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IMPACT OF STOCK MANAGEMENT ON THE PRODUCTIVITY OF BUSINESS ORGANIZATIONS: A CASE STUDY OF FAN MILK NIGERIA PLC.

Download the complete Accounting project topic and material (chapter 1-5) titled IMPACT OF STOCK MANAGEMENT ON THE PRODUCTIVITY OF BUSINESS ORGANIZATIONS: A CASE STUDY OF FAN MILK NIGERIA PLC. here on iProjectTopics. See below for the abstract, table of contents, list of figures, list of tables, list of appendices, list of abbreviations and chapter one. Click the DOWNLOAD FULL WORK BUTTON BELOW CHAPTER ONE  to get the complete project work instantly.

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PROJECT TOPIC AND MATERIAL ON IMPACT OF STOCK MANAGEMENT ON THE PRODUCTIVITY OF BUSINESS ORGANIZATIONS: A CASE STUDY OF FAN MILK NIGERIA PLC.

The Project File Details                                                                                                       

  • Name: IMPACT OF STOCK MANAGEMENT ON THE PRODUCTIVITY OF BUSINESS ORGANIZATIONS: A CASE STUDY OF FAN MILK NIGERIA PLC.
  • Type: PDF and MS Word (DOC)
  • Size: [666 KB]
  • Length: [65] Pages
  • With Reference and Questionnaire
  • Amount: 3000 naira

ABSTRACT

This study examined the impact of stock and management on the productivity of business organization and was aimed at investigating the impact of stock and management and its influence on productivity as well as ascertaining the problems and benefit to be gained from it. The study also attempted to determine the effect of inventory management on organizational productivity. The method used in collecting data was a survey research method and the sample size used for the study was Ninety-six (96). One hundred (100) questionnaires were administered and a total of Ninety-six were returned by the respondents who were chosen from Fan Milk Nigeria plc. The outcomes of study were presented in tables while chi-square statistical analysis tool was employed to test the hypothesis formulated in the research. The test result showed a significant relationship between stock management and productivity and the result also showed that stock management also has relationship with productivity. This indicated that inventory management was an important tool that could assist the organization to achieve her numerous objectives and improve productivity. The research recommended that managers must ensure that necessary materials are supplied to the department at the right time, so as to ensure effective and efficient operation in the organization, the store officer must also ensure regular inspection of the stores especially areas in which materials are stored and handled, to ensure that unused materials are carefully disposed.

TABLE OF CONTENTS

Title Page i
Approval Page ii
Certification iii
Dedication iv
Acknowledgements v
Abstract vi
Table of Contents vii
List of Tables ix

CHAPTER ONE: INTRODUCTION
1.1 Introduction 1
1.2 Background to the Study 1
1.3 Statement of Problem 2
1.4 Objectives of the Study 3
1.5 Research Question 3
1.6 Statement of the Hypothesis 4
1.7 Significance of the Study 5
1.8 Justification of the Study 5
1.9 Scope of the Study 5
1.10 Definitions of Terms 5

CHAPTER TWO: LITERATURE REVIEW
2.0 Introduction 8
2.1 Conceptual Framework 8
2.1.1 Concept of Inventory Management 8
2.1.2 Concept of Material Handling 9
2.1.3 Types of Material 10
2.1.4 Concept of Inventory Control and Management 11
2.1.5 Concept of Material Movement 12
2.2 Theoretical Framework 13
2.3 Literature on the subject matter 14
2.3.1 Purposes for Holding Inventory 14
2.3.2 Material Requirement Planning 18
2.3.3 Economic Order Quantity 22
2.3.4 Purchasing Objectives and Policies 23

CHAPTER THREE: RESEARCH METHODOLOGY
3.0 Area of Study 25
3.1 Research Design and Sources of Data 25
3.2 Study Population and Determination of Sample Size 26
3.3 Instrumentation 26
3.3.1 Validation of instrument 26
3.3.2 Reliability of instrument 27
3.4 Procedure for Data Collection and Data Analysis 27
3.5 Limitations of the Study 27

CHAPTER FOUR: DATA ANALYSIS, FINDINGS AND DISCUSSION
4.1 Introduction 28
4.2 Data presentation and analysis 28
4.3 Discussion of Findings 33
4.4 Test of Hypothesis 39

CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.0 Summary of Findings 43
5.1 Conclusions 43
5.2 Recommendations 44
5.3 Proposal for Further Studies 45
Reference 46
Appendix 48

LIST OF TABLES
Table 4.2.1 Distribution of Respondents by Sex 28
Table 4.2.2 Distribution of Respondent by Marital status 30
Table 4.2.3 Distribution of Respondent by Age 31
Table 4.2.4 Distribution of Respondents by Qualification 32
Table 4.3.1 Response to table 4.3.1 33
Table 4.3.2 Response to table 4.3.2 33
Table 4.3.3 Response to table 4.3.3 34
Table 4.3.4 Response to table 4.3.4 34
Table 4.3.5 Response to table 4.3.5 35
Table 4.3.6 Response to table 4.3.6 35
Table 4.3.7 Response to table 4.3.7 36
Table 4.3.8 Response to table 4.3.8 36
Table 4.3.9 Response to table 4.3.9 37
Table 4.3.10 Response to table 4.3.10 37
Table 4.3.11 Response to table 4.3.11 38
Table 4.3.12 Response to table 4.3.12 38
Table 4.3.13 Response to table 4.3.13 39
Table 4.4.1 Test statistics 39
Table 4.4.2 Test statistics 40
Table 4.4.3 Test statistics 41
Table 4.4.4 Test statistics 42

LIST OF FIGURES
FIGURE TITLE PAGE
4.1.1 Sex Distribution of the Respondents 29
4.1.2 Age Distribution of the Respondents 30
4.1.3 Marital Status of the Respondents 31
4.1.4 Educational Qualification of the Respondents 32

CHAPTER ONE

1.1 Introduction
The creation of management within the procedure of purchasing and storing activities is nothing but to see that the store department which houses the purchasing section achieves it goals. The manner with which materials are handled can have serious effect on thecompany that is, if materials of complex nature or high values are mis-handled this could lead to damage or deterioration of materials which may render them useless by the user’s department and also constitutes a great loss to the organization so to avoid this, materials should be handled in the best manner.

