AN ANALYSIS OF CORRUPTION IN NIGERIAN PUBLIC SERVICE. ( A CASE STUDY OF THE NIGERIAN POLICE FORCE OWERRI, IMO STATE)

AN ANALYSIS OF CORRUPTION IN NIGERIAN PUBLIC SERVICE. ( A CASE STUDY OF THE NIGERIAN POLICE FORCE OWERRI, IMO STATE)

 

ABSTRACT

The primary purpose of this study is to ascertain the effects of corruption in the Nigerian public service. The survey method of descriptive research was used for the study. The main instrument used in data collection for the study was a questionnaire and its responses were detailed in frequency tables and percentage which was used to analyse the data.

The result of the analysis and interpretation revealed that bureaucracy has too much innovation and not rigidity, it sees human feelings and not regarding human as a programme like machines and appropriately manipulated to produce standard outcomes in Nigeria. It was also discovered that rules and regulation encourage the operation of the Nigerian police force. Impersonal orientation help the actualisation of police force objectives, too close supervision and control that helps bureaucrat in the process of carrying out assigned works in Nigeria. Also employees are motivated due to unsterile work environment, strict adherence to rules and regulation applied to workers. Creativity and innovation, hierarchy of authority fosters the process of decision, a message sender and message received for short communication, division of work compete of work comment and slow the process of decision making. Therefore, employees are satisfied by the method of payment and remuneration.

 

TABLE OF CONTENT

Title Page =     =     =     =     =     =     =     =     =     i

Approval page  =     =     =     =     =     =     =     =     ii

Dedication       =     =     =     =     =     =     =     =     iii

Acknowledgement    =     =     =     =     =     =     =     iv

Abstract           =     =     =     =     =     =     =     =     v

Table of Content      =     =     =     =     =     =     =     vi-viii

 

Chapter One

  • Introduction =     =     =     =     =     =     =     1

1.1   Background of the Study =     =     =     =     =     2-3

1.2   Statement of the Problem        =     =     =     =     4-5

1.3   Objectives of the Study   =     =     =     =     =     6

1.4   Research Questions =     =     =     =     =     =     7

1.5   Significance  of the Study =     =     =     =     8

1.6   Scope of the Study  =     =     =     =     =     =     8

1.7   Limitation of the Study    =     =     =     =     =     9

1.8   Definition of Terms  =     =     =     =     =     =     10-11

Chapter Two

2.0   Literature Review    =     =     =     =     =     =     12

2.1   Introduction     =     =     =     =     =     =     =     12-21

2.2   Nature & Characteristics of corruption     =     =     22-23

2.3   Forms of Corruption =     =     =     =     =     =     24

2.4   Element Impact of Corruption =      =     =     =     25-28

2.5   Causes of Corruption       =     =     =     =     =     29

2.6   Bureaucracy    =     =     =     =     =     =     =     30

2.7   Functions of Bureaucracy        =     =     =     =     30-31

2.8   Principles of Bureaucracy        =     =     =     =     32-33

2.9   Effective Control of Corruption and Summary=       34-35

References              =     =     =     =     =     =     36

 

Chapter Three

  • Research Design and Methodology =     =     =     37

3.1   Introduction     =     =     =     =     =     =     =     37

3.2   Research Design =  =     =     =     =     =     =     37

3.3   Source/ Method of Data Collection   =     =     =     38

3.4   Population and Sample Size     =     =     =     =     39

3.5   Sampling Techniques       =     =     =     =     =     40

3.6   Validity and Reliability of Measuring Instruments     40

3.7   Method of Data Analysis  =     =     =     =     =     40

Chapter Four

4.0   Presentation and Analysis of Data   =     =     =     41

4.1   Introduction     =     =     =     =     =     =     =     41

4.2   Data Presentation    =     =     =     =     =     =     41

4.3   Analysis of Data       =     =     =     =     =     =     41-48

4.4   Test of Hypothesis   =     =     =     =     =     =     49-51

4.5   Interpretation of Result (s)=    =     =     =     =     52-54

Chapter Five

5.0   Summary, Conclusion and Recommendation   =     55

5.1   Introduction     =     =     =     =     =     =     =     55

5.2   Summary of Findings       =     =     =     =     =     55

5.3   Recommendation     =     =     =     =     =     =     56

5.4   Conclusion       =     =     =     =     =     =     =     57-59

References             =     =     =     =     =     =     60

        Appendix

Questionnaires           =        =        =        =        =        61-64

 

CHAPTER ONE

1.0   INTRODUCTION

According to Max Weber he defined bureaucracy as an organisation with a hierarchy of paid, full-time officials who formed a chain of command and these are concerned with the business of administration with controlling, managing and co-ordinating a complex series of task. Bureaucracy is a system of control, it is a hierarchical organisation in which superiors strictly control and discipline the activities of the subordinates. ORUEBOR, A.A (2007:142) According to the Oxford Advanced Learner’s Dictionary (2000) defines corruption as “dishonest or illegal behaviour, especially of people in authority; the act or effect or making somebody change from moral to immoral standards of behaviour” corruption is a deviation from following the normal accepted standard of behaviour by a public official in order to serve social economic or political interest. CHINELO AROH (2010:50).

 

1.1   BACKGROUND OF THE STUDY

The Nigerian police Authority have and will continue to be one of the prime mores of development in different parts of the world and their importance and impact on daily activities of citizens cannot be over emphasized. Before the independence of Nigeria in 1960, public relations practice was not popular because only a few Nigerians know what it was. In Nigeria, public relation was introduced on 1st January, 1944 with the establishment of the first ever public relations office in the country though it was not popular. The lack of adequate knowledge of public relations as a career and the absence of public relation programmes for understanding its practise hindered many Nigerian organisations until recently, when the Federal Republic of Nigeria promulgated Decree No.16 of June,1990,establishing and upholding the practice of public relations in Nigeria.

The origin of the police is a product of social crisis in the society. The word Police is derived from the Greek word “polis” meaning that part of non ecclesiastical administration having to do with the safety, health and order of the state. Policing and police work did not start as a paid profession. It started as a noble, incorruptible and distinction. It was the justices of the peace system, which corrupted the parish constable system. The 1960 constitution established the Nigerian police force as a federal force charged with the responsibility for maintenance of law and order throughout Nigeria. However, the constitution did not prevent the regions from establishing their own local police force. The command of the Nigerian police force was under the inspector general of police (IGP) while those of the regions were under the command of commissioners of police. Recently, the Nigerian police force (NPF) dropped the force in its name and now answers the Nigerian police. Do not be surprised to read the Nigerian police in place of the Nigerian police force.

The Nigerian police is grouped into departments A-F;  “A” department takes care of administration personnel promotion, dismissal, transfer and posting, medical budgeting, pay and accounts, public relations and printing etc “B” department and “F” have their own respective duties, our major concern is “A” department where public relations belongs or categorized.

 

1.2   STATEMENT OF THE PROBLEM

Here, the unfortunate aspect of corruption in Nigeria is that there are enabling laws to fight it but the leadership find it difficult to enforce these laws. The menace of corruption leads to slow movement of files in the offices, police extortion eg “In collecting twenty naira from bus drivers causing traffic congestion and even road accidents if any of the drivers refuses to give them money, they will start shooting guns to deflate their tyres. The funds allocated for their welfare disappear into this air. Thus, it is believed by many in the society that corruption is endemic in all government. Corruption is found in democratic and dictation politics, feudal, capitalist and socialist economies.

The leaders as well as their followers are corrupt. If there is lack of control of corruption in every sphere in the nation, it is then like the old saying “When water chokes you, what do you take to wash it down?”(The philosophy of Aristotle, 451-ME2783, p.355). Corruption is as a result of man made factors such as greedy people, especially our leaders, who are not contented with what they have so that they will use public funds for selfish gains. Also, many people in Nigeria, especially the youths want to get-rich-quick, so that they indulge in all types of crimes to make money, kidnapping, electoral fund (thuggery), armed robbery, yahoo yahoo, 419, the list is endless, yet the elders who are to correct them end in praising them. Nigerian police force was known in the eighties and nineties for early dispatch of services, result oriented performance and high productivity.

 

1.3   OBJECTIVE OF STUDY

The aim and objective of this project are as follows:

  1. To solve the problem of corruption in the Nigerian public service for better governance.
  2. To know how bureaucracy structure and control encourage the police force to achieve its objectives.
  3. To find out how bureaucracy improve decision making.
  4. To ascertain how bureaucracy improve productivity.

1.4   RESEARCH QUESTION

  1. `Why is corruption a viable enterprise in the 3rd world, nay, Nigeria?
  2. To what extent does the poor living condition and welfare of the police affect their performance?
  3. To what extent does police brutality and extortion damage its image to the public?
  4. How cordial is the relationship between the police and the press?
  5. To what extent do the Nigerian police effectively handle crowd and crisis management?

The purpose of this research is to answer the uplisted research questions that bother both the police and civilians in the state.

 

1.5   SIGNIFICANCE OF THE STUDY

  1. The findings in this study shall be of immense help to administrators and managers in correcting animates coherent in a bureaucracy set up.
  2. It will aid the government and television authority to avoid bureaucracy bottle neck, red tapism and i do not care attitude portrayed by workers.
  3. It will help the police force also in boasting productivity.
  4. Corporate bodies and entrepreneurs that wish to share their own business police force would find this study invaluable in their endeavors.
  5. Academically, it will help other researchers in further research analysis.

 

1.6   SCOPE OF THE STUDY

Since in large police force corruption in eminent and inevitable for the success of such television authority, the study shall focus on Nigerian police authority and due to its structural largeness the study shall be narrowed down to the administrative sections.

 

1.7   LIMITATION OF THE STUDY

In the study, the researcher encountered certain constraints that impede the academic work. These are:

  1. Time Constraints: This posed as a limitation to the study, as the time frame work constructed by the department for the kick off of the study was incompatible with out academic work load.
  2. Unwillingness of staff to give out information: The researcher myself could not gather as much information and facts due to non compliance and non-challant attitude of respondents of workers against the study.
  3. Funding: Due to economic problem, the researcher myself is faced with lack of adequate finance was not available for mobilization of the work.

 

1.8   DEFINITION OF TERMS

  1. An Organization: This is a group of people who forms a business together to achieve a goal.
  2. Bureaucracy: This is the official rules and ways of doing things that a government or the police force has with positions of an authority will defined hierarchically so as to facilitate the attainment of police force goals.
  3. Administration: This is seen from a government perspective where it is being used as a machinery for implementing government policy.
  4. Objectives: Something that one tries to achieve, it is also the aim or goals the police force or government seek to achieve.
  5. Hierarchy: This is a system with grades of authority or status from the lowest to the highest. At each level of the hierarchy, officials enjoy the right of issuing directives to subordinates who have the duty to obey them.

 

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AN APPRAISAL OF ACCOUNTING SYSTEM IN THE PUBLIC SECTOR (A CASE STUDY OF BOARD OF INTERNAL REVENUE ENUGU STATE)

NUTRITIONAL QUALITY AND NUTRIENT ADEQUACY OF CASSAVA-BASED DISHES AMONG HOUSEHOLD IN AGBOBU COMMUNITY OF OKIGWE LOCAL GOVERNMENT AREA OF IMO STATE

 

ABSTRACT

This study was conducted to investigate on the nutritional content of the cassava based food consumed in Alabata community of Okigwe Local Government Area of Imo state

This study was carried out among 100 households. Information were collected using a structured questionnaire for their socio-demography. Among the consumption of cassava, the three most common forms of consumption are Lafun, Fufu, Garri (Eba) 11.4% are head of Household, 22.8% are Spouse (mothers), 28.4% are sons, 32.2% are daughters and 2.6% are relations.

Further more, it was observed that amongst the three cassava dishes Lafun is high in Crude Protein, Fat, Fibre Ash, Carbohydrate and moisture content. Fufu is high in giving energy with 4.70E2 + 1.25 mean value and Garri (Eba) is also high in moisture content with 13.65 + 0.05. Garri (Eba) contains high vitamins nutritional content.

 

CHAPTER ONE

1.0                                                         INTRODUCTION

Cassava (Manihotesculentacrantz) is an important staple food crop for many millions of people in the tropics (Rao and Hahn,1984).Cassava virtue as a human food is that it is a cheap source of energy that is how most Nigerians view it especially those in the rural areas (Ikpi and Hahn,1988).Cassava root is normally processed before consumption as a means of detoxification preservation and modification (Oyewole,1991)

Cassava (Manihotesculenta), also known as yucca or manioc, is a woody shrub of the ,Euphorbiaceae (spurge family ) native to South America. Cassava is extensively cultivated as annual crop in tropical and sub tropical regions for its edible starchy tuberous roots ,a major source of carbohydrates. Nigeria is the world’s largest producer of cassava. Cassava is the third largest source of carbohydrates for meals in the world.

Various method of processing include fermentation, drying, frying, milling, sieving. Fermentation is an important process method for the crop: fermentation processing method can be broadly categorized into solid state, (without soaking, e.g. for garri) and submerged (involving soaking in water e.g. for fufu) (Oyewole and Odunfa, 1992).

In Nigeria, the most important fermented moderate are ‘gari’ (a fermented partially gelatinized granular product) “fufu” (a creamy white fermented moist paste) and “Lafun” (a flour made from dried fermented cassava (Westby and Twiddy, 1992) “Gari” the most population is produced through the fermentation of grated cassava mash.

1.1 Classification of cassava

Cassava is classified into sweet or bitter depending on the level of toxic cyanogenicglucoside. Cassava in Nigeria is called akpu, ege or ugburu, Cassava based dishes are widely consumed wherever the plant is cultivated. Some of these dishes have regional, national or ethnic importance. Cassava must be cooled properly to detoxify it before it is eaten which can be cooked in various ways.

1.2       Uses

Cassava is grown for its enlarged starch-filled roots, which contains nearly the maximum theoretical concentration of starch on a dry weight basis among food crops. Fresh roots contain about 30% starch and very little protein.

In Alabata cassava is consumed mainly as Lafun,Fufu and Garri (eba).

1.3       OBJECTIVES

1.3.1    Broad Objective

To determine the nutritional content of cassava-based dishes as consumed.

1.3.2    Specific Objective

To assess the socio-demography and socio-economic characteristics of the people To identify the various dishes prepared in Alabata using cassava.

1.4       Justification

This research was carried out to analyse the nutritional content of the cassava dishes prepared observing the proximate content, vitamin and mineral content of the food samples and to know which one has the highest content.

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NUTRITIONAL QUALITY AND NUTRIENT ADEQUACY OF CASSAVA-BASED DISHES AMONG HOUSEHOLD IN AGBOBU COMMUNITY OF OKIGWE LOCAL GOVERNMENT AREA OF IMO STATE

THE IMPORTANCE OF PROPER ACCOUNTING IN MODERN DAY BUSINESS

THE IMPORTANCE OF PROPER ACCOUNTING IN MODERN DAY BUSINESS

CHAPTER ONE

INTRODUCTION
In this day of trade and commerce, many enterprises are springing up. For instance. Sale proprietorship Partnership Corporative, limited liability company Being established for the purpose of achieving objective as it related to their businesses.
These businesses have one thing in common and that is they all employ the factors of production land, capital, labour and entrepreneurship for the achievement of their various objectives. These objectives could be effectively and efficiently achieved if these very important tools are properly managed. A good and efficient business done not end with the profit made but ought to be sustained to ensure a more regular flow of income and subsequent profit. The sustainability of a good business depends on a number of factors the location of the business (which includes the land) environment, proximity to the required raw material and the targeted end users, and more importantly, funds. A good business can only thrive if the effective human resources are employed. Therefore it is necessary to ensure that a proper qualified workforce is employed to enhance productivity.
Another factor that will enhance the productivity and profitability of a good business out fit is proper accounting. If proper accounting procedures is employed in a business, waste of funds. Time and materials will be minimized. Although it is the duty of every employee in a business outfit to imbibe the culture of maintenance and accountability, the accountant has a greater put to play in this aspect of the business. Proper accounting is the hallmark of any business and it cuts across every segment of the business from the security gate to the office of the Chief executive. In modern day business proper accounting is very beneficial and rewarding. It appraises, revaluates and checks the amount of capital invested, as well as revenue and expenditure that occur during the business financial year. With this profit and loss account is brought also into consideration, where proper accounting has not been introduced in a business, there is bound to be some irregularities. The income and expenditures would not be accurately recorded thereby making it difficult for the actual profit to be ascertained.   The importance of proper accounting in modern day business cannot be overemphasized because it definitely has a positive effect of the workforce. The work force will be more careful, cost conscious and committed to the business, profit will increase and waste minimized.
1.1            BACKGROUND OF THE STUDY
Business is the exchange of goods, services and money on an arm’s length basis, that result in mutual benefit or profit for both parties involved. An individual engages in business because he or she believes that the rewards or possible benefit of business are greater than the risks or possible future sacrifices of business.
Accounting is often said to be the language of business it is used in the business world to described the transaction entered into by all kind of organization. The actual record making phase of accounting is usually called bookkeeping and he use to which these record are pt, their analysis and interpretation. An accountant should be interested in relationship between the financial results and the events which have created them.
The owners of a business would want to know Whether or not the firm operating at a profit Where or not the business will be able to meet its commitment as they fall due, or have to close down owing to lack of funds Whether documentary evidence of the company business activities can be maintained. The tool for a successful proper accounting report called financial statement that describes the financial position of a business and the result of its recent operation. A complete set of financial statement for a business include fair related accounting report:A balance sheet. This is the statement that shows the financial position of the business at a specific date by describing its financial resources and obligations.

