The purpose of this study is to assess the implementation of IPSAS 20 in the public sector financial reporting. The study was conducted at Ilala Municipal Council which is located at 1 Mission Street/Sokoine Drive, Dar es salaam. The selection of IPSAS 20 from the 42 available IPSAS is based on the Controller and Auditor General’s findings that, there are a number of non-compliance with respect to application of IPSAS 20 at the central and local government level, so that the standard is selected trying to explore why there are these sort of findings of noncompliance. The study used a standalone IPSAS Disclosure Checklist containing individual requirement of IPSAS against which four consecutive years financial statements of Ilala Municipal Council i.e. 2014/2015, 2015/2016, 2016/2017 and 2017/2018 were assessed to explore the implementation level of IPSAS 20: Related Party Disclosure. The sample selected is considered to be a representative of the population in a sense that Ilala Municipal Council is a public sector institution and as far as sample size is conserved on exploring implementation status evaluation of four consecutive financial years was as well considered to be relevant and representative. The researcher assumed measurement of implantation status in the category of 0% to 49% as unfavourably applied, 50% to 79% as favourably applied and 80% to 100% as adequately applied, of which the researcher found that IPSAS 20 is favourably applied as the finding of the percentage outcome of the level of implementation as a result of the use of the standalone IPSAS Disclosure Checklist resulted into 50% outcome. However, the researcher alerted public sector entities to comprehensively identify various issues for ensuring proper application of the standard. Specifically, the use of the IPSAS Disclosure Checklist in looking after the attainment of the identified specific objectives with respect to the implementation status of disclosure of control requirement, disclosure of transactions with related vii parties and disclosure of information for key management personnel resulted into 0% (unfavourably applied), 0% (unfavourably applied) and 100% (adequately applied) implementation status respectively. In assessing challenges pertaining to application of IPSAS 20, the study used primary as well as secondary source of data. Secondary data were gathered from from Ilala Municipal Council’s annual reports from 2014/2015 throughout 2017/2018 which were evaluated against the standalone IPSAS 20 disclosure checklist to attain the level of compliance. Primary data were obtained from a well-structured questionnaire circulated to accountants and internal auditors at Ilala Municipal Council whereas stratified sampling techniques was used whereby population was classified into accountants and internal auditors strata, these strata were formulated only because the study revolve around technical issues with respect to identifying the challenges, frequency table was used as the technique for data analysis. However there are a number of challenges came out from the study, the research has also come out with recommendations which can significantly resolve those challenges identified.

A Dissertation Submitted in Partial Fulfillment of the Requirements of the Degree of Master of Science in Accounting and Finance (MSc A & F) of Mzumbe University