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PROJECT TOPIC: THE IMPACT OF INTERNATIONAL PUBLIC SECTOR ACCOUNTING STANDARD (IPSAS) IN NIGERIA PUBLIC SERVICE (A CASE STUDY OF LAGOS STATE CIVIL SERVICE)

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CHAPTER ONE

INTRODUCTION

1.1Background of the study

The return of Nigeria to democratic governance in 1999 has been accompanied by various reforms to facilitate transparency and accountability in the governance of government activities and to improve the quality of financial information produced in public financial reporting. The decision of the Federal Executive Council to adopt IPSAS (International Public Sector Accounting Standards) of the three levels of government of Nigeria by January 1, 2016 is an important initiative that should include reporting on financial reporting. in Nigeria, the public sector is improving. IPSAS has become the cornerstone of the global public accounting revolution in response to calls for greater fiscal accountability and greater government transparency (1). IPSAS addresses issues related to the preparation of general purpose financial statements for public sector enterprises that do not refer to SOEs. Barrett (2001) described accountability as a relationship based on the obligation to provide evidence, verification and accountability for the outcome, both in terms of the results achieved in terms of agreed expectations and in terms of the resources used. In other words, the government must be accountable when it conducts its activities in an open, transparent and engaging manner (John 2011).

IPSAS has two accounting bases: cash accounting and the provisioning basis. The accounting bases for accounting are practiced in the private sector, but the introduction of the New Public Management Initiative (NPM) has made it a program to improve financial management in the public sector (Lyfee, 1993). NPM is committed to applying private sector management approaches and techniques to the public sector.

The introduction of IPSAS, including accrual accounting, should serve a number of useful purposes, such as:

(1) improving the assessment of financial performance, as the financial statements reflect all paid and unpaid expenses and all revenues generated; (2) provide information on whether sources of revenue are sufficient to meet short and long-term commitments;

(3) Provide comprehensive information on expenditures that help to understand the impact of the policy on costs and allow comparison with other policies;

(4) determine the future viability of the programs, the liquidity situation and complete information on the government's financial position or assets and liabilities at the end of the year; and

(5) Improve good governance (Benice, 2014).

However, the achievement of the above objectives is doubtful, as several attempts have been made in the past to improve the public sector accounting system in Nigeria. Among these attempts, the federal government's efforts to standardize federal, state and local government degrees, where a committee had been created in 1984 to harmonize the presentation of diplomas in the public sector, were important. The Committee noted the differences in explanations and formats of presentation between the reports of federal, state and local authorities and recommended 16 statements adopted by the three levels of government. Key recommendations have been adopted and implemented, but standard reporting formats have not been adopted consistently (Fedric et al., 2005).


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