to address the central research questions that were used.

Udeagha, (2003); defined research design as the framework thatindicates the type of information that is needed for the research, the source of such information and method of its collection. Definitely, this is a surveyresearch. Survey research is the method of gathering data from respondentsthought to be the representatives of some population using an instrument composed of closed structure or open ended items (questionnaires).

Research design is the plan for a research work. It provides guidelines which directs the researcher towards solving the research problems and it may vary depending on the nature of the problem been studied.

3.3 Population of the Study

The term “Population” can be seen as all the possible value of the variables under study.

According to Odama(1982), there are two types of population, which are:

  1. Finite Population: Population that has fixed number of element.
  2. Infinite Population: Population that has no limit as regards to the elements that constitutes the population.

However, the population used for this research work was taken from the Federal Secretariat, Bauchi.

Staff of Federal Pay Office = Twenty one (21) staff, NAFDAC Office staff = Thirty five (35) staff.

Making a total of fifty six (56) populations.

3.4 Sample and Sampling Technique

Sample technique is choosing some elements of numbers out of a population for observation. A proportion of the population selected on a study is referred to as sample and the method of selecting the sample from the population is known as sampling techniques (Nnadozie et’al, 1985).

3.4.1 Sample size

However, some major reasons why this research work may not cover the whole population for study are:

  1. To save time.
  2. Existence of inaccessible unit to make sample available.
  • Sample is certainly accurate when dealing with the whole population.

For the purpose of this study, out of the fifty six (56) staff fromFederal Pay Office and NAFDAC Office, fifty (50) staff was computed to be the sample size.

3.4.2Sampling Techniques

The population size was fifty six (56) and fifty (50) sample sizes were drawn from the population. Using the Taro Yamane’s formula for sample size determination technique at 5% confidence level, hence, it is computed as follows:

The formula: n=N/1+Ne2


n= Sample Size

N= Population size

e= Error in sampling

1= Constant

Substituting into the formula will be:

n= 56/1+56(0.05)2

n= 56/1+0.14

n= 56/1.14

n= 50

3.5 Methods of Data collection

Data is information obtained in the course of a study. Data collection is the process of acquiring subjects and gathering information needed for the study.

A method of data collection provides information on how to obtain the necessary data on which the result and conclusion can be drawn at the end of the research project.

There are basically two methods of data collection, which are: Primary and Secondary methods of data collection. This study made use of both methods of data collections

3.5.1 Primary Sources of Data

Primary data are originated from the researchers for the purpose of substantial study. Primary data involves information that are collected directly from the field. The primary sources of data used in this research work include: questionnaire administration andoral interview

3.5.2 Secondary Sources of data

Secondary sources of data are second hand information sourced food this project work. Secondary data are data that has already been refined and stored as a record for future purpose. Data collected from these sources are obtained from published and non-published materials which include: journals and periodicals, textbooks, internet.

3.5.3Instruments of data collection

For the purpose of this project work, some questionnaires were administered to the respondents in order to source for primary data, while articles, textbooks and the internet were consulted to source for secondary data.

  • Administration of Instrument

The instrument that was administered in the cause of this study is questionnaires. The researcher administered the questionnaires to the staff of Federal Pay Office and NAFDAC Office for each to be completed at their convenience. The completed questionnaire was later collected by the researcher in order to extract the various responses of the numerous respondents for the purpose of the study.

  • Description of Questionnaire

According to Kama (2005), “questionnaire is a peel or a set of prepared questions in writing from, relating to the aims and objectives of the study to which the respondent is expected to fill in each copy of the questionnaire”.

There are basically two types of questionnaires, viz:

  1. Structured or close ended questionnaire: This requires only ticking of answers chosen.
  2. Unstructured or open ended questionnaire: This requires the respondents to comment on the question asked and give personal view.

For the purpose of this research work, structured or close ended questionnaire were used. The questionnaire is composed of:

  1. Covering letter/introductory letter.
  2. Instructions on how to fill in the questionnaire.
  • Demographic information of respondent.
  1. The questions.
    • Variables and Measurements

A variable is a characteristics, number or quantity that increases or decreases over time or takes on different value in different situation which may either be dependent or independent. This study adopted two variables: IPSAS and Nigerian Public Sector.