1.2 Background to the Study
Stocks are vital to the successful functioning of manufacturing and retailing organizations. They may consist of raw materials, work-in-progress, spare parts/consumables, and finished goods. It is not necessary that an organization has all these stock classes. But, whatever may be the stock items, they need efficient management as, generally, a substantial share of its funds is invested in them. Different departments within the same organization adopt different attitude towards stocks. This is mainly because the particular functions performed by a department influence the department’s motivation. For example, the sales department might desire large stock in reserve to meet virtually every demand that comes. The production department similarly would ask for stocks of materials so that the production system runs uninterrupted. On the other hand, the finance department would always argue for a minimum investment in stocks so that the funds could be used elsewhere for other better purposes, (Vohra, 2008).
Inventory represents an important decision variable at all stages of product manufacturing, distribution and sales, in addition to being a major portion of total current assets of many organizations. Tock often represents as much as 40% of total capital of industrial organizations. It many represent 33% of company assets and as much as 90% of working capital, (Sawaya Jr. and Giauque, 2006). Since inventory constitutes a major segment of total investment, it is crucial that good inventory management be practiced to ensure organizational growth and profitability.
According to Temeng et al (2010), historically, however organizations have ignored the potential savings from proper inventory management, treating inventory as a necessary evil and not as an asset requiring management. As a result, many inventory systems are based on arbitrary rules. Unfortunately, it is not unusual for some organizations to have more funds invested in inventory than necessary and still not be able to meet customer demands because of poor distribution of investment among inventory items. Based on the above analogy, therefore this paper evaluates the inventory management on the productivity of business organization in, with respect toFan Milk Plc., Ibadan.

1.3 Statement of Research Problem
The major challenge that material manager face is to maintain a constituent flow of materials for production. There are factors that inhabit the accuracy of stock which results in production shortages premium freight and often adjustments.
According to the journal of Business logistics (2009). The major issues that all material managers face are incorrect bills of materials, in accurate cycle counts, unreported scrap shipping error, receiving errors and production reporting errors material managers have strived to determine how to manage these issues in the business sectors of manufacturing since the beginning of the industrial revolution. Although there are no known methods that eliminate the afore-mentioned inventory accuracy, inhibitor there are best method available to eliminate the impact up on maintaining an interrupted flow of materials for production. Reluctance can be reduced and effectiveness when service point are clustered to reduce the amount of reluctance. An effective material handling program can also revolve island approaches to shipping, receiving and vehicle movement solutions can include creating a new central loading location as well consolidating service areas and docks from separate building into one. Developing better circulation infrastructure also means reevaluating thick delivery and service vehicle routes. Base on above statement that this research seek to examine the issue of material management and the effect it has on an organization using a manufacturing company as the case study.

1.4 Objectives of The Study
The main objective of this study is to examine the impact of stock management and productivity of a business organization. The specific objectives are:
i. To determine the effect of inventory management on organizational productivity.
ii. To evaluate the nature of correlation between inventory management and organizational profitability.
iii. To examine the level of efficiency and product improvement in material management.
iv. To proffer useful suggestions and ideas on how to effectively manage materials in an organization (Sander 2002).
1.5 Research Questions
The following questions shall guide the study:
1. To what extent does inventory management contribute to an organization performance?
2. Does specification on materials have any impact on the material management?
3. To what extent does material handling help in the enhancement of un-interrupted production?
4. Does forecasting for material requirement help the organization to have smooth operations?
5. Does stock taking and proper stock checking essential for material management?
6. Does materials management contribute to the success of an organization?
1.6 Statement of the Hypothesis
The Following Hypothesis are Formulated?
Hypothesis One
Ho: Gender is not significantly related to whom is responsible for the effective store control, stock holding and assessment of goods.
H1: Gender is related to whom is responsible for the effective store control, stock holding and assessment of goods.
Hypothesis Two
Ho: Age does not determine effective material management which contributes to the success of an organization.
H1: Age determines the effective material management which contributes to the success of an organization.
Hypothesis Three
H0: Inventory management does not significantly impact organization performance.
H1: Inventory management significantly impact organization performance.
Hypothesis Four
H0: Specification on material does not significantly impact material management.
H1: Specification on material significantly impact material management.

1.7 Significance of the Study
The result of this research when concluded will be of great benefit to the following: Companies in the beverage industry especially Fan Milk Plc. The findings and the recommendation will asset production managers to find better ways to manage their inventory. The findings and recommendation can also be used as a stepping stone to other researcher in the areas for further research work.

1.8 Justification of The Study
A research of this nature is significant in the sense that the impact of stock management and productivity of business organization requires a constraint research. It is belief that the study will throw light on the essence and importance of stock management and productivity of business organization and the choice of selecting Fan Milk Nigeria plc. As my case study.

1.9 Scope of the study
This research study centered on materials handling in a manufacturing company. It covered such areas as storage, transportation procurement, materials handling planning control and value engineering. The research is also intended to cover a specified period of time and also information are going to be drawn within the domain of Fan Milk Plc.

1.10 Definition of Terms
There are numerous terms and concepts associated with material handling. It is considered most appropriate to define some of these terms and concept.
1. Inventory Management: This is the part of operation management concerned with maintaining the optimum level of inventory investment. It is concerned with policy making on inventing planning and inventory control.
2. Holding/carrying Cost: These include the cost for storage facilities, handling, insurance, pilferage, obsolescence, depreciation, taxes and the opportunity cost of capital obviously high holding cost tend to favour low inventory and frequent replenishment.
3. Ordering cost: these include certain clerical costs incurred in preparing order delivery and material handling costs, such costs usually represent a fixed amount for order placed regardless of the quality ordered.
4. Stock valuation:- This is the method of assigning value to items of stock of a company. It helps company management to make inventory level decision. They use different method like last in first out (LIFO) first in first out (FIFO).
5. Inventory Control: This involves regulation of quantities of materials or inventory on hand in such a way as to ensure the meeting of current needs of the organization while avoiding excess stock, the calculation being based on the rate of withdrawals and the time necessary of replenishment.
6. Inventory: This is the stock of any item or resources used in an organization. It includes input such as human, equipment, financial and raw materials.
7. Inventory System: These are set of policies and controls that monitors levels of inventory and determines what levels of should be maintained when stock should be replenished and how large orders should be.
8. Re order level: This is the quality level that automatically biggers a new order it is the stock level at which further replenishment order should be placed.
9. Maximum stock: This is the most desirable beyond which stock should not be allowed to rise.
10. Re order Quantity: This is the quantity of the replenishment order.
11. Stock out: when an item of stock is required but is not available, then there is a stock out of that item.
12. Safely stock: An amount of stock in excess of average inventory held in a cushion against a stock out alive to usage or uncertainty of lead time.

