In response to calls for greater governance, accountability, and transparency, governments are moving towards the adoption of International Public Sector Accounting Standards (IPSAS). This move follows the numerous IPSAS benefits in the area of transparency and accountability. However, despite a significant number of studies on IPSAS, investigation is rare on the challenges, benefits and other critical factors associated with the adoption of IPSAS by developing countries such as Malawi. This makes it difficult for countries such as Malawi to transition to the IPSAS. To this end, this study examines the challenges, negative and effective influence, and critical factors required by the developing nation of Malawi to adopt IPSAS successfully. Previous studies have shown the following as critical factors for IPSAS adoption; training, recruitment of qualified and experienced staff, sufficient adoption resources allocation, ICT configuration; This study develops the Cultural Values of Accounting Conceptual Framework based on literature from reputable scholars (Polzer et al, 2021; Edeigba et al., 2020). The theory highlights effect of culture and other success adoption factors on IPSAS adoption by Councils This theory is inspired and founded on similar theories investigating accounting standards adoption with a cultural bearing. These include Edeigba et al.’s (2018) accounting cultural beliefs theoretical framework and Gray’s (1988) cultural constructs theory based on Hofstede’s (1984) multi-national cultural orientations framework.
This mixed-methods study administered a survey to 30 chief accountants and a semi-structured interview tool to 23 directors of finance of district councils in Malawi. Findings of the study show that the culture of openness and transparency is key to the successful adoption of IPSAS. The study shows that key obstacles for IPSAS adoption include cultural practices change resistance, detrimental effects of political interference, inadequate staff capacity and accounting complexities of IPSAS adoption. The findings show that quality of financial reporting in District Councils will improve with the adoption of IPSAS. The findings highlight many critical factors for IPSAS adoption, which include; paradigm shift in the working culture of councils, sufficient government support for quality staff recruitment, retention, and development, well-trained and technically competent personnel, council-wide training to increase adoption success, ongoing training throughout the IPSAS’s lifespan and councils’ IFMIS ICT platform and legal framework revisions to carter for IPSAS. This study contributes knowledge pertaining to IPSAS adoption in Malawi. The study develops the cultural values of accounting framework. Similar future studies might find the framework useful. The study contributes to valuable knowledge to Malawian councils, as transparency and accountability are likely to improve upon IPSAS framework adoption. This will in turn propel national growth and financial strength.