Global Leader, International Public Sector Accounting at Ernst & Young, Mr. Thomas Muller- Marques Berger, has said Nigeria risks losing its competitiveness in the global market should it fails to comply with the International Public Accounting Standards (IPSAS).
He said transparency in business processes had become a precondition for winning investors in a globally connected and highly competitive world.
Speaking in Abuja at the International Public Accounting Standards (IPSAS) launch hosted by the British High Commission in Nigeria, Berger said in the long run, countries which are left out of the international public accounting principles could suffer poor level of investment because of the lack of transparency.
He said given that countries are presently globally connected and playing in the same global capital market through investors and donor organisations including the World Bank and International Monetary Fund (IMF), transparency in public accounting system has remained a critical precondition for success.
Referring to recent report by the IMF, he noted that credible and robust financial statements prepared on the basis of internationally accepted accounting standards had become vital to future interactions.
But he said he was "deeply impressed" by the seriousness and ambition by the Nigerian government to align to international best practice adding though there were still setbacks in planning for the future.
He stressed however that training and capacity building was key to achieving success in the reform process.
He said the country could benefit immensely from the full adoption IPSAS because there would be improved transparency on resources and liabilities to help make better decisions "and not to make decisions on the shoulders of future generations."
Berger also said adopting IPSAS could help to "avoid what we call fiscal illusion which is if we make decisions only on short-sighted information; governments today including my country, Germany make decisions based on cash inflows and outflows basis and that's really the wrong perspective."
According to him, aligning to best practice in public accounting standards would help provide answers as to whether "we poorer or richer after the transaction of the government" as this has to do with transparency and accountability by government.
He added that government decision making needed to go beyond the cash inflow and cash outflow basis.
He said: "Nigeria is currently in the process of adopting the cash basis IPSAS and has plans to implement accrual- based IPSAS across its three tiers of government by January 2016. Nigeria has already achieved significant progress in this journey but there are still challenges that lie ahead."