IMPACT OF GOVERNMENT EXPENDITURE ON ECONOMIC GROWTH IN NIGERIA

Download the complete Accounting project topic and material (chapter 1-5) titled IMPACT OF GOVERNMENT EXPENDITURE ON ECONOMIC GROWTH IN NIGERIA here on iProjectTopics. See below for the abstract, table of contents, list of figures, list of tables, list of appendices, list of abbreviations and chapter one. Click the DOWNLOAD FULL WORK BUTTON BELOW CHAPTER ONE  to get the complete project work instantly.

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PROJECT TOPIC AND MATERIAL ON IMPACT OF GOVERNMENT EXPENDITURE ON ECONOMIC GROWTH IN NIGERIA

The Project File Details                                                                                                       

  • Name: IMPACT OF GOVERNMENT EXPENDITURE ON ECONOMIC GROWTH IN NIGERIA
  • Type: PDF and MS Word (DOC)
  • Size: [666 KB]
  • Length: [65] Pages
  • With Reference and Questionnaire
  • Amount: 3000 naira

ABSTRACT

This study examines the impact of government expenditure on economy growth in Nigeria. In the light of the empirical review and other discussions, a number of questions arose as to whether there is significant relationship between government recurrent expenditure and economic growth of Nigeria, if there is significant relationship between government capital expenditure and economic growth of Nigeria as well as to determine if there is significant relationship between government transfer expenditure and economic growth of Nigeria. Using the Ordinary Least Square (OLS) regression technique with the aid of computer software, for a 1993 – 2012 time series data, the empirical findings revealed among other things, that government investment expenditure has a significant impact on Nigeria’s economic growth. The study is recommends that Transfer expenditure such as provident fund, pensions and other Social Security benefits such as NHIS scheme positively affect the economic growth of Nigeria, and by using government expenditure to achieve supply-side improvements in the macro-economy, such as spending on education and training to improve labour productivity, the economic growth of Nigeria increases it also considers that Administration expenditure, Capital and recurrent expenditure also affect the economic growth of a country. On the strength of these evidences, this work recommends that the Federal Government should be very conscious about how it uses the fiscal policy to regulate government expenditure; government should be consistent with its expenditure/payments as this will stimulate economic growth. Finally, the government should take full advantage of the benefits of capital expenditure, for instance, establishment of industries, setting up of cottage industries, road constructions; the operations could be labour intensive so as to increase employment. If these recommendations are efficiently implemented, the impact of government expenditure on economic growth will be enhanced.

TABLE OF CONTENTS

Title Page i
Approval page ii
Certification iii
Dedication iv
Acknowledgement v
Abstract vi
Table of Contents vii
CHAPTER ONE
1.0 Introduction 1
1.1 Background to the Study 1
1.2 Statement of the Problem 4
1.3 Objectives of the Study 4
1.4 Research questions 5
1.5 Research Hypotheses 5
1.6 Significance of the Study 6
1.7 Scope and limitations 7
1.8 Organisation of the study 8
1.9 Definitions of terms 9
References 11
CHAPTER TWO
2.0 Introduction 12
ix
2.1 Conceptual Framework 12
2.1.1 An Overview of Government Expenditure 14
2.1.2 Types of government expenditure 16
2.1.3 Government expenditure Policies in Nigeria 16
2.1.4 Purpose of government expenditure 18
2.1.5 Significant of government expenditure 18
2.1.6 Component of government expenditure 19
2.1.7 Determinants of Government Expenditure 21
2.1.8 Impact of government expenditure on other variables 24
2.1.9 Effect of government expenditure on long-term trends 25
2.1.10 Government consumption output 26
2.1.11 Classification of government expenditure 30
2.1.12 Need for government expenditure 32
2.1.13 Expenditure planning process 33
2.1.14 Anatomy of government expenditure plans 33
2.1.15 The role of government expenditure 35
2.1.16 Characteristics of a develop economy 35
2.1.17 Distinction between underdeveloped and developed economy 37
2.1.18 Factors affecting economic growth 39
2.1.19 Benefits of economic growth 48
2.1.20 Obstacles to economic development 50
2.1.21 Economic development and growth 50
2.1.22 Ingredients of economic development 52
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2.1.23 The links between health and development 54
2.1.24 Effects of increase in government expenditure 55
2.1.25 Components of aggregate economy 57
2.2 Prior Empirical Review 60
2.3 Theoretical frameworks 67
2.3.1 Theory of government expenditure 67
2.3.2 Theory of increasing government expenditure 68
2.3.3 Peacock and Wiseman’s theory of expenditure 68
2.3.4 Ernest Engel’s Theory of government expenditure 69
2.3.5 Wagner law of increasing state activities 70
References 72
CHAPTER THREE:
3.0 Introduction 74
3.1 Research Design 74
3.2 Restatement of hypothesis 75
3.3 Research population 75
3.4 Sample and sampling technique (s) 76
3.5 Research instrument (s) 76
3.6 Validity and reliability of instruments 77
3.6.1 Validity of the instrument 77
3.6.2 Reliability of the instrument 77
3.7 Method of data collection 77
3.8 Model specification 77
xi
3.9 Data analysis techniques 79
References 80
CHAPTER FOUR
4.0 Introduction 81
4.1 Presentation of data 81
4.2 Restatement of model specification 82
4.3 Analysis and interpretation 83
4.3.1 Hypothesis one 83
4.3.1a Interpretation of hypothesis one (economic growth and total recurrent expenditure) 85
4.3.1b Discussion of findings 86
4.3.2 Hypothesis two 87
4.3.2a Interpretation of hypothesis two (economic growth and total capital expenditure 89
4.3.2b Discussion of findings 90
4.3.3 Hypothesis three 91
4.3.3a Interpretation of hypothesis three (economic growth and total transfer expenditure) 93
4.3.3b discussion of findings 94
CHAPTER FIVE
5.0 Introduction 95
5.1 Summary of Findings 95
5.2 Implication of findings 96
5.3 Recommendations 97
5.4 Conclusions 98
5.5 Contribution to knowledge 98
xii
5.6 Suggestion for further studies 99
BIBLOGRAPHY
Appendix 103

