CHAPTER ONE
INTRODUCTION
1.1 GENERAL MEANING
OF PUBLIC ACCOUNTING
In the public
sector organization exhibit a variety of social economic, political and legal
characteristics. They have different pattern of accountability. They have
different objectives and are financial in many ways. They also have different
organizational structure.
Generally, public
accounting may be defined as a composite
activity of collecting, analyzing, recording, summarizing and interpretation of
the financial transactions of the government units.
1.2 DEFINITION OF
TERMS
ACCOUNTING: It
may be defined as a systematic means of writing an economic history and plans
of organization in both quantities and financial manner so that facts can be
revealed and property analyzing such facts for the purpose of advising
management.
ACCOUNT PERIOD:
This is a period of the time usually one year at the end of which financial
statements are prepared.
CERTIFIED PUBLIC
ACCOUNTANCY (CPA): A professional accountant who has passed a professional
examination obtained practical experience and satisfied other requirement, an
is certified by the estate to practice public accounting including the auditing
of a financial statement of organization.
BUDGET: A balance
sheet of estimate revenue and expenditure designed for financing an entity for
a future period.
EXPENDITURE: The
use of to pay for an expense for the acquisition of an asset for the repayment
of a debt or for any other business purpose.
REVENUE: This is
the increase in owner’s equity or capital resulting from earnings.
1.3 SOURCES OF MONEY
INTO PUBLIC ACCOUNTS
The revenues of
fund are the life-wire of any successful undertaking not only for the private
sector but also for the public sector. The function which government must
perform can only be discharged with resources in the form of money.
The various
categories of sources of money for government pursues are as follows:
a.
TAXATION: It is the compulsory levy, which the government
imposes on the income of the individuals and incorporate establishments for
fund raising purposes.
b.
FESS, FINES, AND SPECIFIC CHARGES: These are income derived
from payment for the use of public services eg. Vehicles license, water bill,
tool fees, electricity bills, stamp duties and so on.
c.
RENT, PROFITS AND RAYALTIES: These are income received from
the use of government property, profit from government business establishment
and income from mining tights.
d.
LOANS: These are income assistance received from other
countries. It is also incomes generated by borrowing from private individuals
or from countries to finance projects.
e.
GRANTS: These are financial assistance received from other
countries or from international organization. Internally government could
receive grants from patriotic citizens and establishment.
f.
LAUNCHING: The Nigerian government often times organize fund
raising launching wealthy individuals and corporate bodies donate generously
towards finding of government projects.
STATEMENT OF PROBLEM
Scale the mid 19th
century, the role of the accountant has grown from the simple reporting of
historical data to complex advising on all types of business decisions. In the
outline of the fourth National development plan (1981-1985), it was observed
that storage of skilled manpower constitute the most serious bottleneck to the
capacity of the economy to absorb the increasing volume of investment made
possible by oil revenue.
The constraint
must be released if the economy is to make rapid progress in the direction of
self-reliance. In the same plan it had been estimated that the country would
need at least 10,200 accountants to enhance the implementation of the event
aspects of the plan. The vital question on why there has been this slow growth
in the accounting profession in Nigeria
despite the pre-professional educational function provided by many colleges and
universities.
Furthermore, the
question would not restrict itself to the measurement of the number of
accountants but also by the scope and quality of services the profession
revenue to the community. Given the poor state of the economy at present and
the complex tools economic management introduced by the government, the
accounting profession seems to be faced with a high rate of inflation makes
profits, rates of return and other performance measures to lose their meaning.
In other words, the prospect of the accounting profession is called in question,
this therefore provides a fertile ground for survey and hence the belief that
necessitated this research works.
PURPOSE OF THE STUDY
Since the economy
of Nigeria
is a developing one, the emergency of a virile accounting profession providing
services to industry, commerce agriculture and government cannot be over
emphasized. Hence the research study is carried out with the aim of appraising
the growth the prospect of accounting profession in Nigeria. Problems militating
against good growth a prospect will be analyzed and solutions and
recommendation given.
CHAPTER TWO
LITERATURE REVIEW
2.1
AREAS OF
EXPENDITURE FROM PUBLIC ACCOUNTS
The money
collected by the government from different sources is being used in many areas.
