of the study
The aim of every
financial statement is to provide information about the financial position and
performance of the organisation and should be useful to users in decision
making. Due to globalization and international trade that exists between
countries, financial information must be prepared and presented in a way that
can be easily understood by all users both locally and internationally. Over
the years, a lot of effort has been made to toughen the financial statement of
private firms to meet international standards but least can be said for the public
sector (Street & Bryant, 1999).
international congress of accountants which was held in New York with the idea
to create an international authority that will be responsible for developing of
accounting in countries where this practice was underdeveloped, emerged. According
to Carey (1965, p. 103; quoted by Camfferman and Zeff, 2007, p .37) “It has
also been suggested that an international information center be established by
the professional accounting organizations of the world, with a full-time
secretariat charged with the duty of distributing professional publications and
disseminating technical information on an international scale. Such an
international center might also offer guidance to newly developing professional
societies in countries where a well-organized profession does not yet exist”.
This led to the creation of International Coordination Committee for the Accountancy
Profession (ICCAP) to create an accounting profession coordinated with uniform
In January 1973,
at the instigation of the American Institute of Certified Public Accountants
(AICPA), a proposal was made to transform the ICCAP into the “International
Accounting”. One of the goals of this organization would be to establish
international standards of accounting and auditing (Bocqueraz and Walton, 2006,
p. 283). Following the proposition of the ICCAP, the IFAC was created on October
7th, 1977, during the 11th international congress of accountants in Munich.
(Cummings and Chetkovich, 1978; Mueller, 1979; Dye, 1988; Humphrey and Loft,
2007a, 2007b). The original constitution of the IFAC presented, in its second
paragraph, that the role of the IFAC was the development and enhancement of a
co-ordinated worldwide accounting profession with harmonized standards (Dye,
1988, p. 14; Humphrey et al., 2004, p. 9).
In June 1986, the
IFAC created a fifth committee dedicated to the public sector: the Public
Sector Committee (PSC). PSC was charged with the task of developing accounting
and auditing standards and promoting their voluntary acceptance. The
Public Sector Committee changed its name to the “International Public Sector
Accounting Standards Board” (IPSASB) to reflect that the role of this body has
become focused on setting International Public Sector Accounting Standards
(IPSASs). This name change became effective immediately following the Council
meeting – consequently the PSC will now be known as the IPSASB” (IFAC, 2004c,
In 1996, the
Public Sector Committee (PSC) of the International Federation of Accountants (IFAC),
developed the International Public Sector Accounting Standards (IPSAS).
International Public Sector Accounting Standards (IPSAS) is the centrepiece of
the “Global revolution in government
accounting” (Heald, 2003) in response for the need to strengthen government
financial accountability and transparency.
accepted for accounting for funds provided under World Bank Programs. Many
countries across the world are encouraged to harmonize their national standards
with IPSAS. Thus, IPSAS has become de facto international standards for assessing
government accounting practices worldwide. Australia, Canada, New Zealand, and
the United Kingdom are considered as de facto adopters of IPSAS. Despite their distinctions,
governments in these countries now routinely issue consolidated financial
statements produced by their accrual accounting systems in accordance with
standards set by boards largely independent of government authorities (J. L.
Current status of IPSAS
Proposed Implementation Date
announced in 2014 that the country would implement accrual basis IPSAS from
2016, with full roll out expected to take five years.
began IPSAS implementation in 2016. Each of Nigeria’s 36 independent states
will determine its own implementation period
at local government level in 2009 using Generally Recognized Accounting
Practice (GRAP). National and provincial public entities report on modified
cash basis using either adopted IFRS or GRAP
adopted accrual IPSAS at all levels of government
began adopting cash basis IPSAS in 2016 and is committed to fully adopting cash
basis IPSAS in 2020
has announced it will adopt accrual basis IPSAS by 2021. Central government
and local authorities are currently using cash accounting.
in Nigeria is expected to impact operating procedures, reporting practices and
hence strengthen good governance and relations with the government. It is
expected to provide useful information for better management and decision. IPSAS
will also expose the government and finance officers to greater public scrutiny
thereby making them more accountable for the efficiency and effectiveness of
their services. The adoption of IPSAS will no doubt serve as the foundation for
financial reporting system in Nigeria and equally build trust between the
government and the citizens (Ijeoma & Oghoghomeh, 2014).
IPSASs have been developed for use by public sector
entities around the world and are meant to serve the public interest by
requiring the presentation and disclosure of financial transactions in a
comprehensive and consistent fashion to enhance transparency and the
accountable management of public resources.
Government has adopted for
implementation the Accrual Basis International Public Sector Accounting
Standards (IPSASs) as the reporting standard for the public sector of Ghana.
IPSASs would, therefore, be the basis for the preparation of public sector
accounts of Ghana for the year ended December 31, 2016, although given the
complexity of the issues involved, a step by step approach to implementation,
spanning a five-year period from 2016, will be encouraged. (G.D. Zaney).
Following this initiative by government, all public
sectors in Ghana, including Judicial Service of Ghana are expected to prepare
and present their financial reports based on IPSAS.
1.2 Problem Statement
Mhaka, 2014, stated that because most financial
statements are prepared and presented in a cash basis of accounting, it creates
series of problems. This has led most countries to adopt IPSAS including Ghana. To the best of my knowledge, a lot of
research has been done on the adaptation of IPSAS but this work seeks to
examine the adaptation of IPSAS in the public sector of Ghana. This study helps
stakeholders better understand the IPSAS and determines whether public sectors
in Ghana have started implementation of IPSAS.
1.3 Objectives of the study
The main focus of this study is to determine
the adaptation of IPSAS in the public sector Ghana.
To ascertain whether the adoption and
implementation of IPSAS accrual basis of accounting will improve accountability
and transparency in public sector financial reporting in Ghana.
examine major challenges that might be faced in first time adaptation of IPSAS
To determine whether the Judicial
Service of Ghana is complying with IPSAS checklist.
1.4 Research Questions
the adoption and implementation of IPSAS accrual basis improve accountability and
transparency in the public sector of Ghana?
2. What are the major challenges that
might be faced in first time adaptation of IPSAS in Ghana?
3. What is the extent of compliance
of IPSAS checklist in Judicial Service of Ghana?
This study focuses on
the adaptation of the IPSAS in the public sector of Ghana. The study only
covered Judicial Service of Ghana to determine whether the IPSAS will help
improve accountability and transparency in the presentation of financial
statement. The study also looked at the benefits of the accrual basis of accounting
and whether public sectors in Ghana have started implementation of the IPSAS.
Significances or Justifications
The findings of this study will help
stakeholders better understand the IPSAS. The study will also help the
government of Ghana to know whether the various public sectors in Ghana have
started implementing the IPSAS after being launched in 2016. The study will
also be the basis for people who will like to do further studies on IPSAS in
Ghana to build on it.
This study was limited to Judicial Service of Ghana.
This study is however divided into five (5) chapters.
one covers the background of the study, the problem statement, objectives of
the study, research questions, scope and
significance of the study.
presents definition and concepts of IPSAS globally, benefits and challenges of
IPSAS, theoretical model and research hypothesis.
covers the methodology of the study.
presents the result and discussions on the findings.
chapter which is chapter five draws conclusion and make recommendations for the