CHAPTER ONE

1.1 BACKGROUND TO THE STUDY
Over the past decades, the public sector spending has been increasing in geometric term through government various activities and interactions with its Ministries, Departments and Agencies (MDA’s), (Niloy et al. 2003). Although, the general view is that government expenditure either recurrent or capital expenditure, notably on social and economic infrastructure can be growth enhancing although the financing of such expenditure to provide essential infrastructural facilities including transport, electricity, telecommunications, water and sanitation, waste disposal, education and health can be growth retarding (for example, the negative effect associated with taxation and excessive debt). The size and structure of government expenditure will determine the pattern and form of growth in output of the economy (Taiwo, and Abayomi, 2011).
The structure of Nigerian government expenditure can broadly be categorized into capital and recurrent expenditure. The recurrent expenditure are government expenses on administration such as wages, salaries, interest on loans, maintenance etc., whereas expenses on capital projects like roads, airports, education, telecommunication, electricity generation etc., are referred to as capital expenditure. One of the main purposes of government spending is to provide infrastructural facilities (Taiwo and Abayomi, 2011).
Nurudeen and Usman (2010) added that, in Nigeria, government expenditure has continued to rise due to the huge receipts from production and sales of crude oil, and the increased demand for public (utilities) goods like roads, communication, power, education and health. Besides, there is
2
increasing need to provide both internal and external security for the people and the nation. Available statistics, according to Nurudeen and Usman (2010) show that total government expenditure (capital and recurrent) and its components have continued to rise in the last three decades. For instance, government total recurrent expenditure increased from N3, 819.20 million in 1977 to N4, 805.20 million in 1980 and further to N36, 219.60 million in 1990. Recurrent expenditure was N461, 600.00 million and N1, 589,270.00 million in 2000 and 2007, respectively. In the same manner, composition of government recurrent expenditure shows that expenditure on defense, internal security, education, health, agriculture, construction, and transport and communication increased during the period under review. Moreover, government capital expenditure rose from N5, 004.60 million in 1977 to N10, 163.40 million in 1980 and further to N24, 048.60 million in 1990. The value of capital expenditure stood at N239, 450.90 million and N759, 323.00 million in 2000 and 2007, respectively. Furthermore, the various components of capital expenditure (that is, defense, agriculture, transport and communication, education and health) also show a rising trend between 1977 and 2007.
Some scholars have argued that increase in government spending can be an effective tool to stimulate aggregate demand for a stagnant economy and to bring about crowed in effects on private sector. According to Keynesian view, government could reverse economic downturns by borrowing money from the private sector and then returning the money to the private sector through various spending programs. High levels of government consumption are likely to increase employment, profitability and investment via multiplier effects on aggregate demand. Thus, government expenditure, even of a recurrent nature, can contribute positively to economic growth. On the other hand, endogenous growth models such as Barro (1990), predict that only those productive government expenditures will positively affect the long run growth rate.
3
The effect of government spending on economic growth is still an unresolved issue theoretically as well as empirically. Although the theoretical positions on the subject are quite diverse, the conventional wisdom is that a large government spending is a source of economic instability or stagnation. Empirical research, however, does not conclusively support the conventional wisdom. A few studies report positive and significant relation between government spending and economic growth while several others find significantly negative or no relation between an increase in government spending and growth in real output.
Gregarious and Ghosh (2007) made use of the heterogeneous panel data to study the impact of government expenditure on economic growth. Their results suggest that countries with large government expenditure tend to experience higher economic growth.
Gemmell and Kneller (2001) provide empirical evidence on the impact of fiscal policy on long run growth for European economy. Their study required that at least two of the taxation/expenditure/deficit effects must be examined simultaneously and they employ panel and time series econometric techniques, including dealing with the endogeneity of fiscal policy. Their results indicate that while some public investment spending impacts positively on economic growth, consumption and social security spending have zero or negative growth effects.
Mitchell (2005) evaluated the impact of government spending on economic performance in developed countries. He assessed the international evidence, reviewed the latest academic research, cited examples of countries that have significantly reduced government spending as a share of national output and analyzed the economic consequences of these reforms. Regardless of the methodology or model employed, he concluded that a large and growing government is
4
not conducive to better economic performance. He further argued that reducing the size of government would lead to higher incomes and improve American’s competitiveness.
According to Olorunfemi, (2008) studied the direction and strength of the relationship between public investment and economic growth in Nigeria, using time series data from 1975 to 2004 and observed that government expenditure impacted positively on economic growth and that there was no link between gross fixed capital formation and Gross Domestic Product. He averred that from disaggregated analysis, the result reveal that only 37.1% of government expenditure is devoted to capital expenditure while 62.9% share is to current expenditure.
In the light of the above, this study intends to examine the impact of government expenditure on economic growth of Nigeria.
1.2 STATEMENT OF THE RESEARCH PROBLEM
The purpose of this study is to analyse the effect of government expenditure on the rise of economic growth with a view of showing the rising trend between 1993 and 2012. In the light of this, the following problems have been identified, recurrent expenditure, capital expenditure, transfer expenditure, administration expenditure.
1.3 OBJECTIVES OF THE STUDY
The broad objective of the study is to examine the impact of government expenditure and economic growth of Nigeria.
The specific objectives are:
1. To determine if there is significant relationship between government recurrent expenditure and economic growth of Nigeria.
2. To examine if there is significant relationship between government capital expenditure and economic growth of Nigeria.
5
3. To evaluate if there is significant relationship between government transfer expenditure and economic growth of Nigeria.
1.4 RESEARCH QUESTIONS
The following research questions are the main question this research paper intends to address:
1. Is there significant relationship between government recurrent expenditure and economic growth of Nigeria?
2. Is there significant relationship between government capital expenditure and economic growth of Nigeria?
3. Is there significant relationship between government transfer expenditure and economic growth of Nigeria?
1.5 RESEARCH HYPOTHESES
Hypothesis, according to (osuala, 2001; 56) is defined as a conjectural statement of the relationship between two or more variables. In the course of finding solutions to the problems identified in the study, three hypotheses were formulated. They are later tested based on the data obtained from the field survey and other relevant sources on the subject of this research.
The following hypotheses will be tested in the course of this study.
Hypothesis I
Ho: There is no significant relationship between government recurrent expenditure and economic growth of Nigeria.
