ROLE OF ACCOUNTING IN THE CONTROL OF PUBLIC EXPENDITURE IN NIGERIA
| Format: Ms Word | 1-5 Chapters | Table of Content|
INSTANT PROJECT MATERIAL DOWNLOAD
Study Level: BTech, BSc, BEng, BA, HND, ND or NCE
This study examines the role of accounting in the control of public expenditures in Nigeria, a case study of Central Bank of Nigeria, Enugu State. The researcher adopted descriptive survey design. The population of the study is the combination of internal audit department staffs and accounting department staffs making it a total of 200. The study used both primary and secondary source of data. Literal works were reviewed for proper understanding and guidance. Questionnaires, personal interview and observation were used for collect of primary data. Secondary source of data were collect from text books, periodical, articles and journals. Tables and simple percentage were used for data analysis, hypothesis were tested using chi-square statistics. Based on the findings, the researcher found out that few of the staff were not following due accounting principles thereby causing inadequate and improper pursuit of the accounting records Omission of certain book-keeping records, improper audit. The staffs and management of central bank of Nigeria has now adopted accounting standard, and the balance of power on NASC, financial analyst government agencies and others.
In most developing countries including Nigeria, government participation in economic activity is usually significant. One of the ways through which government has intervened in Nigerian economy is through the establishment of public enterprises and statutory bodies operating services of an economic or social character on behalf of the government.
Since the colonial era, especially after independence in 1960, Nigerian public enterprises have witnessed a steady growth unit recently. Its Olisa (1988:133) pet it. Beginning as a trickle in the period between this era of the Second World War and Nigeria attainment of independence the creation of public corporations had risen to flood level since independence and his maintained a steady growth. The rationale behind the establishment of public enterprises in Nigeria are many. Some of the reason include: generating revenue, they would add to available rational capital for the support of development and welfare programme, making to be controlled by a few individual, it possible for important profitable enterprises to be controlled by a few individual or group, organization certain critical activities national survival and economic stability and providing employment opportunities (Ademolukun 1983). However, after a long period of growing, starts intervention in the Nigerian economy through public enterprises, the aid of 1980’s onwards had witnessed a reversed which has sometimes been dramatic in public opinion and therefore public policy. This has been brought by the persistent losses which state enterprises that have been running over fears. Consequently, there has been a willingness to look at alternative policy strategies for the achievement of economic development. At the forefront of these strategies is the minimization privatization of public enterprises.
In Nigeria, public enterprises are engaged in a while spectrum of economic activities including agriculture, mining, construction, manufacturing, commerce and services. The classification of public enterprises in Nigeria, had been made according to varieties of criteria by different authorities. The public service review commission (1975:101) classified public sector into: Public utilities, Regulatory of service body, Financial institutions, Commercial and industrial enterprises.
Being a mixed economy, individuals also own and operate private enterprises. A firm classified as private enterprises when it is founded and managed by an individual and other group of individual. These firms are expected to be registered in the local government within which they operate. The rationale for the establishment of private enterprises are numerous just like establishment of public enterprises. They include amongst other; Provision of employment opportunities, Generating income for the owner of the enterprises. Government interest in profit growth of the enterprises which determine the tax liabilities of the firms, improve the performance of the public sector through competition. Moreover, the general public is concerned with the contribution which makes towards social upliftment which is exhibited to the environment in which the business is loaded and its willingness to contribute to the development of the environment.
The activities of the public enterprises have been on the increase in recent times which necessitated the introduction of the accounting practice to check and monitor the financial activities of these enterprises. In this book, titled principles of accounting, by Bimage (1985) accounting is defined 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 records were kept in physical quantities. These records came from the Eastern (early) civilization which involved in the countries around the Mediterranean Sea such as Mesopotamia, Egypt, Crete, Italy etc. Money was recorded as soon as money took the place of barter as a medium of exchange and unit of accounting practice has been closely related to the economic development of the country. If the business organization grows in size and complexity, management and outsiders became more clearly differentiate from the outside groups which include owners of the firm (stock holder) creditors, government employer and the general public. The differentiation necessitated the need to have accounting department in the enterprises to give accurate financial of the management and to satisfy the outside demands or the general public who are already interested on whether the enterprises in growing or not. The role of accounting in public enterprises in Nigeria is primarily to ensure accurate accountability in these sector and present the time and fair financial position of the enterprises. The role is of utmost importance in any organization. An organization can only grow or profit when the resources are well managed and effective observed over expenditure. These resource can only be well managed if accounting department of the organization give an accurate financial information to know how, much the enterprises 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 misappropriation 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 reorganized the role of accounting, all these fables should not have arisen. No enterprises can move forward without having a well-organized financial departments to give accurate financial; information about the firm. This is because if improper accounting records are not minimized or where possible eradicated these is bound to be cases of public enterprises failure. Consequently, staff of such enterprises will forced out of their job. This will result to economic and social; activities in the society.