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THE IMPORTANCE OF PROPER ACCOUNTING IN MODERN DAY BUSINESS

THE IMPACT OF FEDERAL GOVERNMENT’S ECONOMIC POLICY MEASURES ON NIGERIA’S BALANCE OF PAYMENTS

THE IMPACT OF FEDERAL GOVERNMENT’S ECONOMIC POLICY MEASURES ON NIGERIA’S BALANCE OF PAYMENTS

ABSTRACT

This topic “The Impact of the Federal Governments Economic Policy Measures on Nigeria’s Balance of Payments: Position (1999 – 2002)” was aimed at studying the economy of Nigeria.The work covered the balance of payments summary statements from 1999 – 2002 and various economic policy measures for the same period. Analysis was made and observations recorded. Contrary to my speculations, the economy faired well in 2002 and 2001 when the balance of payments recorded favourable balances arising from oil fortunes. However there were unfavourable balances in 1999 and 2002. Worthy of note was the significant contribution of agriculture in the 2001 balance of payment  figure.In the study, the opinion poll was that the economic problems in Nigeria were not in policy formulations but in implementation.   In the end, some doses of economic Panacea were put forward for the improvement of our economy. They include investment in non-oil sectors like agriculture and industry, security of the nation’s borders to cub the excesses of smugglers, foreign exchange budgeting and management to match with the available foreign exchange, manpower development, extensive and intensive re-orientation of Nigeria, etc all aimed at adding life to the economy.

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THE IMPACT OF FEDERAL GOVERNMENT’S ECONOMIC POLICY MEASURES ON NIGERIA’S BALANCE OF PAYMENTS

CHALLENGES OF COST BENEFIT ANALYSIS, IN A COMPUTERIZED ACCOUNTING SYSTEM

CHALLENGES OF COST BENEFIT ANALYSIS, IN A COMPUTERIZED ACCOUNTING SYSTEM

ABSTRACT

This research is on the challenges of cost benefit analysis in a computerized Accounting System. The purpose of this study is to enquire into the viability or other wise of computerized accounting Systems, with particularly reference to coca-cola Bottling Company, Enugu. The objective of the study is to ascertain if the introduction computer system may lead to industrial unrests as workers resists change. Also, the method used in this study is chi-square while the findings in the process of this research work is the implementation of computerization of coca-cola bottling Plc Enugu and also the recommendation for the work is that the company should motivate its personnel more on the use of computers.

TABLE OF CONTENT 
Title Page
Approval Page
Certification Page
Acknowledgement
Dedication
Abstract

CHAPTER ONE
1.0 INTRODUCTION 

1.1 Background Of The Study
1.2 Statements Of The Problem
1.3 Statement Of The Objective
1.4 Research Questions
1.5 Research Hypotheses
1.6 Scope Of The Study
1.7 Significance Of The Study
1.8 Limitations Of The Study
1.9 The Cost Benefit Analysis

CHAPTER TWO
2.0 REVIEW OF RELATED LITERATURE

2.1 Effect on Personnel
2.2 The Feasibility Study
2.3 System Cost versus Size of Organization
2.4 Seeking Expert Advice (The Computer Consultant)
2.5 Data Processing Function Within The Organization
2.6 Capital Budgeting Techniques

CHAPTER THREE
3.0 RESEARCH METHODOLOGY 

3.1 Research Design
3.2 Sources Of Data
3.4 Area Of Study
3.4 Population Of The Study
3.5 Determination Of Sample Size
3.6 Reliability Test: Test Re-Test Method
3.7 Validity Test
3.8 Method Of Data Analysis/Techniques
3.9 Decision Criterion For Validation Of Data

CHAPTER FOUR
4.0 DATA PRESENTATION AND ANALYSIS 

4.1 Data Presentation

CHAPTER FIVE
5.0 SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS

5.1 Summary Of Findings
5.2 Conclusion
5.3 Recommendations
Bibliography
Appendix I
Appendix II

CHAPTER ONE

INTRODUCTION
1.1 BACKGROUND OF THE STUDY

Computer has been defined as electronic machine that accept data (input) processes it to produce useful result (output). It is also capable of storing information. It uses predefined instruction known as computer programs to execute the task in order to produce output. Computers technology has helped in no small measure in activating the problems encountered using the manual tools and machines. Computerization ranks prominently in the commanding heights of economic activities of the business world. Through computerization, industries have been able to control their cost of production heading to high profit margin, sustainable growth and development, accurate and lasting records.
The manufacturing industry has come a long way from the manual era of machine operation to modern day science and technology. Within this period, a number of major changes took place in the
business world with significant positive impact on the business world. Notable among these changes are those changes in manipulation of accounting records, fantastic computer designs etc.
We have various types and categories of computers which perform diverse functions; however, the one of interest and relevance to this research is the digital type of computer.
The history of the digital computer data back to the Abacus which was intended in China more than a thousand years ago and used to add, subtract, multiply and divided . This was followed by the counting invented by John Napier in the 1600’s. Blaise Pascal followed closely with a mechanical machine that could do similar jobs more efficiently. GOH friend Von Liebritz invented a more improved version of Pascal’s machine. Other great mathematicians and investors like Jacuard, Babbage, Grace Hopper etc made greater strides towards, building calculating machines. An American Herman Hoterrith, developed the mechanical members calculator which was used to read punched cards and greatly facilitated the sun of 1890 in that country. Hoterrith founded a company to sell his inventions andtoday that company has grown to become IBM which is (international Business machines) the largest computer company in the world.The era of modern computers began sometime in the period preceding the end of the Second World War when the vast calculations required in the production of the first bomb necessitated he buildings of a giant computer which operated on vacuum tubes. This computer was huge and expensive and only affordable by few.Thus, from this period on wards, with the introduction of new technologies, computer became smaller in size and cheap as well: such that today we have the micro computer which costs a few thousand naira and can do job undreamed of forty years back.
There are three classes of computers now in use viz;
1. The micro – computers
2. The mini- computers
3. The mainframe computers

i. MICRO – COMPUTERS: These computers are designed to handle simple data processing functions; it is the smallest general
purpose computer. Micro computers are capable of handling independent task and do not led themselves to integrated network. Some just j contain a keyboard for input entire, where data is keyed in by an operator of programmes. Others can contain sophisticated input/output forms. Micro computers and their speed are designed to be stand alone computer, which means that they operate independently, on they can be part of a network or system. Their memory is smellier than that of mainframe or mini computers and their speed of processing data is slower also.

ii. A mini computer – is a small computer relative to mainframe and maybe be defined as a seated down mainframe, as the processor and peripherals are physically smaller. Although the processor may be physically smaller, it is powerful than the micro computers; several people can make use of the mini computer to do different jobs simultaneously through a linkage channel called the work-stations or terminals. It can be used to in inventory control, customers account records and employees payroll. It can
also be used to prepare final accounts of companies using computerized accounting system.

iii. The mainframe computer is large and powerful. They have higher processing speed and capability than both mini and micro computers. These are used by large organization with immense data processing deeds. Computers can be used in several fields as widely diverse as law, medicine and architecture. However, the principal concern within the scope of this research work is a data processing and analysis for business organization.In the past thirty year or so, there has been a tremendous advance in technology of automation. The introduction and adaptation of the computer to business has led to revolutionary changes in data processing methods in advanced countries.These changes are fast spreading to the developing world. In present day Nigeria, there is a noticeable and marked trend towards computerization of computers, often with little or no back-up capability often with little or no hack-up capability as guards’ maintenance and utilization.Companies are begin attracted to this computerization possibly with the belief that it is sound business to sight coupled with the feeling that it is in vogue for a company to say it is fully computerized.In answering the question why any organization should consider the transition to computerized accounting system Larry J. Campbel (1979) observes that research by behavioral scientists reveal that he fundamental reasons for transferring to some form of mechanization in information systems are the same as any other tact of an enterprise. Companies turn to mechanization because.
1. Company growth exceeds the capability to expand the present processes by any other reasonable scheme.
2. Technology changes, force different and more computer tactics that can best me mechanized.
3. Efforts to cut costs force searches for alternative. Added it all these is the requirement of data for decision making at a faster speed to meet up with competition.

1.2 STATEMENTS OF THE PROBLEM
The problem of this study includes:
1. The problem of industrial unrest
2. The problem of obsolesce or unsuitableness for the needs of the company.
3. The problems of companies not realize the full potentials of the computer system they have installed thereby leading to inefficiency.
4. The problem of company’s data processing operation which are amiable to automation may be over looked.

1.3 STATEMENT OF THE OBJECTIVE
1. To ascertain if the introduction of computer system may lead to industrial unrest as workers resists change.
2. To identify the wrong computer systems either in terms of obsolesce or unsuitableness for the need of the company.
3. To determine how companies can realize the full potentials of the computer systems installed thereby leading to efficiency.
4. To examine how companies data processing operation can be amenable to automation so that they cannot be over looked.

1.4 RESEARCH QUESTIONS
The followings are the research questions
Research questions help in obtaining adequate information within the preview of any chosen topic. Answers to questionnaire will help in the discussion of a research question, some of the research questions which will help to achieve the objective of the study Viz:
1. Is the turnover of workers higher now that you use computer system? Yes/no.
2. Is the high cost of procurement and installation yielding good returns? Yes/No.
3. Are your computers very expensive to maintain? Yes/No
4. If yes, what is the maintenance cost of your computers yearly?
5. Is the usage of computers advantageous to your company? Yes/No.

1.5 RESEARCH HYPOTHESIS
These are problems that put together all the concepts construct, and variables and give the researchers a clear view of the problem under study. That is, they are prepositions put forward by a researcher to enable him or her solve the problem(s) formulated and to achieve the objectives of the research exercise.
The following research, hypothesis are used where
HO: Stands for Null hypothesis
Hi: Alternative hypothesis
1. Ho: Cost benefit analysis, computerized accounting system does not helped coca-kola bottling company Plc Enugu.
Hi: Cost benefit analysis, computerized accounting system helped coco-kola bottling company Plc Enugu.
2. Ho: Here is no programme of computer training skills and acquisition.
Hi: There is programme on computer training skills and acquisition.
3. Ho: Computerized accounting system has no impact on the staff of coca-kola bottling company Enugu.
Hi: Computerized accounting system has impact on the staffs of coca-kola bottling company Enugu.
4. Ho: The staffs of coco-kola bottling company does not benefit from the cost of using computerized accounting system.
Hi: The staffs of coca-kola bottling company benefit from computerized accounting system.

1.6 SCOPE OF THE STUDY
The challenges of cost benefit analysis, in a computerized accounting system. The project is restricted to coca-cola bottling company plc 9th mile, Emene, Enugu State.

1.7 SIGNIFICANCE OF THE STUDY
1. The study will be of immense benefit to the company by improving the use of computer system.
2. The implementation of computerization of coca-cola bottling company Enugu has significantly saved cost and has increased profit maximization.
3. The computerization of coca-cola bottling company Enugu has led to reduction in labour costs.
4. The introduction of computer did both undermine workers morale.

1.8 LIMITATIONS OF THE STUDY
During the course of this study, some constraints were encountered by the researcher which limit the scope of and details of the study. The constraints were numerous as they prove formidable and able to determine to some external the ultimate outcome of the study.
1. Time was one of the constraints, the little time I have as a student had to be apportioned between studies, research and other social endeavors since all the these activities are very important to my well-being none had to be forgone.
2. Financing a research of this nature is not easy, money is needed to sought for material, print questionnaires, and post to respondents and to compile the report. Finance being a scare resource was a very big constraint to the smooth conduct of this study.
3. The uncooperative attitude of some people and due to the duty of secrecy they owe to their company staff makes the not be make available some important fact.

1.9 THE COST BENEFIT ANALYSIS
1. The benefit of an organization using a computerized accounting system is important because the organization will be modernized in its cost of using computer systems for its business.
2. An organization will benefit from the cost of using computers systems whereby the organization will no longer have to spend much money on employees to be employed in the cost of using manual system in the organization because there is no computer system to make their work faster.
3. The cost benefit which an organization will benefit from using a computerized accounting system will include the organization benefiting from the account of the organization not having errors like in the case of using manual system. In using a computerized accounting system, an error cannot occur because the computers will be there to detect error.
4. The organization will also benefit from using a computerized accounting system if in the case of centralize organization whereby their staff can at home it they need anything, from the
office, they can go to the computer and get the information they need from their organization to ease the stress of them going to the office to get information.
5. In the cost of an organization benefiting from using a computerized accounting system, the work of the organization will also be fast and will not be left behind unlike using a manual system that lead to the organization been slow in their activities.

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CHALLENGES OF COST BENEFIT ANALYSIS, IN A COMPUTERIZED ACCOUNTING SYSTEM

ROLE OF FINANCIAL STATEMENTS IN INVESTMENT DECISIONS A STUDY OF SELECTED BANKS

ROLE OF FINANCIAL STATEMENTS IN INVESTMENT DECISIONS A STUDY OF SELECTED BANKS

ABSTRACT
The research topic of this study is “The role of financial statement in investment decisions” – a study of selected banks in Enugu metropolis. The purpose is to identify the relationship between financial statement and investment decisions, and the impact of financial statement in investment decision making and also to know if investment decisions depends solely on financial statement. The study population is 125 persons who are the member of staff of the five major selected banks. Using the Yaro Yamani formula, the sample size calculated gave (95). The formulated hypotheses were tested using Z test with statistical technique at 5% level of significance. The researcher also made use of primary methods of data collection which included questionnaires and personal interviews. Also the secondary methods of data collection used are library research of relevant materials and existing documents from the selected banks. The researcher recommends that banks in Enugu metropolis should consult the financial statement before making investment decisions, and also it is recommends that all interested parties to financial statement should used required financial ratio analysis for decision making.

CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Every business prepares profit and loss Account or income statement to ascertain the net result of financial working of the business whether it has earned some income or profit or sustained any loss. It also prepare balance sheet to find out the financial position of the business. Profit and loss account or income statement, retained earnings statement and balance sheet are known as financial statements.
Gautam (2005) sees financial statement as financial information which is the information relating to the financial position of any firm; when presented in a concise and capsule form. Besides profit and loss account and balance sheet, some other statements are also prepared for deriving certain conclusions. A schedule of current assets and current liabilities of two years may be prepared to know the changes in working capital. Similarly a fund flow statement and cash flow statement may also be prepared to ascertain the future estimate of cash receipt and payment. Thus, financial statement include: profit and loss Account, income statement and balance sheet along with certain schedules and statement.
Ezeamama (2010) is of the opinion that rational decisions have to be taken to manage modern business successfully and for this rational decision to be taken in line with the firms’ objective. Some analytical tools ought to be available and used based on the strengths and weakness of the firms. Thus, the financial strengths and weaknesses of a firm are revealed in its financial statement.
The nature of financial statement is that financial statement is that financial statements always relate to a past period and hence they are called historical documents. Financial statements are expressed in monetary terms and it indicates profit abilities of the business through balance sheet.
Financial statement are analyzed in order to use the information in financial statements to ascertain the profitability and financial soundness of the firm, to Judge the managerial efficiency for inter form comparison of similar nature and to make valuable for costs.
According to Remi Aborode (2006), financial statement need to be interpreted for better understanding and analysis and it can thus be interpreted using individual items contained in financial statement or/ and using ratios computed from items contained in financial statement ( Ratio analysis).
The essentials of financial statements range from the fact that financial statements should disclose correct information about profitability and financial position of a business. The information disclosed should be presented in such a manner that it can be easily compared with the figures of the previous year or with those of other similar firms. The information so provided in financial statement should be that which can be verified from the relevant and prepared within a reasonable time after the end of accounting period. The information provided by financial statement should also be easily understood by the interested parties. Such as investors, creditors, lender and Bankers, customer’s employees, government and other agencies, the public and stock exchange.It can therefore be seen that financial information is very effective and essentials in making investment decisions in an organization be it private or public. Thus the role of financial statements in investment decision in some selected banks in Enugu metropolis will be critically evaluated.
1.2 STATEMENT OF THE PROBLEMS
Several investment decision tools are used an financial statement of firms and these has been used for several investment decisions, which most often pays off bearing in mind the definition of what a financial statement is. It is important to note the various roles it plays in investment decision.
– However, the problems encountered by these investors include.
-Whether these financial statements represent a true and fair view of what it purports to represents. Whether all necessary disclosure have been made by the management of the enterprises, which can now convince a person that deductions made base on the financial statement is not misleading.
-What benefit is this financial statement to the external users particularly investors who are taking decision on a daily basis?
-How analytical tools are set to aid prospective investors in accessing the financial position of the corporate organization.
-How to determine the profitability of a company.
1.3 OBJECTIVE OF THE STUDY
The general objective of this research work is to determine the role of financial statement in investment decision of selected bank in Enugu metropolis. This research work has the following objective
– To identify the relationship between financial statements and investment decisions
– To evaluate the impact of financial statement in investment decision making.
– To identify factors influencing investment decisions on financial statements.
– To highlight the problems associated with financial statement in investment decision.
– To highlight the various tools used in investment decisions on financial statement.
1.4 RESEARCH QUESTIONS
The research questions were formulated from the objective such as:
– What significant relationship does financial statement have to do with investment decision?
-What impact does financial statement have with investment?
-Are there any factors that influence investment decision?
-Does making investment decisions depends depend solely on financial statement?
-What are the various tools used in investment decision on financial statement?
1.5 HYPOTHESES OF THE STUDY
The following questions were constructed to guide the researcher in her study.
H0 :Financial statement does not have any significant relationship with investment decision.
Hl Financial statement has significant relationship with investment decision.
H0 : Financial statement does not have any impact in investment decision.
Hl :Financial statement has an impact on investment decision.
H0 : Making investment decisions does not solely depend on financial statement.
Hl : Making investment decisions solely depend on financial statement.
1.6 SIGNIFICANCE OF THE STUDY.
This study will be of immense help to the prospective investors and other interested parties of the general public so as to know how to study the financial report of a business firm in order for them to make a decision as to whether or not to invest in such firm. It will help the government to determine the taxation due and as well as to determine if all the company’s income has been included in the computation of taxes. By doing this, there will be an improvement in the overall assets and liabilities management and the management will also upgrade assets quality and lower cost of funds. The researcher is of the view that this research work will address the problem properly.
1.7 SCOPE AND LIMITATION OF THE STUDY.
This study is on the selected Banks in Enugu metropolis, the limitation is of the study in the selected Banks in Enugu metropolis Enugu state. This is due to
some constraints; those constraints were financial difficulties which prevented the running down from one relevant selected Banks in Enugu to another for sources of information necessary for this study.Another constraint is the time limit within my disposal, the demand from the academic activities and limit within this constitutes.
1.8 DEFINITION OF TERMS
FINANCIAL INFORMATION
Financial information summarize the economic performance and situation of a business when confronted with the information and it is useful to have a framework of analysis available to make an attempt to draw what is important from the mass of less important data
 FINANCIAL RATIOS
Financial ratios provide a means by which various items in the financial accounts are related to an appropriate base and thereby enabling these items to be regarded in their proper perspective financial ratios permit comparative studies and therefore they are important tools of financial analysis.
 INVESTMENT
Investment is the act of intelligently determining the uses to which saving can be put investment can also be defined as the defined as thesacrifice of current consumption for a future large gain of money or consumption which could be uncertain.
INVESTMENT COMPANY
These are financial institutions organized for the purpose of enabling an individual investor to obtain the advantages of wide diversification in a single commitment.

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ROLE OF FINANCIAL STATEMENTS IN INVESTMENT DECISIONS A STUDY OF SELECTED BANKS

GEOGRAPHICAL INFORMATION RETRIEVAL SYSTEM (GIRS)

GEOGRAPHICAL INFORMATION RETRIEVAL SYSTEM (GIRS)

CHAPTER ONE

INTRODUCTION
1.1 BACKGROUND OF STUDY

According to Chang, K. T. (2008), Geographic Information Retrieval System (GIRS) is a system designed to capture, store, manipulate, analyze, manage and present all types of geographical data. The acronym GIRS is sometimes used for geographical information science or geospatial information a study which refers to the academic discipline or career of working with geographic information system. In simplest terms GIRS is the merging of cartography, statistical analysis and database technology.
A geographical information retrieval system can be thought of as a system which digitally creates and manipulates spatial areas that may be jurisdictional, purpose or application- oriented. Generally, a GIRS can be custom designed for an organization. Hence, a GIS developed for an application jurisdiction, enterprise or purpose may not be necessarily interoperable or compatible with a GIRS that has been developed for some other application, jurisdiction, enterprise or purpose. What goes beyond a GIRS is a spatial infrastructure, a concept that has no such restrictive boundaries.
In general sense, the term GIRS describes any information system that integrates, stores, edits, analyzes, shares and displays geographic information for informed decision making. GIRS applications are tools that allow users to create interactive queries (user – created searches), analyze spatial information, edit data in maps and present the result of all these operations. Geographic information science is the science underlying geographic concepts, applications and systems.
The link between geography and information technology can not to a very large extent be over- emphasized.
Using Enugu State tourism board as a case study has helped to give a comprehensive understanding of the importance and the need of a geographic information system, as it is believed, information technology has a significant role in geographic information system and high level of expectations would and is already being demanded from its use both in Nigeria and the world at large.

1.2 STATEMENT OF THE PROBLEM
In our daily lives as humans, most of our endeavors involve moving from one location to another for one thing or the other. A problem emerges when there is no proper direction or a system as to give accurate direction in locating our destination, what the said destination contains and what is has to offer. This is the problem the state has as concerning tourism, whereby a good number of tourists
(most especially tourists visiting for the very first time) and other individuals wanting to visit tourist sites in the state but cannot do so because of the lack of a well detailed system to provide them (tourists) with an accurate geographic information system as to how to locate these sites within the state.
Due to the lack of an accurate geographic information retrieval system as far as tourism is concerned, most tourists are discouraged from exploring these tourist locations within the state, this in turn hampers the positive impact that tourism is meant to have on the development in the state and the Nigerian society at large.

1.3 OBJECTIVES OF THE STUDY
1. To examine the existing / current system in regards to how geographic information for tourism is provided for tourists in and outside the state.
2. To improve on the already existing system by designing a geographic information retrieval system that is well detailed and easily accessible.
3. This study also seeks to help in broadening the scope of tourism in the state through providing a comprehensive geographic information retrieval system.

1.4 SIGNIFICANCE OF THE STUDY
The significance of this study is to show that a link between geography and other professions can be created on the platform of information technology. i.e. to show
that with information technology the problem of location can and is solved to a very large extent.

1.5 SCOPE OF STUDY
The scope of this study is limited to tourist locations and hotels within the state using the Enugu state tourism board as a case study in view of providing / improving on the existing geographic information system of the board for tourism in the state.

1.6 LIMITATIONS OF THE STUDY
Time was a major constraint faced during the research for this project work and limited the effort in developing a much more comprehensive package needed in the design and implementation of the geographic information retrieval system.

1.7 DEFINITION OF TERMS

GEOGRAPHY: Geography is a science that deals with the distribution and arrangement of all elements of the earth‟s surface. The word geography was adopted in the 200s BC by the Greek Scholar Eratosthenes and means „earth description.‟

INFORMATION SYSTEM: An information system can be defined technically as a set of interrelated components that collect (or retrieve), process, store and distribute information to support decision making and control in an organization.

GEOGRAPHIC INFORMATION RETRIEVAL SYSTEM: A “geographic information system” (GIRS) is a computer-based tool that allows you to create, manipulate, analyze, store and display information based on its location

LOCATION: The position, site or sitting of somebody or something.

MAP: A diagrammatic drawing of something such as a route or area made to show the location or how to get there.

TOURISM: Travel to benefit from a particular service or activity that is unavailable at home.

COMPUTER : An electronic device that can accept data/ information inform of input , process the data /information in order to produce an output and also has the capability to store the information for future use.

DATA: Data refers to raw or unprocessed information.

SOFTWARE: This is the logically written instruction that controls the operations of the hardware.

HARDWARE: This is the physical components of computer system and other geographic tools or devices.

DATABASE: This is the collection of related data/ information stored mostly in a central location.

COMPUTER AIDED DESIGN (CAD): Software programs for the design, drafting and presentation of graphics. Originally designed for manufacturing and drawing, now also widely used for mapping.

OPERATING SYSTEM: A series of computer programs which control the operations of the computer itself. Application programs such as GIS software run under an operating system. Examples of operating system include UNIX, VMS, DOS etc.

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GEOGRAPHICAL INFORMATION RETRIEVAL SYSTEM (GIRS)

ANALYSIS OF THE TECHNIQUES OF DETERMINING SOLVENCY IN THE NIGERIAN MANUFACTURING

ANALYSIS OF THE TECHNIQUES OF DETERMINING SOLVENCY IN THE NIGERIAN MANUFACTURING

ABSTRACT 
In the contemporary and ever dynamic business world, there has been an increasing shift in management concepts a shift in emphasis from production management to marketing management and now to management of resources at the firms disposal. Management now strive to achieve sound and stable financial standing by concentrating efforts on financial planning and control. The firm has to allocate its limited resources among alternative uses. If resources were unlimited, there would be no need for decisions, because all possible activities could be achieved. Scarce resources necessitate a choice, and the selection of one alternation implies the exclusion of others.
On this background therefore, the author intends to undertake a performance analysis of the Nigeria breweries Plc through the investigation of the success of the brewing industry. This would require the determination of solvency.
The major sources of data for this study will be the financial statement of the Nigeria Breweries Plc. This will be supplemented with questionnaire distributed to the senior and Junior staffs of the company. The secondary source of data will be from different financial texts on solvency and liquidity related matters. Financial ratios (both short and long term) will constitute part of the analysis.
Further illustrations will be projected using tables, graphs and charts. It is hoped that things the result of the finding will among other things serve the purpose of useful information source for the management of the Nigeria Breweries Plc indecision making. For students in your research work, and also for any other person undertaking a work on the techniques of determining solvency both as problem solving tool as well as an academic exercise.

CHAPTER ONE

1.0 INTRODUCTION 
1.1 BACKGROUND OF STUDY
The Nigerian Breweries Plc was incorporated first, as Nigerian Breweries Limited on 16th November, 1946 and later as Nigerian Breweries Limited on the commencement of operations in a second breweries at Aba in 1957. In accordance with the companies and allowed maters Act of 1990, the name was again changed to Nigerian Breweries Plc, since the formal incorporation in 1946, 51 years have rolled by, 51momentous years that saw the company grow from its modest beginnings into the ground company that it is today. The company now has five Breweries from which their highly refreshing high quality brands are distributed to all the nooks and corners of this great country.
The company has kept pace with key international development, thus ensuring that their systems, processes and operational procedures are always in conformity with proven best practices in most parts of the world. This has been evident in the vision and professionalism demonstrated in the way the business ha been managed in the past 51 years. The company now has a portfolio of eight high quality brands, star and Gulder lagers Maltina Amstel Malt drinks and legend extra stout, Schweppes Bitter Lemon, Schweppes Tonic Water and Schweppers Soda Water, all the above improvements in the company would not have been possible with out the company being solvent.
The old business adage “you have got to have money to make money” is simply a recognition that most companies needs funds in order to operate profitably. The need for funds in a manufacturing company which Nigerian Breweries Plc is no exception affected by everything that happens to the company. While the amounts needed in this company is inluenced by many factors and fluctuate over a period of time, this company have substantial investment in the current asset of stock, customers (debtors) and cash also in fixed assets such as building plants and equipment. As a result of scare resources which is visible in almost all manufacturing companies, the assets disclosed on the balance sheet at any point in time are reflection of the cumulative investment decisions of management.
A weak liquidity position poses a threat to the solvency of the comparing and makes it unsafe and unsound. This company does not consider the use of the techniques for determining solvency very important and as such the only technique they use are as follows:-
(a) Total capital to total profit Assets and
(b) Dividends to profit after tax What the company does most of the time is forecasting and assumption. The company is always interested in cash and upheld it as the best technique for measuring the companies solvency. As a giant, this company always meet up with their cash requirement. Their ratios for measuring solvency will be included in the study.
(David E.L 1981)

1.2 STATEMENT OF THE PROBLEMS 
1. One of the important factor that has contributed much in drilling the activities of this company is liquidity problems and its attend and insolvency. At times the company find it difficult to meet up with their maturing financial obligations due to late arrival of funds.
2. The economic recession in the country and the political uncertainty have also aggravated this problem of liquidity and this has become a great concern to the company. A common issue in the board meeting of this company is how to survive through solvency.
3. With the increase in the activities of this company over the years, a critical look at the balance sheet of this company reveals a corresponding increase in the level of bad debts.

1.3 OBJECTIVE OF STUDY
(1) The objective of this study is to undertake a performance analysis of the Nigerian Breweries Plc towards finding, out the extent of their success or failure. This involved the determination of their solvency or liquidity position.
(2) An investigation would also be carried out into the possible areas of improving the solvency of the company for better performance and growth.

1.4 RESEARCH QUESTIONS
(A) Does your firm make use of any technique/methods in the determination of its solvency?
(B) What benefit does your firm device from its accumulated investments?
(C) When your firm runs short of cash, how does raise the required fund?
(D) Apart from ordinary shares, what are the other sources oif funds to the firm?
(E) How can the company be assessed considering the present economic situation in the country?

1.5 RESEARCH HYPOTHESIS
The following Hypothesis has been formulated to which the study will attempt providing answers.
Ho: The Nigerian Breweries Plc does not make use of any techniques/methods in the determination of its solvency.
HI: The Nigerian Breweries Plc makes use of techniques/methods in the determination of its solvency.
Ho: The Nigerian Breweries Plc does not drive any benefit from the accumulated investments of the industry.
HI: The Nigerian Breweries Plc make adequate benefit from the accumulated investments of the industry.
Ho : Apart from the ordinary share the Nigerian breweries Plc does not make use of other sources of fund.
HI: Apart from the ordinary share the Nigerian Breweries Plc makes use of other sources of funds.

1.6 SIGNIFICANCE OF THE STUDY 
After carrying out the study, the researcher will be in a position to establish the solvency position of the Nigerian Breweries Plc. The reason for their success or failures, solvency or insolvency must have discovered, and this will help the researcher put up recommendation for improvement.
These recommendations will be of much significance to:
(1) The management of the Nigerian Breweries Plc in their decision making
(2) Students in their research work
(3) Any other person undertaking a work on solvency both as a problem solving tool as well as an academic exercise.
(4) To any other person especially students on how to make proper use of techniques such rations in determining the solvency of any company.