H1: There is a significant relationship between government recurrent expenditure and economic growth of Nigeria.
Hypothesis II
6
Ho: There is no significant relationship between government capital expenditure and economic growth of Nigeria.
H1: There is a significant relationship between government capital expenditure and economic growth of Nigeria.
Hypothesis III
Ho: There is no significant relationship between government transfer expenditure and economic growth of Nigeria.
H1: There is a significant relationship between government transfer expenditure and economic growth of Nigeria.
1.6 SIGNIFICANCE OF THE STUDY
It is expected that this study would consolidate existing literature on the issues surrounding the relationship between government expenditure and economic growth. The study would also facilitate the examination of the effects of government expenditure and economic growth in Nigeria and thus boosting the empirical evidence from Nigeria. Therefore this research work is apparently going to be useful to the following,
i) Government; this research will be relevant to the top officials of the government as it will enable them to come out with pragmatic policies for expenditure management aimed at improving the quality of their economic growth.
ii) Companies; this research enable companies acquaint themselves with the effects of rise of sales which will enhance their profit
iii) Citizens; most citizens are ignorant of the fact that they benefit more from economic growth of Nigeria cause of the blunt thinking that government benefit alone from all, the findings of this
7
study will enlighten the citizens more on how government expenditure can actually have effect on economic growth.
iv) The economy; it will also highlight to the economy as a whole because if the level of economic growth is rise, government will be able to provide more resources to help in the development of the economy.
v) Contribution to existing work; the findings of this study could be seen as a contribution to existing works on impacts of government expenditure on economic growth in Nigeria. Indeed, this would contribute immensely in building up academic knowledge in a wide range issues.
vi) Further research; the study would also play a significant role of engineering further research into other aspects of topic under consideration or other related topics in the economic growth, in other words, forming a future research in this area. it would also add to the available literature on the areas of study while also providing a platform for other researchers who may want to further this study.
vii) Education analysts; the result of the study would be of benefits to education analysts, and institutions in examining the effectiveness of government expenditure and economic growth.
viii) Empirical researchers; It will also be useful in stimulating public discourse given the dearth of empirical researchers in these areas from emerging economies like Nigeria.
1.7 SCOPE AND LIMITATION OF THE STUDY
This study is undertaken to examine the impact of government expenditure on economic growth. In term of time series, a period of twenty years is used (i.e. 1993 to 2012) as means of assessing the impact of government expenditure on the growth of Nigerian economy. It is hoped that this will help to achieve the stated objective of the study.
8
In any research study of this nature, there is normally the enthusiasm to touch as many areas as possible which are connected to the various needs of such study. However due to the nature and scope of the work, such a wild scope is out of the question since a work of this nature can hardly achieve a feat. This study will examine mainly the Impact of government expenditure on economic growth of Nigeria covering the period 1993 to 2012.
i) Time factor; this project was carried out when academic were at its peak, particularly for the final year students as this was one of the courses offered by the researcher. Therefore, there were challenges faced by the researcher in time allotment
ii) Non availability of records; this is one of the most important limiting factors in the course of the study. There were no records of past research works done to see the style, design and writing methods by past graduating students since the researcher is among the first set of students that will be graduating from the school.
iii) Fund; the problem of funding was not left out in the course of research to this study. This type of study required adequate money and time to enable the researcher visit the necessary places for collection of data. Insufficient funding was a limiting factor for the in depth study of this research since it was financed from meager pocket money of the researcher.
1.9 ORGANISATION OF THE STUDY
This research studies the impact of government expenditure on economic growth in Nigeria. It is organized into five chapters. The first chapter shall contain the background of the study, the statement of the research problem, the objectives of the study, the research questions etc. that would guide the study. Chapter two would present the literature review on the subject matter. The methodology to be adopted in the study would be stated in chapter three. Chapter four shall
9
focus on the presentation and interpretation of the regression results. The last chapter five would present the summary of the findings, conclusion and appropriate recommendations.
1.0 DEFINITION OF TERMS
This aspect relates to definition of the concepts used for purpose of this study.
1) Aggregate demand: A schedule or curve which shows the total quantity of goods and services, demanded at different prices.
2) Aggregate production function: this is a function showing the maximum output of a country given a set of inputs, assuming that these inputs are used efficiently.
3) Capital expenditure: Refers to spending on fixed assets such as roads, schools, hospitals, building, plant and machinery etc., the benefits of which are durable and lasting for several years.
4) Capital stock: Means the total value of the fiscal capital of an economy; including inventories as well as equipment’s.
5) Classical economics: The macroeconomic generalizations accepted by most economists before the 1930s which led to the conclusion that a capitalistic economy would employ its resources fully.
6) Current expenditure: Refers to spending on wages and salaries, supplies and services, rent, pension, interest payment, social security payment. These are broadly considered as consumable items, the benefits of which are consumed within each financial year.
7) Dependent variable: A variable in which changes as a con sequence of a change in some other (independent) variables.
10
8) Economic growth: Means increase in an economic variable, normally persisting over successive periods. The variable concerned may be real or nominal GDP. Increase in real output or in real output per capita.
9) Economic model: A simplified picture of reality representing an economic situation.
10) Economic policy: Course of action intended to correct or avoid a problem.
11) Economic resources: Land, labour, capital and entrepreneur which are used in the production of goods and services.
12) Expanding economy: An economy in which the net domestic investment is greater than zero.
13) Fiscal policy: The use of taxation and government spending to influence the economy.
14) Government expenditure: Spending by government at any level. It consists of spending on real goods, and services purchased from outside suppliers; spending on employment in state services such as administration, defense and education; spending on transfer payment to pensioners; spending on community services; spending on economic services..
15) Growth rate: The proportional or percentage rate of increase of any economic variable over a unit period, normally a year. ..
16) Poverty: Inability to afford an adequate standard of consumption.
11
REFERENCES
Niloy, B., Emanuel. M. H and Denise. R.O (2003): Government expenditure and Economic Growth: A Disaggregated Analysis for Developing Countries, JEL, Publication.
Nurudeen, A. and Usman, A. (2010), Government Expenditure and Economic Growth in Nigeria, 1970 2008: A Disaggregated Analysis, Business and Economics Journal, 1(10):1 11
Taiwo, M. and Abayomi, T. (2011), Government Expenditure and Economic Development: Empirical Evidence from Nigeria, European Journal of Business and Management, 3(9): 18 – 28.

