ABSTRACT
The Nigeria economy
within the first half of this century experienced quite a lot of business
failure. Business failure can be defined as the inability of a particular
business enterprise to continue to function as a going concern this development
has started generating anxiety by both international and local investors in
arriving at investment decision.
However, the task of identifying the
root causes of corporate collapse in what this study seeks after. This study is
carried out at ensuring a survival dosage of business in Enugu through the use of accounting profession
(Auditing) to appraise operational performance.
Some of the causes of business failure
includes mismanagement, bribery and corruption, and poor remuneration etc. the
brain behind the failure of business in the political under tune in the appointment
and selection of key officer to management positions.
Based on the findings in this study,
the following conclusion were drawn, mismanagement mode of appointment and
selection of key officers, poor coordinated management device, government
interference and privatization and commercialization programme.
Finally, it is recommended that
business should appreciated the importance of audit as a tool of evaluating
performance, appointment of Board of Directors and top management officers
should be based on skill, experience and qualification and government should
also institute its commercialization and privatization programme in place etc.
TABLE OF
CONTENT
Title page
Approval page
Dedication
Acknowledgement
Abstract
Table of
content.
CHAPTER ONE
1.0 INTRODUCTION
1.1.
Objective of the study
1.2.
Statement of problems
1.3.
Significant of the study
1.4.
Hypothesis formulation
1.5.
Scope of the study
1.6.
Limitation of the study
1.7.
Definition of terms
CHAPTER TWO
2.0 REVIEW OF RELATED LITERATURES
2.1
Introduction
2.2
The going concern concept of business
2.2.1.
Definition of business
2.2.2. Forms of
business
2.2.3.
Importance of business
2.2.4.
When a business is not going concern
2.2.5.
When a business may not a going concern
2.3
Symptoms of imminent business failures
2.4
Nature and causes of business failures
2.5
The development of accounting profession (Auditing)
2.5.1
Definition of Auditing
2.5.2
Types of Audit
2.5.3
Importance of Auditing
2.5.4
The Auditor and the danger of self fulfilling prophesy
2.5.5
The Audit committee
2.5.5.1. Nature
of Audit committee
2.5.5.2
Composition of Audit Committees
2.5.5.3 Functions
of Audit committee
2.5.5.4.
Qualification of Audit committee members
2.5.5.5. Size
of Audit committee
2.5.5.6.Size
committee relationship with management
2.5.5.7. Audit
committee and the external auditor
2.6 The effect
of business failures on a depressed economy.
CHAPTER THREE
3.0 RESEARCH
DESIGN AND METHODOLOGY
3.1
Introduction
3.2
Research design
3.3
Sampling techniques
3.4
Questionnaire design
3.5
Data collection techniques
3.6
Questionnaire distribution and collection.
CHAPTER FOUR
4.0 DATA
PRESENTATION AND ANALYSIS
4.1
Introduction
4.2 Data
presentation
4.3 Test of
hypothesis
CHPATER FIVE
5.0 SUMMARY OF
FINDINGS, CONCLUSION AND RECOMMENDATION
5.1 Discussion
of findings
5.2 Summary of
findings
5.3 Conclusion
5.4
Recommendation
5.5 Suggestion
for further studies
BIBLIOGRAHPY
APPENDIX
CHAPTER ONE
1.1
INTRODUCTION
The Nigeria economy within the first
half of this century (20th century, 1901 – 2000) experienced quite a
lot of business failures. There was a rapid growth in the number of indigenous
companies in the country, but these companies collapsed with the same rapidity
with which they were established.
Business failures are actually one of
the most difficult and complex concern faced by investors in the equity market
or the stock exchange market in the recent times. Even with the best of
strategic cooperate planning, business failure are still a common occurrence.
Business failure can be defined as the inability of a particular business
enterprise to continue to function as a going concern. The going concern concept
presumed that an enterprise will continue in operation for the foreseeable
future and that there is neither the necessity nor the intention to liquidate
In general it was gathered that some
of the causes of business failure includes:
a.
Lack of capital (inadequate capitalization)
b.
Inefficient management
c.
Poor remuneration packages
d.
Inadequate accounting records
e.
Unprofitable expansion (premature expansion)
f.
Mode of appointment of chief executives etc.
g.
Lack of feasibility study report.
h.
Fraud.
Given the
divesting effect of business ailments, it become necessary to undertake a
research into the problems and failures of business life as well as making
suggestion on ways of ameliorating their adverse effects.
According profession (Auditing) is one
of the effective tool of evaluating and predicting business failures. Auditing
is a process carried out by suitable qualified auditing) where by the accounts
of business entities, including limited companies characterize, trusts and
professional firms are subjected to scrutiny in such details as will enable the
auditors to form an opinion as to their truth and fairness (Emile W. 1997)
So many parties such as creditors,
investors owners, the firm itself and the government etc. are interested with
the present and expected future earning and the stability of these earning, and
financially business as a good concern. Therefore they need accounting
profession to evaluate and compare the profitability as well as to predict the
survival of the business.
Therefore, this study seeks to use
statistical tools to appraise and predict corporate failure with the aim of
putting into place an integrated framework on the subject.
1.2 OBJECTIVE OF THE STUDY
It has been
argued in recent times that the monetary value of corporate failures is of
colossal notation which could faster economic growth. Therefore the following
are the main aim of this study
i.
To know why business are failing.
ii.
Investigate whether government policies and actions affect operational
performance
iii.
Do business rely on accounting profession (Auditing) as tool for their
performance
iv.
Identify and analyze strategic corporate plans adopted byh business.
v.
Assess the preparedness of companies to respond to remedial dosage of companies
corporate objectives
1.3 STATEMENT OF PROBLEMS
Problem is
a phenomenon occurring in most, if not all area of human endeavor. The
existence of problem call for the finding of solution aimed at obviating such
problems. The seriousness and urgency of solution to problems are largely
dependent on the threat posed to problems. However, some problems appears to
defy certain worked out solution to them. Such a situation demands a close
examination of the issues involved.
1.
Why are business failures on the increase in Enugu
2.
Why do auditors qualify their reports when such are
failing
3.
How effective are Accounting profession (auditing0 they
use in the measurement of their business
4.
To what extent has this failures affected the economy
5.
To what extend do companies rely on accounting
profession (Auditing) as a tool for their performances.
6.
What is the remedial dosage needed by these failure
concer.
SIGNIFICANCE OF THE STUDY
Obviously
candidates who are undertaking a study of business failures are likely to
encounter similar problems. Accordingly, this study examines business failures
in companies identifying problems and stating visible suggestion that will be
useful to corporate bodies and any establishment with survival strategies in a
period of economic depression.
Apart from the research workers,
government agencies will also benefit immensely from this study.
HYPOTHESIS FORMULATION
Hypothesis I
Ho: Business failure are not as a result of
inadequate accounting records.
Hi: Business failures are as a result of
inadequate accounting records.
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