Impact of International Public Sector Accounting Standards (IPSAS) Adoption on Financial Transparency in the Nigerian Public Sector

Abstract

This study empirically examines the impact of International Public Sector Accounting Standards (IPSAS) adoption on financial transparency in the Nigerian public sector. Motivated by Nigeria's formal commencement of IPSAS implementation in 2014 and the persistent gap in large-sample primary evidence on its outcomes, the study employed a cross-sectional survey design with a structured questionnaire administered to 400 purposively selected public sector accounting officers, finance directors, internal auditors, and budget officials across federal, state, and local government entities in six geopolitical zones of Nigeria. Data were analysed using descriptive statistics, Pearson product-moment correlation, and ordinary least squares (OLS) multiple regression, with robustness checks including variance inflation factor (VIF) diagnostics and the Durbin-Watson test. The findings reveal that IPSAS adoption exerts a significant positive effect on financial transparency (β = 0.412, t = 8.354, p < .001), disclosure quality (β = 0.187, t = 4.439, p < .001), accountability (β = 0.178, t = 4.047, p < .001), and comparability (β = 0.166, t = 3.705, p < .001). A weaker but statistically significant positive effect was found on corruption reduction (β = 0.098, t = 2.487, p = .013). Institutional capacity did not significantly moderate the IPSAS-transparency relationship (t = 1.649, p = .100). The model accounted for 62.6 percent of the variance in financial transparency (R² = 0.626, Adjusted R² = 0.620, F(6,393) = 109.88, p < .001). The study concludes that IPSAS adoption has meaningfully improved financial transparency in Nigeria's public sector, though full benefits are contingent on strengthening institutional capacity. The study recommends accelerated migration to full accrual-based IPSAS, targeted professional capacity building, and expanded GIFMIS rollout to sub-national entities.