Impact Of Financial Management System On Organizational Accountability: A Study Of Selected Firms In Nigeria
The business organizations is an indivisible economic agent of federal State government. The business organization therefore contributes to the development of the rural areas with the social amenities, bringing peace and harmony among the citizens with the provision of policy. However, the result of the role of business organization in the development of rural areas in Nigeria is a result of the financial budget and allocation portioned to the various business organizations.
1.1 Background of the Study
Financial management constitutes the most crucial and central aspect in the administrative process of the business organization. This is due largely to the fact that finance determines the amount of services, development and quality and quantity of personnel provided by the business organization.
However, the amount of revenue available to the business organization and it’s accountability makes for efficient and effective business organization. Financial and it’s management is a sensitive area in government, and it’s strictly governed and guided by elaborate rules, regulation and guideline. Apparently, budgeting is the central activity in financial management, it includes the financial plan systematically designed showing details of the governments anticipated revenue and expenditure for a fixed period of time, which forms the basic and guide of government activities during the period.
Greater emphasis is always placed on the financial management, as the pedestal machinery for development and total governance in the business organization. It equally in skills a level of financial display on the leadership execution and performance evolution. Furthermore, it is believed that financial management held’s the prospect of creating many opportunities, full exploitation of revenue sources available within the business organization area. This can subsequently create for mobilization and expansion of commercial activities. In addition and embezzlement associated with the business organization.
Equally, financial management induces the demand for policy, which makes for prudent spending, economy in the application of funds and avoidance of waste.
Ideally the prospect of financial management helps prevent deficit and create for documentary foundation to question the wisdom and justify the revenue and expenditure in the planning and policy adjustment in business organization.
Ardently, there exist problems, which are associated with financial management in the business organizations. These problems which are wide in scope and complex in nature, but relative to the diverse business organization areas. Actually, the business organization requires huge financial resources I order to provide it’s finances, amplifies their problems. Thus, the low internal revenue generation in our government appears to be a very wide problem, which consistency leads to deficit spending in their state of affairs. It is dear that almost every local, government system possess weak financial base. The financial departments of many business organizations are adequately stated with qualified and experienced financial managers, accounts, auditors and property valuation officers who would apply their skills and initiatives to develop plans and strategies which would help them harvest and exploit fully and effectively the internal revenue sources. These indispensable, for efficient financial management, which are lacking in the business organization have reduced the revenue generation capacities of the business organization. It is also observed that the financial management of our business organization of our business organization is grossly indicated and fraudulent abuse of priorities is a rampant practice. While public accountability is not taking seriously in the business organization, business organization accounts are not regularly audited to ensure financial discipline within financial memorandum and the prudent management of available funds.
In addition the financial management of the business organization suffers relatively from the endemic problem of instability in the business organization. It creates it’s own problem in the business organization finances, the constant fundamental changes in the business organization does not give it the required long term for planning, experimentation or alternative strategy techniques and solutions to problem. The financial management of the business organization could be better in performance it devoid of constraint interceptions and changes. Conversely, with the facilities has an adverse effect on the financial management of the business organization through the statutory revenue allocation is constructional and legitimate yet it is often with held, delayed or reduced, affect the financial estimates and management of the business organizations. In addition, the undue state control of business organization and it’s accounting system have contributed to how extractive the capabilities of the business organization are. Orewa observed in this sense that the late approval of the budgets of business organization have made it practically impossible to mobilize effective revenue and led to poor implementation of the budget, deficit and debt burden.
Finally, the lack of effective public enlightenment programme have significantly created problem to financial management in the business organization. The negative attitude of people towards taxation, public levis and fees have reinforced inadequate financial management and the absence of accountability cum the people’s full inclement in local affairs. Public enlightenment can help to change management in the business organization.
1.2 Statement of Problem
Had been shady and muddled treatment to issues that affect financial management in the business organization. It’s associated prospect and problems are ignored to the determination of improved business organization.
- The poor performances of the business organization are of great concerns and subsequently call for review a study. Also the wrong perceptions in the business organization have ridiculed the mobilization of local resources and prudent utilization of available resources. Insufficient attention has been given to it by contemporary writers and scholars.
- The constant problems confronting the business organization have correlation with the nature, prospect and problem of financial management. Financial men agent is the critical nerve centre of the very existence of our business organization.
- Apparently the low rate of development at the local administration level and the near absence of government impact and presence which fundamentally increase the rate of poverty, unemployment and in acceleration of attractive investment have remained for fuller actives in the business organization area would be given an objective study in the thesis.