1.7 SCOPE LIMITATIONS
The researcher encountered a lot of problem in the course of this work (study), which nearly frustrated his effort in achieving meaningful result. One of the most striking thing that could have frustrated my carrying old this work was dearth of information in this company. Getting into the companies company took a week before the actual problem began which is seeing the Brewing accountant, who latter rendered some help. I was not given 100% help as required due to what they called company’s secrecy. I was just helped for the sake of academic exercise and at last when I was fully understood by the management team of the company, I was given some help which I consider adequate for this work.
TIME/COST: The researcher was also constrained to use only one company as case study (Nigerian Breweries Plc) which is relatively small, instead of the six quoted Breweries in the country because of time/cost functions. The researcher still believe that the bigger the sample the better the result.
1.8 DEFINITION OF TERMS
1. Solving: State of being solvent, that is having enough money to pay your debts.
2. Liquidity: In banking perspective, this simply means being able to meet every financial commitment (BROWN C. 1940)
3. Techniques: By this I mean the various way of finding whether a company can be able to meet its current liabilities with current asset or whether a company could be able to pay its debt.
4. Total capital to total profit after tax and dividend to profit after tax are both techniques used in measuring solvency.

REFERENCES
1. David E.L. (1981) Instant Business Dictionary
New Jersy carrier Publishing
Inc: P 278.2. Nwankwo G.O (1991) Management – Principles
and Practice 1st edition,
Lagos: Mathouse Press
Limited, P 723. Courtney B.C (1940) Liquidity and instability New
York, columbia University
Press P. 1

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ANALYSIS OF THE TECHNIQUES OF DETERMINING SOLVENCY IN THE NIGERIAN MANUFACTURING

THE ADOPTION LEVEL OF MODERN MANAGEMENT ACCOUNTING TECHNIQUES BY SMALL AND MEDIUM SCALE ENTERPRISES (SMES)

THE ADOPTION LEVEL OF MODERN MANAGEMENT ACCOUNTING TECHNIQUES BY SMALL AND MEDIUM SCALE ENTERPRISES (SMES)

CHAPTER ONE

INTRODUCTION

1.1   Background to the study

The small and medium scale enterprises sector has been recognized worldwide for its role in economic advancement through various ways like; wealth generation, employment creation, and poverty reduction. Small and medium scale enterprises are a fundamental part of the economic fabric in most developing countries, and they play a very important role in furthering growth, innovation and prosperity. Small and medium scale enterprises are defined as non- subsidiary, independent firms which employ less than a given number of employees, this number varies across national systems, other parameters other than the number of employees are used in categorizing businesses as small and medium scale enterprises. Small and Medium Scale Enterprises are mostly found in the service sector of various economies which in most countries account for two-thirds of employment levels.The primary objective of management accounting is to help managers in carrying out the tasks of: planning, organizing, directing, controlling, and decision making. Also, the major goal of every organization is to achieve satisfactory financial result and for a firm to be financially buoyant the management of that organization must be efficient and effective and this will depend on the management accounting techniques being used. According to Rehman, (2011) efficiency means maintaining a satisfactory relationship between a firms resource inputs and its outputs (the number of labor hours required to produce a product); effectiveness on the other hand refers to how well a firm attains its goal (for example, actual sale value against planned sale value).Nurturing of the small to medium size enterprises (SMEs) is being hailed for their pivotal role in promoting grassroots economic growth and equitable sustainable development, this nurturing has resulted in increased entrepreneur activities in the small and medium scale enterprises sector in developing countries. Small and medium scale enterprises play a key role in transition and developing countries. These firms, constitute a major source of employment and generate significant domestic and export earnings, thus small and medium scale enterprises development emerges as a key instrument in poverty reduction efforts and their advancement is key to sustained economic growth, for they are an integral part of a country’s economic fabric and their success affects the well being of the society as engines of job creation, economic growth and innovation. In Kwara state, the small and medium scale enterprises play an important role in employment and wealth creation, income distribution, accumulation of technological capabilities and spreading the available resources among a large number of efficient and dynamic small and medium size enterprises.The small and medium scale enterprises sector acts as the incubating center for emerging entrepreneurial pursuits and thus complementing the process of adjustment in large enterprises by bringing backward and forward linkages for products as well as services previously not available in the market. If well utilized, the modern management accounting techniques can provide the firm’s management with the aid to be more efficient in its operations as well as being more effective in its end results.Small and medium scale enterprises (SMEs) are the life wire of every developing economy. Their role in the economy cannot be over looked as they contribute immensely to the growth of the nation’s economy and equally generates employment opportunities. The need for the adoption of modern management accounting techniques in these forms of enterprises therefore becomes paramount as this will enable them embrace and appreciate the benefits of management accounting and conduct their businesses to meet internationally accepted accounting standard. As today‟s business environment becomes increasingly competitive, business organisations are becoming more aggressive and dynamic in identifying competitive strategies that will ensure profitable existence. Competition may be attributed to business innovations, advancement in technology and the changing demand of customers. Competition amongst business organisations may compel the management to develop business techniques and strategies that would guide an organisation towards the maximisation of profits. This may be achieved through increased sales and reduced cost of production. The optimisation of profits and minimisation of costs may enable an organisation to create a competitive advantage in its industry. Certain management accounting practices provide strategies that can influence a large number of customers to have a lasting preference for a company’s products. Thompson, Strickland and Gamble (2009) are of the view that the adoption of management accounting techniques may provide an organisation with a sustainable competitive advantage over its rivals. Management accounting practices have moved from reporting historical information, especially on variance analysis, to taking part in the strategic planning process of an organisation (Kiesler and Sproull, 1982:548). These authors contend that management accounting skills are actively applied in the business environment where both market intelligence is sought and evaluated, and strategic decisions are made and competitive strategies put in place. These are factors which Ittner and Larcker (1997:243) argue that they enable an organisation to gain an advantage in the ever demanding competitive business environment where innovative management accounting practices need to be employed.

1.2   Statement of the problem

Traditionally, management accounting has been dominated by quantity financial information. Modern management accounting techniques such as Activity based costing, Target costing, and Lifecycle costing are mainly developed as a reaction to changes in information needs driven by a growing competitive environment. Activity based costing systems measure more accurately the cost of activities, products, services and customers. Target costing is a method of strategic management of cost and profit. It involves setting a target or objective for the maximum cost of a product or service and then working out how to achieve this target. Life cycle costing is a technique that attempts to identify the total cost associated with the ownership of an asset so that decisions can be made about asset acquisition.Subject to changes in the economic system around the globe, there is an indication that management accounting may have lost some relevance to management of other information. Lack of managerial accounting skills and techniques for decision making are obstacles to SMEs obtaining credit. Adoption of modern management accounting techniques such as Activity based costing, Target costing, and Life cycle costing would bring about the following benefits: Accurate measurement of cost of activities, Strategic management of cost and profit, and improved evaluation of options.

1.3 Objectives of the study

The main objective of this study assessed the adoption level of modern management accounting techniques by small and medium scale enterprises (SMEs) in Kwara state, Nigeria.

This was pursued through other specific objectives that:

1. assessed the awareness levels of Activity Based Costing technique among small and medium scale enterprises in Kwara state

2. determined the impact of Target Costing technique on the performance of small and medium scale enterprises

3. determined the benefit of adopting life cycle costing technique by small and medium scale enterprises

1.4 Research Questions

The following questions were asked with a view to providing answers to the questions asked during this research work:

1. What is the awareness level of Activity Based Costing technique by small and medium scale enterprises?

2. What is the impact of Target costing technique on the performance of small and medium scale enterprises?

3. How does the adoption of life cycle costing technique benefit small and medium scale enterprises?

1.5 Research Hypothesis

The following hypotheses in the null form were formulated to substantiate the study:

HO1: There is no significant level of awareness of Activity Based costing technique by small and medium scale enterprises.

HO2: Adoption of Target Costing technique by small and medium scale enterprises do not have an impact on their performance.

HO3: Adoption of life cycle costing technique by small and medium scale enterprises do not have an impact on their performance.

1.6 Justification for the study

Overtime, it has been seen that the level of adoption of modern management accounting techniques by small and medium scale enterprises is low and this has caused some problems for the growth and survival of small and medium scale enterprises. Fowzia, (2011) wrote that since mid-1980’s there has been criticisms about the current state of management accounting techniques which were widely publicized in professional and academic literature. In the words of Kadel and Luther, (2006) traditional management accounting is ‘well and alive’ but there are indications of likely increased use of: information concerning the cost of quality; non-financial measures relating to employees and analyses of competitors’ strengths and weaknesses. There are evidence of a gap between current textbooks and actual practices and there are indications that management accounting techniques may have lost its relevance, hence there is a need to adopt management accounting techniques in small and medium scale enterprises in Kwara state. Furthermore, the study will try to breach the gap if any, which may exist between management accounting in theory and practice and also how government can help improve management accounting practice in Nigeria.Adoption of modern management accounting techniques by small and medium scale enterprises is a fundamental issue that needs to be addressed in order to ensure small and medium scale enterprises long term success. This study will be of immense benefit to students, business owners and other stakeholders who are interested in the success of various small and medium scale enterprises. This study will analyze and shed more light on modern management accounting techniques, how it can be adopted and benefits derived from the adoption.

1.7 Scope of the study

This study was conducted by sampling the opinion of respondents from some selected small and medium scale enterprises in Ilorin, Kwara state. The small and medium scale enterprises selected was based on random sampling. The period covered was from October 2014 to December 2014. For the purpose of this study, the modern accounting techniques that were examined are: Activity based costing, Target costing, and Life cycle costing.

1.8 Plan of the study

The report of this study was organized into five (5) different chapters. Chapter one  dealt with the introduction of the study; Chapter two discussed the Review of relevant literature to the study; Chapter three focused on the research methodology to be adopted; Chapter four of the study is dedicated to the Presentation and analysis of data; and finally, Chapter five presents the summary, conclusion, and recommendations.

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THE ADOPTION LEVEL OF MODERN MANAGEMENT ACCOUNTING TECHNIQUES BY SMALL AND MEDIUM SCALE ENTERPRISES (SMES)

 

APPLICATION OF BUDGETS AND BUDGETARY CONTROL MEASURES IN A NON-PROFIT ORGANIZATION: A CASE STUDY OF CATHOLIC CHURCH

APPLICATION OF BUDGETS AND BUDGETARY CONTROL MEASURES IN A NON-PROFIT ORGANIZATION

2.1  CONCEPTUAL FRAMEWORK 
A budget is defined by the Institute of Cost and management Accountants as “a planned outcome to be generated and for the expenditure to ensure during that period and the capital to be employed to attain a given objective.
Ezeugwu (1999), defined a budget as a quantitative plan of action of how to carry out an operation/process by a business/establishment.
Osisioma (1989), defined a budget as a different phases of business operation aimed at helping management towards the attainment of organizational objectives.
Horngren and Foster (1987), see a budget as a quantitative expression of a plan of action and an aid to co­ordination and implementation. Matz and Ivory described a budget simply as a plan expressed in a financial and other quantitative terms and stressed that the terms “Budgeting, Profit and Planning” are synonymous. Pogues opined that a budget is a plan or target I the form of a quantitative statement for a specified time-span. He stated that a budget for the future time-span attempts to look over the hill into the future t where the business hopes to be in a future period of time and how it intends to get there. The budget, therefore, attempt to look at tomorrow’s business world (in a short time frame) and management is forced to think a tomorrow’s opportunities.
Budget was also described as comprehensive and co-ordinated plan, expressed in financial terms, for the operations and resources of an enterprise for some specifies period in future. A budget involves every level of activity integrating revenue plans, expense plans, asset requirements and financing needs.
To Pandey (1985) a budget is a plan of the organization’s manipulation of relevant variables (controllable and uncontrollable) and reduces the impact of uncertainty. It activates the management into influencing the environment in the interest of the organization.
According to Osisioma (1989) a budget has a number of characteristics, namely.

  1. It is a plan of action
  2. The plan is stated in quantitative or financial terms or both.
  3. It is prepared prior to a defined period of time for the control of performance within the period.
  4. It states performance expectations over a defined period of time, in different phases of business operation – sales, production, marketing and so on.
  5. It integrates the resources and costs of an organization, to plan for anticipated level of performance.
  6. It is aimed at the attainment of organizational objectives

From the foregoing, it could be seen that a budget is a quantitative state of plans in a future period. The process of preparing budget is known as budgeting.Planning, according to Osisioma (1989) is the management function concerned with the identification of objectives and target and, the selection of policies and methods necessary to achieve those objectives. Planning is a process of deciding what action should be taken in the future Furthermore, it was defined by Homgren and Foster as the delineating of goals, predictions of potentials, results under various ways of attain described results. The purpose of business planning is to minimize uncertainty about the future and through co-ordination of plans to increase the chances of making a satisfactory profit. Planning is, therefore, required at all levels of an organisation, departmental/sectional plan must synchronize in order to achieve the broad objectives of the organisation.
Controlling as a management function which according to Matz and Usry is the measurement and correction of performance of activities of subordinates in order to make sure that enterprise objectives and the plans devise to attain them are being accomplished. Meigs concurred with this view or the managerial controls includes, planning, action, reporting and evaluation. They explain that planning is the setting of organizational objective standards of performance and choosing among alternative course of action while action is to see that the plans are put into effect and that policies are followed reporting in the ensuring of the results of actions taken and evaluation represents the accessing of the quality of performance and taking necessary steps to correct deviation from plans.
Chartered Institute of Cost and Management Accountants (1975) defined budgetary control as the establishment of departmental budgets relating the responsibilities of the executives to the requirements of policy and continuously comparing actual with budgeted results either to secure by individual action the objective of that policy or to provide a basis for it revision.
According to Anthony (1970), control is a process by which management assures itself that so far is possible, actions taken by the members of the organization conform the management’s plans and policies. Control is seen by Osisioma as the regulation of activities of an organization so that performances are in accordance with the functions of management. According to Shim and Siegel “at the beginning of the period, the budget is a plan or standard, at the end of the period. It serves as a control device to help management measures whether its performance may be improved. However, it has been said that a good control, planning, according to Lucey (1996), is concerned with internal resource allocation to achieve certain objectives whereas control is concerned with the task of co-ordinating and using the allocated resources (labour, machine, space and finance) to achieve predetermine level of efficiency. He is of the opinion that there are very real practical problems in developing separated budgets but it remains that a single budget used for planning and control, which appear to be the norm, is attempting to achieve two different objectives which may conflict
The above notwithstanding, budgeting is very essential in all organizations in order to enhance the efficiency and effectiveness of business operations. Budgeting is means whereas planning and control are the yardstick for achieving corporate goals.

2.1.1   TYPES OF BUDGETS FOR PLANNING AND CONTROL 
Generally, there must be avenues for achieving an end and these avenues relates to the forms, processes and methods involved, Consequently, the planning and control activities of businesses and organizations are achieved through various forms of budgets through which planning and control are effected.
The two used types of budgets are fixed and flexible However, some organizations use other types of budgets called continuous budgeting.

2.1.2  FIXED BUDGET 
Fixed budgets, according to Pogue (l987), is a budget based on one level of activity to which the various costs are related thus material, labour and overhead cost are related to one level of activity. He is of the view that the control costs are difficult with fixed budget because its actual activity is different from budgeted activity, then the budgeted cost or yardstick costs by which actual cost are measured and variances calculated are meaningless.
Lucey (1996) defined a fixed budget as one which is designed to remain unchanged irrespective of the volume of output. The fixed budget is a single budget with no provision for adjustment. Because many businesses cannot predict accurately, their future activities as a result of fluctuations in their mode of operation, the fixed budget is of little importance to management.
If there is a significant difference between actual and planned level of activity such situation demands a performance evaluation. Such situation demands that a performance report be prepared after the act to show what revenue and costs should have been at the level of activity.

2.1.3 Â Â  FLEXIBLE BUDGET: 
Flexible budgets on the other hand estimates costs at several level of activity. The purpose of flexible budget as described by Anyigbo (1999) is to present  the  quantification and monetary values of cost and  benefits that are  attributable to varying levels or volume of  business activities. It is also entails the direction of the  overhead costs so as to  establish the variable and fixed  components  and the   determination of the extent to which these cost will  vary remain  constant within the normal range of  operational activities.  Flexible budgets recognize the different behaviourial pattern of cost in relation to the various output levels.
It is note worthy to state that a company with a steady production run but seasonal, uncertain sales businesses may be by the choices of the managing director. A comprehensive budgeting system consists of the preparation of a master budget with a complete package of the component budgets consisting of three main types: Operating budgets, financial budgets and Capital budgets.