IMPACT OF DIVIDEND POLICY ON THE STOCK PRICES OF QUOTED FIRMS IN NIGERIA

Download the complete Accounting project topic and material (chapter 1-5) titled IMPACT OF DIVIDEND POLICY ON THE STOCK PRICES OF QUOTED FIRMS IN NIGERIA here on iProjectTopics. See below for the abstract, table of contents, list of figures, list of tables, list of appendices, list of abbreviations and chapter one. Click the DOWNLOAD FULL WORK BUTTON BELOW CHAPTER ONE  to get the complete project work instantly.

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PROJECT TOPIC AND MATERIAL ON IMPACT OF DIVIDEND POLICY ON THE STOCK PRICES OF QUOTED FIRMS IN NIGERIA

The Project File Details                                                                                                       

  • Name: IMPACT OF DIVIDEND POLICY ON THE STOCK PRICES OF QUOTED FIRMS IN NIGERIA
  • Type: PDF and MS Word (DOC)
  • Size: [666 KB]
  • Length: [65] Pages
  • With Reference and Questionnaire
  • Amount: 3000 naira

ABSTRACT

The study examined the impact of dividend policy on the stock prices of quoted firms in Nigeria. Quantitative analysis design was adopted and simple random sampling technique was used in the selection of the sample size. The data for the study were sourced from the secondary sources. The sample period covers from 2010-2014. The data were sourced from the annual report and accounts of the selected firms on the Nigeria Stock Exchange.

Data were analyzed by the use of multiple regression of the ordinary least square analysis;

Findings indicate that dividend per share has a positive impact on stock prices per share and it is a signal to the investors that the firm is performing well and it is profitable. This will allow potential investors to invest more in the stocks of such company.

It has also revealed that retained earnings per share has a positive and significant impact on the stock prices per share of companies the awareness of this make present investors to increase their level of investment in the stocks of such companies and potential investors are also motivated to invest in the stock of such companies.

It is recommended that, the fact that dividend is still an important determinant of share market prices means that companies may increase their share market price by increase in the rate of dividend paid. In order words, there is sufficient empirical evidence to believe that a liberal dividend policy will lead to a higher average market value of common stocks than will penurious dividend policies. In effect, we suggest that corporate management should follow generous dividend policy, which will maximize the long term benefits to its stockholders.

TABLE OF CONTENTS

Title page

Certification                                                                             i

Dedication                                                                               ii

Acknowledgement                                                                   iii

Abstract                                                                                   iv

Table of content                                                                       v-vi

 

CHAPTER ONE: Introduction

1.1     Background of  the study                                                1

1.2     Statement of the research problem                                            3

1.3     Research objectives                                                                  4

1.4     Research questions                                                                   5

1.5     Research hypothesis                                                                 5

1.6     Significance of the study                                                 6

1.7     Scope of the study                                                          7

1.8     Definition of terms                                                                   8

 

CHAPTER TWO: Literature review

2.1     Conceptual review of the study                                       10

2.2     Theoretical review of the study                                       22

2.3     Empirical review of the study                                                   27

 

CHAPTER THREE: Research methodology

3.1       Introduction                                                                            38

3.2     Research design                                                              38

3.3     Research population                                                                 38

3.4     Sampling techniques and sampling size                                     38

3.5     Method of data collection                                                         39

3.6     Model specification                                                                  39

3.7     Measurement of variables                                                         40

3.8     Method of analysis                                                          40

 

CHAPTER FOUR: Data Presentation, Analysis and Interpretation

4.1     Descriptive Analysis                                                                 42

4.2     Correlation Matrics                                                                  43

4.3     Effect of Dividend Policy on Stock Prices                                 44

 

CHAPTER FIVE: Summary, Conclusion and Recommendation

5.1     Summary of research finding                                                    46

5.2     Conclusion                                                                     46

5.3     Recommendation                                                           48

 

BIBLIOGRAPHY                                                          50

APPENDIX                                                                   53-54

CHAPTER ONE

          INTRODUCTION

  • BACKGROUND OF THE STUDY

Dividend policy in general term refers to the percentage of earning that an enterprise can make in its internal financial decisions. The objectives of choosing a dividend policy should be to maximize the returns made by an enterprise to its shareholders. Dividend as it should be realized are not limited to cash, it may involve some other items of assets. Soyode points out at dividend encompasses the distribution of any asset or additional stock split dividends and other practices by which earning or asset can be distributes to shareholders. Dividends ate projects made by a corporation to its shareholders members. It is the portion of corporate profits paid out to stockholders. When a corporation earns a profit or surplus, that money can be put to two uses; it can either be invested in the business called retained earnings or it can be paid to shareholders as a divided many corporation retain a portion of their earnings and pay the reminder as a dividend for a joint stock, a dividend is allocate as a fixed amount per share. Therefore, a shareholder receives a dividend in proportion to their shareholding for the joint stock company paying dividend is not an expenses rather, it is the division of an asset among shareholders companies usually pay dividends on a fixed schedule a special dividend to distinguish it from a regular according to members activity, so their dividends are of the consider to be a pre-tax expenses. Dividends are usually settled on cash basis, as a payment from the store credit (common among retail consumer corporative) and shares in the company (either newly-created shares or existing share brought in the market ).

Further, many public company offer dividend reinvestment plan, which automatically, use the cash dividend to purchase additional share for the shareholders. The word dividend comes from the Latin word “dividendum” meaning the thing which is to divided among all these various objectives are maximum profit, survival, maximizing returns to shareholders which are form of dividend payment.

However, in order to achieve these objectives, decisions have to be made by the enterprises. In our business organization, there are three broad decision; financing decision, investment decision and dividend decision.

Investment decision and dividend decision, these decisions must be coordinates such that the overall objectives of the enterprises are maximized. Therefore, the subject of concern in this project will be dividend decision and the maximization of the enterprises returns to shareholders. It is assumed that invest cash in an enterprises for the same reason that any other investment decision is made, in the hope that any result of this investment, he will be able to receive more than the initial among investors, the shareholders look to the enterprises to generate cash for which he can justify his investment.

The most obvious way in which cash will be released to the shareholders, in order to justify his investment so a high dividend payout will reduce the amount of earning to be retained in the enterprise and vice-versa. As said earlier, it is from profit eared that dividend are paid to shareholders and not out of capital of the company. So in case where there are no profits, dividend cannot be paid according to Pandey, dividend paid to shareholders represent a distribution of earning that cannot be profitably reinvested by the company.

A stock dividend represents a distribution of shareholders in lied of or in addition into cash dividend or existing shareholders while a stock split is a method to increase the number of outstanding shares through a proportional reduction in the value of the share.

In general, dividends are a primary reason of investing or being of the share of enterprise although, some shares may be interested in capital gain resulting if the shares are sold at a price not higher than the cost.

