.
guidance
throughout the period of my studies and for making me what I am today.
ABSTRACT
The purpose
of the is to see how the accounting system of government owned companies meets
the statutory requirement that such books of accounts must be kept as will give
a true and fair view of state of affairs of a business, and to explain its
transaction.
Secondly, it is to see how far the
system aids improving the efficiency of the management of the company.
The various books of account were
examined and the manner of recording transaction right from their points of
origination was studied.
1.
Direct observation of accounting staff at work.
2.
Indirect interview with various cadres’ officials in
accounting department.
Findings
generally showed that the system was adequate for a company of its size for the
purpose of maintaining proper books for managerial information and control is
very under developed in the company.
The
effect of this cannot be accurately quantified.
Nevertheless, it cannot fail to be significant.
It
is recommended that there should be an urgent investigations into the causes of
the increase in the costs of sales and services. Effort should made to control the increase
matched by appropriate increase in the revenue from sales and services.
The
effective practice of this will involve instatement of Budgetary control system
which will enable actual performance to be compared with the budgets
periodically and deviations from the budgets analyzed as to causes and effects.
TABLE OF
CONTENTS
Title page
Approval
page
Dedication
Acknowledgement
Abstract
Table of
contents
CHAPTER ONE
1.0
Introduction
1.1 Background of the study
1.2
Statement of the problem
1.3
Purpose of the study
1.4
Significance of the study
1.5
Scope and limitation of the study
CHAPTER TWO
2.0
Review of related literature
2.1 Background of accounting in government
owned companies
2.2 Meaning of accounting government owned
companies
2.3 Subsidiary books & Nominal accounts
2.4
Sales
2.5
Final account
2.6
Research design
2.7
Source of data
2.8
Method of data collection
CHAPTER THREE
3.1
Summary of findings
3.2
Conclusion
Bibliography
CHAPTER ONE
INTRODUCATION
1.1
BACKGROUND OF THE STUDY
Following reports of
irregularities and malpractices in the government owned companies, then the
state governor, chief, Jim Nwobodo appointed a panel of inquire to investigate
the management finances and organization of the company. This was in September 1980.
The panel discovered in the course of
its investigations that the management like store ledger payment vouchers, cash
books and accounting ledgers. After a
through investigations of the financial operation the panel found:-
a.
That the company board started operation with out the
necessary preparation that would enable it function well both as a service and
profit making concern.
b.
That at the early stage of the company operation, only
memorandum records of the financial transactions were kept. The company board did not maintain proper
books of accounts and the accounting system.
A very recent testimony to this assertion is the controversial case of
NNPC(The Nigerian national petroleum corporation). The missing #2.8 billion this was around 1979
and even recently more of such testimonies still exists.
Testimonies at the House
of Representatives special committee investigating the missing money revealed a
gross deficiency in the accuracy of the accounting system. The presidency then under the civilian
administration set up a judicial commission of inquiry into the affairs of the
NNPC.
This country will be
saved a lot of waste in the midst of poverty if our government corporation and
parastatals are more efficiently managed.
It is in the light of this project is being carried out determine the
accuracy as well as the adequacy of accounting system of one of the government
owned companies in Enugu state with a view to ascertain how efficiently it has
been contributing towards the improvement of the efficiency of the management
of the company.
1.2
PURPOSE OF THE STUDY
The purpose of this
project is to study the accounting system of government owned companies to see
is proper books of accounts and kept as required by the S.122 (1)(b)(c) and 2
of schedule, table of the companies and Allied matters Decree 1968, and to see
how effectively the system helps the management of the company to improved its
efficiency by supplying it with relevant information in proper form and timely
enough to be useful in the fulfillment of its management function.
(a)
All sums of money received and spended by the company
and the matter in respect of which the receipt and expenditure take place.
(b)
All sales and purchase of goods by the company.
(c)
The assets and liabilities of the company in subsection
(2) of the same section it says “proper book shall not be demanded to give a
true and fair view of the state of the company’s affairs and to explain its
transactions.
1.3
SIGNIFICANCE OF THE STUDY
The study is focused on
the improvement of accounting system in government owned companies. This work therefore, would be significant and
beneficial to the following ways.
A.
The study is a scientific enquiry geared towards the
improvement of accounting system in government companies. Therefore, it will be of interest to the
management of government companies, especially the accountants, members of the
Board of Directors etc.
B.
The research findings would contribute extensively to
the existing pool of knowledge in the areas of accounting system in Nigeria. The academic and the general seekers in
knowledge would gain from the pool of knowledge in many ways.
C.
