PROFESSIONAL PRONOUNCEMENT ON PUBLIC SECTOR ACCOUNTING, ECONOMIC AND FINANCIAL IMPLICATION (A STUDY OF AKWA IBOM STATE MINISTRY OF FINANACE)

posted on May 24, 2018

PROFESSIONAL PRONOUNCEMENT ON PUBLIC SECTOR ACCOUNTING, ECONOMIC AND FINANCIAL IMPLICATION (A STUDY OF AKWA IBOM STATE MINISTRY OF FINANCE)

TABLE OF CONTENTS

Certification ———————————————————————————-i

Dedication————————————————————————————ii

Acknowledgement————————————————————————iii

Abstract————————————————————————————–iv

Table of content—————————————————————————–v

CHAPTR ONE

INTRODUCTION

Background Of The Study———————————————————–1
Statement Of The Problem———————————————————–2
Objective Of The Study—————————————————————3
Research Questions——————————————————————–3
Statement Of Hypothesis————————————————————-4
Significance Of The Study———————————————————–4
Scope Of The Study ——————————————————————-5
Limitation Of The Study————————————————————-5
Definition Of Terms——————————————————————-6
Historical Background Of The Organization ——————————–7

CHAPTER TWO

REVIEW OF RELATED LETERATURE

2.1 conceptual Review———————————————————————9

2.2Professional pronouncement: an overview————————————-11

2.3 United Nations pronouncement (1945) —————————————-13

2.4 international public sector accounting standard (IPSAS)——————-15

2.5 Economic and Financial implication———————————————22

2.6 The way forward for Akwa Ibom State Ministry of finance—————23

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Public sector accounting is governed by norms, conventions, laws, regulations and some of these regulations come as a major pronouncement. Therefore, public accountability is the hall mark of modern democratic governance and democracy will remain on lips if those saddled with the responsibility of managing public funds cannot be held accountable in accordance with the various professional pronouncements. According to cook (1998), public accountability is the basic tenet of democracy and the objectives of modern democratic governance in assessing the public sector organization are financial objectives and economic objectives, while financial objectives is concerned with the ability of the government to meet the needs and aspirations of taxpayers and the entire citizenry, economics objectives is tailored towards the growth in economic performance and international relations.

Tanzi (1999) notes that governance is essential part of a framework for financial and economic management which includes: macroeconomic stability commitment to social and economic equity and the promotion of efficient institutions through structural reforms such as periodic enactment from international Public Sector Accounting Standards (IPSAS) and domestic deregulation’ However, poor governance may result from factors such as lack of institutions, the pursuit of economically inefficient ideologies or misguided economic models hence the need to keep abreast with the latest developments in the international community as public sector accounting is witnessing some profound changes.

Accountability in the public sector is the hallmark of modern democratic governance and throughout the world is being given serious attention in view of the fact that the government is the highest spender of public funds Obazee, (2006). It is therefore incumbent on the government establishment to harmonize with International public Sector Accounting Standard (IPSAS) just as commercial entities across the world are moving towards International Financial Reporting standards (IFRS) Sylvester, (2013) to this extend is the study.

1.2 STATEMENT OF THE PROBLEM

One of the major problems of professional pronouncements is that, it has not been given its own pride of place in the preparation and presentation of financial report particularly IPSAS pronouncement. The United Nations carter of 1945 Pronouncement section 3 opines that the Account must be maintained in a manner that will clearly identify the objects and purposes for which funds have been received and expended and the executive authorities who are responsible for custody and use of funds in programme execution. The above pronouncement point clearly that professional pronouncement is to served as a check in the preparation and presentation of account which is not adhered to, as Nigerian Accounting System seems to be mainly Book-keeping or administrative legal compliance procedures than Modern Accounting Approach (the IPSAS), the amount of paper work is vast, But neither efficiency, accountability nor financial control are achieved.

1.3 OBJECTIVE OF THE STUDY

The objectives of the study include the following

To examine how professional pronouncement could enhance effective preparation and presentation of account.
To examine why professional pronouncement has not been given its pride of place in the preparation and presentation of government account.
To find out how professional pronouncement could serve as a check to preparation of financial report and inefficient management of funds in the public sector organization.
To highlight how professional pronouncement could be used to enhance public sector economic activities.

1.4 RESEARCH QUESTTONS

Can professional pronouncement in anyway enhance the preparation and presentation of account?
Can professional pronouncement served as a check in the preparation of financial account and safe guard from waste?