  • STATEMENT OF PROBLEM

In view of the inability of the Nigeria economy, many enterprise have witnessed favorable and unfavorable economic and financial conditions and this had a lot of influence on their ability to achieve the predetermine objectives. The ability of these enterprises to acquire profit as well as wealth including some other related factors will have a lot of influence in the decision of the present and potential shareholder of the enterprises and this will define the growth rate of the enterprise.

On this route, both present and potential shareholders of the enterprises will be mostly willing to subscribe to the enterprises if they are expecting a higher dividend from those enterprises and their rate of subscription will affect the ability of the enterprise to withstand the ever dynamic economy of the country and the ability of the enterprise to survive within the content of constraints imposed on it by the economy and this will also determines the ability of the enterprises to growth and survive autonomously which is also one of the various objectives of an enterprise in the world generally, these is an increasing tendency of shareholding in enterpriser because of its benefit, especially as it source of income. In Nigeria enterprises promotion decree of 1972 and 1977, where by some foreign companies were order to transfer some of their shares to Nigerians. This has made boards of directors of enterprise to think of ways of formulating dividend policy that will maximize their shareholders wealth and at the same time, having enough of earning ploughed back in the enterprise.

Dividend policy determines the division of earning between payment of shareholders and re-investment of the enterprises. The amount set aside by an enterprise is known as retained earnings. It is one of most significant.

  • OBJECTIVES OF THE STUDY

The objective of the study is as follow:

  1. To examine how dividend policies affect market share values in Nigerian companies.
  2. To highlight the extent in which diversion of dividend policies on market shares affect companies in Nigeria.
  3. To know the challenges faced by the companies in planning the policies.
    • RESEARCH QUESTIONS
  4. To what extent do dividend policies affect market value in Nigerian companies?
  5. To what extent is diversion of dividend policies on market shares affect companies in Nigeria?
  6. To what extent is the challenges faced by the companies in planning the policies?
    • RESEARCH HYPOTHESIS

Hypothesis One

Hi: There is significant relationship between dividend policies and market share value in Nigeria companies.

H0: There is no significant relationship between dividend policies and market share value in Nigeria companies.

Hypothesis Two

Hi: There is significant relationship between diversions of dividend policies on market share companies in Nigeria.

H0: There is no significant relationship between diversions of dividend policies on market share companies in Nigeria.

 

 

Hypothesis Three

Hi: There is significant relationship between challenges faced by the companies and planning the policies.

H0: There is no significant relationship between challenges faced by the companies and planning the policies.

  • SIGNIFICANCE OF THE STUDY

The main purpose or significance of this research involves the principle of factor influencing the dividend policy of market value of share on the basis of looking into are of increasing dividend and utilizing retained earning with a view of putting it into best use financing the growth of the company. The knowledge of dividend policy in financial planning of an enterprise will be increased and a recommendation where necessary will be made to the company. The study of the impact of dividend policy will be useful especially in this present day of privatization and commercialization of most of government parastatal. It is also my belief that this project will go along to help potential shareholders on the benefit of shareholdings and as well as existing ones in making judicious decision and for those who may want to know more about dividend policy such as newly planned enterprises.

The study would also be of great assistance for scholars who may want to carry over research to the effects of dividend policy of many enterprises; it is also my small contribution in the area of dividend policy in Nigeria Company, considering that not much work has been done by Nigerians investment.

  • SCOPE AND LIMITATION OF THE STUDY

The scope of the study will cover only Nigeria companies however, this is not to say that all companies will be studied but only one company will be used as a case study. This is due to the constraint of time and money and it will be for a period of five years, 2002 to 2012.

The major limiting factor in this research work is the inadequate of materials on the issue of dividend policy on market value of share. Another limiting factor will be time constraints; there is limited time for the researcher to carry out proper research work on this study.

Inability to visit all or some known company is another limiting factor, hence only one company will be visited but effective effort will be made sure that these will be true representative as they will be chosen at random other factor, which might limit the study, is financial constraints. The researcher will try as much to guide against all this shortcomings through the maximization of resources so that it will help the reader and any one that might come across this project to have adequate interpretation of the result.

 

 

  • DEFINITION OF TERMS

Assets: An asset is a resource with economic value that an individual, corporation or country owns or controls with the expectation that it will provide future benefit. Assets are reported on a company’s balance sheet, and they are bought or created to increase the value of a firm or benefit the firm’s operations.

Capital: Capital refers to any financial resources or assets owned by a business that are useful in furthering development and generating income.

Dividend: A dividend is a distribution of a portion of a company’s earnings, decided by the board of directors, paid to a class of its shareholders. Dividends can be issued as cash payments, as shares of stock, or other property.

Dividend policy: Dividend policy is the set of guidelines a company uses to decide how much of its earnings it will pay out to shareholders.

Investments: In an economic sense, an investment is the purchase of goods that are not consumed today but are used in the future to create wealth. In finance, an investment is a monetary asset purchased with the idea that the asset will provide income in the future or will be sold at a higher price for a profit.

Retained earnings: Retained earnings refer to the percentage of net earnings not paid out as dividends, but retained by the company to be reinvested in its core business, or to pay debt. It is recorded under shareholders’ equity on the balance sheet.

Shareholders: A shareholder or stockholder is an individual or institution (including a corporation) that legally owns one or more shares of stock in a public or private corporation.

Stock price: A share price is the price of a single share of a number of saleable stocks of a company, derivative or other financial asset. In layman’s terms, the stock price is the highest amount someone is willing to pay for the stock, or the lowest amount that it can be bought for.

Tax: A tax (from the Latin taxo) is a mandatory financial charge or some other type of levy imposed upon a taxpayer by a governmental organization in order to fund various public expenditures. A failure to pay, or evasion of or resistance to taxation, is punishable by law.

IMPACT OF AUDITING IN DETECTING AND CONTROLLING FRAUD IN NIGERIA BANKING INDUSTRY

Download the complete Accounting project topic and material (chapter 1-5) titled IMPACT OF AUDITING IN DETECTING AND CONTROLLING FRAUD IN NIGERIA BANKING INDUSTRY here on iProjectTopics. See below for the abstract, table of contents, list of figures, list of tables, list of appendices, list of abbreviations and chapter one. Click the DOWNLOAD FULL WORK BUTTON BELOW CHAPTER ONE  to get the complete project work instantly.