The study is an academic effort directed towards the
laying of solid foundations for more research in the areas of human endeavor,
therefore, this work will be a great help to the future researchers reference.
D.
The improvement in the accounting system in the
government owned companies promotes the up-comings latent accounting deficiency
companies.
E.
Finally, research work is an academic task designed for
the award of Bachelor Degree in Accountancy to the researcher by the Madonna University collage, Okija, an affiliate
of Esut.
1.4
SCOPE AND LIMITATION OF THE STUDY
The research study is
limited towards improved accounting system in government owned companies. However, the researcher hopes to cover all
possible regarding government owned companies.
As more concern is being
expressed over the failure rate of government owned companies, thus becomes
necessary. This study was conducted on
selected companies within the limit of problem or difficulties which government
owned companies in this case it is necessary to determine the extent to which
accounting records or control is recognized for the success of the government
owned companies.
Policy by careful and
scientific analysis of accounting records he can bring to light significant
facts which will enable errors in management and policy to be rectified and
reform & economics to be introduced.
He must be competent to device and consolidate the accounting records of
branches and subsidiaries, install and direct costing system and generally to
advise and give effect to their policy and all matters affecting the business
in its financial and accounting aspects.
In summary what they are
saying is that it is the duty of accountant to design a system that will
produce accounting information acquired and to extract the information,
analysis it and translate it to the language which is easily comprehensible to
those who are likely to us it. The
information provided by the system must be those that will meet the specific
information needs of the business and its management.
Yagore Goldschmidt says
that the use of the information should dictate the type of data provided by the
accounting system. It is not possible
for one accounting system to serve all purposes. Rather, the accounting system has to be
failure to the purpose at hand.
J. Batty insists that the
system should collect and record accounting information in the manner most
suitable for assisting management in its work.
Anthony and Reece (1975)
described the best accounting system as that one which achieve the following
objectives.
1.
To process the information efficiently, that is at low
cost.
2.
To obtain report quickly.
3.
To ensured a high degree efficiency
4.
To minimize the possibility of their or fraud.
Warner (1972) suggest
that the setting up of the accounting system can be divided into two main
parts, firs, the development of technique which yield accurate information no
what the company is actually doing and second the presentation of that in a
form which is comprehensible to management.
Accountant are encouraged to give meaning to a purely factual analysis which
is the result of their recording methods, it is their responsibility to see
that information reaches management in a form that provides the basis for
decision. The raw data itself is
insufficient. This is saying that an
accounting system must be able to provide information that will aid management
in performing its planning and controlling functions, as well as reporting the
events that actually occurred in the business.
It is not enough to provide one and live the other.
G.A Lee (1973) says that the ultimate
concern of every truly artienlated accounting system is with money value
created by exchanges of economic goods and services, or their equivalents in
current money, between the entity and other entities and manifesting themselves
in shorter and longer runs as cash flows into or out of the entity. Value personality distinct from persons
comprising it the company may due or be send in its own name in an action at
law, and neither the death nor bunkmate of any of its members nor any personal
of the membership affects its independent existence. In advance countries like UK over 600,000 companies are in
existence and they are a popular form of business ownership because with
certain rare exceptions, the members are limited in their liability for the
debts contracted by the company. This
principle of limited liability company has attracted investors who are willing
to become part owners of a business under such conditions, and has made
possible the formation of companies with very large capitals to carry on large
scale business. At the other extreme,
many sale trading and partnership concerns have been converted into companies
to take advantages of the limitations of the liability. A few companies have been incorporated by
special act of parliament, as were in British Railways, or by Royal charter,
like the Hudson Bad Company. Most were
incorporated under the companies Acts.
Since government owned companies are known as Unit Companies in other
countries, especially in America
where it originates, Kamerschen (1984) maintained that in the Hotel system, the
activities of a hotel is confined to a single office, through they are allowed
to have branches with strictly limited area.
In words of R. Kent, under the unit Hotel system, however, the hotel operations
are carried through a net work of branches.
Under this system of hotel, the hotel ling office shall operate within a
limited area almost with 20 branches, the size of the hotel shall be quite
small compared to the branch hotel ling organization. This unit hotel ling system is entirely America
in character towards the information “money trustâ€.
In Unit hotel ling system, many merits
derivl from it, it include efficient management, less possibility of economic
concentration, accountability, stewardship.
Moreover there are some demerits namely, limited financial resources,
effected by economic fluctuations.
In summary, the accounting system of
any company ought to keep proper books of account are kept as required by
section 122(1)(b)(c) &(2) of schedule 1 table A of the companies Decree
19,68, amended 1990.
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