| Abstract: | IPSAS are international accounting standards applicable to the public sector, which include charity organizations. Nowadays, International public sector accounting is among the main drivers of changes and developments in the field. The harmonization of accounting practices is considered to diminish variability in accounting and financial reporting in financial markets, as well as increase comparability in financial statements both globally and regionally. Concerning this, limited research has been conducted on IPSAS perception and implementation. However, their is gap in addressing first time adoption of IPSAS it’s applicability in Ethiopia . the purpose of this research is to examined challenges and prospects of international public sector accounting standards (IPSAS) first time adoption. this study used descriptive survey design to collect data and in order to address the research questions, 286 questionnaires were prepared and distributed out of these questionnaires 232 were filled and returned. Accordingly ,the result of the study showed that, the adoption of accounting standards used by local and international charities that works on children affairs in Addis Ababa is in an infant stage. Also the finding shows that charities that works on children affairs has various practical challenges faced while adopting IPSAS in charities operating in Addis Ababa those were lack of full understanding of the issues involved, skilled manpower (Lack or shortage of the necessary internal technical expertise on IPSAS in the organization), increase administrative, compliance or other costs like IT, IPSAS is unfamiliar in Ethiopia, the contradictory condition between IPSAS and ChSA , institutional culture, Problem of transitioning from recording/registration under the cash/modified cash basis to the accrual basis, inadequate Information and Communication Technology (ICT), IPSAS allows both cash and accrual basis of accounting, also the question raises about IPSAS is difficult or bulky were those challenges that the respondent's rate as a major challenge in the study. ChSA (government) should modify the time frame and proclaim strongly as a rule and regulation for their representative is considerd as a recommendation. |
