Global insights on public sector accounting reforms: a comprehensive study on the adoption, implementation, and impact of IFRS and IPSAS
ISSN: 1030-9616
Article publication date: 31 December 2024
Issue publication date: 31 January 2025
Abstract
Purpose
This paper aims to investigate the adoption of International Financial Reporting Standards (IFRS) and International Public Sector Accounting Standards (IPSAS) and their impact on financial transparency, public sector accountability and economic performance across 173 jurisdictions from 2000 to 2022.
Design/methodology/approach
A robust quantitative approach using econometric panel data analysis with fixed- and random-effects models evaluates the effects of IFRS and IPSAS adoption. This study compares 69 adopting countries with 104 non-adopting or partially adopting nations, examining cross-country and temporal dynamics.
Findings
This paper provides compelling evidence that adopting IFRS and IPSAS significantly improves financial transparency and public sector accountability. Countries adopting these standards, mainly developed economies, experience increased foreign direct investment and improved sovereign credit ratings. The impact is more pronounced in nations with solid institutional frameworks while developing countries benefit from enhanced governance and reduced corruption, though to a lesser extent. These findings contribute to the literature by demonstrating how international accounting standards enhance governance quality and economic performance.
Research limitations/implications
The study’s limitations include the availability and reliability of financial data in jurisdictions with weaker institutional systems. Future research should include longitudinal case studies and stakeholder analyses to explore the nuanced effects of IFRS and IPSAS adoption in different regions.
Practical implications
The results emphasise the need for tailored implementation strategies, especially for developing countries. Strengthening institutional frameworks, investing in capacity-building programmes and enhancing financial literacy are essential to maximising the benefits of IFRS and IPSAS adoption. Policymakers can leverage these standards to improve transparency, attract investment and promote economic stability.
Social implications
By improving financial transparency and accountability, IFRS and IPSAS foster better governance, reduce corruption and promote more equitable resource distribution. These reforms have a particularly positive impact on developing countries, enhancing public trust, supporting social equity and encouraging sustainable economic development.
Originality/value
This paper provides a unique contribution to the discourse on global financial standards. It offers a comprehensive quantitative analysis of IFRS and IPSAS adoption over 23 years and valuable insights for policymakers and financial regulators seeking to strengthen governance and promote global economic integration.
Keywords
Acknowledgements
The author sincerely appreciates the constructive feedback and insightful comments provided by the editor and anonymous reviewers of the Accounting Research Journal. Their valuable suggestions have significantly improved the quality and rigour of this manuscript. The author is grateful for their time, effort and expertise, which have contributed significantly to enhancing this research’s clarity, coherence and overall contribution.
Funding: The author declares that this research did not receive any specific grant from public, commercial or not-for-profit funding agencies.
Citation
Masoud, N. (2025), "Global insights on public sector accounting reforms: a comprehensive study on the adoption, implementation, and impact of IFRS and IPSAS", Accounting Research Journal, Vol. 38 No. 1, pp. 80-105. https://doi.org/10.1108/ARJ-06-2024-0228
Publisher
:Emerald Publishing Limited
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