ASSESSMENT OF INTERNATIONAL PUBLIC SECTOR ACCOUNTING STANDARDS (IPSAS) IMPLEMENTATION CHALLENGES AND OPPORTUNITIES IN THE CASE OF LOCAL NGOS IN ADDIS ABABA

Abstract

This study assesses the Benefits and challenges of implementation of IPSAS in the case of local NGOs located in Addis Ababa. The objective of the study was to determine the benefit the charity organizations get after implementing IPSAS and to identify the current challenges that Local NGO’s charities may encounter while adopting IPSAS. The population of study was 121 active and operational charity organization and 1 government offices were selected for this study 26 of the population were taken from the charity organization and 1 from government organization. So, the total sample were 26. Purposive sampling was done. The methods used for the study were descriptive analysis and interview were done with one auditing board of Ethiopia official. A close ended questionnaire-based Likert scale and open-ended interview was used to collect data. Data was analyzed by use of tabulating, specifically, frequencies, Mean, Standard deviation analysis were generated using SPSS version 20.The study revealed that IPSAS implementation has a benefits of increase quality of financial reports, high level of transparency and accountability, help in decision making process, promotes standardization, harmonization & consistency, improves credibility, positive result on management to develop procedures, rules, policies, build a team that reviews audit reports, increase the funding opportunity, build more confidence. Further, lack of proper guidelines from regulatory bodies, different standards/expectations imposed by donors and IPSAS, skilled manpower, additional reporting standard to produce reports as per ACSO requirement and lack of coherence between regulatory bodies and standard setting bodies are challenges still continues after implementing IPSAS. The study recommends that AABE learn from the challenges faced implementing IPSAS and use it for the new standards that will be adopted in the near future.