The Role Accounting In The Control Of Private And Public Sectors Of The Nigeria Economy (A Case Study Of Chidex Group Of Companies And Power Holding Nigeria Ltd)
In recent times, private and public organizations, in Nigeria have been faced with cases of financial crisis, which have resulted in most of the organization going into extension. Those who are able to survive more are in gunil pace. Obviously, the causes of financial crisis in our private and public sector have been attributed to be unrecognized in nature and total negligence of the role accounting in our private and public organizations.
This research work will look the role of accounting in the central of private and public sectors in Nigeria. It will try to analyzes the implication of applying the accounting principles in our private and public organizations and then look at how these principles confirmed the operation of the private and public sectors of the organization in Nigeria.
Table Of Content
- Title page
- Approval page
- Table of content
- 1.1 Background of the study
- 1.2 Short Background history of the case study
- 1.3 Statement of the problem
- 1.4 Research Objective and purpose
- 1.5 Significance of the study
- 1.6 Research questions
- 1.7 Hypothesis
- 1.8 Scope and Limitation of the study
- 1.9 Definition of terms
- 1.10 Reference
2.0 Literature Review
- 2.1 Historical development of account in Nigeria
- 2.2 The nature of accounting principles
- 2.3 Types of accounting principles
- 2.4 Factors affecting accounting principles
- 2.5 The role of accounting in the control of public sector
- 2.5.1 Problems of accounting in the control of public sector in Nigeria
- 2.5.2 How accounting is used to control public sector in Nigeria economy
- 2.6 The role of accounting in the control of public sector
- 2.6.1 How accounting been used in the control of ptivate sector
- 2.6.2 The role that accounting played in the control of private sector
3.0 Research Methodology and Design
- 3.1 Introduction
- 3.2 Research methodology
- 3.3 Research design
- 3.4 Population sampling
- 3.5 Reliability of data
- 3.6 Sampling technique
- 3.7 Development
- 3.8 Observation
- 3.9 Data analysis
- 3.10 Data collection
4.0 Data Presentation and Analysis
- 4.1 Introduction
- 4.2 Data presentation and analysis
- 4.3 Test techniques
- 4.4 Decision rule
- 4.5 Testing the hypothesis
- 4.6 General comment
5.0 Findings Recommendation and Conclusion
- 5.1 Summary of findings
- 5.2 Recommendations on finding
- 5.3 Recommendations for further studies
- 5.4 Conclusion
- 5.5 Further suggestion to the studies work
1.1 Background Of The Study
In most developing countries Nigeria, government participation in economic activating is usually significant. One of the way through which the Nigeria economy is through the establishment of public enterprises. Public enterprises are statutory bodies operating services of an economic or social character or both on behalf of the colonial era. Especially after independence in 1960, Nigeria public enterprises have witnessed a steady growth until recently.
As “o lies (1988.133) puts it.” Beginning as a twinkle in the period between the era of the second world war and Nigeria attainment of independence, and the creation of public co-operation has risen to flood revel since independence and has maintained a steady growth.
The rationales behind the establishment of public enterprises in Nigeria are many. Some to the reason include: generating revenue that would add to available national capital for the support of development on welfare programmes, making it impossible for important profitable enterprise to be controlled by a few individuals or group, organizing certain critical activities for national survival and economic stability and providing employment opportunities (Ademotecum 1983)
However after a long period of growing starts intervention in the Nigeria economy through public enterprises, the mid 1980’s. onward has sometimes and put policy. This has been brought by the persistent has been running over the years. Consequently, there has been a willingness to look at the alternative policy strategies for the achievement of economic developments. As the fore front of the sea strategies in the minimization of the state in the economic including privation of public enterprises.
In Nigeria public enterprises are engaged in a whole spectrum of economic activities including agriculture mining, constriction, manufacturing, commerce and other services. The classifications of public enterprises in Nigeria have been made according to a variety of criteria and by different authority. The public service review commission (1975:101) classified.
Public sector into:
- Public utilities
- Regulatory or service body
- Financial institution
- Commercial and industrial enterprises being a mixed economy, individuals also own and operate enterprises.
