The Effect Of Professional Accounting Bodies On Accounting Practices (A Case Of ANAN)

Project and Seminar Material for Accountancy / Accounting

Abstract

This study used a survey design to examine the effect of professional accounting bodies on accounting practices using ANAN as a case study. The population includes members of ANAN in Nigeria. The data gathered and collated was analyzed using frequency tables and percentages. Hypotheses was tested using Chi-Square statistical tool. The findings of the study indicated that the extent to which ANAN execute its statutory roles is high. The findings also indicated that ANAN participate effectively in addressing issues confronting accounting profession in Nigeria. The findings of the study indicated that ANAN code of conduct have an impact on accounting profession in Nigeria. And ANAN participate in entrenching the ethics of accounting practices in both public and private sector. With respect to the findings of the study, the researcher recommended that ANAN Members need to sign a declaration of compliance with ethical codes periodically. This may be once every year or two years. There should be disciplinary committee in accounting bodies to check and implement proper sanctions on professionals who abuse their privileges by engaging in unethical. To mention only but few.

Table of Content

Chapter One:

Introduction

1.1 Background of the Study
1.2 Statement of the Problem
1.3 Objective of the Study
1.4 Research Questions
1.5 Research Hypothesis
1.6 Significance of the Study
1.7 Scope of the Study
1.8 Limitation of the Study
1.9 Definition of Terms
1.10 Organization of the Study

Chapter Two:

Review of Literature

2.1 Conceptual Framework
2.2 Theoretical Framework
2.3 Empirical Review

Chapter Three:

Research Methodology

3.1 Research Design
3.2 Population of the Study
3.3 Sample Size Determination
3.4 Sample Size Selection Technique and Procedure
3.5 Research Instrument and Administration
3.6 Method of Data Collection
3.7 Method of Data Analysis
3.8 Validity of the Study
3.9 Reliability of the Study
3.10 Ethical Consideration

Chapter Four:

Data Presentation and Analysis

4.1 Data Presentation
4.2 Analysis of Data
4.3 Answering Research Questions
4.4 Test of Hypotheses

Chapter Five:

Summary, Conclusion and Recommendation

5.1 Summary
5.2 Conclusion
5.3 Recommendation
References
APPENDIX
QUESTIONNAIRE

Chapter One

Introduction

1.1 Background to the Study

Several scholars in the field of business ethics have argued that professional accountants rarely use professional code of conduct to solve the problem of compliance in their practices that have resulted to several accounting scandals and business failures. As a result, there are concerns for the development and effective implementation of professional code of ethics. First, critics argue that professional code of ethics are for public relations than altering conduct and are used for window dressing. Second Ladd (1979 in Jamal and Bowie 1995) argued that professional code of ethics is designed to protect the economic interest of the professional rather than they are for protecting the public from unethical conduct. Third, some of the provisions are viewed to show that particular morale positions of professionals and don not represent the moral view of the society (community).

Professional bodies are organizations established to regulate the activities of the professionals under their jurisdictions. Professionals are expected to exhibit high level of integrity, probity and transparency in their dealings with the societies. There is a serious challenge in the system as many professions have been highly commercialized. Many professionals need to cut cost and maximize their profits thereby leading to high case of anti social financial practices among the professional accountants in the public services. Undue influence of the politics on the professionals contributes to high level of in accountability among the professional accountants. Accountability must be crusaded by their professional bodies. Accountability is the ability of a steward to give report of its stewardship to the owner of the business entrusted in his care. Accountability within the government accounting has been sidelined in the management of public finance. Those charged with the responsibility of managing the public purse are expected to be answerable to various challenges pose by their actions and inaction in the management of public fund. Misappropriation, embezzlement and various financial crimes perpetrated within the system called for questions. The system could be blamed for its porosity and weakness.

But the study opined that the accounting and control system could only be porous and weak if the people who are charged with responsibilities are corrupt. Professional accountants are not saints in the issues of misappropriation and other financial crimes. Professional accounting bodies must rise to the task of enforcing accountability among their members within the public sector. Enforcement of professional ethics and various codes of conduct by the regulatory bodies go a long way to instill integrity in the professional accountants in the public sector.

One of the more common suggestions for addressing ethical lapses in businesses and professions is the use of professional code of conduct. The function of ethics and the need for accounting decision maker to possess ethical expertise so as to be able to conduct appropriate professional judgement (Keim and Grant 2003) is widely acknowledged by the public, regulators and the profession. ANAN, for example, recognizes the importance of ethical behaviour for Accounting Professionals and provides its code to guide the behaviour of members (Buff and Yonkers 2005).

