Appraisal Accounting System In Multinational Company Operations (Case Study Of Cadbury P.L.C. Lagos)

Project and Seminar Material for Accountancy / Accounting

Appraisal Accounting System In Multinational Company Operations (Case Study Of Cadbury P.L.C. Lagos)


This project focuses on the value of accounting system in multinational company operation using Cadbury plc of Lagos as a case study.

It comprises of five chapter one deals with the background of the study viewed by the researcher.

Chapter two contains adequate attempts made by the researcher to merge muiti-dimensuinal view form literature that is opinion of different writers in journals magazines and textbooks in relation to topic.

Chapter three deals with research methodology, method of data collection, sources of data, research instrument used, research design and termination of sample size.

Chapter four analyzes the returned questionnaires, tests the hypothesis and interprets them.

Finally, in chapter five the writes summarize, conclude and recommend the project work for appropriate persons.

Table of Content

  • Title page
  • Certification
  • Dedication
  • Acknowledgement
  • Table of contents

Chapter One


  • 1.1 Background of the study.
  • 1.2 Statement of the research problem.
  • 1.3 Objective of the study.
  • 1.4 Significant of the study.
  • 1.5 Research question.
  • 1.6 Scope of study.
  • 1.7 Study plan.
  • 1.8 Definition of the key

Chapter Two

Literature Review

  • 2.1 Determination accounting system of multinational company.
  • 2.2 Branch accounting system.
  • 2.3 The summary of the requirement of the statement of accounting.
  • 2.4 Accounting practice (SSAP 20 foreign current transaction)
  • 2.5 Method and rates of transaction of foreign financial statement of subsidiary company.
  • Reference

Chapter Three

Research Methodology

  • 3.1 Historical profile or case study.
  • 3.2 Research hypothesis.
  • 3.3 Method of data collection.
  • 3.4 Method of data analysis.

Chapter Four

Data Presentation and Analysis

  • 4.1 Data presentation and analysis.
  • 4.2 Computation of measures of effectiveness of accounting multinational companies operation.
  • 4.3 Discussion of findings

Chapter Five

Summary Conclusion and Recommendation

  • 5.1 Summary
  • 5.2 Conclusion
  • 5.3 Recommendation
  • 5.4 Limitation of the study
  • Bibliography
  • Appendices
  • Letter of Introduction

Chapter One


1.1 Background of the Study

A multinational enterprise is a business enterprises that carries on operation in more than country through a network of branches, division, influenced invests and subsidiaries.

Multinational enterprises obtain raw material and capital in countries where such as plateful, multinational enterprises manufacture their product on nations where wage and other operating cost are lowest and they sell their product in countries that provide the most profitable market.

An accounting system is the possible ways or method in which accounting concepts may be applied to financial transactions.

Accounting policies refer to the accounting basic used by a company when accounting its financial statement.
Accounting system in multinational companies varies with the nature of operation type of business as well as the accounting standards principal and adopted by each company.

Accounting for multinational companies is one of several recognized specialist in the accounting, auditing, management accounting, behavioural accounting and financial information system.

The history of accounting is an international one double entry book-keeping often though of as the genesis of today, accounting eliminated from Italian city-state of the fourteenth and fifteenth centuries, in due course, Italian city state book-keeping migrated t Germany, France, the lowland and subsequently to Britain, the Britain influence spread accounting and auditing techniques not only to north American but brought out the existing Britain common wealth.

Multinational enterprises face a number of reporting requirement not applicable to domestic enterprises.

1.2 Statement of the Research Problem.

There are several problems that are faced in the appraised of the accounting system in multinational companies operation some of them are: –

  1. The conflict and difficult included by different national accounting standard and practices.
  2. The problem of adjusting financial statement to reflect the various level of inflation in different countries.
  3. The deficiency in the consolidation of the financial statement of foreign subsidiaries and the regulative affects in the multinational setting.
  4. The problem of determining the total return from a multinational setting
  5. The problem involved in foreign exchanged transaction into the accounting system in multinational company operation.
  6. Internalization of some technical accounting standards.

1.3 Objectives of the Study.

The specific objectives of the study are: –

  1. To investigate the affect of numerous existing the national accounting rules and regulations on multinational companies operations.
  2. To examine the events have influenced the type of accounting system adopted in multinational companies.
  3. To examine the problem of conversion of foreign exchange transaction brought about by the internalization accounting.
  4. To examine the effect of consolidation of the financial statement of foreign subsidiaries or affiliates on multinational settings.
  5. To investigate the effects of internalization of accounting on multinational enterprises operations.
  6. To ascertain the area the clearly require adjustment in their accounting system.
  7. To highlight the effect of competition on the sales procedure.
  8. To examine the kind accounting books on records being kept as well as the type of account prepared in relation with the nature of operation in existence.
  9. To examine the accounting policies adopted by the multinational companies.

1.4 Significance of the Study.

This study will serve the following usefulness.

  1. It will undoubtedly contribute tremendously to the accrete efficiency of the accounting system of the case study company and accounting system of the multinational company as a whole.
  2. It will also contribute to the adoption of a uniform international companies.
  3. This study will need for proper accounting system that meet international accounting standards.

1.5 Research Question.

In the course of this study, the experimental and group theory approach and question was adopted. This school of thought in favour of this approach open that the knowledge sought in any research is collect and or such that finding research is emerge from the analysis of the result achieves the group theory approach exchange the use of research question and simply to extract the necessary information required.

