NEXUS BETWEEN ACCRUAL BASED ACCOUNTING (ABA) AND FINANCIAL REPORTING QUALITY IN NIGERIAN PUBLIC SECTOR

Abstract

This study examines the impact of Accrual-Based Accounting (ABA) on the quality of financial reporting within the public sector of Osun State, Nigeria. The research is inspired by the global trend toward adopting International Public Sector Accounting Standards (IPSAS) to enhance transparency, accountability, and financial management. Adopting an ex-post facto and exploratory research design, the study targets accountants and members of the Public Accounts Committee in Osun State's Ministries, Departments, and Agencies (MDAs). Using Taro Yamane’s formula, a sample of 243 respondents was drawn from a population of 617 public sector employees. Data were analyzed using Pearson Product-Moment Correlation and Ordinary Least Squares (OLS) regression. The findings indicate a significant relationship between ABA implementation and the quality of financial reporting. Specifically, receivables, inventory, payables, and revenue exhibited a positive impact on reporting quality, though non-current assets showed a slightly negative effect. Approximately 53% of the variation in financial reporting quality was explained by the accrual-based variables. The study concludes that robust ABA implementation enhances transparency and credibility in financial reports. It recommends that government authorities provide necessary institutional support for the successful adoption of ABA to foster public trust and financial accountability.