AN INVESTIGATION INTO THE EFFECT OF IPSAS ADOPTION ON FINANCIAL ACCOUNTABILITY OF LOCAL GOVERNMENT AREAS IN OGUN STATE: AN EMPIRICAL ANALYSIS

The need for financial probity cannot be overemphasized as this has
drawn the attention of researchers in the field of accounting and
finance that demands urgent attention. Despite widespread reforms
aimed at enhancing transparency and governance, persistent
challenges such as inconsistent compliance, delayed reporting and
weak institutional capacity undermine financial accountability at
the subnational level. This study addressed a critical gap in the
literature by empirically investigating the specific effect of IPSAS
within the unique socio-administrative context of Ogun State LGAs
focusing on four dimensions: compliance, transparency, corruption
and timeliness. The objective of the study was to investigate the
effect of IPSAS adoption on financial accountability of LGAs in Ogun
State. The study employed a survey research design targeting a
population of 475 accountants, internal auditors and accounts staff
across Ogun State LGAs. A sample size of 448 was determined using
the Olonite sampling technique. Data were collected via structured
questionnaires and the instruments reliability was confirmed with
Cronbach’s Alpha coefficients ranging from 0.733 to 0.909 indicating
excellent internal consistency. Data was analysed using descriptive
and multiple regression analysis to test the hypothesized
relationships. The results and findings show that IPSAS adoption
had a positive and significant effect on Compliance with Financial
Reporting Requirements (CMFR) for hypothesis one (Adj R
2 = 0.713, F(4, 345) = 6.898, p < 0.05). IPSAS adoption had a positive and
significant effect on Transparency of Financial Reporting (TRFR) for
hypothesis two (Adj R
2 = 0.723, F(4, 345) = 2.682, p < 0.05). From the
findings and results, the study concluded that IPSAS adoption has a
significant effect on financial accountability in LGAs in Ogun State.The study however recommended that local government authorities
institutionalize continuous IPSAS training programs for accounting
personnel, enforce strict compliance mechanisms, automate
accounting processes to ensure timeliness and enhance the public
dissemination of financial reports to foster transparency and public
trust.