The independent variable in this study is IPSAS and the dependent variable is the Nigerian Public Sector which is depending on IPSAS for quality and transparency.

The measurements adopted in this study to measure the level of the dependent variable are:

  1. The quality of public sector financial report;
  2. Improved public enterprise performances; and
  • Transparency of financial reporting in public sector.

3.7 Methods of Data Analysis

Analysis refers to breaking a whole into it’s separate components for individual examination. Data analysis is a process for obtaining raw data and converting it into information useful for decision making by users. Data is collected and analyzed to answer questions, test hypothesis or disprove theories.

When data are collected, it has no meaning until it has been processed and turned into information. It is the data collected through questionnaires that will be presented for analysis in this research.

3.7.1Non-Inferential Technique

Data collected fro analysis from the respondents was presented in a mean sample percentage. The researcher uses mean so as to interpret the responses and performances of the respondents. The formula is:


x̄= Mean

Σ = Sum

F = Frequency

X = Data

3.7.2 Inferential Technique

The main technique adopted by the researcher in the analysis and interpretation of the data collected here is the Analysis Of Variance (ANOVA). The ANOVA can be used to investigate the differences among the mean of all the population simultaneously. The formula is given below:


MST = Mean sum of squares due to treatment.

SST = Sum of squares due to treatment.

p = Total number of populations.

n = Total number of samples in a population.

1= Constant.


This chapter deals with the research design, it provides the clue towards solving the research problem. It states the population to be sampled, how the data collected through the questionnaire will be analyzed and interpreted to make decisions.










Chapter Four: Data Presentation, Analysis and Interpretation



4.1 Introduction

This chapter deals with data presentation, analysis and interpretation. The presentation of data collected means the way of presenting and arranging the different forms of data obtained through various data collecting techniques to enable the researcher perform analysis and exact new meanings from it. The data collected are presented for analysis using the SPSS one way ANOVA. The data analysis was based on the answers to the key questions received from the various departments.


4.2 Responses from questionnaire

A total of 50 questionnaires were administered to the respondents, but only 46 were returned. Therefore, the analysis was based on the returned questionnaires.

Table 4.2: Responses from questionnaires

Options                                                         No. of questionnaires                      Percentage (%)
Completed and returned                                    46                                                    92%

Unreturned                                                            4                                                                  8%

Total50  100%
Source: Field Survey, 2016










4.3 Demographic Profile of the respondents

Table 4.3.1: Sex of therespondents
Frequency Percent Valid Percent Cumulative Percent
Female 11 24.0 24.0 24.0
Male 35 76.0 76.0 100.0
Total 46 100.0 100.0

Source: Field Survey, 2016

From the table above, it shows that 24% of those who responded the questionnaire are Female, while 76% of them are Male.

Table 4.3.2: Marital Status of respondents
Frequency Percent Valid Percent Cumulative Percent
Married 31 67.0 67.0 67.0
Single 15 33.0 33.0 100.0
Total 46 100.0 100.0

Source: Field Survey, 2016

This table shows that 67% of the respondents are married, while 33% of the respondents are Single.

Table 4.3.3: Position of respondents
Frequency Percent Valid Percent Cumulative Percent
Middle/Junior 32 69.7 69.7 69.7
Senior Staff 14 30.3 30.3 100.0
Total 46 100.0 100.0  

Source: Field Survey, 2016

From the table above, it shows that 69.7% of the respondents are Middle or Junior Officers, while 30.3% are Senior Staff.

Table 4.3.4: Department of respondents
Frequency Percent Valid Percent Cumulative Percent
Accounts/Finance 42 91.3 91.3 91.3
Admin 4 8.7 8.7 100.0
Total 46 100.0 100.0  

Source: Field Survey, 2016

From this table, 91.3% 0f the respondents are from the Accounts/Finance of the Agencies, and 8.7% of the respondents are from the Administration department.

