CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE
STUDY
In most developing
countries including Nigerian government participation in economic activity is
usually significant. One of the ways through which government has intervened in
Nigerian economy is through the establishment of public enterprises and
statutory bodies operating service of an economic or social character on behalf
of the government.
Since the colonial era,
especially after independence 1960, Nigerian public enterprises have witnessed
a steady growth unit recently. Its Olisa (1988-133) pet it. Beginning as a
trickle in the period between this era of the second world war and Nigeria
risen to flood level since independence the establishment of public enterprise
in Nigeria are many add to available rational capital for the support of
development and welfare programme, making to be controlled by a few individual,
it possible for important profitable enterprise to be controlled by a few
individual or group organization certain critical activities national survival
and economic stability and providing employment opportunities (Ademolukun
1983). However, after a long
period of growing starts intervention in the Nigeria
economy through public enterprises, the 1980’s onwards had witnessed a reversed
which has sometimes been dramatic in public opinion therefore public policy.
This has been brought by the persistent
losses which state enterprises that trivet been running over fears.
Consequently, there has been a willingness to look at alternative policy
strategies for the achievement of economic development. At the forefront of
these strategies is the minimization privatization of public enterprises.
In Nigeria, public
enterprises are engaged in a while spectrum of economic activities including
agriculture, mining, construction, manufacturing, commerce and services. The
classification of public enterprises in Nigeria has been made according to
varieties of criteria by different authorities. The public service review
commission (1975:101) classified public sector into.
Public utilities
Regulatory
of service body Financial institutions
Commercial
and industrial enterprises
Being a mixed economy,
individuals also own and operate private enterprises. A firm classified as
private enterprises when it is founded and managed by an individual and or a
group of individual. These firms
are
expected to be registered in the local government within which they operate.
The rational for the establishment of
private enterprises are numerous just like establishment of public enterprises.
They include amongst others; provision of employment opportunities generating
income for the owner of the enterprises government interest in profit growth of
the enterprises which performance of the public sector through competition.
Moreover, the general public is concerned with contribution which makes towards
social enlistment which is exhibit to the environment in which the business is
loaded and its willingness to contribute to the development of the environment.
The activities of the
public enterprises have been on the increase in recent times which necessitated
the introduction of the accounting practice to check and monitor the financial
activities of these enterprises. In this book, titled principles of accounting,
by Bimage (1985) Accounting is defined as a process by which data relating to
the economic activities of an organization are measured recorded and
communicated to interested parties for analysis and interpretation. The
earliest methods of accounting records were kept in physical quantities. These
records came from the Eastern (early) civilization
which involved in the countries around the Mediterranean
Sea such as Mesopotamia, Egypt, Crete, Italy etc. Money was recorded as soon as
money took the place of barter as a medium of exchange and unit of accounting
practice has been closely related to the economic development of the country.
If the business organizations grows in size and complexity management and
outsiders groups which include owners of the firm (stock holder) creditor,
government, employer and the general public.
The differentiation
necessitated the need to have accounting department in the enterprises to give
accurate financial of the management and to satisfy the outside demands or the
general public who are already interest on whether the enterprises in growing
or not. The role of accounting in public enterprises in Nigeria is primarily to
ensure accurate accountability in these sectors and present the time and fair
financial position of the enterprises. The role is of utmost importance in any
organization. An organization can only grow or profit when the resources can
only be well managed if accounting department of the organization give accurate
financial information to know how much the enterprises having. It only when
this is done that the firm allocate its resources and knows what is to be done.
The role of accounting seems to be more pounced in the public enterprises. In
recent times, there are cases of mis appropriation of
funds in the public enterprises and improper accountability. These factors have
led to a lot of public enterprises go into Obiwon, if the government has
reorganization the role of accounting, all these feeble should not have risen.
No enterprises can more forward without having a well organized financial
department to give accurate financial, information about the firm. This is
because if improper accounting records are not minimized or where possible
eradicated these is bound to be cases of public enterprises failure.
Consequently, staff of such enterprises will force out of their job. This will
result to economic and social activities in the society.