They use it for many purposes like for smooth running of the affairs of the
country, debt-serving etc.
The expenditures
are being made as were provided by the year budget. The major areas of
government expenditure are: general administration, economic, services,
transfers and social services.
GENERAL ADMINISTRATION
Government spends
in order to provide funds for administration of some important arms of the
government. These are defense, police administration of the civil services and
so on. They build houses for the soldiers, provide their uniforms and guns.
They also provide aimed cars and pay their salaries.
ECONOMIC SERVICES
These are
spending in indirect productive activities such as agriculture, communication,
transport, trade, construction, industry etc.
They at times
provide some incentives to traders for instance, those that make the highest
profit in the year will be given grants.
In agriculture,
they sponsor the farmers trading programs, build banks and established some
schemes to guarantee the problems associated with agricultural finding.
They provide
transport and communication facilities such as mass transits, post offices, etc
their spending on construction and industry are constructing of bridges,
flyovers, express roads and building of industries like oil company.
TRANSFERS
Expenditure that
are made not on directly productive activities but on some non-productive but
important items are made by the government also. They are debt services,
unemployment benefits, pension payments etc.
The countries
debt is being paid by the government. The government gives or provides bonus to
unemployment youth and students. They also pay pensions and student. They also
pay pensions and gratuity to retired workers.
SOCIAL SERVICES
These are
expenditures on social amenities example of them are building of schools,
hospitals, community projects, rural electrification and so on. Their
expenditure in education involves building of both primary and post primary
institutions colleges of education, polytechnics and universities.
They also send
qualified teachers, train them, supply the schools with laboratory equipment
such as thermometer, testing tubes etc and build library for them.
They build
hospital and theatres, provide surgical equipments and beds. They bought some
drugs and sell them to the hospital. They also embark on community development
projects like establishments of pipe borne water, rural electrification etc.
2.2
TYPES OF
ACCOUNTING OFFICERS IN THE PUBLIC
There are various
types of accounting officers in the public, they are as follows:
a.
Accountant general
b.
Auditor general
c.
Accounting officer
d.
Sub-accounting officer
e.
Federal pay officer
f.
Revenue collector
g.
Impress holder
h.
Officer controlling expenditure
a.
ACCOUNTING GENERAL: This chief accounting officer of the
receipts and payment of government in the federation. He is responsible for the
general supervision of the accounts of all ministries and compilation of the
annual financial statement.
b.
AUDITOR GENERAL: He is responsible under the constitution
for the audit of the accounts of all accounting officers and all persons
entrusted with collection, receipts, custody and issue, payment of federal
public money or with receipt custody issue, sale, transfer or delivery of any
government property and the certification of the annual accounts.
c.
ACCOUNTING OFFICER: This is the officer of a ministry or
department who upon receiving an appointment as permanent secretary or head of
an Extra-ministerial department is designed and appointed accounting officer of
the ministry or department by the minister of finance.
d.
SUB-ACCOUNTING OFFICER: He is entrusted with the receipts,
custody and disbursement of public money and required to keep one of the
recognized cash book and other records as may be prescribed by the accountant
general.
e.
FEDERAL PAY OFFICER: He is in charge of the federal pay
officer in a state.
f.
REVENUE COLLECTOR: This is an officer who is entrusted with
an official particular form of revenue and who is required to keep a cash book.
g.
IMPRESS HOLDER: He is entrusted with the disbursement of
public money voucher for, which cannot be presented immediately to a sub
Accounting Officer.
h.
OFFICER CONTROLING EXPENDITURE: He is the one whom the
control of a sub-head, or specified amount of a sub-head has been delegated by
the appropriate officer.
2.3
THE ROLE OF
ACCOUNTING OFFICER IN THE CONTROL OF PUBLIC EXPENDITURE
Budget, which is
an estimate of expenditure expressed in monetary terms, needs to be effectively
and efficiently controlled in order to achieve its maximum objective.
The role of
accounting officer in the control of public expenditure are as follows:
a.
Approval and securitization of report
b.
Issuance of warrant
c.
Appointment of committee for issuance of guidelines for
budget preparation
d.