Table 4.3.5: Qualification of respondent
Frequency Percent Valid Percent Cumulative Percent
0’LEVEL 11 23.9 23.9 23.9
MA/Bsc/HND/ 18 39.1 39.1 63.0
NCE/ND/DIPLOMA 17 37.0 37.0 100.0
Total 46 100.0 100.0

Source: Field Survey, 2016

From this table, it shows that 23.9% of the respondents are O’Level holders, 39.1% are either MSC, MBA, Bsc, Btech or HND holders while 37% are either NCE, National Diploma or Ordinary Diploma holders.

4.4 Descriptive Statistics

Table 4.4.1: Research Question 1
Frequency Percent Valid Percent Cumulative Percent
Valid SA










U 6 13.0 13.0 93.4
D 3 6.6 6.6 100.0
Total 46 100.0 100.0

Source: Field Survey, 2016

From the table above, 41.3% of respondents of the questionnaire strongly agreed that the implementation of IPSAS will improve the quality of financial reporting in the public sector, 39.1% also agreed. While 13.0% are undecided and 6.6% disagreed to it.

Table 4.4.2: Research Question 2
Frequency Percent Valid Percent Cumulative Percent
Valid SA 21 45.6 45.6 45.6
A 21 45.6 45.6 91.2
U 4 8.8 8.8 100.0
Total 46 100.0 100.0

Source: Field Survey, 2016

From the table above, 45.6% of the respondents strongly agreed that IPSAS adoption will help in fighting corruption in the Nigerian public sector 45.6% also agreed. While 6.6% were undecided about the question.

Table 4.4.3: Research Question 3
Frequency Percent Valid Percent Cumulative Percent
Valid SA










U 2 4.3 4.3 84.7










Total 46 100.0 100.0

Source: Field Survey, 2016

From the table above, 41.3% of the respondents of this question strongly agreed that the implementation of the standard will improve the performance of public sectors in Nigeria, 39.1% also agreed. While 4.3% were undecided, 11.0% disagreed and 4.3% strongly disagreed to the question.

Table 4.4.4: Descriptives statistics
N Mean Std. Deviation Std. Error 95% Confidence Interval for Mean Minimum Maximum
Lower Bound Upper Bound
Factors 0 7 4.71 .488 .184 4.26 5.17 4 5
1 2 4.00 1.414 1.000 -8.71 16.71 3 5
2 4 3.75 .957 .479 2.23 5.27 3 5
3 2 3.50 .707 .500 -2.85 9.85 3 4
4 2 4.00 1.414 1.000 -8.71 16.71 3 5
5 3 3.67 .577 .333 2.23 5.10 3 4
6 2 3.00 .000 .000 3.00 3.00 3 3
7 1 4.00 . . . . 4 4
8 1 2.00 . . . . 2 2
10 3 4.33 .577 .333 2.90 5.77 4 5
12 2 2.50 .707 .500 -3.85 8.85 2 3
14 3 2.33 1.528 .882 -1.46 6.13 1 4
15 3 2.67 2.082 1.202 -2.50 7.84 1 5
16 2 2.00 1.414 1.000 -10.71 14.71 1 3
17 3 1.67 .577 .333 .23 3.10 1 2
18 2 2.00 .000 .000 2.00 2.00 2 2
19 4 1.25 .500 .250 .45 2.05 1 2
21 2 1.50 .707 .500 -4.85 7.85 1 2
22 1 1.00 . . . . 1 1
25 1 1.00 . . . . 1 1
Total 50 3.00 1.429 .202 2.59 3.41 1 5
Question 0 7 2.57 1.512 .571 1.17 3.97 1 5
1 2 9.00 1.414 1.000 -3.71 21.71 8 10
2 4 7.50 1.732 .866 4.74 10.26 6 9
3 2 2.50 .707 .500 -3.85 8.85 2 3
4 2 4.50 4.950 3.500 -39.97 48.97 1 8
5 3 7.67 2.082 1.202 2.50 12.84 6 10
6 2 3.50 .707 .500 -2.85 9.85 3 4
7 1 5.00 . . . . 5 5
8 1 10.00 . . . . 10 10
10 3 7.33 .577 .333 5.90 8.77 7 8
12 2 5.00 .000 .000 5.00 5.00 5 5
14 3 6.33 2.082 1.202 1.16 11.50 4 8
15 3 7.67 2.309 1.333 1.93 13.40 5 9
16 2 10.00 .000 .000 10.00 10.00 10 10
17 3 6.33 2.082 1.202 1.16 11.50 4 8
18 2 4.50 2.121 1.500 -14.56 23.56 3 6
19 4 3.75 1.708 .854 1.03 6.47 2 6
21 2 1.00 .000 .000 1.00 1.00 1 1
22 1 2.00 . . . . 2 2
25 1 9.00 . . . . 9 9
Total 50 5.50 2.901 .410 4.68 6.32 1 10