2.1. OPERATING BUDGET:

Operating budgets relate to the planning of activities operations of the enterprise, such as production, sales and purchases, they are concerned primarily with specified physical activities, for an instance, the sales budget s distributed to the sales division while the production budget is sent to the production department etc.

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APPLICATION OF BUDGETS AND BUDGETARY CONTROL MEASURES IN A NON-PROFIT ORGANIZATION: A CASE STUDY OF CATHOLIC CHURCH, DELTA

THE IMPORTANCE OF FINANCIAL ACCOUNTING LITERACY ON THE GROWTH, DEVELOPMENT, SURVIVAL, PRODUCTIVITY AND PERFORMANCE

THE IMPORTANCE OF FINANCIAL ACCOUNTING LITERACY ON THE GROWTH, DEVELOPMENT, SURVIVAL, PRODUCTIVITY AND PERFORMANCE OF SMES IN KWARA STATE

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

Financial literacy remains an interesting issue in both developed and developing economies, and has elicited much interest in the recent past with the rapid change in the finance landscape. Atkinson and Messy (2005) defined financial literacy as the combination of consumers’/investors’ understanding of financial products and concepts and their ability and confidence to appreciate financial risks and opportunities, to make informed choices, to know where to go for help, and to take other effective actions to improve their financial well-being.Financial literacy helps in empowering and educating investors so that they are knowledgeable about finance in a way that is relevant to their business and enables them to use this knowledge to evaluate products and make informed decisions. It is widely expected that greater financial knowledge would help overcome recent difficulties in advanced credit markets. Financial literacy prepares investors for tough financial times, through strategies that mitigate risk such as accumulating savings, diversifying assets, and purchasing insurance.Financial literacy facilitates the decision making processes such as payment of bills on time, proper debt management which improves the credit worthiness of potential borrowers to support livelihoods, economic growth, sound financial systems, and poverty reduction. It also provides greater control of one’s financial future, more effective use of financial products and services, and reduced vulnerability to overzealous retailers or fraudulent schemes. Facing an educated lot, financial regulators are forced to improve the efficiency and quality of financial services. This is because financially literate investors create competitive pressures on financial institutions to offer more appropriately priced and transparent services, by comparing options, asking the right questions, and negotiating more effectively. Investors on their part are able to evaluate and compare financial products, such as bank accounts, saving products, credit and loan options, payment instruments, investments and insurance coverage, so as to make optimal decisions (Miller, Godfrey, Levesque and Stark, 2009).Lack of business and management skills can magnify financial barriers for SMEs. Low levels of financial literacy can prevent SMEs from adequately assessing and understanding different financing options, and from navigating complex loan application procedures. Similarly, the fact that SMEs’ accounting and financial statements are often not transparent makes them risky borrowers and thus less attractive to lenders. Capacity building of SMEs in terms of preparing financial statements and business plans, as well as improving their financial literacy and management training, is shown to have positive impact on SME development. Furthermore, strengthening the horizontal linkages with other SMEs and vertical linkages with larger firms would improve SMEs’ market access. (Hogarth and  Hilgert, 2002).

1.2 Statement of the Problem

Quite a number of studies have been conducted in developed countries and have shown significant relationship between financial accounting literacy and the growth and survival of small and medium scale enterprise. However, there are a lot of diverse perceptions about financial accounting literacy and these are caused by several factors. A major concern is the ignorance of owners of SMEs on the importance of book keeping and the proper understanding of the entity concept, thereby causing their business to suffer, due to lack of information (financial in nature) to aid in forecast against future eventuality and expansion. This has necessitated this study to find out the impact of financial accounting literacy on the growth and survival of small and medium scale enterprise in Kwara state, Nigeria. This study will help small and medium scale owners and folks interested in going into similar venture to understand the impact of financial accounting literacy on the growth and survival of SMEs.

1.3 Research Questions

The following research questions will be pursued in the course of this work:

i. What is the impact of financial accounting literacy on the growth of small and medium scale enterprises?

ii. What is the impact of financial accounting literacy on the survival of small and medium scale enterprises?

1.4 Justification of the Study

Lusardi and Mitchell (2006) found that financial illiteracy is widespread and is particularly acute among specific groups of the population, such as women, the elderly, and those with low education. Agarwal, Driscoll, Gabaix and Laibson (2007) further show that financial mistakes are prevalent among the young and the elderly, who display the lowest level of financial knowledge and cognitive ability. Again a study by the OECD (2005) and the work by Lusardi and Mitchell (2007) which review the evidence on financial literacy across countries show that financial illiteracy is a common feature in European countries, Australia, and Japan. These findings were confirmed in the work of Christelis, Jappelli and Padula (2006), which used micro data from European countries to find that most respondents in Europe scored low on financial numeracy and literacy scales This study will be very useful in that the previous studies carried out on financial literacy used Europe and other developed countries of the world as its case study, but this study will focus on Nigeria and most especially Kwara state to be specific as it will serve as a guide for SME owners in this part of the world to know the impact of financial accounting literacy on the growth and survival of their enterprise. This study will be very useful in that a lot of businesses in Kwara state today hit the rocks due to illiteracy on financial management matters.

1.5          Objectives of the Study

The main objective of this study will be to determine the importance of financial accounting literacy on the growth, development, survival, productivity and performance of SMEs in Kwara state.

The specific objectives are to:

i. determine the impact of financial accounting literacy on the growth of small and medium scale enterprises.

ii. determine the impact of financial accounting literacy on the survival of small and medium scale enterprises.

1.6 Hypotheses of the Study

The hypotheses to be tested in this study are;

H01: There is no significant relationship between financial accounting literacy and the growth of SMEs in Kwara state.

H02: There is no significant relationship between financial accounting literacy and the survival of   SMEs in Kwara state.

1.7 Scope of the Study

This study will focus on all SMEs in Kwara state. However, only three local government areas (Ilorin South, Ilorin North and Ilorin East local government areas) will be selected for this study using simple random sampling technique.

1.8 Plan of the Study

This study will contain five Chapters. CHAPTER one will serve as the introduction which will include background to the study, the statement of the problem, objectives of the study and research questions. CHAPTER two will deal with the literature review which will contain the conceptual framework, theoretical background and empirical evidence. The third CHAPTER will focus on the report of research methodology, research design, method of data analysis, method of data collection, sampling technique and population of the study. Presentation, analysis and interpretation of data will be covered in CHAPTER four, while CHAPTER five which will be the last CHAPTER will contain summary, conclusion and recommendation.

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THE IMPORTANCE OF FINANCIAL ACCOUNTING LITERACY ON THE GROWTH, DEVELOPMENT, SURVIVAL, PRODUCTIVITY AND PERFORMANCE OF SMES IN KWARA STATE

ASSESSING BOOK-KEEPING PRACTICES OF SMALL AND MEDIUM SCALE ENTERPRISES IN UYO LOCAL GOVERNMENT AREA

ASSESSING BOOK-KEEPING PRACTICES OF SMALL AND MEDIUM SCALE ENTERPRISES IN UYO LOCAL GOVERNMENT AREA

ABSTRACT

Nigeria’s economy is characterizedverybylarge numberarelativ of micro enterprises, and in between lie small and medium enterprises (SMEs). The unique feature of most SMEs is that, they can be easily established since their requirement in terms of capital, technology; management and even utilities are not as demanding as it is the case of large enterprises. Consequently, small enterprise sector is one of the leading employers (next only to peasant agriculture) in Nigeria and has been recognized as significant sector in employment creation, income generation, poverty alleviation and a base for industrial development. It is estimated that there are over 30 million enterprises in the sector employing between 15 to 16 million people. Despite the enormous potential of the private sector, poor record keeping is identified as a constraint hampering its growth in Nigeria. Businesses are unable to keep track of daily activities and banks are unwilling to lend to SMEs all due to lack of financial information. Hence, this study seeks to investigate whether SMEs practice bookkeeping or not, and the contributions of bookkeeping to the growth of SMEs in the Uyo in Akwa Ibom State of Nigeria. The study considered a total population of 450 comprising SMEs, 15 Banks as well as SMEDAN office in the Local Government Area. Out of this figure, a simple random sampling technique was used to select a sample size of 136 for the study. From the findings of the study, it was revealed that, 80.8% SMEs were practicing bookkeeping and the manual system was predominantly used. The recommendations however were that, SMEDAN must be strengthen and well resourced by government to offer support services in the area of organizing effective training programmes for SMEs operators. There must also be an intensive publicity in the local dialect through the mass media to sensitize SME operators on the need to maintain proper books of records.

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ASSESSING BOOK-KEEPING PRACTICES OF SMALL AND MEDIUM SCALE ENTERPRISES IN UYO LOCAL GOVERNMENT AREA

THE AUDITOR AND THE PUBLIC: EXPECTATION GAP

THE AUDITOR AND THE PUBLIC: EXPECTATION GAP

Abstract

This study examines the auditor and the public: Expectation gap. It was carried out to determine if there exists any significant expectation gap in the Nigeria auditing environment. The  expectation gap developed from the differing expectations of the function of independent audit between the auditors and the public. The researcher used primary source of data towards obtaining authentic information on the topic. It was discovered that there is a wide expectation gap in Nigeria. The propositions made in the study were evaluated using selected items or statement from the questionnaire. The study concludes that. The audit function is crucial in providing users the assurance about the information provided by management in the financial statements and an attempt to put an end to this wide gap in perception of the users to the auditor’s functions are being carried out in various part of Nigeria. The study recommends among others that the existing duties and responsibilities of auditors should be a clearly defined and widened to include fraud detection.

TABLE OF CONTENTS

Title Page

Certification

Dedication

Acknowledgements

Abstract

Table of Contents

Chapter One: Introduction                                        

1.1    Background to the Study

1.2    Statement of Problem

1.3    Research Questions

1.4    Objective of the Study

1.5    Statement of Hypothesis (es)

1.6    Significance of the Study

1.7    Scope of the Study

1.8    Limitations of the Study

1.9    Definition of Terms

Chapter Two: Review of Related Literature                

2.1    Introduction

2.2   Auditor Competence and the Components of the

Audit Expectation Gap

2.3   Audit Reporting

2.4   Errors/Fraud Prevention and the Auditor

2.5   Liability of an Auditor

2.6   Narrowing the Gap

Chapter Three: Research Method and Design             

3.1    Introduction

3.2    Research Design

3.3    Description of Population of the Study

3.4    Sample Size

3.5    Sampling Techniques                                                                        3.6    Sources of Data Collection

3.7    Method of Data Presentation

3.8    Method of Data Analysis

Chapter Four: Data Presentation, Analysis and Hypothesis Testing                            

4.1    Introduction

4.2    Presentation of Data

4.3    Data Analysis

4.4    Hypothesis Testing

Chapter Five: Summary of Findings, Conclusion and Recommendations                             

5.1    Introduction

5.2    Summary of Findings

5.3    Conclusion

5.4    Recommendations

References

CHAPTER ONE

INTRODUCTION

1.1   Background to the Study

Audit expectation gap first came up in 1974 when Liggio discuss the presence of expectation gap due to the fact that since the late 1960, the audit profession had been under attack regarding the quality of its professional performance. He suggested two reasons for this; “a greater willingness to hold others especially professionals–accountable for perceived misconduct and the expectation gap as factor of the levels of expected performance as envisioned by both the independent and by the user of financial statements. The difference between these levels of expected performance is expectation gap.Then during the 1970s in the united States when the American institute of certified public Accountant (AICPA) set up the commission on Auditor responsibilities (Cohen Commission) to conduct whether a gap exist between what the public expect or need and what the auditor can and should reasonably do, the definition for expectation gap was extended a little. It submitted that the gap which gives rise to criticisms of auditors is that, between what societies expects from auditors and what it perceives it receives from them.Porter (1993) however argued that the definitions used by Liggio (1974) and the Cohen Commission report were too narrow and they failed to consider the possibility of substandard performance of auditors. She Stats:The definitions are too narrow in that they do not recognize that auditors may not accomplish “expected performance. It is therefore proposed that the gap, more appropriately entitled “that audit expectation that gap between public’s expectations of auditors and auditors’ perceived performance (PSO)”.There are also definitions from other researchers: for example: Innes, Alvin and Liggio (2003) define the audit expectations gap as “the difference between what the public expects from auditing profession and what the auditing profession can actually provide”. Humphrey (1999) defines it as “a representation of the feeling that auditors are performing in a manner at variance with the beliefs and desires of these for whose benefit the audit is carried out”. Humphrey (1999) extends his definition to include other issuers such as the adequacy of editing standards and the quality of audit delivery.Different underlying expectations have been offered for the continuing presence of the explanations problem. Trickier (2002) views the expectation gap as the result of a natural time lag in the auditing profession identifying and responding to continually evolving and expanding public expectation. Other authors argued that it was the consequence of the contradictions in or self regulated that it was the consequence of the contradictions in or self regulated audit system operating with minimal government intervention as evidenced in Hopwood (2000).A lot has been written about the possibility of an audit expectation gap. Concerns over ambiguities in the roles and responsibilities of auditors have led to the establishment of several government and professional investigation which form an important part of the expectation gap literature. These include the Cohen commission (1987), in the United States, the cross Committer (1977), Greenside Committee (1978), Metcalf Committee (1976), and Tread way Commission (1987); in the United State; the Cross Committee and Greenside Committee (1977) and Mac Donald Commission (1988) in Canada.A common finding in all these investigation is that there is a gap between audit performance and expectation exists. Due to the growing expectation gap between the auditors and the public, the accounting profession has attempted to narrow, if not eliminate the gap and counteract the negative consequences. Efforts to this end have included the changes in accounting/auditing standard, revising the audit report and conducting official investigation as evidenced in the studies of Pound and Fensome (2003), Chenok (2004), ICAA (2004) and Guy (2008).According to Fadzly and Ahmed (2004), the audit expectation gap is a critical issue in auditing because of the damage it has brought and continues to bring to the essence of auditing profession.

1.2   Statement of Problem

Research to date on the audit expectation gap indicates that it exists for several reasons. Porter and Gowthropew (2004), for example, have argued that the gap exist due to deficiency in auditor’s performance and auditing standards. Pierce and Kilcommins (2006) argue that the gap exists due to misinterpretations and misunderstanding of the meaning of auditing by the users. These studies suggest that users do not understand the audit functions and role of auditors. Consequently, they have unrealistic expectations of auditors.Surprisingly, unlike the situation in the private sector, the research into the audit expectations gap in the public sector has received little attention by researchers. To date only Chowdhory and Innes (1998), Pendlebory and Shrieim (2001), have undertaken research investigating the audit expectations gap in the public sector.Until recently studies of audit expectation in the context of performance audit have only been conducted in developed countries. However, due to the recent collapse of large companies in Nigeria, the existence of expectation gap has been brought to light. Hence, what are the causes of expectation gap in Nigeria?

1.3   Research Questions

1.     Is there any significant expectation gap in the Nigeria auditing environment?

2.     Could these gaps be identified?

3.     Could these gap areas been eliminated?

4.     Could these gap be reduced if, cannot be completely eliminated?

5.     What are the perception of the auditors and users of audit reports towards the roles and responsibilities
of the auditor?

1.4   Objective of the Study

The broad objective of auditor and the public expectation gap in Nigeria. The specific objectives are;

1.     To find out whether there is expectation gap in Nigeria.

2.     To ascertain whether the areas of the gap could be identified.

3.     To check if the identified areas will make it possible to eliminate the gaps.

4.     To check if the expectation gap can be reduced in cases which can not be completely eliminated.

5.     To find out the perception of auditor and users of audit reports and the responsibilities of the auditor.

1.5   Statement of Hypotheses

The following null hypotheses were tested in order to provide answers to the aforementioned questions in the aims and objectives.

