THE IMPACT OF ACCOUNTING STANDARD ON THE DEVELOPMENT OF SMALL SCALE BUSINESS IN AKWA IBOM STATE (A STUDY OF USMAN TABLE WATER COMPANY)
TABLE OF CONTENTS
CHAPTER ONE: INTRODUCTION
1.1 Background of the Study
1.2 Statement of the Problem
1.3 Objectives of the Study
1.4 Research Questions
1.5 Research Hypothesis
1.6 Significance of the Study
1.7 Scope of the Study
1.8 Limitation of the Study
1.9 Definition of Terms and Acronyms
CHAPTER TWO: REVIEW OF RELATED LITERATURE
2.2 Meaning of Small Scale Business
2.3 Characteristic of Small Scale Business
2.4 Stating problem and Failure Signs of Small Scale Business
2.5 Budget-Objectives and Benefit
2.6 Basic Accounting Problems of Small Scale Business
2.7 Records Keeping and the Law
2.8 Accounting Books Needed By Small Scale Business
2.9 Interpretation of Account
2.10 Analysis of Financial Statement
CHAPTER THREE: METHODOLOGY AND RESEARCHER DESIGN
3.2 Area of Study
3.3 Population of the Study
3.4 Sample Determination and Sampling Techniques
3.5 Method of Data Collection
3.6 Source of Data
3.7 Data Presentation and Analysis
CHAPTER FOUR: PRESENTATION AND ANALYSIS OF DATA
4.2 Data Analysis and Result
4.3 Test of Hypothesis
4.4 Discussion of Findings
CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATION
1.1 Background of the study
There is no body that strikes for self-actualization where there is no need for it; it has been applied to business. A small scale business is a privately owned and operated business, characterized by a small number of employees. Small scale businesses are the back bone of our economy creating jobs and adding new and innovative product to the market.
The future reliefs on the small scale business operator or promoters in the economic development of the nation. This can be enhanced by complying with the accounting standard set to guide business operations, other wise know as General Accepted Accounting principle (GAAP). GAAP refers to the standard frame work of guideline for financial accounting used in any given jurisdiction. These include the standards, convention and rules that accountant follows in recording and summarizing and in the preparation of financial statement. Many countries use or are conveying on the international financial reporting standard (IFRS). It was established and is maintained by the international accounting standard board. IFRS are designed as a common global language for business affairs so that companies are understandable and comparable across international boundaries in some countries, local accounting principle are applied for regular companies but listed or large companies much conform to IFRS, so statutory reporting is comparable internationally across jurisdictions.
However, in the development of small scale business, adherence to accounting standard would go a long way. Therefore this research is carried out mainly tog mark small scale business be ware of ways of resolving their business accounting problem which liquidate their business or financial transaction.
1.2 STATEMENT OF THE PROBLEM
As institution, firm and government have certain specified rules and regulations governing them, so do business have rules that guide or give standard to which transactions are recorded, summarized and prepared for financial statement in a given jurisdiction. These set of guideline in accounting is known as accounting standard, otherwise referred to as general accepted accounting principles (GAAP).
The cause of these problems such as the issue of misapplication of accounting policies, electrical mistake in accounting date, omission of transactions, records or document, is what has prompted the researcher to carryout a study on it which will spread venture result in preferring suggestion that will lead to solution to them with reference to Usman Table Water Company, Mbak Itam.
Most business does not abide by these rules especially the small scale business, which has led to their down fall (or folding up), large scale business also have begun to fold up as a result of not adhering to these standards. If they are not folded up completely, they resort tog small scale business. Now the question arise “if they were unable to follow the accounting standard when large how much more then will they be able to follow these standard while small in nature”.
1.3 OBJECTIVES OF THE STUDY
The objectives of the study include the following
- To evaluate the impact of accounting standard on small scale businesses.
- To identify the problems created by non-existence of accounting records and inadequate accounting information.
