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.