1.2 HISTORICAL DEVELOPMENT OF CBN (A PUBLIC COMPANY)
The formation of CBN started gradually in the early 1950’s but gathered momentum by the middle and towards the decade. Precisely CBN was established in 1958. Among the factors that led to the formation for an apese financial institution in the early “50s” were the dissatisfaction and short coming to the west African currently board. The WACB established in 1912 was playing the role for an apese monetary institution in the British West Africa especially in areas of the country.
The issue of West Africa Currency exchanging this with the existing currencies, investment of reserve mainly in London and the repatriation of existing currencies. However, because of the anomalies and short coming of the WACB especially as if could not perform the monetary management, Nigeria nationalist continued to amount pressure on the colonial administration for the establishment of a central Bank that should have all pioneers of a central bank, and not just a glorified currency exchange house.
In 1952 at the floor of federal house of Assembly (First sitting) Lagos-Chief Anthony Enahoro Summoned up courage and more a private member motion calling for the establishment of central Bank for the purpose of rapid economic development in all its phases.
However, as result of the composition of the house then and lack of awareness of the importance of central bank on the part of some Nigeria members the bill failed. Even though the motion was not successful, it stirred the hornet comb. It gingered the colonial office in London Administration appointed Mr. Fisher, a senior staff of Bank of England, to inquire into the desirability and practicability of establishing a Central Bank of Nigeria as an instrument for promoting the economic development of the country.
Fishers in his report as an agents of colonialism and on orthodox bank stated that central Bank cannot be established in a financial environment where all factors that make a central Bank perform are not existent.
In the same year, while fisher was submitting his report to another independent term of financial expects were in Nigeria from world Bank (international Bank for reconstruction and development) with a mission like that of fisher at examining the desirability and practicability of establishing a central bank of Nigeria.
The World Bank mission were more objective in their report and less inclined to perpetual economic dependence. They really agreed with the recommendation of fisher on the instability of the financial environment as a result of weak money and market instruments but they were quick to add, that the continued political and economic advancement of Nigeria is bound to lead to the establishment of a central bank. To postpone the day when functions of currency issue and the management of foreign assets are performed in Nigeria will also postponed the day when trained Nigeria will be able to perform these functions responsible by themselves.
In 1957, even though Nigeria had not totally got her indigence, but she gained the antonomy of self-internal rule. The nationalists did not wash time in commissioning another financial expert from Bank of England J.B Loyness to advise then as:
- The establishment of a federal institution to perform appropriate central banking functions.
- The introduction of Nigerian currency and the administration of such as currency so as to presence in external value and its acceptability within the country.
- The relationship of the federal institution to the federal and regional government, to government institutions, to the commercial Bank and to the public and
- The role of such an institution in the development of a local money and capital market. The report of JB Loyness led to establishment of the central Bank of Nigeria (CBN) by the Central bank of Nigeria ordinance of 17th March, 1959, the bank officially commenced business on 1st July, 1959.
1.3 STATEMENT OF THE PROBLEM
Obviously, every privates and public entries in Nigeria has their accounting department and there are increase cases of financial mismanagement in virtually all the public and private organization in Nigeria. The problem of this study lies on how the manages of these enterprises are able to recognizes the role of accounting in their enterprises so that these cases of improper accountability will be minimized or if possible its total eradication in our society.
1.4 PURPOSE OF STUDY
This study aims at investigating the role of accounting in the control of public enterprises in Nigeria. The purpose of this study include among others:
- To determine the extent to which accounting records has controlled the effect of expenditures in public enterprises.
- To find out factor that affects the accounting department preventing them from carryout their function as expected.
- To determine government policies which promote accountability in public enterprises in Nigeria.
