The Role Of The Accountant In The Privatization And Commercialization Of Parastatals In Nigeria

Project and Seminar material for Accountancy

Project and Seminar material for Accountancy


Abstract


The topic of this research work is the role of accountant in the privatization and commercialization of parastatals in Nigeria. In this research work, we were trying to know the impact an accountant takes in different sectors of the economy in Nigeria .from researches I made, an accountant is a person who has the right to keep audit and inspects the financial records of individuals or business entity and prepares financial and tax report.

The major motive of this research work is to highlight the roles accountant offers to the government and the other interested groups before, during and after the programmes of privatization and commercialization towards the attainment of the set objectives.

The objective of this study is to know the actual number of parastatals in Nigeria for privatization and commercialization. During the course of the researches, we encountered certain problems that faced by federal government during the beginning of the privatization and commercialization programmes.
In an attempt to conduct fair and comprehensive research, we discovered certain limitations in the process of carrying out the research work as a cause of inadequate finances and time limit.

In summary, the major objective of this work is to generally based on the role of an accountant in the privatization and commercialization of parastatals in Nigeria and the preparation of financial statement of a firm.

The research work I carried on is divided into three chapters. Chapter one deals with problems, definition of terms. Chapter two involves literature review and the role of different sectors in the economy. Lastly chapter three involves summary, conclusion and recommendations.

I used recommendations in the study to anticipate contributions that is being carried out by the accountant.


Chapter One


1.0 Introduction

According to the topic “The Role Of the Accountant the Privatization and Commercialization of Parastatals in Nigeria”, firstly and accountant is a person that keeps audit and inspects the financial records of individuals or business concerns and prepares financial and tax report. He is also a person concerned with the maintenance and audit of business accounts and the preparation of consultant reports in tax and finance. According to the definition, the accountant helps the private and commercial parastatals in Nigeria to control their financial status.


1.1 Background Of The Study

According to the native revenue proclamation No: 2 of 1906, which was the first step taken by the British colonial to introduce a comprehensive legislation and revenue generation in the colony. This step was applied to the southern part of Nigeria. Due to the urge for instance in the revenue generation and share incidence of administration conveyance, Sir Lord Lugard amalgamated the northern and southern Nigeria in 1914. With this arrangement there was a rise in consolidated revenue and also to the setting up of uniform public enterprises and corporation in Nigeria through the modified proclamation ordinance No of 1917.

There was a fundamental transformation of the economy which went from a policy orientation to a more liberalized regime. The policy was made possible by Nigerian enterprises promotion degree of 1972/1974, which the world oil market situation was depressed by late 1980, there was an account of about 50% of GPD and over 60% of modern sector employment which created to non commercial and 110 commercial and federal parastatals with a state level of large number which rely on government subvention to cover operating loss. Due to the collapse of oil prices there were adverse consequences on the economy which exchange rate, a incentive structure which discourage savings and investment to low or even negative growth rate of the GPD capacity privatization to the virtual disappearance of non oil tradition product from over export profit.


1.2 Statement Of The Problem

  1. The greatest problem faced by the federal government during the beginning of the privatization and commercialization programme in July, 1988 was the sound implementation of the programme.
  2. This provides a decision by any perspective private investor whether to decide on, to invest in any enterprise an accountant who understands the language of the business, vis-a- vis the interpretation of financial statement among other roles, it is known that most public enterprises fails because of inadequate accounting information which aids management in her decision.
  3. Due to the failure government parastatals, the role of accountant and re-evaluating of accounting concept was made necessary.
  4. This identifies the major cause which is said to be lack of sound and prompt utilization of accountant’s personal which helps in the co-ordination of the business functions in other departments. The project reviews the role of accountants in relation to the provision of information.

1.3 Research Questions

  1. What are the reasons for the privatization and commercialization of government parastatals?
  2. What is the meaning of privatization and commercialization?
    • full meaning
    • Partial meaning.
  3. What are the criteria used in qualifying government corporations for full or partial commercialization?
  4. How many public enterprises were stated for privatization and commercialization?
  5. How many of the affected parastatals have been privatized and commercialized so far?
  6. To what extent can the accountant display to the successful privatization and commercialization exercise?

1.4 Purpose Of The Study

The topic of this research is an interesting area which requires the details on the control of failure, of the government parastatals as a result of improper management of man, materials and machines, the main purpose of this study is on the role the accountants offers to the government and other interest groups before, during and after the programmes of privatization and commercialization towards the attainment of the set objectives. The problems is said to be non recognition of accounting rules, principles, techniques and procedure essential to understand the activities of the parastatals vis-à-vis public in the implementation of proper.


1.5 Significant Of The Study

The state and federal level of privatization and commercialization of public enterprise may not be completed within the first four year of the four republics. Which is due to the consideration of issues on the floor of the house that are to be decided by the federal government state legislators on the type full partial and the actual establishment for the exercise which will require a gradual process.

The recent constituted committee on privatization and commercialization programmes reviews the roles of an accountant which must be appreciated in the execution of the programme by ex-raying in pros and cons in the financial statements/records both in the planning down to control exercises.