Hypothesis One

HO:   Expectation gap does not exist in Nigeria

HI:    Expectation gap exist in Nigeria

Hypothesis Two

HO:   There is no significant difference in the perception of respondents groups on existing duties and responsibilities of auditors.

HI:    There is significant difference in the perception of respondents groups on existing duties and responsibilities of auditors.

Hypothesis Three

HO:   Educating users will not reduce their perception towards auditors.

HI:    Educating users will reduce their perception towards auditors.

1.6   Significance of the Study

From the researcher’s point of view, this study potentially contributes to the auditing literature in various ways.

i.      It extends the existing knowledge on the audit expectation gap by providing evidence of the nature of audit expectation and their composition in Nigeria.

ii.     By examining the nature of performance audit and audit process, using Nigeria as a case study, this study contributes to the literature of performance audit in developing countries. This study demonstrates that the audit institutions of such countries cannot afford to overlook the importance of compatibility with needs of users to the conduct of auditing.

iii.    Finally, the finding of this study could provide a useful framework for studding the audit expectation gap in the public sector and be useful to academics and other researchers.

1.7   Scope of the Study

This study examines the auditor and the public expectation gap. Geographically, the study was limited to Benin City and the sample size was limited to 75 potential participants. The study is motivated by the current state of the auditing profession in Nigeria as a result of recent financial scandals Therefore the perception of selected stakeholder were sought tin providing answer to the questions raised in the study. The focus of the research in term of study group includes external auditors, (auditor’s public account and management) and audit beneficiaries (stakeholders and investor).

1.8   Limitations of the Study

In the course of this research, some problems were encountered which include the following:

  1. Biasness on the respondents.
  2. Lack of available information to be obtained from the sample firms.
  3. Some selected firms were used as case study hence if the result is generalized, it may not reflect the true position of other firms due to environmental difference.

1.9   Definition of Terms

Auditing: This is defined as a systematic and independent examination of data, statement, record, operations and performance.

Expectation gap: Is the difference between the effectiveness of audit engagement what users believe and what auditors believes.

Audit competence: It means to be able to apply knowledge and skill to achieve intend result in the financial records.

Audit report: Is a written opinion of an auditor regarding whether an entity’s financial statement present fairly its financial position.

Fraud: This is deliberate deception to secure unfair or unlawful gain.

Fraud prevention: Fraud prevention to be effective in an organization requires a number of contributing elements including an ethical organizational culture, a storing awareness of fraud among employee, suppliers and client on effective internal control framework.

Accountability: This is the obligation of an individual or organization to account for its activities, accept responsibility for them and to disclose the result in transparent manner.

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THE AUDITOR AND THE PUBLIC: EXPECTATION GAP

EFFECTIVE ACCOUNTING INFORMATION SYSTEM: AN IMPERATIVE FOR PROFIT PERFORMANCE

EFFECTIVE ACCOUNTING INFORMATION SYSTEM: AN IMPERATIVE FOR PROFIT PERFORMANCE

CHAPTER ONE

INTRODUCTION

1.1     BACKGROUND OF THE STUDY

Accounting Information Systems (AISs) are a tool which, when incorporated into the field of Information and Technology systems, are designed to help in the management and control of topics related to organization’ economic-financial area. But the stunning advance in technology has opened up the possibility of generating and using accounting information from a strategic viewpoint (El Louadi, 1998). Accounting Information System (AIS) is vital to all organizations (Borthick and Clark, 1990; Curtis, 1995; Rahman et al., 1988; Wilkinson, 1993; Wilkinson et al., 2000) and perhaps, each organization either profit or non profit-oriented need to maintain the AISs (Wilkinson, 2000: 3-4). On the other hand, an AIS is the whole of the related components that are put together to collect information, raw data or ordinary data and transform them into financial data for the purpose of reporting them to decision makers (LI, M., YE, L.R. 1999).To better understand the term ‘Accounting Information System’, the three words constitute AIS would be elaborated separately. Firstly, literature documented that accounting could be identified into three components, namely information system, “language of business” and source of financial information (Wilkinson, 1993: 6-7). Secondly, information is a valuable data processing that provides a basis for making decisions, taking action and fulfilling legal obligation. Finally, system is an integrated entity, where the framework is focused on a set of objectives (Watts, 1999).Accounting literature argues that strategic success is considered an outcome of Accounting Information Systems (AIS) design (Langfield-Smith, 1997). Several, studies have analyzed the impact of AIS in strategic management, examining the attributes of AIS under different strategic priorities (Ittner and Larcker, 1997; Bouwens and Abernethy, 2000). It has also been analyzing the effect on performance of the interaction between certain types of strategies and different design of AIS (e.g. different techniques and information). The appropriate design of AIS supports business strategies in ways that increasing the organizational performance (Chenhall, 2003). Increasing AIS investment will be the leverage for achieving a stronger, more flexible corporate culture to face persistent changes in the environment. Innovation is the incentive with which a virtuous circle will be put in place, leading to better firm performance and a reduction in the financial and organizational obstacles, while making it possible to access capital markets. AIS are systems used to record the financial transactions of a business or organization. AIS combines the methodologies, controls and accounting techniques with the technology of the IT industry to track transactions, provide internal reporting data, external reporting data, financial statements, and trend analysis capabilities to affect on organizational performance (GUL, F.A. 1991).In managing an organization and implementing an internal control system the impact of accounting information system (AIS) is crucial. An important question in the field of accounting and management decision-making concerns the fit of AIS with organizational requirements for information communication and control (Nicolaou, 2000). Benefits of accounting information system can be evaluated by its impacts on improvement of decision-making process, quality of accounting information, performance evaluation, internal controls and facilitating company’s transactions (Bolon, 1998).

1.2     STATEMENT OF THE PROBLEM

Currently, most organizations continue to increase spending on information system and their budgets continue to rise. Moreover, economic conditions and competition create pressures about costs of information. Generally, information system is developed using information technology to aid an individual in performing their job. Therefore, most organizations focus on developing information system in order to support decision system, communication, knowledge management, as well as many others. The key part of information system needed for decision making in organization is accounting information system.Today, information technology and an increasingly transparent financial sector have become key driving forces in business operations, strategies, structures, ownership, and performance. These forces cut across many industries to force changes that, in turn, have had significant economic and social impacts on the organizational effectiveness (Doms, Jarmin and Klimek, 2004). Structurally, the emerging information technology industry is uncharacteristic of typical a traditional process which has gradually grown out of the need to increase efficiency and cut on operations costs in the industry. Therefore, this study seeks to examine the effectiveness of accounting information system in the performance of profit making organization.

  • OBJECTIVES OF THE STUDY

The objectives of the study are to find out the following:

  1. To examine the impact of accounting information systems on the effectiveness of performance in an organization.
  2. To determine whether accounting information system enhance the effective decision making in Anchor Insurance Company Limited, Uyo.
  3. To determine whether accounting information system increase profitability of an organization.
  4. To find out the problems confronting Anchor Insurance Company Limited, Uyo in maintaining effective accounting system.To make useful recommendations based on research findings.

1.4     RESEARCH QUESTIONS

The following research questions were formulated to guide this study:

  1. Does accounting information system increase profitability in Anchor Insurance Company Limited?
  2. What are the impacts of accounting information systems on the effectiveness of performance in an organization?
  3. Does accounting information system enhance effective decision making in Anchor Insurance Company Limited, Uyo?
  4. Are there any problems confronting Anchor Insurance Company Limited, Uyo in designing effective accounting system?

1.5     RESEARCH HYPOTHESES

The following research hypotheses were formulated to guide this research:

Hypothesis 1

H0:     There is no significant relationship between accounting information system and increase profitability in Anchor Insurance Company Plc.

H1:     There is a significant relationship between accounting information system and increase profitability in Anchor Insurance Company Plc.

Hypothesis 2

H0:     There is no significant relationship between the impacts of accounting information systems and the effectiveness of performance in an organization.

H1:     There is a significant relationship between the impacts of accounting information systems and the effectiveness of performance in an organization.

1.6     SIGNIFICANCE OF THE STUDY

The study is of key significance to Anchor Insurance Company Plc as well as other firms in the same sector in terms of determining the benefits accruing due to the integration of accounting information systems in their operations. This enabled insurance firms in gauging the model in terms of enhancing organizational effectiveness. The study is useful to other researchers interested in the problem under investigation as the study has laid a platform on which further studies related to the subject can be undertaken.The study would provide a theoretical basis about accounting information system successful adoption dimension to firms. It would provide practical guidance for accounting information systems implementation in other areas and it would also provide empirical and practical contributions for organization in effectively applying accounting information system in their operations.Accounting information systems provide information about the financial resources, obligations, and activities of an enterprise that is intended for use primarily by external decision makers – investors and creditors. This study provides useful information in making investment and credit decisions.

1.7     SCOPE OF THE STUDY

The study concerns about effective accounting information system an imperative for profit performance with a particular reference to Anchor Insurance Company Plc, Uyo.

1.8     LIMITATION OF THE STUDY

The limitation of this study was inability of management to divulge certain information which they consider sensitive and fear of publication which might be detrimental to their operation.Also, the outright inability of some respondents to complete and return the questionnaire to the researcher is one of the limitations of the study.Another limitation to the study was traffic congestion for the researcher to meet them in their offices and for possible return of the questionnaire.Finally, the researcher observed the non-cooperative attitude of some workers of the company to make information available for her.

1.9     DEFINITION OF TERMS AND ACRONYMS

  1. a) ACCOUNTING: This is defined as the process of identifying, measuring, and communicating economic information to permit informed judgements and decisions by users of the information (Frank Wood & A. Sangster, 2005).
  2. b) ACCOUNTING INFORMATION SYSTEM: Accounting Information System is defined as is a computer based system that increases the control and enhances the cooperation in the organization (Nicoloau, 2000).
  3. c) INSURANCE: It is social way of providing financial compensation for the effects of misfortune, the payments being made from the accumulated contribution of all parties participating in the scheme.
  4. d) PROFIT: This is a sum in which the business made after the deduction of all the expenses and it can be withdrawn from a business while maintaining the capital that existed at the beginning of the business

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EFFECTIVE ACCOUNTING INFORMATION SYSTEM: AN IMPERATIVE FOR PROFIT PERFORMANCE

 

PRACTICES OF ACCOUNTING FIRMS IN TAX AVOIDANCE THE NIGERIAN EXPERIENCE

PRACTICES OF ACCOUNTING FIRMS IN TAX AVOIDANCE THE NIGERIAN EXPERIENCE

Abstract
This research work examines the strategies and practice of accounting firms in tax avoidance (the Nigerian experience) and also why businessmen avoid tax payments, to what use is taxation to investors and business and how taxation weaken companies financially. The sample size for the study to select the respondents, (120) questionnaires were designed and administered while (100) were returned. The researcher used simple percentage (%) and chi-square (X2) analyze the data and test of hypothesis.
From the analysis of data, it was discovered that tax avoidance has significant impact on corporate profit, also corporate tax affect revenue generation of any government. In the light of these findings, it was concluded that tax with significant impact on revenue generation and avoidance have resulted to poor infrastructural development of many nations. Finally, the following recommendations were made amongst others; government should tighten the various possible loopholes that are capable to create avenues for tax avoidance, government should make it a point of duty to check the activities of the accounting firms in connection with tax avoidance.

CHAPTER ONE

INTRODUCTION
1.1  Background to the Study
Taxation is the aspect of fiscal policy of government that deals with the raising of revenue. Christonson & Murphy (2004, pp.37-38) assert that in economic terms, taxation transfers wealth from corporate organizations and business to the government of the nation. A fund generated from taxation has been used by states and their functional equivalent throughout history to carry out many functions. In buttressing the above opinion US General Accounting office (2003), notes that most modern government also use corporate taxes to fund welfare and public service, and these services can include education system, pensions for the aged, to fund foreign and military aid, public transportation and to influence macro-economic performance of economy.In societies with interests in business, the role of accounting firms in tax avoidance cannot be ruled out. Though in the past, accounting and auditing services formed the core business for accounting firms, but today, it is a complete different issue. Sikka & Hampton (2006), opine that the state guaranteed monopoly of external auditing has been the making of accounting firms unlike other consultancy business, it gives them comparatively easy access to company executives and provides an opening to impress potential clients with zeal about meeting deadlines, attention to details to the value of surveillance, judgement, control and related implications of cutting across costs and inefficiencies. In the real sense, accounting firms have applied their strategies and practices in taxation in different ways.
They have used their expertise skills in ensuring that their clients costs or expenses are reduced to the lowest minimum.In the course of carrying out their roles for their clients, or corporate organizations they are being accused of growing profit and reducing taxes to the  detriment of the state to provide social infrastructure for the populace.Commenting on the above view Sikka & Wilmot (1995, p.184) contend that accounting firms have long been identified as key players in the “rules avoidance” and have further enhanced their credentials by developing and marketing a variety of tax avoidance schemes to enable their audit clients and others report higher profits.In contemporary entrepreneur culture, tax avoidance is promoted as a natural inevitable and a desirable pursuit. Ernest & Young Partner (n.d) claimed that “tax is a cost of doing business.
So naturally good manager will try to manage this cost and the risk associated part of good corporate government”. (Sikka, 2004, p.189) US senate joint committee on taxation (2003) and OECD (1996) reported four types of tax avoidance schemes utilized by accounting firms, to include transfer pricing abuse, conduct situation (Treaty shopping), routing and potential government abuse of tax sparing. In the same vein, accounting firms sell tax avoidance schemes through presence network of law forms, investment advisory firms, securing opinion letters, non-disclosure agreement etc Sikka (2004, p.192) and (US joint committee on taxation, 2003).
Tax avoidance occurs when the taxpayer is exercising his legal right under the tax law, makes the best use of available reliefs, allowance exemptions etc to pay the least possible tax. And this is achieved through the services of tax experts who exploit various loopholes in the tax laws to reduce liability.Against the backdrop, a country’s corporate tax system and the strategies and practices of accounting firms in tax avoidance especially in a democratic setting like (Nigeria) is often a reflection of its communal values or the values of those in power.

1.2  Statement of Problem
This research work is aimed at ascertaining if tax has helped in revenue generation in Nigeria. It also looks on how tax avoidance has significant impact on corporate profit. The loopholes accounting firms used to avoid tax.

1.3  Research Questions
To enhance the progress and development of tighten the loopholes accounting firms uses to avoid tax, more effort is required towards achieving the review of tax law.This implies that taxation which was established primary to raise revenue to finance government expenditure can help to answer the following questions:
1.   Is it that the role of accounting firms in profit pursuit in corporate organization?
2.   Are there various strategies and practice of accounting firms used in tax avoidance?
3.   Is that there are various strategies and practices of accounting firms in selling tax avoidance?
4.   Are there anti-tax avoidance measure provision in Nigeria?

1.4  Objectives of the Study
The objectives of any research are the mirror image of the research questions. On this note, the objectives of the study are stated below:
1.   To find out the role of accounting firms in profit pursuit of corporate organization.
2.   To find out the various strategies and practices used by accounting firms in tax avoidance.
3.   To determine the various strategies and practices used by accounting firms in setting tax avoidance scheme.
4.   To evaluate the anti-tax avoidance provisions in Nigeria.

1.5  Significance of the Study
The importance of this study cannot be over-emphasized. The study will be of great importance study and relevance in the following ways:
1.   It will assist the government in re-structuring her tax schemes and tighten all the loopholes capable to create avenues for tax avoidance.
2.   It will assist accounting firms and other professional bodies associated with tax matters to improve on their strategies and practice and make public disclosure about such activities.
3.   It will assist those in authority charged with the responsibility of legislating, executing and interpreting tax avoidance laws.
4.   It will enlighten business on the need to pay taxes out of profit genuinely and support government in discharging their civil responsibility to the people.

1.6  Statement of Hypotheses
A hypothesis is a tentative answer to a research question, it is often stated in the form of a relationship between a dependent and independent variable. It is a conjectural statement of the relationship between two or more variables.