1.5 SIGNIFICANCE OF THE STUDY
At the completion of this study it is expected that the findings will aid in highlighting the inherent problem encountered in the account department of most organizations. Specifically to the accounting officers in Central Bank of Nigeria to improve on their system of expenditure where lapses are discovered to exist. It is expected that the findings will be of interest to the owners of business enterprises, the government, students and the general public. To shareholders, owners of enterprise, interested persons and the government, this study is expected to rekindle their interest the more and they will take note of various recommendations mentioned here and help steer the management team towards forming a study organizations to present an accurate financial information of their firm.
This study will also help to serve as literature to individual or corporate bodies into want to carry on further research on the role of accounting in the public sector in Nigeria.
1.6 RESEARCH HYPOTHESES
The following null and alternate research hypotheses were formulated by the researcher:
Ho: Good accounting records budgeting has no control effect on expenditure of Central Bank of Nigeria.
H1: Good accounting records budgeting has control effect on expenditure of Central Bank of Nigeria.
Ho: Corruption do not affects the quality of service rendered by accountants in public enterprises.
H2: Corruption affects the quality of service rendered by accountants in public enterprises.
1.7 SCOPE AND LIMITATION OF THE STUDY
The scope of this study shows extent of coverage done in the accounting sector. The research topic centered on the role of accounting in the public enterprises in Nigeria. The main focus is on Central Bank of Nigeria (CBN) Enugu State. I take this to be a fair representative of Nigerian Public Enterprise that is either avoidable or hard to come by. The researcher however encountered some constraints in the course of the research;
TIME: This which was a major problem was adequately not managed by the researcher. There is not enough time for the research to get the project time, get it approved and within a short time we will be talking about our exams assignment and quiz.
LACK OF MATERIALS: The lack of co-operation from most people working in the library and other offices where the researcher needed to get materials posed great problem to the research. Some of the staffs do not feel safe letting have access to some materials while other will change you more than double the cost of Photostat before one can get what he wants.
FINANCE: Before now our project use to be a joint project of a group of four-ten people but now it has to be on individual student. So finance hinder the projects in one way or the other. Either by transportation to where to get the materials or where to obtain the necessary information among many others.
1.8 DEFINITION OF TERMS
Budget: a financial statement indicating income and expenditure for a periodof a year.
Control: is any activity or action taken to ensure that Procedure are directed towards the achievement of set objective.
Public: Ordinary people in society in general.
Resources: supply of something that one can use to increase wealth.
Regulations: An official rule made by a government or some order authority
Sector: A part of an area of activity especially of a country’s economy
MANAGEMENT: Its function, it is centered on the running and controlling of the organization, the way the directors perform their function to attain a successful operation.
ACCOUNTING: In this context, an accountants records, classify and summaries all public expenditure in the Central Bank of Nigeria in a significant manner and in terms of monetary events and transaction which are in part at least financial character and to interpreter the result thereof.
FINANCIAL STATEMENT: An accountant makes an accounting report issued by a business to describe its financial affairs and results of the operations.
CENTRAL BANK OF NIGERIA: The Central Bank of Nigeria (CBN) was established by the CBN Act of 1958 and commenced operations on July 1, 1959. The major regulatory objectives of the bank as stated in the CBN Act are to: maintain the external reserves of the country, promote monetary stability and a sound financial environment, and to act as a banker of last resort and financial adviser to the federal government.
1.9 JUSTIFICATION FOR THE STUDY
Here, the researcher is expected to state clearly why he feels the research is necessary. (Orsaah, 2009:50) however, the research is necessary for the following reasons. They are;
To determine the likely areas of weaknesses of the expenditure control in the public sector and make the necessary suggestions for improvement.
The control of public expenditure is important to an individual in particular and the public generally as these controls contributes to theattainment of the objectives of the public expenditure.
It is also necessary to control the expenditure of the public funds to ensure that members of the public will benefit from such expenditure by ensuring that funds are applied directly to those projects they are meant for.
It is necessary because, it involves determining the best approach and techniques in achieving the effects of expenditure control on the effective management of public sector in Nigeria in order to achieve the desired control of public sector in Nigeria.
USE THIS MATERIALS AS A GUIDE FOR YOUR PERSONAL RESEARCH WORK (IF PROPERLY CITED)
Account Number: 0709546102
Access Bank: Savings
Account Name: Emmanuel Idorenyin Samuel.