IMPROVEMENT OF ACCOUNTING SYSTEM IN GOVERNMENT OWN COMPANY.
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
Table of contents
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
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
2.5 Final account
2.6 Research design
2.7 Source of data
2.8 Method of data collection
3.1 Summary of findings
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.