1.6 Scope of Study.

The scope of the study covers the following

  1. The requirement of various accounting standard and practice in multinational enterprises.
  2. Accounting for braches.
  3. Accounting for joint ventures.
  4. Accounting for transaction involving foreign currencies (foreign branch and subsidiaries)
  5. Computerized accounting system.
  6. Business combination and consolidation financial statements.

1.7 Study Plan.

The study of plan is organized into five chapters.

  • Chapter one is the introduction: this entail giving definition of the study that is stating the theoretically background to study. It also enter highlighting the statement of the study, the scope and limitation of the study.
  • Chapter two the literature review: in this chapter topic relating to the study from different author are discussed. Topic such as determination of accounting system, multinational companies branches, accounting system, summary of the requirement of statement of accounting practice (ssrs) foreign currency transaction as well as accounting for group of companies.
  • Chapter three is the case of study and methodology: this given on historical background of the case study, which is a Cadbury plc. In Lagos. It also discusses the issue of research and source of data.
  • Chapter four is the data presentation and analysis: this entails stating the analysis of data computation of effectiveness of the study and statement of hypothesis.
  • Chapter five give the summary, conclusion and recommendation: is also highlights major of final summary and conclusion drawn the issues and useful recommendation.

1.8 Definition of Key Terms.

A. Working Capital:

This is referring to the administration of all aspect of current asset and current liabilities. Is also relates to the total investment in current assets or the different between current asset and current liabilities floating or circulating capital is sometimes use for this term.

B. Economic Order:

The number of units which will quantity (EOQ) order at a time and while result in incurring minimum cost.

C. Investment:

This is on asset held mainly for the purpose of increasing shareholder, wealth but is not in the principal line of the business of the firm.

D. Inventory:

This is otherwise known as stock inventories, are asset held for render in the ordinary courtesy of business of goals that will be used or consumed in the production of goods to be said.

E. Operating Cycle:

The average time that it takes to convert raw materials into cash. These are defined as chime help against other for money, goods or services collectable within a year or the operating cycle which ever is longer.

F. Re-Order Level:

The print at which is essential and imperative during the next hading or operating period.

G. Hypothesis:

These are tentative statement open to criticism.

H. Securities:

These refer to share stock debenture or bonds treasury bills, commercial bank deposits e.t.c.

I. Budget:

This is a financial and or qualitative statement prepared and approved prior to a defined period of time of the policy to be pursued during that period, for the purpose of affecting a given objective.

J. Current Liabilities:

Current liabilities are the obligation that reasonable expressed to be liquidated.

Chapter Five

Summary, Conclusion and Recommendation

5.1 Summary

This study was basically an investigate on which south of identify and evaluate those variable that contribute significantly forwards achieving organization goals.

The following are the highlight of major finding centralized accounting system is in operation in such companies and this private adequate control and proper monitoring of the operation of other branch, which may prevent and can easily direct fraud and errors.

The oversees parent company discharge inventories to regional branch outside their locality at other plus commission (buying commission).

It was discovered that the effectiveness of accounting system of multinational companies in Nigeria is very satisfactory.

The main types of account in a multinational purpose are branch account, manufacturing account, company account, considered account.

The principal ledger account being used in preparing multinational account are, sale journal, purchase journal, invoices receipts and vouchers.

It was discovered that the staff in the account department are very efficient.

It was revealed that the parent company should use their equity for an investment in the preferred stock of a subsidiary to maintain the parent company concept.

A subsidiary may be excused from consolidations any of the following circumstance exists:

  1. The consolidation may be misleading because of its will to the group.
  2. The holding has contractual or other restriction imposed on its ability for approach the majority of the board of director.
  3. The control is intended to be temporary.
  4. The subsidiary is in bankruptcy processing.
  5. The subsidiary is a finance company.

The gains from the translation of foreign currency financial statement should be included in the net income of the accounting in which it occurs.

5.2 Conclusion.

In conclusion, the important of effectiveness accounting system is multinational companies operation cannot be over emphasized; this system is broad base and companies various segment of accounting system.

Multinational companies have cure to say they are huge existing organization. It is rare to see such companies running into liquidation and winding up. Depending on how one measure, if there are probably 500 companies convercertily in Nigeria that can be classified on multinational.

Multinational companies produce appropriately are fourth of Nigeria economic output. Some people hold the multinational in contempt for their assorted power play strategies. Other see theirs as highly efficient economic engineers, transfer of knowledge and stall for multitude of countries and as a significant economic and social development agent.

Multinational enterprises are highly adaptable organization, they constantly shift resource on a world wise scale. These shift can not be accomplished in an effective and efficient manner unless highly reliable process of information permit careful analysis of investment opportunities and continues control of the deployment of available resources. It also promotes unity among nation.

5.3 Recommendation

The following recommendations will be made;

  1. The management of the company must exercise great care in evaluation, the probability of branch operation when investment are acquire from the head office.
  2. The company should try to meet the needs of their staff as they are the grateful factor of production.
  3. The company should improve on its foreign investment analysis and foreign exchange risk management.
  4. The company should ensure that muse experts are employed to occupy the key position and enhance efficiency.
  5. The company should increase the level of advertisement of the company products.

5.4 Limitation of Study.

a) Time Constraints:

The duration of time available for the project is relating short to make adequate research.

b) Limitation of Data Source:

No disclosure of all relevant material on the part companies.

c) Financial Constraints:

Due to the above sated limitation only the highly in the scope of study will be covered.

Appraisal Accounting System In Multinational Company Operations (Case Study Of Cadbury P.L.C. Lagos)

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Appraisal Accounting System In Multinational Company Operations (Case Study Of Cadbury P.L.C. Lagos)


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