Rendering of self-accounting unit
e.
Inspection of accounting system.
Their explanations
will be seen below:
a.
APPROVAL AND SCRUTINIZATION OF REPORT: They consider and
approve the estimate submitted to them by the president. They also examine and
scrutinize the report of the Auditor General.
b.
ISSUANCE OF WARRANT: The issue of the document which the
authorities the accountant general to issue money and the officer controlling
votes to incure expenditure. A system of warrant allows the executive a more
effective and sensitive pattern of control over the issue of funds and how it
is expended.
c.
APPOINTMENT OF COMMITTEE FOR ISSUANCE OF GUIDELINES FOR
BUDGET PREPARATION: They usually appoint a committee on estimates and budgets
which advises them on policy measures after receiving the current economic
situation and the previous years performance. The estimates after transmitted
to the presidential officers issue guidelines on the preparation of the budget.
d.
RENDERING OF SELF ACCOUNTING UNITS: They keep their own
record and book of account which they will later render to the treasury for
inclusion in its final accounts every month through the monthly transcript and
that is called the self accounting unit.
e.
INSPECTION OF ACCOUNTING SYSTEM: Inspection officers go from
time to time to ministries and departments to inspect their system of
accounting. They sent Auditors to mainly self-accounting departments in order
to appraise the accounting activities of the ministries and report upon any
inadequacy found during the period of review.
PROBLEMS HINDERING ACCOUNTANTS FROM IMPLEMENTING EFFECTIVE
CONTROL
i. Lack of co-ordination between budgeting
and accounting which are complimentary functions, non-use of government account
for budgeting function by the budget department.
ii. The general lack of understanding of the
purpose of government accounting among the society in general and the following
specific groups in particular, the politicians, the administrator and a
substantial proportion of the accounting personnel in government.
iii. Difficulty of pushing though proposals for
improvement in financial administration of national, state and departmental
level.
iv. Failure to apply computerization effectively
to the accounting systems.
v.
Accounting personnel poses inadequate accounting education,
therefore poor understanding of the role of accounting function in government
consequently cannot make desirable impact on the activities of his
organization.
vi.
Shortage of qualified accounting staff due to lack of
training facilities within and outside government.
SUGGESTIONS AS TO THE SOLUTION OF THESE PROBLEMS
i.
Treasury should commission a writer or an author or a study
group to write a standard and comprehensive accounting manual for the treasury.
ii.
Government should set up a tribunal to ensure recovering of
the misappropriated funds and expenditures by some irresponsible public officer.
iii.
Government should employ honest workers as staff.
iv.
Treasuries all over the country should be strengthened by
re-location, by internal re-organization and by legislation.
v.
Training programmes for accounting staff to be expanded and
a professional certificate in government accounting introduced.
vi.
There is need to educate the society at large on public
accountability. The mass media and the treasury could co-operate to formulate a
programme for this purpose.
DEFINITION OF ACCOUNTING
Accounting
functions when were profound mostly by foreign accountants because almost all
the manufacturing companies then had foreign connections and they recruited
their high level manpower from their home country.
Following the
advancement in the level of industrialization and its attendant effect on the
need for qualified with different professional bodies oversees came together
and formed an associated called the Association of Accountants in Nigeria.
The growth of the profession however could be related to the establishment by
Act of parliament (No. 15) 1965 of the institute of chartered accountants of
Nigeria (ICAN).
The main object
of this institute as to regulate entry into the accounting profession by
determining the standards of knowledge and skills to be attained by prospective
accountants.
The institute
plays a dual role of being a professional associated of accountants as well as
the controlling body responsible for accounting standard in Nigeria. The quantity of the role
played by (ICAN) seems to be a contributing factor in the growth of the
profession.
This research
paper focuses on the growth and prospect of accounting profession in Nigeria.
The following related discussions are embodied namely – historical development
of the accounting profession in Nigeria,
the role of the institute of chartered accountants of Nigeria (ICAN) and other
related agencies and professional and its changing environment. Thus, against
the foregoing discussions, an analysis of the growth, problems and prospects of
the profession in Nigeria is
conducted finally, it effects some suggestion and recommendation necessary form
a rapid growth in the profession in Nigeria.
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