To what extent can professional pronouncement in public sector accounting influence the financial activities in Nigeria public sector?

Can strict adherence to professional pronouncement culminate to any significance financial and economic implication in Nigeria public sector?

1.5 STATEMENT OF HYPOTHESIS

Ho: Professional pronouncement is not necessary in the survival of public sector organization.
Ho: Professional pronouncement could not serve as a check preparation of financial report and inefficient management of funds in public sector establishment.

1.6 SIGNIFICANCE OF THE STUDY

The significance of professional pronouncement in the survival of public sector accountability is not one that should be undermined.

Therefore, the result of this study would help Akwa Ibom State ministry of finance (the very study entity) and other government organizations to enforce strict compliance to (IPSAS) professional pronouncement in the preparation and presentation of financial report of the activities of government. It would also serve as a good source of reference for those who may be interested in undertaking further study on the subject.

Likewise, it would be useful to all career accounting officers in any organization in preparation and presentation of financial reports of government functions/activities. It would also contribute significantly to store of knowledge in general and in the field of Public Sector accounting in particular.

Furthermore, it is believed that it shall meet the requirement for the award of a Higher National Diploma to the researcher

1.7 SCOPE OF THE STUDY

Professional pronouncement on public sector accounting financial and economic implication will be limited only to Akwa Ibom State ministry of finance, it will also be limited to how they have provided for professional pronouncement in the preparation and presentation of their financial reports, and how this professional pronouncement are felt in the operation of the activities of the ministry.

1.8 LIMITATION OF THE STUDY

Employing primary method of data collection was quite expensive, apathy on the part of some respondents was also a major problem encountered on the course of this research work. All these problems withstanding, sufficient efforts was made by the researcher to ensure that adequate data was generated for this study.

1.9 DEFINITION OF TERMS

Sector Accounting – Livingstone, (2004) Defines public sector as the act of establishing and maintaining proper accounting as required by statutory regulations and utilizing information from it to advise management towards achieving public sector goals.

Professional Pronouncement – Though without a direct definition comes in forms of laid down policies, regulations, norms and code of issued from time to time by professional bodies to regulate the practice of Accounting in both public and private establishment.

Hyperinflation – Is a very fast rise in prices that seriously damages a country economy.

Standard – According to Longman dictionary of contemporary English Defined Standard as the level that is considered to be acceptable, or the Level that someone or something has achieved.

IPSAS – International Public Sector Accounting Standard are a set of professionally developed, high quality, global Accounting Standards that require accounting on cash or a ‘full accruals’ basis (i.e. all assets and liabilities are recorded). IPSAS generally encourages government to progress to the accrual basis of Accounting and harmonize national requirements with the IPSAS

1.10 HISTORICAL BACKGROUND OF THE ORGANIZATION

The Akwa Ibom Ministry of Finance and Economic Development as it was then known came into existence at the creation of Akwa Ibom September 23^rd 1987. In the year 2002, the Ministry of Development was carved out and it was then known as the ministry of finance. The ministry has the core mission of establishing, maintaining and ensuring the continuous improvement of the machineries for the sourcing, collection, custodying, accounting and utilization of public funds.

Its vision is to maintain the required management capacity and institutional framework for effective and efficient application of financial resources in an accountable and transparent manner; and to instill due process in government financial transactions to ensure probity, value for money, transparency and accountability in public expenditure. The ministry had the following chief executive officers/commissioners.

Bede O. Asuquo – 23^rd Sept. 1987 – Dec. 1988
Obong Obot D. Etukafia, Mni – Feb 1989 – Jan. 1991
A. W. Etukudo – 15^th Jan. 1991 – Dec. 31^st, 1991
Patrick E. Archibong – Feb. 1992 – Dec. 1993
Geofrey I. Bartepeh – 31^st Jan. 1994
Okon Edet Effiong – 20^th Jan. 1997
Edet Sunday Effiong 19^th Oct. 1998
Sunday U. Akpan (KSM) – 10th June, 99-29 May, 2003
Umana Okon Umana – August 2003 – 29th May 2007
Bassey Albert Akpan – Sept. 2007 – April, 2014
Akan Okon – May, 2014

To fulfill its mission and vision, as well as carry out its functions and responsibilities, the ministry of finance is structured into offices and departments, thus: