Organisational Factors and International Public Sector Accounting Standards as Determinants of Relevance of Financial Reporting in Nigerian Public Sector Institutions

Abstract

The relevance of financial reporting in the public sector has significant implication for government accountability and transparency. This study aimed to examine the effect of organisational factors and International Public Sector Accounting Standards (IPSAS) adoption on the relevance of financial reporting of Nigerian public institutions. Data were extracted from the audited financial statements of ninety public institutions for 2017 and 2018. Panel regression analysis was conducted on the data. The findings revealed that IPSAS adoption and organisational characteristics jointly demonstrated significant effect on relevance (Adj R2 = 0.3772, F(4, 175) = 27.54, p < 0.05). IPSAS adoption demonstrated an independent effect on relevance (β = 3.21, p < 0.001). The study concluded that IPSAS adoption significantly impacts the relevance of financial reports to decision makers in the public sector. Strict compliance with IPSAS reporting guidelines by Nigerian public institutions is strongly recommended.