A CRITICAL REVIEW OF ACCOUNTING SYSTEM IN NIGERIA INSURANCE INDUSTRY A CASE STUDY OF INDUSTRIAL AND GENERAL INSURANCE COMPANY LT. A RESEARCH PROJECT MATERIAL ON ACCOUNTING
This study will survey a critical review of the accounting system in Nigeria’s insurance industry.This study as a case study is an attempt to review the problems of accounting system in industrial and general insurance company limited. It has become necessary because of proper understanding and correct treatment in various items in the account. This study will make a fair contribution towards the understanding of the treatment of various items by insurance companies.In collecting the data for the study, the researcher will made use of the tools like structured and in structured interview and question will form primary method data collection while secondary will consist annual report, accounts, journals, insurance year book, and text books etc.Finally, the conclusion will be that though there are lack of proper understanding and correct treatment of various items in the accountant of the insurance companies, however, the problem can be solve if the researcher can bring to light the difference in the treatment of various items by insurance companies and its effect on intra and inter-company comparison.
Insurance accounting as relates to insurance company is a distinct and specialized account that is always referred to as “specialized Accounting” just like taxation is a specialized area. Though it employees the general accounting principles, concepts and conventions, there in need for a clear understanding of its preparations.
In the days of “T- forms” presentation of financial statements an insurance company account could be easily recognized form the sides of the “T” to which income and expenditure items are placed. They where reversed and therefore not in conventional form. The convention was placing revenue items to the right of the “T” insurance company revenue, profit and loess account had the revenue items to the legit of the “T” and expenditure items to the right.
Nowadays, the vertical forms of presentation are adopted and this peculiarity of reversal of sides is no longer these.
However, there are other features that distinguish accounting system in insurance industry or company form other accounting system. There are:
i. Requirement by law for remitting of quarterly and annual returns to central Bank of Nigeria (CBN) and Nigerian insurance supervisory Board (NISB).
ii. Prescription by law of the type and level of investment.
iv. Requirement by law for rendition of returns to the Nigerian insurance supper story board (NISB) with stated deadline.