International Public Sector Accounting Standards Adoption on the Quality of Financial Reporting

Abstract

Purpose: As governments worldwide strive for greater transparency, accountability, and efficient use of public resources, adopting IPSAS has emerged as a pivotal step in achieving these objectives. Despite ongoing efforts to facilitate IPSAS adoption in Ghana, limited research exists on how implementing these standards has directly influenced the quality of financial reporting within specific ministries. This study aims to fill this gap by investigating the impact of IPSAS implementation on the quality of financial reporting in selected ministries in Ghana.

Methodology: This study adopts a quantitative research approach, as it is best suited for evaluating the causal relationships between IPSAS adoption and improvements in financial reporting quality. It follows a positivist research philosophy based on the principle that reality is objective and can be observed and measured empirically. Purposive sampling was utilized to select a sample size of 366.

Findings: The study examined the effect of International Public Sector Accounting Standards (IPSAS) on transparency and accountability in financial reporting. The findings indicate a significant and positive relationship between IPSAS adoption and these aspects.

Unique Contribution to theory, practice and policy: This study contributes to the institutional theory by demonstrating how IPSAS serves as a regulatory framework that enhances compliance and governance in financial reporting. Governments and regulatory bodies should mandate the full implementation of IPSAS to ensure financial transparency. IPSAS adoption improves financial decision-making by ensuring accurate and reliable financial data.