1.6 Scope Of The Study

There are a great number of parastatals in Nigeria stated for privatization and commercialization, they include NNPC, NITEL, NPA, PHCN, NRC, NCC, NTA, NMA, NAA, WATER BOARD, BANKS, ROLLING MILLS, SALT AND TEXTILES, NAGCON, etc.

Based on this fact area of concentration is going to be centered on July 3 of the parastatals namely the petroleum, communication and electricity (NNPC, NITEL, PHCN). By special field of study there will be the role of the accountant in the above parastatals and how she is involved in the current privatization and commercialization programme in Nigeria.


1.7 Limitations Of The Study

An attempt was made to conduct a comprehensive research work on this project so as to make it a board base text to all manner of people. However, the inadequate finances and limited time period allowed for the completion of this project was not considered enough and could not allow for a thorough and in-depth work to be done. As a result of the above relatively small sample was being studied here as there was limited number of literatures on the topic, which denied this research must acknowledge what other scholars have done on the topic in the past. In any case, apart from the literature review relevance is placed on the credible questionnaire responses by respondents in spite of all these short comings, this research was the belief that the data and information gathered will adequately stand text of the time, thereby, serving the need for this study.


1.8 Definition Of Terms

Privatization:

This can be defined as a total transfer of government owned equity interest wholly to private investors.

Commercialization:

This is the running of government owned enterprises in a sector to be profitable through changes in a management.

Full Privatization:

This can be defined as a total transfer of government owned equity interest in an enterprise wholly to the private investors.

Full Commercialization:

This is the process of running government owned enterprises and efficient manner as to make enough profit to cover both the capital and overhead profit.

Partial Commercialization:

This is the process of running government owned parastatals in a manner to cover the overhead cost while leaving the capital cost to be done by the government.

Parastatals:

This can be defined as the government owned establishment. They are often called public enterprise.

Technical Committee On Privatization And Commercialization

This is a committee being established by the federal government to supervise and monitor the organization of privatization and commercialization programme.


Chapter Five


5.0 Summary, Conclusion, Recommendation

5.1 Introduction

In this chapter we are going to see the summary of the study which is the role of an accountant in privatization and commercialization of parastatals in Nigeria.


5.2 Summary Of Findings

The major objective of this study is generally based on the role of an accountant in the privatization and commercialization of parastatals in Nigeria. Also based on the entire research work. In the courses of this study one major role of accountant is the preparation of financial statement which provides information to both external and internal users of the enterprises. Therefore, the researcher as motivated in her quest to substantiate her assumptions about the role the accountant plays in the on going privatization and commercialization exercise.

In summary, for the discussion of a prospective investor in any parastatals on whether to or not invest in them must require the services of the accountant whose role is to interpret the financial statement. The accountant will also serve as an anchor man in which he provides the necessary financial information thereby, playing the role of a watch dog in the parastatals. In this way, he makes sure that the government enterprises are being accounted for.


5.3 Conclusion

The production of this reliable result in the study with the statistical analysis provides us with some reasonable degree of certainty that:

  1. There is a positive and significant relationship between roles the accountant play and the sale of unproductive investments in the parastatals.
  2. The accountants play some positive role in initiating the privatization and commercialization of parastatals.
  3. There is no relationship between the financial statements of the parastatals and their extend of utilization in the privatization and commercialization exercise.

In conclusion, the researcher reveals the certain vital role played by the accountants and their extend of utilization in the privatization and commercialization programme which consists the following;

  1. Setting up sound accounting system to suit the services of operation of the parastatals.
  2. Preparing the annual report of TCPC or BPE to be presented to the national council of ministers.
  3. The modern accountant is a computer specialist on export to benefit external and internal decision makers
  4. Providing and prompting wider share ownership.
  5. Offering corporate advice on dividend, banking and taxation.
  6. Translating the numerous economic events that occur in the enterprises into financial statements.
  7. Providing their report in order to meet stock exchange requirements.
  8. Providing proper financial records in appropriate combinations and ratio of a guide for effective planning and control by management.

In conclusion to the above facts, the accountants play a smooth role of the privatization parastatals in Nigeria.


5.4 Recommendation

In this study, an anticipated contribution is being carried out by the accountant and the important use of the accounting system in privatization and commercialization of parastatals in Nigeria. Thereby, providing relevant and viable information for sound decision making for the government and investors. Based on the research on this project, the following recommendations listed below are made to the government, investors and households. And they include:

  1. The ensuring of an effective and sufficient account of the parastatals is based on the employment of a creative accountant with an exposure and proper training.
  2. The authorities should consider the disclosure of the other financial statement as been important and relevant other than only statement and balance sheet in the smooth implementation of privatization and commercialization exercise.
  3. The liaising of the institute of chartered accountants of Nigeria (ICAN) to convince the process of reviving the accounting standards in parastatals by the government.
  4. There should be a free hand to exhibit the profession knowledge in privatization and commercialization exercise by the accountant, thereby enhancing the profitability and viability of such enterprises.

The Role Of The Accountant In The Privatization And Commercialization Of Parastatals In Nigeria


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