IPSAS Adoption, Financial Reporting Transparency, and Public Trust in Nigerian Federal Ministries

This study examines the relationship among International Public Sector Accounting Standards adoption levels, financial reporting transparency, and public trust in Nigerian federal ministries. The Office of the Accountant General of the Federation has driven IPSAS adoption across Nigeria's federal government since 2016, with the aim of improving the comparability, completeness, and credibility of public financial statements. However, the link between IPSAS compliance and actual public trust in government financial management has not been empirically established. This study uses a mixed-method design, combining document analysis of financial statements from 18 federal ministries for 2020 to 2023 with a survey of 220 citizens, civil society representatives, and public finance observers. IPSAS adoption is assessed using a compliance checklist developed from the IPSAS Board's standards. Transparency is measured using disclosure completeness and timeliness indicators. Public trust is derived from a validated trust scale adapted for the public financial management context. Structural equation modeling is applied. Results indicate that IPSAS compliance quality significantly improves financial reporting transparency, and that transparency, in turn, has a significant positive effect on public trust. However, the effect of IPSAS on trust is substantially mediated by citizens' ability to access and understand public financial reports, highlighting financial literacy as a critical moderating factor. The study concludes that IPSAS adoption must be complemented by proactive public financial communication to maximize its trust-building potential. It recommends annual simplified citizen budget and accounts publications for all federal ministries.

Keywords: IPSAS adoption, financial reporting, public trust, federal ministries, Nigeria.