Ipsas Implementation and Reported Financial Irregularities in Ghana’s Public Sector: The Mediating Role of Financial-Reporting Timeliness

Abstract Abstract This study examines the association between International Public Sector Accounting Standards (IPSAS) implementation, financial-reporting timeliness, and reported financial irregularities in Ghana’s public sector. Grounded in agency theory (Jensen & Meckling 1976) and political economy theory (Weingast & Wittman 2008), the study utilizes an archival panel dataset of 729 institution-year observations from 238 public-sector entities spanning 2018 to 2025. Applying two-way fixed-effects regressions with institution-clustered standard errors, the findings reveal that progressive IPSAS implementation is significantly associated with reduced reporting lag (improved timeliness), with the most pronounced improvements occurring at advanced implementation stages (stages two and three). Furthermore, mediation analysis indicates that financial-reporting timeliness partially mediates the relationship between IPSAS implementation and reported financial irregularities, establishing a significant indirect pathway. However, a positive direct association is also observed, suggesting that enhanced implementation intensity may concurrently improve the detection and audit disclosure of previously unrecorded irregularities. The study contributes to public administration theory by integrating agency and political economy perspectives in an emerging-market context, offering practical insights for public financial management reforms and audit oversight.