Professional code of conduct is the glue that binds the professional community together (Brien 1998), that guarantee the basic of trust between a profession and the society ( Russ – Eft 2004). It provides a tangible standard against which the performance of the professional is measured (Tucker, Stathakopolous and Patti 1999, Coughlan 2001). Also, some professional code of conduct include punitive measures (including loss of membership), for members that violates the standard (Frankel 1989).

A well-run profession or business must have high and consistent standards of ethics in order to stand fast and to stand the test of time (Smith and Smith, 2003). Finance and accounting departments in industries are taking ethical considerations to be extremely important (Vickers, 2005 as cited in Mathenge, 2012). A tension often exists between a company’s financial goals and strategies to improve profits, and ethical considerations with concerns for right-behavior. When the public loses confidence in the ability of the market to prevent corporate misbehavior, it often demands increased government regulation. For example, frequent cases of misconduct by corporate executives have led to the passage of various Acts in Nigeria, Such Acts include the Companies and Allied Matters Act, 2004 Cap C20, LFN, the Economic and Financial Crimes Commission (EFCC) Act, 2004, the Investment and Securities Act (ISA) 2007, the Independent Corrupt Practices and other Related Offences (ICPC) Act 2003, Banks and other Financial Institutions Decree 2004, the Nigerian Deposit Insurance Corporation Act 2006, Money Laundering Act, and many others.

Ethical standards set by professional accounting bodies in Nigeria, ICAN and ANAN, can act to supercharge the engine of morality and good conducts in the discharge of auditing functions in Nigeria. Efforts are being made to introduce and enforce the practice of ethical standards by the regulatory bodies, however, strict adherence to the standards has been a problem (Gowthorpe and Amat, 2005). This study therefore seeks to assess the effect of professional accounting bodies on accounting practices.

1.2 Statement of Problem

Ethics in professional accounting are of utmost importance. However, the widespread corruption in the society and the failure of organization in every parts of the world have once more increased the need for accounting professionals to adhere strictly to the codes of professional ethics prescribe by international accounting bodies. According to Ogbonna and Appeah (2011), the widespread corruption in the business environment seems to be the order of the day in all societies. Recently, business ethics have attracted renewed attention globally due to the several notorious corporate scandals like those of Enron, WorldCom, Arthur Anderson, Tyco International, Adelphia, Cadbury PLC, Lever Brothers PLC amongst others (Ojeka, Ogundana & Iyoha, 2017). Unfortunately, these collapses have led to a widespread disregard for the reputation of the accounting profession. Additionally, the growing importance of government regulations, the amplified scrutiny of media, and the increasing pressure from different stakeholders have placed the business ethics challenge on the strategic agenda of virtually all firms (Weaver, Trevino & Cochran, 1999). The ethical lapses among public accountants have necessitated a revision of the accounting professional standards (Rist, 2002). Interestingly, professional accountant working in accounting firms are faced with new challenges within the profession as a result of the debacles of large corporations(Swift,2002).
Organizational cultures and environment pose a good opportunity for accountants to exploit the loopholes in reporting and financial management. expected to foster the growth of ethical education and awareness, they are often faced with stiff resistance from the top level management (Fisher& Lovell, 2009).

Accountants have obligations to shareholders, creditors, employees, suppliers, the government, the accounting profession, and the general public at large Therefore, behaving ethically is an essential and expected trait. In this regard, an accountant bears the consequences of his moral choices not only based on his own life but also the lives of other people. The nature of the work carried out by accountants and auditors require a high level of ethics. Furthermore, shareholders, potential shareholders, and other users of the financial statement rely heavily on their professional competence.

1.3 Objectives of the Study

The primary aim of this study is to examine the effect of professional accounting bodies on accounting practices using ANAN as a case study.

Specific objectives of this study are:

To ascertain the extent to which ANAN execute its statutory roles.
To ascertain whether ANAN participate effectively in addressing issues confronting accounting profession in Nigeria.
To determine whether ANAN code of conduct have an impact on accounting profession in Nigeria.
To ascertain whether ANAN participate in entrenching the ethics of accounting practices in both public and private sector.