Hypothesis One Ho:  Strategies and tactics used by accounting firms to sell schemes that enables their clients avoid corporate tax have no impact on their corporate taxes.
Hi:   Strategies and tactics used by accounting firms to sell schemes that enables their clients avoid corporate tax have impact on their corporate taxes.
Hypothesis Two Ho:  Strategies and practices of accounting firms in corporate tax avoidance have no significant impact on corporate profit.
Hi:   Strategies and practices of accounting firms in corporate tax avoidance have significant impact on corporate profit.
Hypothesis Three Ho:  Strategies and practices of accounting firms in corporate tax avoidance have no significant relationship with corporate cost reduction.
Hi:   Strategies and practices of accounting firms in corporate tax avoidance have significant relationship with corporate cost reduction.

1.7  Scope of the Study
This study examines the strategies and practices of accounting firms in tax avoidance as the Nigerian experience especially in Lagos and Edo State. This study will illustrate the role of the accounting firms using strategies and practices as its impact on organizational performance in Nigeria between 2008 – 2013.For the course of this study, the researcher used a sample size of 100 for effective survey.

1.8  Limitation of the Study
The study is faced with some constraints which may likely affect the generalization of findings, the constraints include the following below:
–   Geographical Coverage: Factor that may likely affect the work is the issue of investigating all accounting firms in the country. Due to the spread of accounting firms all over major cities in the country, the researcher could not be able to cover the whole areas. Hence, emphasis was focused on only Benin City and Lagos which I think could affect the generalization of result.
–   Problem of sourcing for material: The research was faced with problems of getting current materials, textbooks, journals, seminar papers in relation with this research topic. The University of Benin library are outdated for this research work. In the final analysis most interviewed and investigated could not give some vital information that would have acted as ingredients in the work.
1.9  Definition of Terms
–   Tax: Tax is a financial charge or other levy imposed on an individual or legal entity by a state or functional equivalent of a state.
–   Corporate Tax: This refers to a direct tax levied by various jurisdictions on the profits of an organization.
–   OECD: Organization of Economic Cooperation and Development.
–   Avoidance: Arranging one’s affairs so as to pay the accounting firm smallest amount of tax required by law.

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PRACTICES OF ACCOUNTING FIRMS IN TAX AVOIDANCE THE NIGERIAN EXPERIENCE

THE IMPACT OF DOMESTIC INVESTMENT ON THE ECONOMIC GROWTH OF NIGERIA

THE IMPACT OF DOMESTIC INVESTMENT ON THE ECONOMIC GROWTH OF NIGERIA  

INTRODUCTION
1.1   BACKGROUND OF THE STUDY
Since the attainment of independence in 1960 various policies of the Nigerian government have been geared towards promoting the growth and development of the Nigeria economy by influencing the trends of Gross Domestic Investment or indirectly through policies aimed at stimulating the flow of finance in any growing economy. Several literature have shown that there is a nexus between increase in Real Gross Domestic Investment and economic growth of the Nigerian economy. Real Domestic investment in the economy is an acceptably way of increasing capital formation in the economy thus increasing productivity, output and economic growth in Nigeria. Real Domestic Investment is expenditure made to increase the total capital stock in the economy.
This is done by acquiring further capital-producing assets and assets that can generate income within the domestic economy. Physical assets particularly add to the total capital stock. Boosting economic development in Nigeria requires higher rates of economic growth than savings can provide. Part of the finance for investment in Nigeria is provided by the corporate sector, bank loans and household savings make up the other part.Investment in finance is the acquisition of financial assets for earning returns (Stiglitz, 1993). Investment can be divided into autonomous and induced investment.
Autonomous investment is service based and not induced by demand as its is not influenced by immediate returns while induced investment is largely profit motivated. Autonomous investment is in the purview of the public sector and therefore propelled by the government. Most autonomous investment end up increasing capital formation in the Nigerian economy thus, fostering economic growth.Real Domestic Investment can be undertaken by the public or private sectors, with the government being involved mainly with autonomous investments which act as the main drivers of other investment in the economy. Autonomous investment in Nigeria has dwindled drastically because the expenditure made by the public sector are not delivering value where rightly conceived. A simple analysis of the Gross Domestic Investment statistics from the Central Bank of Nigeria (CBN) shows that the nominal investment in Nigeria is going down and his fallen in real terms over the years.
Investment could be social in outlook others are infrastructural (transport, power, water, housing etc) while others are purely economic, which the private sector undertakes for private capital accumulation while financial investment is an avenue to increase wealth, real investment in Nigeria is directed towards increasing productivity and economic growth of the Nigerian economy. Thus, this research work seeks to unfold the nexus between domestic investment and economic growth of the Nigerian economy since gross domestic investment is a sine qua non to the economic growth of the Nigerian economy. The relationship between physical investment and GDP is considered the most important of the factors antecedent to growth. Ige (2008) opines the important role of the government in providing autonomous investment which is more government propelled and the role of government a financial management.

1.2   STATEMENT OF THE PROBLEM
One of the major economic problem of the Nigerian economy and developing economics at large is low Gross Domestic investment finance which leads to a decline in economic growth and development. The vicious cycle of low domestic investment finance as a result of low savings which leads to low capital formation has become a canker worm which has eaten deep into the fabrics of the Nigerian economy and development of the Nigerian economy which has reduced the pace of economic growth of the Nigeria economy in particular and developing economies in general.The Nigerian government as an economic has not been helpful to domestic investment in the country and with the direction of its investment over the years. Where the government has made investment, it is in projects that do not ginger other investment or on project that do not have economic linkages that can foster economic growth though it might have borrowed funds from the financial system to commit to such investment. It is therefore important to reposition the countries financial stance by given consideration to effective mobilization of domestic private investment as a development strategy for driving sustainable long term economic growth.
In most developing economies in general and Nigeria in particular, domestic private investment has proven to be insufficient in giving the economy the required boost to enable it achieve it growth target because of the disparity between the capital requirement and their savings capacity and rather than the government taking concrete steps to implement policies and formulate a culture of continuous domestic investment the government is gradually shying away from its responsibility.
The summary of the research problem are stated below:The vicious cycle of low domestic investment finance as a result of low savings resulting into low capital formation has militated against Nigeria’s economic growth. Nigeria’s government has not been channeling their investment to economic viable projects and sectors of the economy thus curtailing the pace of Nigeria’s economic growth. In developing economies in general and Nigeria in particular, domestic investment has proven to be insufficient and extremely low to ginger or accelerate Nigeria’s economic growth. Lack of effective mobilization of domestic investment in Nigeria to various sectors of the economy, thus militating against sustainable long-term Nigeria’s economic growth. Disparity between capital requirement for investment and savings capacity in Nigeria, thus hampering Nigeria’s economic growth. Poor government policies that do not foster domestic investment in Nigeria.

1.3   RESEARCH QUESTIONS
The following research question shall guide this study:Is there any nexus between domestic investment and economic growth in Nigeria? What are the factors affecting domestic investment in Nigeria. What factor effect domestic investment in Nigeria What theoretical and empirical exist for the explanation of investment – economic growth linkage. What suggestions exists for policy recommendation for the improvement of domestic investment for economic growth.

1.4   OBJECTIVE OF THE STUDY   
The broad objective of the study is to investigate the impact of domestic investment on the economic growth of Nigeria.The specific objectives of this study include:To ascertain the nexus between domestic investment and economic growth. To investigate the factors for low domestic investment in Nigeria To identify the factors affecting domestic investment in Nigeria. To offer theoretical and empirical insights into the link between domestic investment and economic growth. To offer policy recommendations based on the empirical findings of this study.

1.5   RESEARCH HYPOTHESES
H0: Increase in domestic investment in the various sectors of the economy namely; the agricultural sector, petroleum and power sector, have not impacted on Nigeria’s economic growth.
H0: Low domestic investment in Nigeria has not affected Nigeria’s economic growth.
H0: Domestic investment does not have any significant impact on Nigeria’s economic growth.

1.6   SIGNIFICANCE OF THE STUDY
This research is carried out with the aim of enlightening scholars and every other person that is opportuned to lay hands on it, on the impact of domestic investment on Nigeria’s economic growth. It is also believed that this may proffer useful suggestions to policy makers and economic planners towards making effective economic decision for effective economic growth and development. Thus, domestic investment is seen as a sine qua non to fostering economic growth in Nigeria.

1.6   SCOPE OF THE STUDY
The scope of this study revolves around the impact of domestic investment on the economic growth of Nigeria between the year 2008 and 2011.

1.7   DEFINITION OF KEY TERMS
-Investment: Investment on finance is the acquisition of financial assets for earning returns.
-Domestic Investment: This refers to the investment made by residents of a country both private investment made by citizens and public investment made by government.
-Gross Private Domestic Investment: This is the measure of physical investment used in computing Gross Domestic product (GDP) in the measurement of a nations economic ability.
-Economic Growth: This is a sustained increase in the output of a country over a period of time. It also refers to the sustained increase in the Gross Domestic Product (GDP) of a country.

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THE IMPACT OF DOMESTIC INVESTMENT ON THE ECONOMIC GROWTH OF NIGERIA 2008 TO 2013

 

THE IMPACT OF DOMESTIC INVESTMENT ON THE ECONOMIC GROWTH OF NIGERIA

THE IMPACT OF DOMESTIC INVESTMENT ON THE ECONOMIC GROWTH OF NIGERIA 2008 TO 2013

INTRODUCTION
1.1   BACKGROUND OF THE STUDY
Since the attainment of independence in 1960 various policies of the Nigerian government have been geared towards promoting the growth and development of the Nigeria economy by influencing the trends of Gross Domestic Investment or indirectly through policies aimed at stimulating the flow of finance in any growing economy. Several literature have shown that there is a nexus between increase in Real Gross Domestic Investment and economic growth of the Nigerian economy. Real Domestic investment in the economy is an acceptably way of increasing capital formation in the economy thus increasing productivity, output and economic growth in Nigeria. Real Domestic Investment is expenditure made to increase the total capital stock in the economy. This is done by acquiring further capital-producing assets and assets that can generate income within the domestic economy. Physical assets particularly add to the total capital stock. Boosting economic development in Nigeria requires higher rates of economic growth than savings can provide. Part of the finance for investment in Nigeria is provided by the corporate sector, bank loans and household savings make up the other part.Investment in finance is the acquisition of financial assets for earning returns (Stiglitz, 1993). Investment can be divided into autonomous and induced investment.
Autonomous investment is service based and not induced by demand as its is not influenced by immediate returns while induced investment is largely profit motivated. Autonomous investment is in the purview of the public sector and therefore propelled by the government. Most autonomous investment end up increasing capital formation in the Nigerian economy thus, fostering economic growth.Real Domestic Investment can be undertaken by the public or private sectors, with the government being involved mainly with autonomous investments which act as the main drivers of other investment in the economy. Autonomous investment in Nigeria has dwindled drastically because the expenditure made by the public sector are not delivering value where rightly conceived. A simple analysis of the Gross Domestic Investment statistics from the Central Bank of Nigeria (CBN) shows that the nominal investment in Nigeria is going down and his fallen in real terms over the years.
Investment could be social in outlook others are infrastructural (transport, power, water, housing etc) while others are purely economic, which the private sector undertakes for private capital accumulation while financial investment is an avenue to increase wealth, real investment in Nigeria is directed towards increasing productivity and economic growth of the Nigerian economy. Thus, this research work seeks to unfold the nexus between domestic investment and economic growth of the Nigerian economy since gross domestic investment is a sine qua non to the economic growth of the Nigerian economy. The relationship between physical investment and GDP is considered the most important of the factors antecedent to growth. Ige (2008) opines the important role of the government in providing autonomous investment which is more government propelled and the role of government a financial management.

1.2   STATEMENT OF THE PROBLEM
One of the major economic problem of the Nigerian economy and developing economics at large is low Gross Domestic investment finance which leads to a decline in economic growth and development. The vicious cycle of low domestic investment finance as a result of low savings which leads to low capital formation has become a canker worm which has eaten deep into the fabrics of the Nigerian economy and development of the Nigerian economy which has reduced the pace of economic growth of the Nigeria economy in particular and developing economies in general.The Nigerian government as an economic has not been helpful to domestic investment in the country and with the direction of its investment over the years. Where the government has made investment, it is in projects that do not ginger other investment or on project that do not have economic linkages that can foster economic growth though it might have borrowed funds from the financial system to commit to such investment. It is therefore important to reposition the countries financial stance by given consideration to effective mobilization of domestic private investment as a development strategy for driving sustainable long term economic growth.
In most developing economies in general and Nigeria in particular, domestic private investment has proven to be insufficient in giving the economy the required boost to enable it achieve it growth target because of the disparity between the capital requirement and their savings capacity and rather than the government taking concrete steps to implement policies and formulate a culture of continuous domestic investment the government is gradually shying away from its responsibility.The summary of the research problem are stated below:The vicious cycle of low domestic investment finance as a result of low savings resulting into low capital formation has militated against Nigeria’s economic growth. Nigeria’s government has not been channeling their investment to economic viable projects and sectors of the economy thus curtailing the pace of Nigeria’s economic growth. In developing economies in general and Nigeria in particular, domestic investment has proven to be insufficient and extremely low to ginger or accelerate Nigeria’s economic growth. Lack of effective mobilization of domestic investment in Nigeria to various sectors of the economy, thus militating against sustainable long-term Nigeria’s economic growth. Disparity between capital requirement for investment and savings capacity in Nigeria, thus hampering Nigeria’s economic growth. Poor government policies that do not foster domestic investment in Nigeria.

1.3   RESEARCH QUESTIONS
The following research question shall guide this study:Is there any nexus between domestic investment and economic growth in Nigeria? What are the factors affecting domestic investment in Nigeria. What factor effect domestic investment in Nigeria What theoretical and empirical exist for the explanation of investment – economic growth linkage. What suggestions exists for policy recommendation for the improvement of domestic investment for economic growth.

1.4   OBJECTIVE OF THE STUDY
The broad objective of the study is to investigate the impact of domestic investment on the economic growth of Nigeria.The specific objectives of this study include:To ascertain the nexus between domestic investment and economic growth. To investigate the factors for low domestic investment in Nigeria To identify the factors affecting domestic investment in Nigeria. To offer theoretical and empirical insights into the link between domestic investment and economic growth. To offer policy recommendations based on the empirical findings of this study.

1.5   RESEARCH HYPOTHESES
H0: Increase in domestic investment in the various sectors of the economy namely; the agricultural sector, petroleum and power sector, have not impacted on Nigeria’s economic growth.
H0: Low domestic investment in Nigeria has not affected Nigeria’s economic growth.
H0: Domestic investment does not have any significant impact on Nigeria’s economic growth.

1.6   SIGNIFICANCE OF THE STUDY
This research is carried out with the aim of enlightening scholars and every other person that is opportuned to lay hands on it, on the impact of domestic investment on Nigeria’s economic growth. It is also believed that this may proffer useful suggestions to policy makers and economic planners towards making effective economic decision for effective economic growth and development. Thus, domestic investment is seen as a sine qua non to fostering economic growth in Nigeria.

1.6   SCOPE OF THE STUDY
The scope of this study revolves around the impact of domestic investment on the economic growth of Nigeria between the year 2008 and 2011.

1.7   DEFINITION OF KEY TERMS
Investment: Investment on finance is the acquisition of financial assets for earning returns.
Domestic Investment: This refers to the investment made by residents of a country both private investment made by citizens and public investment made by government.
Gross Private Domestic Investment: This is the measure of physical investment used in computing Gross Domestic product (GDP) in the measurement of a nations economic ability.
Economic Growth: This is a sustained increase in the output of a country over a period of time. It also refers to the sustained increase in the Gross Domestic Product (GDP) of a country.

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THE IMPACT OF DOMESTIC INVESTMENT ON THE ECONOMIC GROWTH OF NIGERIA 2008 TO 2013

 

 

 

IMPACT OF INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS) ON SMALL AND MEDIUM SCALE ENTERPRISES IN NIGERIA

IMPACT OF INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS) ON SMALL AND MEDIUM SCALE ENTERPRISES IN NIGERIA

Abstract

This study sought to establish the relevance of International Financial Reporting Standard (IFRS) to small scale enterprises in Nigeria. The international accounting standard board (IASB), in its objectives and preamble, suppose that the beneficial effects from IFRS adoption include transparency, accounting quality and reduced cost of capital. Based on these assumptions, this study applied timeliness, simplicity/ understandability, quality, transparency and comparability to find out whether the adoption of IFRS has relevance to small scale enterprises in Nigeria. The study employed multiple regression analysis and the findings showed that there is a positive significant relationship between the variable timely preparation of financial statement and the adoption of IFRS. The study concluded that the adoption of IFRS is a big move for the firms, accounting regulatory body and the government in Nigeria because the benefits are more than the demerits as discussed earlier in this report. However, the study recommended that the government should introduce some incentives to motivate the SMEs or introduce compulsory adoption of these standards to ensure that all SMEs adhere to the adoption.

