| Abstract: | This study assesses the benefits and challenges of adopting and implementing the
International Public Sector Accounting Standards (IPSAS) in some selected NGOs working
in Ethiopia. The objective of the study was to provide an insight on the contribution of
adopting IPSAS in enhancing the level of accountability, transparency and taking educational
and professional responsibilities. The population of the study was non-governmental
organizations which have already adopted and started to implement IPSAS. Using purposive
sampling five NGOs were selected for the study. 51 sample respondents, who understood
IPSAS's objectives and were responsible for the adoption process, were taken from the above
five institutions to fill the questionnaire. The methods used for the study were descriptive
analysis and interview with concerned officials of accounting and auditing board of Ethiopia
and professionals found in NGOs. The findings show that the adoption of IPSAS enhances
level of accountability and transparency of managements by providing timely and clear
financial reports. It was also found that IPSAS adoption is realistic target and clearer
understanding of the standard leads to effective implementation. However, the adoption of
IPSAS has challenges including additional cost, lack of training, unavailability of adequate
staffs in the market, lack of wide participation in the organization, difficulty in recognition,
measurement and valuation of assets, delay in amendment to local regulations and lack of
coordination and communication. It was also observed that the government higher officials
should be committed to implement IPSAS to enhance the quality and comparability of
financial reports; the government should give emphasis to implement IPSAS to attract
foreign direct investment; AABE should assist public sectors by providing training and
consultancy in the adoption process; and universities and professionals need to take the
educational and professional responsibilities qualifying for the standard. It was
recommended that NGOs should adopt IPSAS for better management, accountability and
transparency in financial reporting. And also, AABE should encourage the use of IPSAS that
helps to attract more donors. |