1.4 Research Questions

The following research questions will be answered in this study:

To what extent do ANAN execute its statutory roles?
Does ANAN participate effectively in addressing issues confronting accounting profession in Nigeria?
Does ANAN code of conduct have an impact on accounting profession in Nigeria?
Does ANAN participate in entrenching the ethics of accounting practices in both public and private sector?

1.5 Research Hypotheses

The following null hypotheses will validate this study:

H0: ANAN does not participate effectively in addressing issues confronting accounting profession in Nigeria.

Ha: ANAN participate effectively in addressing issues confronting accounting profession in Nigeria.

1.6 Significance of the Study

This study is will be useful to professional accounting bodies, individuals and regulators in Nigeria on the need to pay attention to good ethical conduct and also the need to adhere strictly to the ethical code of conduct.

Additionally, subsequent researchers will use it as literature review. This means that, other students who may decide to conduct studies in this area will have the opportunity to use this study as available literature that can be subjected to critical review.

1.7 Scope of the Study

This study focuses on examine the effect of professional accounting bodies on accounting practices using ANAN as a case study. Specifically, this study focuses on ascertaining the extent to which ANAN execute its statutory roles, ascertaining whether ANAN participate effectively in addressing issues confronting accounting profession in Nigeria, determining whether ANAN code of conduct have an impact on accounting profession in Nigeria and ascertaining whether ANAN participate in entrenching the ethics of accounting practices in both public and private sector. The respondents for this study will be obtained from some selected members of ANAN in Nigeria.

1.8 Limitations of the Study

In the course of carrying out this study, the researcher experienced some constraints, which included time constraints, financial constraints, language barriers, and the attitude of the respondents. However, the researcher were able to manage these just to ensure the success of this study.

Moreover, the case study method utilized in the study posed some challenges to the investigator including the possibility of biases and poor judgment of issues. However, the investigator relied on respect for the general principles of procedures, justice, fairness, objectivity in observation and recording, and weighing of evidence to overcome the challenges.

1.9 Definition of Terms

Accounting:

The system of recording and summarizing business and financial transactions and analyzing , verifying and reporting the result.

1.10 Organization of the Studies

The study is categorized into five chapters. The first chapter presents the background of the study, statement of the problem, objective of the study, research questions and hypothesis, the significance of the study, scope/limitations of the study, and definition of terms. The chapter two covers the review of literature with emphasis on conceptual framework, theoretical framework, and empirical review. Likewise, the chapter three which is the research methodology, specifically covers the research design, population of the study, sample size determination, sample size, and selection technique and procedure, research instrument and administration, method of data collection, method of data analysis, validity and reliability of the study, and ethical consideration. The second to last chapter being the chapter four presents the data presentation and analysis, while the last chapter(chapter five) contains the summary, conclusion and recommendation.

Chapter Five

Summary, Conclusions and Recommendations:

5.1 Introduction

This chapter summarizes the findings on the effect of professional accounting bodies on accounting practices using ANAN as a case study. The chapter consists of summary of the study, conclusions, and recommendations.

5.2 Summary of the Study

In this study, our focus was on the effect of professional accounting bodies on accounting practices using ANAN as a case study. The study is was specifically carried out to ascertain the extent to which ANAN execute its statutory roles, ascertain whether ANAN participate effectively in addressing issues confronting accounting profession in Nigeria, determine whether ANAN code of conduct have an impact on accounting profession in Nigeria, and ascertain whether ANAN participate in entrenching the ethics of accounting practices in both public and private sector.

The study adopted the survey research design and randomly enrolled participants in the study. A total of 50 responses were validated from the enrolled participants where all respondent were members of ANAN in Nigeria.

5.3 Conclusions

Based on the findings of this study, the researcher concluded that;

The extent to which ANAN execute its statutory roles is high.
ANAN participate effectively in addressing issues confronting accounting profession in Nigeria.
ANAN code of conduct have an impact on accounting profession in Nigeria.
ANAN participate in entrenching the ethics of accounting practices in both public and private sector.

5.3 Recommendations

Based on the conclusions of the study, the following recommendations are made:

It should be recommended that strong enforcement mechanism such as a council to regulate the activities of professional accountants should be established any professional practices accountant indulging in unethical practices should be denied of membership and the practicing license should be withdrawn
ANAN Members need to sign a declaration of compliance with ethical codes periodically. This may be once every year or two years.
There should be disciplinary committee in accounting bodies to check and implement proper sanctions on professionals who abuse their privileges by engaging in unethical.