1.2 STATEMENT OF PROBLEM
Obviously, every privates and public entries
in Nigeria has their accounting department and there are increase cases of
financial mismanagement in virtually all the public and private organization in
Nigeria. The problem of this study lies on how the manages of these enterprises
are able to recognizes the role of accounting in their enterprises so that
these cases of improper accountability will be minimized or if possible its
total eradication in our society.
1.3 PURPOSE OF STUDY
public enterprises in Nigeria. The purpose
of this study include among
others:
Ø To
determine the extent to which accounting records has controlled the effect of
expenditures in public enterprises.
Ø To
find out factor that affects the accounting department preventing them from
carryout their function as expected.
Ø To
determine government policies which promote accountability in public
enterprises in Nigeria.
1.4
SIGNIFICANCE OF THE STUDY
In this study, the researchers have set out
to examine the role of accounting in the public sector in this country. Nigeria
with the aid of highlighting the inherent problem encountered in the account
department of most organizations. It is expected that this work will be of
interest to the owners of business enterprises, the government, students and
the general public.
To shareholders, owners of enterprise,
interested persons and the government, this study is expected to en kindle
their interest the more and they will take note of various recommendations
mentioned here and help steer the management team towards forming a study
organizations to present an accurate financial information of their firm.
This study will also help to serve as literature to
individual or corporate bodies into want to carry on further research on the
role of accounting in the public sector in Nigeria.
1.5 RESEARCH QUESTIONS
1.
What extent does accounting records has
control in affecting the expenditure of public enterprise?
2.
What are the factors that affect accounting
department of most organization which makes them not to function effectively as
expected?
3.
What are these governments polices which
promote accountability in Nigeria public enterprises?
1.6
RESEARCH HYPOTHESES
This
research hypothesis is to know the findings or result of this
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research;
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1. H0 - Good accounting
records budgeting has no control
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effect
on
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expenditure of public enterprises.
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H1-
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Good accounting
records budgeting has
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control
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effect on
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expenditure
of public enterprises.
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2.
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H0- Corruption do
not affects the quality of service rendered by
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accountants in
public enterprises.
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H1- Corruption affects
the quality of service rendered by accountants in public enterprises.
3.
H0-
Government accounting policies do not aid in promoting accountability in
Nigeria public Enterprise
H1-
Government accounting policies aid in promoting accountability in Nigeria
Public Enterprises.
1.6 SCOPE AND
LIMITATION OF THE STUDY
Scope of the study shows extent of coverage
done in the study. The research topic suggests a study on the role of
accounting in the public enterprises in Nigeria. The focus of the study is on
Central Bank of Nigeria (CBN) Enugu State. I take this to be a fair representative
of Nigerian Public Enterprise that is either avoidable or hard to come by.
There are factors as constraints that
normally follow this research work, some of them are;
1. TIME:
This which was a major problem was adequately not managed by the researcher.
There is not enough time for the research to get the project time, get it
approved and within a short time we will be talking about our exams assignment
and quiz.
2. LACK
OF MATERALS: The un co-operative of most people working
in the library other offices where the research needed to get materials
posed great problem to the research. Some of the staff do not feel safe
letting
have access to some materials while other will change you more than double the
cost of Photostat before one can get what he wants.
3. FINANCE: Before now our project
use to be a joint project of a group of four-ten people but now it has to be on
individual student. So finance hinder the projects in one way or the other.
Esther by transportation to where to get the materials or where to obtain the
necessary information.
1.8 DEFINITION OF
TERMS
MANAGEMENT: Its function, it
is centered on the running and controlling of the organization, the way
the directors perform their function to attain a successful operation.
ACCOUNTING: In
this context, an accountants records, classify and summaries all public
expenditure in the Central Bank of Nigeria in a significant manner and in terms
of monetary events and transaction which are in part at least financial
character and to interpreter the result thereof.
FINANCIAL STATEMENT:
An accountant makes an accounting report issued by a business to
describe its financial affairs and results of the operations.
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