- To give recommendations that is appropriate for controlling and monitoring of small scale business in order to make reasonable profit in the business by the owners.
- To ascertain the reason why qualified personnel are not engaged in the service of small scale business.
1.4 RESEARCH QUESTIONS
- How can Accounting standard enhance the development small scale business?
- To what extent can accounting standard be applied in small scale business?
- What are the causes of small scale business failure?
- What are the challenges faced by small scale business in the application of accounting standards?
- Do small scale business have any impact on the growth and development of the economy?
1.5 RESEARCH HYPOTHESIS
Ho: Accounting Standards does not have significant impact on the development of small scale business.
Hi: Accounting Standards have a significant impact on the development of small scale business.
Ho: There is a significant effect of economic activities on the development of small scale business.
1.6 SIGNIFICANT OF THE STUDY
- The significance of the study is to solve accounting problems encountered by small business proprietors and manager. Besides, it also helps in knowing why these small scale business proprietors have been keeping few records and or in some cases, not keeping any record at all.
- Again this research will help in revealing the problems encountered by those small scale business and providing a lasting solution to it in order to help the investigators and managers expand their businesses and finally solving their solvency problems if record of accounting is followed. Also, it will created an avenue whereby the impact of professionalism would be fall in accounting system and in which accounting network is built in the world of business.
- Finally this research work will in no small way assist those inter.
- This study was undertaken to find out how the small scale business in Uyo as developed overtime and to what extent it has performed its critical role of driving the country and state industrials transformation and development as it has done in other develop countries.
- Significant of the study determine that lack of finance is a function of multiple problems and that the major source of credit available for the financing small scale business in Akwa Ibom State are personal saving family friend support and commercial bank. The study recommended among others small scale partnership and equality participation by financers loan guarantees interest rate concession, fiscal incentive and adequate training for SMEs as the factors that will drive the rapid transformation and development of the SME sector in the state.
1.7 SCOPE OF THE STUDY
The study is a based on the impact of accounting standard on the development of small scale business a study of Usman Table Water Company, Mbak Itam Akwa Ibom State. The following areas are covered with the scope of the study, basic account problems of small scale business, account books needed by small scale business, interpretation of account and analysis of financial statement.
1.8 LIMITATION OF THE STUDY
It should be noted that this project only concern itself on business particularly, Uyo. The research as a result of limited time factors, anti-research attitude and lack of finance are the limitation involved in putting the project together. Lack of fund and time do not constitute a limitation on the study.
1.9 DEFINITION OF TERMS AND ACRONYMS
The following terms as well as used in the research work defined or explained;
- Accounting Standard: Is a principle that govern current accounting practice and that is used as a reference to determine the appropriate treatment of complex transactions by Nseobong Jonathan (2011) also investopedict explains accounting standard as a guildeline for financial accounting, such as how a firm prepares and presents it business income and expenses, assets and liabilities.
- Business Control: Accounting to Stephen (2012) defines business as the production or purchase and sale of goods undertaken with an objective of earning project and acquiring wealth through the satisfaction of human wants.
- Internal Control: Is a process for assuring achievement of an organization’s objectives in operational effectiveness and efficiency reliable financial reporting and compliance with laws, regulations and policies. According to Chukwu Emeka O. Ojo (2007).
- Book Keeping: This is the recording on a day to day basis of the financial transaction and information pertaining to a business by Ojo (2010).
- Convention: A body of principles that regulates the practice of accounting profession, so that the preparation of financial statement is guide by consisted and acceptable principles by Joseph Udoh (2013).
- Profit: Money gained by selling a product or services for more than it cost produce or supply. Ifiok Abasi A. (2012).
Financial Ratio: Is an instrument used in assessing the performance of a company according to Agbo (2010).
THE IMPACT OF ACCOUNTING STANDARD ON THE DEVELOPMENT OF SMALL SCALE BUSINESS IN AKWA IBOM STATE (A STUDY OF USMAN TABLE WATER COMPANY