TABLE OF CONTENTS

Title Page

Certification

Dedication

Acknowledgements

Abstract

Table of Contents

Chapter One: Introduction                           

  1. Background to the Study
  2. Statement of Problem
  3. Research Questions
  4. Objective of the Study
  5. Statement of Hypothesis(es)
  6. Significance of the Study
  7. Scope of the Study
  8. Limitations of the Study
  9. Definition of Terms

Chapter Two: Review of Related Literature 

2.1   Introduction

2.2   International Financial Reporting Standards for

Small and Medium Scale Enterprises

2.3   Advantages of Adoption of IFRS for SMEs

2.4   Disadvantages or Challenges of Adoption of IFRS

2.5   Concept of Small and Medium Scale Enterprises

2.6   Financial Reporting by SMEs

2.7   Empirical Literature Review

Chapter Three: Research Method and Design      

  1. Introduction
  2. Research Design
  3. Description of Population of the Study
  4. Sample Size
  5. Sampling Techniques
  6. Sources of Data Collection
  7. Method of Data Presentation
  8. Method of Data Analysis

Chapter Four: Data Presentation, Analysis and Interpretation                                                 

4.1   Introduction

4.2   Data Presentation

4.3   Data Analysis

4.4   Hypothesis Testing

Chapter Five: Summary of Findings, Conclusion and Recommendations                                                

5.1   Introduction

5.2   Summary of Findings

5.3   Conclusion

5.4   Recommendations

References

Appendix I

Appendix II

CHAPTER ONE

INTRODUCTION

1.1   Background to the Study

Government at all levels in Nigeria have in recent times emphasized on the diversification of the economy through the promotion of small and medium scale enterprises.The importance of small and medium scale enterprises to the economic development of any country whether developed or developing cannot be over-emphasized. They are the driving forces of economic and industrial development. To a large extent, small and medium scale enterprises play significant role in improving the living standard of the citizens of any nation by creating goods and services, stimulating private ownership and entrepreneurial skills, creating sources of revenue to both individuals and government developmental purposes, creating employment opportunities and aiding the development of indigenous technology. According to Adelaja (2014) SMEs are generally seen as labour intensive, capital saving and capable of helping create most of the one million new jobs the world will need by the end of the century.Owing to the enormous benefits inherent in the development and sustainability of small and medium enterprises, government through the Small and Medium Scale Enterprises Development Agency of Nigeria (SMEDAN), Manufacturers Association of Nigeria (MAN), and other organizations such as the International Accounting Standards Board (IASB) have been on the vanguard of exploring possible means of promoting the activities of SMEs. According to Osotimehin (2012), no other development strategy has enjoyed as much prominence in Nigeria’s development plans as the Small and Medium Scale Enterprises (SMEs) development strategy.The international Accounting Standards Board (IASB) in July, 2009 introduced the International Financial Reporting Standards (IFRS) for Small and Medium Scale Enterprises (SMEs) as a way of enhancing the activities of small and medium scale enterprises through improved accounting and reporting practices. IFRS for SMEs is a self-contained set of accounting principles that is based on full IFRS but has been simplified for SMEs (Deloitte, 2010).Accounting and reporting information is a critical component of an enterprise business decision-making strategy. Accounting and reporting information enables an enterprise to perform the function of measuring its financial standing, assessing profitability and cash flow. Good accounting and reporting information can also help an enterprise in accessing funds both locally and internationally. As a result of the importance of SMEs to the economic and industrial development of Nigeria and the role of accounting and reporting information in enhancing the activities and growth of any enterprise, it becomes very pertinent to examine the relevance of IFRS for SMEs to Small and Medium Scale Enterprises in Nigeria, using selected enterprises in Benin, Edo State as case study.

1.2   Statement of Problem

All over the world, including Nigeria, greater emphasis have been on the growth and development o SMEs due to their contributions to economic, industrial and infrastructural development of any country.However, according to Deloitte (2012), Nigeria has joined the league of Nations reporting IFRS and currently in her second phase of IFRS  implementation with first phase drawing to a close on 31st December, 2012 when all listed and significant public entities are expected to produce first IFRS financial statements.With the issuance of IFRS for SMEs by IASB in July, 2009, SMEs in Nigeria are also expected to adopt and implement IFRS in the preparation and presentation of their financial statements. This research work is thus intended to examine/assess the relevance of IFRS for SMEs to Small and Medium Scale Enterprises in Nigeria and to offer suggestions and recommendations on how enterprises can benefit from the adoption of IFRS for SMEs with reference to the selection and study of some SMEs in Benin metropolis.
More so, this research is intended to bridge the gap in knowledge of IFRS and its importance to SMEs in Nigeria.

1.3   Research Questions

In relation to the objective of the study, the following research questions are addressed:

1.     Are Small and Medium Scale Enterprises in Nigeria aware of the introduction of IFRS for SMEs?

2.     Are accounting and reporting practices of Small and Medium Scale Enterprises in Nigeria in accordance with IFRS for SM Es?

3.     Are IFRS for SMEs adoption relevant to Small and Medium Scale Enterprises in Nigeria?

1.4   Objective of the Study

The broad objective of the study is to examine the relevance of IFRS to Small and Medium Scale Enterprises in Nigeria with particular emphasis on Small and Medium Enterprises in Benin metropolis.
Specifically, the objective of this study are to:

1.     Ascertain whether SMEs in Nigeria are aware of the introduction of IFRS for SMEs.

2.     Determine whether SMEs in Nigeria have already adopted 1FRS for SMEs.

3.     Investigate if IFRS for SMEs are relevant to Small and Medium Enterprises in Nigeria.

1.5   Statement of Hypothesis

The study seeks to test the following hypotheses:

Hypothesis One

HO:   SMEs in Nigeria are not aware of the introduction of IFRS for SMEs.

HI:    SMEs in Nigeria are aware of the introduction of IFRS for SMEs.

Hypothesis Two

HO:   SMEs in Nigeria do not carry out their accounting and reporting practices in accordance with IFRS for SMEs.

HI:    SMEs in Nigeria do not carry out their accounting and reporting practices in accordance with IFRS for SMEs.

Hypothesis Three

HO:   The adoption of IFRS for SMEs is not relevant to Small and Medium Enterprises in Nigeria.

HI:    The adoption of IFRS for SMEs is relevant to Small and Medium Enterprises in Nigeria.

1.6   Significance of the Study

This study would be beneficial to practitioners, academicians, management of SMEs government and interested researchers in the following ways;

i.      To practitioners and academicians: this study provides useful information about the relevance of IFRS to SMEs in Nigeria.

ii.     To management of SMEs: This study provides information about the theoretical and actual benefits and challenges of adoption of IFRS for SMEs.

iii.    To government, IFRS regulatory body and management of SMEs, it helps them to be aware of the perceived and actual benefits and challenges in the adoption of IFRS by SMEs and give insights on how to benefit from IFRS not effectively.

iv.    To interested researchers, it help others that are interested in conducting detailed and comprehensive research study on the relevance of IFRS and SMEs in Nigeria to have a spring board to initiate their study on.

1.7   Scope of the Study

The topic International Financial Reporting Standard (IFRS) in SMEs in Nigeria is a wide and complex one. In this study the researcher is quite aware that the study is supposed to be a comprehensive survey of all small and medium enterprise in Nigeria but this could not be possible due to the fact that time and cost does not permit the researcher to move from one enterprise to the other.However, the study has been designed to study selected small and medium enterprises in Benin metropolis. Only companies that fall within range of small and medium scale enterprises and are located within Benin metropolis are considered in this study. That means companies that are listed on the Nigerian Stock Exchange and publish their financial statements to the public are not covered in the study. A sample size of 50 was employed for effective result.

1.8   Limitations of the Study

This study is mostly limited by scope. The following are the limitations of this research study;

  • The research is for small and medium enterprises in Nigeria but by design is limited to selected small and medium enterprises in Benin metropolis. This is a small population of the small and medium enterprises operating in Nigeria.
  • There are larger concentrations of small and medium enterprises in towns like Lagos, Onitsha, Aba and Kano. It therefore becomes difficult to generalize the outcome of this research on the whole population of SMEs in Nigeria.
  • Another limitation of this study is the difficulty in obtaining data.
  • Most SMEs do not know the importance of keeping proper books of accounts.
  • Lack of co-operation from management of SMEs is another trend as most of them are not willing to give their firms financial information, thinking that if might be misused by their competitors and fear of being reprimanded by their employer.

1.9   Definition of Terms

IFRS: This means International financial Reporting Standards. IFRS is used interchangeably with IFRS for SMEs which is the abridged version of the International Financial Reporting Standards for Small and Medium Scale Enterprises.

SMEs: this means Small and Medium Scale Enterprises, that is, not quoted privately owned enterprises that do not publish their financial statements to the public.

IASB: this means International Accounting Standards Board. It is the body responsible for publishing and reviewing of international accounting standards.

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IMPACT OF INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS) ON SMALL AND MEDIUM SCALE ENTERPRISES IN NIGERIA

IMPACT OF EFFECTIVE ACCOUNTING SYSTEM ON NON-PROFIT MAKING ORGANIZATION IN NIGERIA

IMPACT OF EFFECTIVE ACCOUNTING SYSTEM ON NON-PROFIT MAKING ORGANIZATION IN NIGERIA

Abstract

This study examines the evaluation of designing an effective accounting system for non-profit making organization in Nigeria. The objective of this study is to find out if organization has a proper accounting and internal control system and also to find out if the members of the non-profit making organization are being exploited by the administrators. The data for this study are collected through questionnaire and personal interview. However, the questionnaire forms the major instrument of data collection. The simple random sampling method is used to select the respondents of the study. It was found out that organization structure of the association impose accounting leaders and does not give them enough liberty. The study concludes that account and financial statement of the organization are subject to both internal and external auditing. It was recommended among others that comprehensive budget should be drawn up and as much as possible it should be made for revision if necessary.

TABLE OF CONTENTS

Title Page

Certification

Dedication

Acknowledgements

Abstract

Table of Contents

Chapter One: Introduction

1.1    Background to the Study

1.2    Statement of Problem

1.3    Objectives of the Study

1.4    Research Questions

1.5    Statement of Hypothesis(es)

1.6    Significance of the Study

1.7    Scope of the Study

1.8    Limitations of the Study

1.9    Definition of terms

Chapter Two: Review of Related Literature

  1. Introduction

2.2    Who needs Accounting?

2.3    Activities of Non-Profit Making Organization

  1. Accounting System in Non-Profit Making Organization

2.5    Objective of Financial Management

2.6    Resource Management

2.7    Accounting Systems and Records

2.8    Problem of Accounting in Non-Profit Organization

2.9    Internal Control

2.10  Essentials of Effective Internal Control

2.11  Budget and Budgetary Control

2.12 Need for Organization Audit

2.13  SAS/IAS Provision in Respect to Accounting

Chapter Three: Research Method and Design

3.1    Introduction

3.2    Research Design

3.3    Description of Population of the Study

3.4    Sample Size

3.5    Sampling Techniques

3.6    Sources of Data Collection

3.7    Methods of Data Presentation

3.8    Methods of Data Analysis

Chapter Four: Data Presentation, Analysis and Interpretation  

4.1    Introduction

4.2    Presentation of Data

4.3    Data Analysis

4.4    Hypothesis Testing

Chapter Five: Summary of Findings, Conclusion and Recommendations

5.1    Introduction

5.2    Summary of Findings

5.3    Conclusion

5.4    Recommendations

References

Appendix I

Appendix II

CHAPTER ONE

INTRODUCTION

Background to the Study

The word non-profit making organizations explained that the organizations are not established for the purpose of making profits. Non-profit making organizations such as clubs, societies, charitable organizations and social organizations are established basically for the purpose of promoting the welfare and activities of the members and not for profit motive unlike business enterprise. This organization normally has founders, presidents, some executives and members. The formation of the non-profit making organization cannot be traced to a particular age. Most non0profit making organizations has in their deed the right to partake in little business to maintain their organization and meet up with its expenses.

Statement of Problem

The non-profit making organization is expected to be an exemplary means of exhibiting the love for humanity, as a result of which we know, if this associations reach out to research the problem affecting the common man, the needy and less privileged in the society who are helpless, from the bunk of revenue collected as donation, fines, subscription sold etc.

Research Questions

  1. Are the non-profit making organization members of the opinion that they are being exploited by the administrators?
  2. Does the organization have a proper accounting and internal control system?
  3. Does the increase in the financial position of the body relate to the increase in membership?

Objective of the Study

The main objectives of this research are:

  • To find out if the organization have a proper accounting and internal control system.
  • To ascertain if the financial position of the body is related to the increase in membership of non profit making organization in Nigeria.
  • To find out if the members of the non-profit making organization are being exploited by the administrators.

Statement of Hypotheses

The study provides the following as the research questions:

Hypothesis One

Ho:  The members of the non-profit making organization are not of the opinion that they are being exploited by the administrators.

Hi:   The members of the non-profit making organization are of the opinion that they are being exploited by the administrators.

Hypothesis Two

Ho:  The organization does have a proper accounting and internal control system.

Hi:   The organization has a proper accounting and internal control system.

Hypothesis Three

Ho:  The increase in the financial position of the body  is not related to increase in membership.

Hi:   The increase in the financial position of the body  is related to increase in membership.

Significance of the Study

It is hoped that this study will be of benefit to the government, members and the management of the organization in knowing and arising to their responsibilities in Nigeria.

Scope of the Study

This study examines an evaluation of designing an effective accounting system for non-profit making organization in Nigeria. This study will be centred on investigating the designed accounting system set up for the origination as well as what the members feel or think about pertaining the management of the organization funds in Nigeria between the period of 2008-2013.For the course of this study, the researcher used a sample size of 40 for effective survey.

Limitations of the study

During the process and course of this research, a number of problems were encountered which include the following;

  1. Time, finance and access to book record of the organization and journals, but as much as possible objectivity was observed.
  2. Due to the uniqueness and the controversial nature of the research, we have had to be very subtle in eliciting information so as to avoid prejudicing or giving our blessing to any claim or opinion as they stand publicly. Even then total cooperation in obtaining information was not possible.
  3. Relevant books and literatures were not readily available in the school library and the organization consulted.
  4. Where some journals, papers, articles were seen, they were so much of foreign nature than the domestic environment of Nigeria was not depicted.
  5. The tense academic environment was a bi constraint to the research because we had to execute the project and yet contend with the continuous assessment of the policy of polytechnic.

Definition of Terms

For the purpose of clarity and easy understanding, the following terms are defined in the content of their usage in this study.

Organization: This is a body or a firm established for a purpose or object comprising of materials, structures and humans.

President: In some of the non-profit making organizations there is the post for a head or leader called the president to give directives to the operation of the organization.

Executive: These are persons appointed to assist the president in the running of the organization.

Subvention: This is a source of income to the organization. It is money granted to it to support its activities.

Fines: These are money charged on the members as a punishment to their misdeed.

Income and Expenditure: The method of designing accounting system for the organization which is non-profit oriented but has income and incurs costs as well as having assets and liabilities.

Internal Control: This is the system of control both financial and otherwise designed to regulate the efficiency and effectiveness of the organization. Therefore the designed accounting system and the auditing is part of the control system.

Audit: This is an examination of the underlying accounting records so as to form an opinion as to the fair and have position of the designed accounting system and accounting results on information. For the purpose of members it is necessary whether profit or non-profit organization.

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IMPACT OF EFFECTIVE ACCOUNTING SYSTEM ON NON-PROFIT MAKING ORGANIZATION IN NIGERIA