ECOWAS Community Faces Challenge of Non Unified Accounting System

As the Economic Community of West African States, ECOWAS, Parliament deliberates on issues affecting its member states, both members of the Parliament and major stakeholders have identified lack of uniformity in the International Public Sector Accounting Standard, IPSAS, as one of the major problems confronting the bloc. The challenge is evident in the lack of implementation of the IPSAS, which has led to delays in preparing financial statements and proper audit of reports within the member states. The intention for the implementation and operationalization of the IPSAS, was to change government's accounting system from cash basis to accural basis. In his presentation on "Compliance with International Public Sector Accounting Standard", before the Parliament's Committee on Public Accounts, the Deputy Director, Centre for Entrepreneurship Studies, University of Abuja, Dr James Adefiranye, said, adopting the IPSAS would greatly help ECOWAS member states move forward in dealing with their financial statements and reports. "Cash basis entails that, activities should be reported when cash is received . That means, if we have activity or function for the year 2020 and we did not release the cash untill 2022, we will not talk about it untill 2022, even though we have the access. It's not ideal, that's why IPSAS is saying no, lets do it the way its done in the very sector; when we receive an item, we convert the liability, we report it that year, that is what is accural basis", he said. He said the level of adoption of the IPSAS by member states differ, explaining that, what is being experienced in the ECOWAS member states was an attempt to prepare government's financial statements using the acural basis. Dr Adefiranye stressed that, by extension lack of uniformity of IPSAS in member states would likely affect activities of the ECOWAS. "For example, when ECOWAS report is strictly on IPSAS accural basis, and the local communities have another system. When you send your report, government of such States will have to delay in accepting your reports, because, they are doing it according to the cash basis they are used to, then is looks strange or questionable', he said. He recommended that, if they must achieve a near perfect, transparency and accountability in ECOWAS states, they need to adopt and apply the use of IPSAS. "To make this a reality, this Body, this Institution should know that there should be conscious efforts made towards assisting community institutions in addressing the obstacles and other challenges that are militating against the full adoption of IPSAS. We can make efforts to encourage the local communities", he said. He informed the Committee that, almost all states in ECOWAS have tilted towards IPSAS, but encountering challenges in the area of implementation. He therefore urged the Members od Parliament to do a careful study of the outcome of the audit management letters, in order to pinpoint areas and aspects that need urgent attention, and to ensure they scrutinize each item raised in every audit management.