- The near breakdown of our moral fabrics and institutional basis for governance have paved way for management attitude which neglect the purpose of governance and real existence of business organization are problems which- this study hopes to fundamentally address.
1.3 Objective of Study
- This work endeavors to appraise the financial management styles of the business organization
- It will also attempt to refocus attention to the essence of financial management and accountability in the business organization.
- It will analyze the problems and prospects coupled with financial management and accountability in the business organization
- It will analyze the various obstacles and variables that have affected financial management and accountability with a view to providing remedies.
- Finally, it will reduce properly, the prospects of business organization for development.
1.4 Significance of Study
It is hoped that this study will be great benefit to students in the polytechnics and other institutions of higher learning; the state and the general public.
It is expected that the study would help to improve the financial management of our business organization resources.
The study will significantly define the importance of financial management in government. It will have hindered the development of business organization areas
Furthermore, it will help to encourage the; issue of auditing, and accountability in governance, which creates for confidence and development the study as assumed to offer suggestion and reminders on ways of improving the financial management of business organizations will identify the neglects and failures in the management system of our business organization.
1.5 Research Questions
- Does the present financial management system sufficient and satisfactory to promote development of business organization areas?
- Does most business organization adopt financial management styles to caution the problems inherent in the system and area?
- Is it believed that the prudent financial management in business organization would boast the economic potential of the area?
1.6 Scope of the Study
Financial management in public administration involves taxing, budgeting, spending, auditing, accounting and evaluation functions. At the business organization level, polities circumscribe the budget process and the various area of expenditure.
A budgeting is a projection into the immediate future of an organization or government. Government budget today is an annual ritual, which shows what the government expects to earn and what it purposes to spend in the forth-coming financial year.
Is the hallmark of financial administration because one who controls the strings calls the tone and secondly because in democracy officers should not only be honest but also should appear to be so. Democracy is a part to devise sorts of mechanical and human means to protect public money form susceptibility of its officials.
Government rely on one or more of the following sources of revenue to financial their spending, they are more or less the functions of financial management.
1.7 Limitation Of Study
It is important to point out that this research would have been in the right sense nation wide or state under to make for good generalization.
But as a result of limited resources and other obstacles such as illiteracy accessibility and unco-operation by respondents and inefficient transport system among others has contributed me to carryout this research or study in selected business organization areas of Imo state
1.8 Definition of Terms
Is the taxing budgeting, spending auditing, accounting and evaluation functions.
Is the degree to which a person must answer to some higher authority for actions in the larger society or in the organization.
Administration is defined as a process of mapping out a procedure to do something and then carrying people along in order to achieve the stated objective depending on the lasted procedures.
This is termed as third tie of government, which helps to educate the rural areas on the operation of the government.
Summary, Conclusion and Recommendation
Basically, the thesis tends to review the impact of financial management system on organizational accountability: a study of selected firms in Nigeria. Financial management was seen to be crucial and pedestal in business organization development and governance.
This is largely to the importance of finance in every human endeavors and organization. It’s management is sensitive and touching to the overall attainment of goals. It holds the opportunity for the full exploitation and mobilization of local resources this prospect is quite interesting in helping to accelerate growth and development.
In addition, it behaves the prospect of stemming the tide of fraud, corruption and embezzlement system. This agrees with view of Ocrunna (1996) on the essence of financial management.
Furthermore, it is observed that most departments adopt suitable competition method to suit their convenience and peculiarities. The view, many observed in table three indicates efforts to cushion the associated problems.
Financial management would help in the proper utilization of available resources and creates for effective co-operation and control of business organization affairs. All these are to be affirmed through planning measures.
Financial management is quite crucial in business organization. It is inevitable and dressing the entre activities of the system. It operates with stringent rules, guides and regulations; thesis rules help in co-ordination, stemming fraud and embezzlement, supervision and control financial management.
Budgeting is equally essential and endemic with financial management. It therefore holds that financial management is inherent with prospects and accountability the prospect includes:
- It creates for many opportunities for full exploitation and utilization of resources and revenue available to the business organization
- It provides for effective measures against fraud, corruption. Wastages and extravagance and in monitory projects over development efforts.
- It includes demand for policy and planning to guide spending of funds
- It provides for coordination and control of business organization activities and development.
- The business organization should employ within it’s service financial experts to handle their affairs.
- Relevant bye-laws should be promulgated to stem fraudulent abuse of office, mismanagement and corruption
- There should be state economic and development policy that will integrate the business organization, so as to help mobilize more revenue.
- Public enlightenment should be encouraged.
- More autonomy and independence and financial assistance should be given the business organization.
- Financial experts should be employed in the business organization.
- The business organization structure should be reorganized by prudent financial management.
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