Affirm is classified a private enterprises when it is founded and managed by an individual and or a group of individuals. There firms are local government within they operate.
The rational for the establishment of private enterprise are numerous just like the establishment of public enterprise. They include among others, provision of employment opportunities, generating in come for the owners of the enterprises government is also interested in profit performance of the enterprises which determines the fax liability of the firm moreover the generate public are concerned with the sense of social responsibility which the business exhibits to the environment in which it is located and its within ness to contribute to the upliftment of the environment.
The activities of the public and private enterprises have been on the increase in resent times, which necessitated the introduce of and accounting practices to check and monitor the financial activities of these enterprises in his book titled, “principles of accounting”, Image (1985 defines accounting 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 method of accounting in Nigeria was the use of money to record the amount of agriculture commodities like yams, cassava and livestock, which passed from one person to another. The historical development of modern accounting practical has been closely related to the economy development of the country. As business organization grows in size and complexity, management and outsides become more clearly different from the outside group which includes owners of the firm (stock holders) creditors, government employers and the general public.
The differentiate the need to have accounting department in the enterprises to give accurate financial information for use in judging the performance of the management and to satisfy the outside demand of the general public who are already interested on whether the enterprises is growing of not.
The role of accounting in the public and private enterprises in Nigeria is primarily to ensure accurate accounting in these sector and present fine financial position of the enterprises. The role is of utmost important and in any organization. An organization can only grow or make profit when its recourse is well managed. And resources can only be well managed when the accounting departments of the organization give accurate financial information to know how much the enterprise is having. It is 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 pronounced in the public enterprises. In recent time, there are cases of in appropriation of funds in the public enterprises and improper accountability. These factors have led to a lot of public enterprises going into oblivion. If the government has recognized the role of accounting all these causes should not have arise. No enterprise can move forward without having a well organization financial department to give accurate financial information about the firm
1.2 Short Background History Of The Case Study Chidex Group Of Company And Power Holdings Nigeria Ltd.
Chidex group of company’s is a company charged with overall responding suability of formulating and efficient transportation policies essential for the economic, social and political development of the Nigeria economy. The company is under the leadership of chief John Mice. Who as its managing director has the general responsibility for the assignment of corporate objectives and management of the resources of the company. Another key officer of the chief Account and Mr. Eze Christian. The company started in the year 1990 and has being into is the list of the directors from 1990 Till date
- Engr. Felix okoh 1990-1995
- Mr. Victor O. Ogwu 1995-2000
- Mr. Kema Chikwe 2000-20005
- Dr. Ifeanyi ikeh 20005-2010
- Hon. Dan okeke 2010-Date
In order to achieve its set objectives the company is organized into five (5) departments as stated below Departments
- Personnel management
- finance and supply
- Planning research and statistics
- Transport co-ordination and
Power Holding Nigeria Ltd
This is a development of energy project and has been leading the development of the something coal to sore facility since its inception. The partners each with decades of experience in leadership roles across a broad spectrum of responsibilities ranging from executive and operation management to finance to engineering. The company began as an energy marketer and moved into development of on site co-generation of power at larger industrial sites.
These are some of power holding management:-
Robert A Cilpin
– Chief Executive officer he has more than 20yrs experience in the gas and electric industry. He holds a Bs in economics from the University of Missionary and an MBA in entrepreneurialism, from Depanu University graduate college of business.
Stephen B. Show
– Chief financial officer, He is a founding member of power holdings he is an energy industry executive with over 20yrs experience in finance accounting strategic planning and human resources he holds both an MA in economics from Wayne State University and an MBA in finance from Eastern Michigan university.
Robert J .Desisto
– Consenting engineer, He has over 30yrs industrial experience Robert has spent the past nine years in power production and development. He was an original member of power holdings. He has a BS in chemical engineering from North eastern university and an MBA in management from the University of Wisconsin, Oshkosh.
Joseph N Darguzars
– vice president engineering. He has over 35yrs experience in energy project. Holds a BS in Aerospace and mechanical engineering from iuinois institute of technology
1.3 Statement Of Problem
Obviously every private and public enterprise in Nigeria have their accounting department. And there are increasing cases of financial mismanagement in visually all the public and private organization in Nigeria. The problem of this study lien on how the managers of the enterprises are able to recognize the role of accounting in their sectors so that these cases of improper accountability will be minimized or if possible total era- dictation in our society.
