Accounting Project Topics

Effect of Public Sector Accounting Practices and Fund Management in Nigeria (Case Study of Uyo Local Government)

Effect of Public Sector Accounting Practices and Fund Management in Nigeria (Case Study of Uyo Local Government)

Effect of Public Sector Accounting Practices and Fund Management in Nigeria (Case Study of Uyo Local Government)


Purpose of the study

The main objective of the study is to determine the impact of IPSAS adoption on financial control system of public service in Nigeria. Specifically, the study aimed to:

  1. Determine the impact of IPSAS adoption on value relevance of Book value per share of public service in Nigeria
  2. Determine the impact of IPSAS adoption on value relevance of earningsper share of public service in Nigeria.
  3. Investigate the impact of IPSAS adoption on value relevance of capitalized intangible assets of public service inNigeria
  4. Determine the incremental impact of IPSAS adoption on relevance of accounting information of listed financial firms in Nigeria




The public sector is a term used to identify the portion of a nation‟s economy that is focused on providing basic services to citizens through the framework of a governmental organization.

According to Frank, (1972). He said that accounting is often said to be the language of business. It is used by the business world to describe the transaction entered into by all kinds of government parastatals. In any office were money is used as a means of exchange, there is need to record all monetary transactions that took place in the office and this is done so that at any moment a reference can be made to fund the effect of all transactions.

According to Roger, (1989). He said the users of the information define accounting as the process of identifying, measuring, communicating economic information to permit firm judgement and decision. This information is primarily financial and generally stated in monetary terms. Accounting then is a fundamental measurement and communicable process use to report on the activity of a profit seeking business organisations and not for non profitable organisations.

According to Omelehinwa, (1990), he said, accounting system is a set of rules, regulation and procedure which are anticipated by appropriate theoretical force into a system. This definition of accounting system is rather instructive. He maintained that accounting system processes data into information which are received as input in the decision making process of the organisation.

According to Ani Uchena, in his book titled “Government and public sector accounting” he said, public sector is that sector of the economy established and operated by the government and its agencies, this distinguishes public sector from private sector and it is organised on behalf of the whole citizens as they are expected to make minimum profit from their operations.

According to Orewa, (1978). He emphasized that one of the main reasons why local government council exists is to collect various forms of revenue from its citizens or the federal government and then use the collected revenue to provide social services in an efficient manner as possible. It has to be prepared periodically a plan of expected cost of various services to be provided in the coming year.




Research Design

For the purpose of this study, correlation, pre and post research designs are used. The reason for the selection of these designs is; first, correlation, pre and post research designs are sibling of quasi-experimental research design which relate to social science research. And the second, correlation, pre and post research design has the ability of describing the statistical association between the two or more variables and allows for making predictions by testing the expected relationship between variables. For the pre-post design, the period of the study is split in to 4 years each, 2008-2011 and 2012-2015. Therefore, the two research designs are suitable and appropriate for this study.



Descriptive Statistics

Table 4.1 presents the descriptive statistics for both pre and post IPSAS compliance, where minimum, maximum, mean and standard deviations of the data for the variables used in the study are presented and discussed.




Based on the discussion and analysis in the preceding chapter, the study concluded that both empirical and statistical evidence on the utility of three explanatory variables of book value, earnings per share and capitalizes intangible in predicting the explained variable (share prices of the sample firm) was provided. Also, it is concluded that even though the adoption of IPSAS was mandated in order to increase financial control system, that mandatory adoption has been proven to enhance the relevance of book value of equity to the users of accounting information of financial service firms in Nigeria through share prices.

Secondly, this study concludes that relevance of IPSASs regarding to earnings per share has been improved after the adoption of IPSAS. This can be further explained by the fact that adoption of IPSAS has not restored the confidence of investors by influencing the share price of financial service firms in Nigeria.

Thirdly, the study provides evidence that value relevance of capitalised intangible assets has been improved after the adoption of IPSAS. This can be explained by the fact that the mandatory adoption has enhanced the investors need by influencing the share price of financial service firm in Nigeria.

Lastly, IPSAS adoption reflect more value relevant information on accounting information which is beyond that of pre IPSAS adoption period through the share prices of public service in Nigeria.


In line with the findings and conclusions of the study the following recommendations are proffered:

  1. Statistical evidence revealed that book value per share has conveyed useful information to the market share price of the public service after the adoption of IPSAS. Therefore, management should pay more attention to IPSAS by ensure adequate compliance. This can be achieved by strengthening internal control unit in the organization to ensure that every aspect of accounting processes undergone a holistic check of IPSAS compliance checklists. Similarly, potential and existence investors should give priority investment wise, to the company that adopts IPSAS fully as shown statistically that the said standards influence the share prices through book values of equity.
  2. Statistical evidence proved that capitalized intangible asset has impact on share price of Nigeria public service after IPSAS adoption period. Therefore, management should capitalize their intangible assets because they have significant impact on market share price. Also the Standard setters should therefore ensure adequate adherence to the IAS 38 which prescribe how intangible assets should be capitalized, expensed, amortized or impaired. Managers should ensure that more intangible capital should be present in their financial
  3. Financial reporting council and other regulatory agency should ensure the strict adherence of IPSAS. Because the adoption of the standard is proved to have an incremental value relevance on accounting information of public service in Nigeria.


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