Source: Field Survey, 2016

From the table above, the questionnaires were collected using likert scaling which allows respondents to specify their level of agreement, disagreement or otherwise on a symmetric scale.

This study made use of symmetric scale 1-5 which stands for:

  1. Strongly Agree
  2. Agree
  3. Undecided
  4. Disagree
  5. Strongly Disagree.

The mean for the research question from the descriptive are: 4.71, 3.75 and 3.67, while the N is 0,2 and 5 respectively.

4.5 Test of Hypothesis

The hypothesis tested here was derived rightly from the research questions which were also analyzed in the Descriptives. They were tested using the One Way ANOVA SPSS.

They are:

  • 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.

Table 4.5.: Test of Hypothesis
Sum of Squares d.f Mean Square F Sig.
Factors Between Groups 72.238 19 3.802 4.109 .000
Within Groups 27.762 30 .925
Total 100.000 49
Question Between Groups 311.702 19 16.405 4.883 .000
Within Groups 100.798 30 3.360
Total 412.500 49

Source: Field Survey, 2016

From the table above, our obtained “F value” are 4.109 and 4.883 at 5% level of significance. The observed “p” value is .000 both which falls below the required .05 alpha level. Thus, we can now reject the null (H0) of both the hypothesis.

4.6 Discussion of Results

From our descriptive table shown above, the research questions have been analyzed and it is clear that, IPSAS adoption in Nigeria would help in fighting corruption in the Nigeria Public Sector, the implementation of IPSAS will improve the quality of financial reporting in the public sectors and the implementation and adoption of IPSAS will improve the performances of public sectors in Nigeria.

And from the hypothesis tested, we have rejected the null hypothesis (H0) and concluded that, the adoption and implementation of IPSAS will help in curbing corruption and mismanagement in the public sector organizations in Nigeria and also, the adoption and implementation of IPSAS have the potentials to improve the performance of public enterprises.


4.7 Summary

In this chapter, we have succeeded in presenting, analyzing and interpreting the data obtained from the questionnaires administered. We have also discussed the results obtained from in the various data analysis carried out using the One Way ANOVA SPSS.










CHAPTER FIVE: Summary, Conclusion and Recommendation


5.1 Introduction

This final chapter which presents the summary of findings of the study, conclusion and recommendation to the study was discussed. Also, limitations of the study were discussed and sections that followed discussed the suggestions for further study.

5.2 Summary of findings

This study examined the impact of the adoption of International Public Sector Accounting Standard (IPSAS) on the quality of Public Sector Accounting in Nigeria. As a result of the study, the findings revealed the following:

  1. There aremany benefits in adopting and implementation of the International Public Sector Accounting Standard (IPSAS) in Nigeria.
  2. It was observed at the course of the study that IPSASs adoption and its full implementation is expected to increase the level of accountability and transparency and will also brings about quality in the financial reports of Public Sectors in Nigeria.
  • The implementation and adoption of IPSAS will improve the performances of public enterprises and will also encourage foreign investors. And will help in curbing corruption and mismanagement.



5.3 Conclusion

We can therefore, conclude that the adoption of IPSAS in Nigeria, Federal Secretariat Bauchi, will impactoperating procedures, reporting practices and hence, strengthen good governance and good relations with the government and the governed (Onwubuariri, 2012).