1.4 Research Objectives And Purpose
The purpose of this research work is to fine out the role of accounting in the control of private and public sectors in Nigeria with reference to Chidex group of companies and power holdings Nigeria ltd.
- To determine the extent to which accounting generally affects. The economic activities of the private and public sectors in Nigeria.
- To examine how managers adequately and efficiently apply the role of accounting in their organizations.
1.5 Significance Of The Study
In this study, the researcher has set out to examine the role of accounting in the control of private and public sectors in this country Nigeria mostly concerned with chidex group of coy’s and power holding company. Nigeria with highlights of the inherent problems encountered in the accounting department of most organizations. It is expected that that this work will be of interests to the owners of business enterprises the government and the public.
To shareholders, owners of the enterprises, interested person and the government this study is expected to kindly their interest the more and they will take note of various recommendation mentioned team towards forming a sound accounting department which would enable organization to present accurate financial information of the firm.
This study will also help to serve as literature to individuals or corporate bodies who want to carry out further research on the role of accounting in the private and public sectors in Nigeria.
1.6 Research Questions
- Has accounting principles has any control over public and private sectors in Nigeria economy?
- What training method can improve the manager’s skill, knowledge and experience such that high concentration will be given to the accounting control in private and public sector?
- What will be done so that there will be perfect accountability in the accounting section of any organization?
- What type of accounting standard or technique will be applied to see to the maintenance of accuracy in the accounting control of public and private sector in Nigerian economy?
- How will manager of the enterprises be able to recognize the role of accounting in their sector so that these cases of improper accountability will be minimized or eradicated?
For the purpose of this study following hypothesis are used:
- H0: The role of accounting in the control of public and private sectors Is independent on both sectors.
- H: The role of accounting in the ant on both sectors.
- Ho: Accounting control of public and private sector has effects the economic activities in both sector of the economy.
- Hi: Accounting control of public and private sectors has not effects to the economic activities on both sectors of the economy.
1.8 Scope And Limitation Of The Study
The research topic suggests a study on the role of accounting in the public and private enterprises in Nigeria. The scope of this study will focus at companies, private companies and a sole proprietorship, a case of study will feature for chidex group of companies and plan.
1.9 Definition Of Terms
The following terms were used for the purpose of this study.
This is that sector of the economy established and operated by the government or its agencies, distinguishable from the private sectors and organized on behalf of the whole citizens.
This is that sectors of the economy established and operated by individual. Its agencies are totally different from public sectors.
This is the composite activity of collecting analyzing recording, summarizing, Reporting and interpreting the through financial position or transaction of any organizations or government units.
This is state of forgetting or being quite forgotten i.e. to show that if any organization fail to give proper accountability of the financial position it will be forgotten.
Finding, Recommendation And Conclusion
The data that is collected for this study have been presented and analyzed in the previous chapter. Thus various organization representing the private and public sectors were used for this study and certain findings where made.
That more organization in the private sectors publishes financial statement bearing in mind the requirement of the SAS and CAMD.
That certain economic factors as well as government policies and changes in the accounting affect the procedures by which the roles of accounting are applied in the private sectors.
That the expectation of management in an organization usually provide the other factors when choosing a method by which an accountant principle is adopted. And that the Nigeria accounting standard Board does not carry out its functions on the publishing of standard as effectively and efficient as expected of them.
According to Butter man in his speech during a seminar titled: Do accounting standard works in the public interest? He said “there are ominous sign is in practice, the whole issue of compliances with accounting standard is getting out of hands companies attempt to blackmail the auditors into accounting derivation from accounting standard.
This problem can be put down to accounting standard of financial, accounting and reporting coming in for increasing criticism “with limited resources to keep us with current practices”.
Mathew patent believes that the root of the problem is that accounting standard have been spirit formulated to appeal to the spirit of the true and fair view, airing auditors to work out the details. In today’s practices according to him; the spirit of the true and fair view has been thrown to the wind as Nigeria businessmen seek to adopt standards to their needs.
