Prospects and Challenges of Adopting International Public Sector Accounting Standards: The Case of Foreign Charities Based in Addis Ababa, EthiopiaProspects and Challenges of Adopting International Public Sector Accounting Standards: The Case of Foreign Charities Based in Addis Ababa, Ethiopia

Abstract

This study examined the Prospects and challenges of adopting international public sector accounting standards: the case of foreign charities based in Addis Ababa, Ethiopia. The objectives of the study was to provide an insight on the contribution of adopting IPSAS in enhancing the level of accountability, transparency, strengthening the stakeholders perception of the standards and taking educational and professional responsibilities. 70 sample respondents, who understood IPSAS's objectives and were responsible for the adoption process, were taken from the respondent fill the questionnaire. data were analyzed using descriptive statistics, correlations, and multiple linear regression analysis the main results evidenced that the adoption of IPSAS enhances level of accountability through asset management and transparency in information provided in the financial reports. The study indicates that the adoption of International Public Sector Accounting Standards (IPSASs) in Ethiopia significantly enhances financial reporting transparency and promotes greater comparability of financial statements among charity organizations. This standardization is believed to reduce fraud within the sector and facilitates easier access to charity records, thereby improving accountability and trust among stakeholders, including potential donors. Despite the mandatory requirement for IPSAS implementation, Ethiopia faces resource constraints. The study suggests the establishment of an authoritative body to oversee the implementation process and ensure adherence to quality standards. Continuous efforts by bodies like the Accounting and Auditing Board of Ethiopia (AABE) are also recommended to raise awareness among foreign charities about IPSAS. These efforts include organizing workshops, producing communication materials, and conducting capacity building trainings to improve the acceptance and effective implementation of IPSAS across the sector. In conclusion, while IPSAS adoption promises enhanced transparency, comparability, and reduced fraud in charity financial reporting in Ethiopia, addressing resource challenges and promoting comprehensive stakeholder engagement are crucial for successful implementation and widespread acceptance of these standards.