International Public-Sector Accounting Standards adoption and implementation issues in Africa

Abstract

Purpose: The study aims to establish the reasons as to why several African Governments have not adopted and implemented International Standards – IPSAS Accrual and what are the challenges they face when applying them while deliberating on likely benefits countries would enjoy upon full IPSAS adoption and implementation.

Methodology: The Research used desktop reviews of existing Public Information such as Governments’ Financial Statements, presentations by African Accountant Generals; PFM experts and other public sector IPSAS adopters. Also, an interview was conducted to obtain some primary information on accrual-based IPSAS in the Rwandan case.

Findings: The results indicate that most African countries wish to adopt and are eager to implement the IPSAS accrual, but several challenges prevalent in such economies appear to be retarding the zeal. Particularly in Africa, fraud and corruption are still rampant despite enormous efforts and initiatives put in place to fight the vice. Analyzed data indicated that most African countries lacked enough funds to implement IPSAS, most rely on donor funds to do so; inadequate stakeholder engagement and buy-in is another challenge; along with a lack of competent staff with the knowledge and competencies needed; poor infrastructure with old fashion
technology. External support from professional bodies is required to raise awareness of the need for transparent financial reporting in the public sector.

Practical implications: The study recommends that adopting and implementing accrual-based accounting can be beneficial for African governments. And this can be achieved through enhanced stakeholder engagements; effective transformation and change management; building capacity in the public sector by collaborating with Public Accountancy Organizations (PAO’s) and other tuition providers; well thought through implementation approach, and enhanced stakeholder engagement as well as better decision making.

Originality: The findings are significant to governments that wish to adopt and implement accrual-based IPSAS. And to ensure that African governments enjoy the benefits, they need to adequately address the challenges which include, lack of skilled staff, inadequate IT infrastructure, insufficient political will, and implementation costs.