That the primary aim of this establishment as regards to auditing is not to detect fraud and error but to provide a grate moral check on the management and staff of an organization against commission of errors and fraud. The prevention and detection of fraud and error hence are primarily the responsibilities of management and responsibility of the auditors.
In the organization studied example CAC and PHCN several of the junior staff interview have never heard of accounting standards and how they are applied in the financial transaction of the organization which they work. Only the senior staffs are expected to know about accounting standards while in in-service training are organized for senior staff. Other pick-up their knowledge through observation of various process.
Non-profit making organizations as well as small scale business enterprises do not see the need in preparing up to data financial report on their receipt and disbursement of assets and liabilities. From the researcher would like to make a few recommendations.
5.2 Recommendation On Findings
The following recommendations have been made on the basis of the findings of this study.
Less emphasis should be placed on the needs and expectation of management when preparing financial reports and prepare should not be based in the preparation.
Better awareness should be created amongst the public and practitioner of accounting profession the need and importance of adequate application of accounting standards.
The NASB should show bit imagination and adequate research on its standard and an attempt should be made to develop a system of accounting standard reflective of local social economic, culture and experience.
Theoretical postulates and development should be separated from the control of practitioners. Rather practitioners should be guide in their practice by a body of independently developed theory.
A high level working committee should be inaugurated to examine blatant breaches of accounting standards and the balance of powers on NASC should be belittled to favour the procedure of account, the auditors and the public inters equally and more detailed standard should be published.
An organization in both public and private sectors of the economy should be made to comply fully with the standard requirement of the presentation of reports on financial transaction and strict disciplinary measures should be taken against those that will fail to comply.
Efforts to improve existing principles will have better chances of success if they have made with full recognition of the needs and special, problem of business exercised financial analyst government agencies and other who use the accounting information in their organization.
5.3 Recommendation For Further Studies
Even through this study added to existing literature on the topic, the extent and coverage has been constrained by some factors as pointed out in chapter one.
The researcher hereby recommend those further studies on the role of accounting in the control of private and public expenditure in Nigeria should be carried out to find out the areas of weakness and how the role can be made more efficient and effective
Furthermore, a study should be carried out on the role of the Nigeria Accounting standard board in improving the level of practices amongst practitioners on the role of accounting principles.
The role of accounting principles in the control of private and public expenditure in Nigeria was the main aim of this project work. The organization were, the major ones include Chidex Group of Company (CGC) and Power Holding Company Ltd (PHCN) and the minor ones which were also sampled include Nigeria bottling company (NBC) and federal inland revenue services (FIR).
Also studies were the effect of certain economic factors and government policies on the role of accounting principles from the data obtained, it was observed that the role of accounting principles indeed affected by both sectors that government policies on economic matters affect the method and basis upon which accounting principles are applied and it was discovered that various law and decree on company Act did not conflict with each other application.
At the end of this project, it was discovered that the role of accounting is not effective in the private and public sectors and that the level of awareness on the need for adequate application of the standard were rather low in both sectors and that the NBSB do not show any sign of imagination nor research in its standard which is reflective of local social economic, culture and experience, but rather there seems to be a jet age youth to meet up with international standard at the expenses of local needs and development.
It was suggested that further project write up, thesis inclusive should be carried out extensively on the topics studied. The validity of accounting principles rest on their simplicity, clarity and generality in current practices in furnishing guidance for more conduct of practitioners of the profession.
Finally, the role of accounting by all organization in the public and private sectors would result in higher productivity level and the rate of development of the country would be better enhanced. Therefore, the practice should be better encouraged amongst practitioners of all levels of production, both in profit making organization because lack of proper accounting by the private and public sectors is chronic on the economic development of an economy.
5.5 Further Suggestion To The Studied Work
My suggestion is that adequate standard should be raised and the level of awareness be increased to the private and public sectors in Nigeria by National Accounting Standard Board (NASB) and other professional accounting bodies so that all the accounting department should know that they were expected to do in the accounting principles should be applied by all the organization. So that this standard raised will be maintained and role of accounting sectors in Nigeria economy.
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