1.0 Introduction
1.1 Background of Study
Historically, Nigeria’s public sector has faced numerous challenges related to financial mismanagement, corruption, and lack of transparency, which have undermined public trust and hindered development efforts (Adebisi et al., 2018). In response to these issues, Nigeria has undertaken several reforms aimed at improving public sector financial management, including the implementation of International Public Sector Accounting Standards (IPSAS) and the adoption of computerized accounting systems (Fashola et al., 2020). According to Akinlo & Olaleye (2018) reported that, public sector accounting in Nigeria is deeply intertwined with the country’s broader political, economic, and administrative developments. Traditionally, Nigeria’s public sector accounting practices were characterized by manual record-keeping systems that relied heavily on paper-based processes, with limited standardization and transparency. During the colonial era, accounting practices were primarily designed to serve administrative convenience, often lacking the necessary rigor to support accountability or transparency in public resource management (Akinlo & Olaleye, 2018).
Adeniran (2017) reported that, the public sector plays a pivotal role in the development and governance of any nation, as it is responsible for the administration and management of public resources to meet societal needs (Adeniran, 2017). Effective management and accountability in the public sector are essential to ensure that resources are used efficiently, transparently, and in accordance with established policies and regulations. Public sector accounting serves as a vital tool in achieving these objectives by providing reliable financial information that facilitates decision-making, oversight, and accountability (Owolabi & Olanipekun, 2019).
In the context of public administration, public sector accounting can be defined as the systematic process of recording, classifying, summarizing, and reporting financial transactions and positions of government entities and agencies to ensure transparency and accountability (Amidu & Abubakar, 2016). The importance of public sector accounting lies in its role to provide accurate and timely financial information that enables effective governance and accountability. As public resources are derived from taxpayers, there is a heightened need for transparency to prevent misappropriation and corruption, thereby fostering trust in government operations (Owolabi et al., 2018).
In Nigeria, the evolution of public sector accounting has been driven by efforts to improve financial management systems, enhance transparency, and strengthen accountability mechanisms within the public sector. Adeyemi (2019) asserted effective public sector accounting systems serve as vital tools for transparency, accountability, and efficient resource utilization, which are essential for good governance and sustainable development (Adeyemi, 2019). Previous research indicates that robust accounting systems positively influence transparency and reduce corruption, leading to better governance outcomes (Yusuff, 2017). Therefore, this study aims to bridge this knowledge gap by examining how accounting reforms, compliance with standards, and internal controls influence accountability in Nigeria’s public sector.
1.2 Statement of Problems
Investigation revealed that many public sector entities in Nigeria face significant capacity constraints, including inadequate trained personnel, insufficient technological infrastructure, and resistance to change (Ezeani & Okocha, 2021). As a result, financial statements are often viewed as mere compliance exercises rather than tools for meaningful oversight and decision-making.
In Nigeria’s public sector, there is widespread perception of financial mismanagement, corruption, and misappropriation of public funds, which undermine public trust and hinder development efforts (Adebisi & Oladipo, 2018).
Furthermore, the lack of a strong culture of accountability and transparency within the public sector often means that even when financial irregularities are identified, they are not always adequately addressed or sanctioned. It is against the backdrop that this study seeks to address these problems by exploring the impact of public sector accounting on accountability in the Nigerian public sector.
1.3 Aim and Objectives of Study
The aim of this study is to examine how public sector accounting influences accountability within Nigeria’s public sector.
The specific objectives of the study are as follows:
- To determine the relationship between public sector accounting standards and accountability.
- To identify challenges faced by public sector entities in implementing accounting reforms.
- To assess the current state of public sector accounting practices in Nigeria.
- To evaluate the impact of accounting reforms on transparency and accountability.
- To recommend strategies for strengthening the role of accounting in promoting accountability in Nigeria’s public sector.
1.4 Research Questions
Based on the objectives of the study, the following research questions have been formulated:
- What is the current state of public sector accounting practices in Nigeria?
- How do public sector accounting standards influence accountability in Nigeria’s public sector?
- What challenges are faced by public sector entities in implementing accounting reforms?
- To what extent have recent accounting reforms improved transparency and accountability?
- What strategies can be adopted to enhance the impact of public sector accounting on accountability?
1.5 Significance of Study
The outcome of this research will serve as a basis for future reforms aimed at improving financial management and accountability in the public sector. Also, this research will assist policymakers in designing effective reforms and regulations.
Furthermore, the Nigerian public will benefit from increased trust in government financial management.
Finally, academic institutions and researchers will find the study a useful reference for further research on public financial management.
1.6 Scope of Study
The scope of this research is focused on the impact of public sector accounting on accountability in the public sector of Nigeria with particular attention to the Lagos State Ministry of Finance.
1.7 Limitations of the Study
Several limitations were encountered during the course of this study, which may have influenced the results and conclusions.
- Delay from Respondents: Many participants experienced time constraints or hesitated to commit to the study due to their busy schedules. This delay limited the volume of data that could be gathered within the planned timeframe.
- Financial Constraints: Due to budget limitations, there was insufficient funding to expand the research to a larger sample size or to include more varied geographic locations, which might have provided a broader perspective.
- Time Constraints: The time available for conducting the study was limited, reducing the possibility of performing a more in-depth longitudinal analysis.
1.8 Definition of Terms
Accountability in Public Sector:
It refers to the obligation of government officials and agencies to be answerable for their actions and to manage public resources responsibly. It involves transparency, responsibility, and answerability, which are essential for good governance (Adebisi & Oladipo, 2018).
Public Sector Accounting:
It encompasses the systems, processes, and standards used by government entities to record, report, and manage financial information. It aims to provide accurate, timely, and reliable financial data that support decision-making, oversight, and accountability within the public sector (Fashola & Akinwale, 2020).
Transparency:
In this context refers to the openness of government operations and financial activities to public scrutiny, fostering trust and accountability (Ezeani & Okocha, 2021).
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