It is also expected to provide useful information for better management and decision, IPSAS will also expose the government and finance officers to greaterpublic scrutiny.

5.4 Recommendation

From the result and findings of the study, I recommend that:

  1. The government should ensure full implementation of IPSAS in Nigeria looking at its significance.
  2. The government should ensure full compliance to the standards for the public sector enterprises.
  • Priority should be given towards the improvement of the public sectors in Nigeria.

5.5 Limitation

This study is only limited to the “quality” of the financial reports produced by the public sectors, the materials used for this study only covers from 2012 to 2016 only and since this is almost an entirely recent development in the field of Accounting, adequate materials were not available.


5.6 Suggestion for further study

Since this study does not cover all the aspects related to the subject matter, the following suggestion are therefore made for other researchers who may wish to work in this field:

  1. An evaluation of the benefits of implementing IPSAS in Nigerian Public Sectors.
  2. The impact of the adoption of IPSAS on the financial reporting of Public Sectors in Nigeria.


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  1. Letter of Introduction

Department of Accountancy,

Federal Polytechnic,

Gwallameji, Bauchi,

Bauchi State.

June, 2016.

To Whom it may Concern

Dear Respondent,

I, Markus Sunday, a final year student of the above named Polytechnic is conducting a research on The impact of the adoption of International Public Sector Accounting Standard (IPSAS) on the quality of public sector Accounting in Nigeria, a case study of the Federal Secretariat, Bauchi. I hereby, wish to gather all the necessary information for the above named project topic carried out in partial fulfillment for the award of HND in Accounting.

The information collected is purely for this research purpose only. Therefore, your assistance in filling the questionnaire is unavoidably needed in order to make this work a success. I assure you that all information given as regards this work will be treated with utmost confidentiality and strictly used for this purpose only.

Thank you in anticipation of your corporation.

Yours faithfully,

Sunday Markus

  1. Questionnaire

Instruction: Please tick [√] on the appropriate box for your answer(s).

  1. Sex: Male [ ]       Female [   ]
  2. Marital status: Single [   ]      Married [   ]
  3. Position:__________________________
  4. Department:___________________________
  5. Qualification :___________________________
  6. International Public Sector Accounting Standards [IPSAS] adoption would help in fighting corruption in the Nigerian Public Sector: Strongly Agree [ ]     Agree [   ]    Undecided [  ]   Disagree [  ]      Strongly Disagree [   ]
  7. IPSAS adoption in Nigeria will foster transparency in the financial reporting of public sectors in Nigeria: Strongly Agree [ ]  Agree [   ]  Undecided [  ]   Disagree [  ]      Strongly Disagree [   ]
  8. The implementation of IPSAS will improve the quality of financial reporting in the public sector: Strongly Agree [ ]     Agree [   ]    Undecided [  ]   Disagree [  ]      Strongly Disagree [   ]
  9. The benefits of IPSAS adoption will far outweigh it’s cost of adoption: Strongly Agree [ ]     Agree [   ]    Undecided [  ]   Disagree [  ]      Strongly Disagree [   ]
  10. The use of IPSAS will attract foreign investors in Nigeria: Strongly Agree [ ]     Agree [   ]    Undecided [  ]   Disagree [  ]      Strongly Disagree [   ]
  11. The implementation and adoption of the standards will improve the performance of public sector: Strongly Agree [ ]     Agree [   ]    Undecided [  ]   Disagree [  ]      Strongly Disagree [   ]
  12. The adoption or application of the standards will enhance comparability (internal and external) of financial of the Federal Secretariat, Bauchi: Strongly Agree [ ]     Agree [   ]    Undecided [  ]   Disagree [  ]      Strongly Disagree [   ]
  13. Apparent complexities and lack of qualified trained professional Accountants brought about the change in the implementation date: Strongly Agree [ ]     Agree [   ]    Undecided [  ]   Disagree [  ]      Strongly Disagree [   ]
  14. The adoption will give Nigerians easy access to government records and expression and opinions: Strongly Agree [ ]     Agree [   ]    Undecided [  ]   Disagree [  ]      Strongly Disagree [   ]