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PROJECT TOPIC AND MATERIAL ON IMPACT OF AUDITING IN DETECTING AND CONTROLLING FRAUD IN NIGERIA BANKING INDUSTRY

The Project File Details                                                                                                       

  • Name: IMPACT OF AUDITING IN DETECTING AND CONTROLLING FRAUD IN NIGERIA BANKING INDUSTRY
  • Type: PDF and MS Word (DOC)
  • Size: [666 KB]
  • Length: [65] Pages
  • With Reference and Questionnaire
  • Amount: 3000 naira

ABSTRACT

Human beings are often said to be the most difficult animal God created because it would always desire for something or conditions better than the one it find itself. The notion has proven itself to be true giving the incessant cases of financial frauds that have littered the history of human race.

Funny enough, fraud and other financial irregularities are on the increase in the banking institutions where money are supposed to be keep safe and free from harms and troubles.

This research work is therefore determined to access the impact of auditing fraud detection and control in the banking sector of Nigeria. In the cause of analysis and data presentation First bank Plc. Shall be used for better presentations.

From the study, such factors like poor staffing, poor remuneration, and weak internal control among other factors contributed immensely to the incidence of fraud in banks.  The study revealed that the most effective way of preventing fraud in banks is through an effective in-built control mechanism.  This internal control mechanism is designed in such a way to designate responsibilities so that a staff’s activities are checked by another which is in turn checked by a higher officer.  This calls for a strong and independent inspection and audit department in every bank comprising of staff with impeccable integrity.

This study applied necessary data collection techniques such as questionnaires.

 

 

TABLE OF CONTENTS

TITLE PAGE

APPROVAL PAGE

DEDICATION

ACKNOWLEDGEMENT

ABSTRACT

LIST OF TABLE

TABLE OF CONTENTS

CHAPTER ONE

INTRODUCTION

  • BACK OF THE STUDY
  • STATEMENT OF PROBLEMS
  • OBJECTIVES OF THE STUDY
  • SCOPE OF THE STUDY
  • RESEARCH QUESTIONS
  • SIGNIFICANCE OF THE STUDY
  • DEFINITION OF TERMS

CHAPTER TWO

  • LITERATURE REVIEW
  • THE CAUSES OF FRAUD IN BANKING SECTOR
  • THE EFFECT OF FREQUENT FRAUD OCCURRENCE IN THE BANKING INDUSTRY
  • THE RELATIONSHIP BETWEEN BANKING PRACTICES AND FRAUD PERPETRATION
  • THE IMPACT OF BANKS AND GOVERNMENT’S EFFORT ON FRAUD ELIMINATION

2.5     DEFINITION OF FRAUD

CHAPTER THREE

RESEARCH METHODOLOGY

  • RESEARCH DESIGN
  • AREA OF STUDY
  • POPULATION OF STUDY
  • SAMPLE AND SAMPLING PROCEDURE
  • INSTRUMENT FOR DATA COLLECTION
  • RELIABILITY OF THE RESEARCH INSTRUMENT
  • VALIDITY OF THE RESEARCH INSTRUMENT
  • METHOD OF ADMINISTRATION OF THE RESEARCH INSTRUMENT
  • METHOD OF DATA ANALYSIS

CHAPTER FOUR

4.0     DATA PRESENTATION AND RESULTS

  • RESEARCH QUESTION 1
  • RESEARCH QUESTION 2
  • RESEARCH QUESTION 3
  • RESEARCH QUESTION 4
  • RESEARCH QUESTION 5
  • RESEARCH QUESTION 6
  • RESEARCH QUESTION 7
  • RESEARCH QUESTION 8
  • RESEARCH QUESTION 9
  • RESEARCH QUESTION 10
  • RESEARCH QUESTION 11

CHAPTER FIVE

DISCUSSION

  • DISCUSSION OF RESULTS
  • CONCLUSIONS
  • IMPLICATIONS OF THE RESULTS
  • RECOMMENDATIONS
  • SUGGESTIONS FOR FURTHER RESEARCH
  • LIMITATION OF THE STUDY

REFERENCE

APPENDICES

 

CHAPTER ONE

INTRODUDCTION

1.1     BACKGROUND OF THE STUDY

Fraud is a `cankerworm’ that has eaten deep into the nation’s fabrics.  It is visible in all the sectors of the economy.  In the financial sector, fraud is an `offshoot’ of financial crimes which covers offences, which are securities, related and involves the movement, transfer or use of monetary instruments in circumstances, which render such acts unlawful.  The above definition can be extended to include any dishonest, unethical or unprofessional conduct which results in financial loss to someone or institution for the benefit of another.  Financial fraud include but are not limited to the following, cheque-kiting, loan fraud, advance fee fraud, securities fraud, account opening fraud, insider-dealing clearing fraud, computer-fraud, telex fraud and money laundering.

Fraud as stated earlier is not peculiar to the banking industry but cuts across other sectors of the economy.  Frauds in banks are not new, in fact, it is as old as the industry itself.  But in recent times, the practice has assumed an alarming proportion.  Sometimes, the act is carried out by outsiders while in most cases there is a collaborated effort between outsiders and staff to perpetrate this financial crime.

Against this background, government in its effort to combat fraud and other financial crimes has set up various monitoring and control commissions such as the independent corrupt practices and other related offences commission (ICPC), which is the apex body, saddled with the responsibility of fighting corruption and other related offences.  The ICPC was inaugurated on the 20th of September 2002.  The act establishment this commission in section 3 provides for the independence of the commission and gives the chairman authority to rescue order for the control and general administration of the commission and financial crimes commission (EFCC) which was established in 2002.  Another is the National Drug Law Enforcement Agency (NDLEA).

 

HISTORY OF FIRST BANK PLC

PRE-INDEPENDENCE

The Bank traces its history back to 1894 and the Bank of British West Africa.[9] The bank originally served the British shipping and trading agencies in Nigeria. The founder, Alfred Lewis Jones, was a shipping magnate who originally had a monopoly on importing silver currency into West Africa through his Elder Dempster shipping company. According to its founder, without a bank, economies were reduced to using barter and a wide variety of mediums of exchange, leading to unsound practices.[10] A bank could provide a secure home for deposits and also a uniform medium of exchange. The bank primarily financed foreign trade, but did little lending to indigenous Nigerians, who had little to offer as collateral for loans.

POST-INDEPENDENCE

In 1957, Bank of British West Africa changed its name to Bank of West Africa (BWA). After Nigeria’s independence in 1960, the bank began to extend more credit to indigenous Nigerians. At the same time, citizens began to trust British banks since there was an ‘independent’ financial control mechanism and more citizens began to patronize the new Bank of West Africa.

In 1965, Standard Bank acquired Bank of West Africa and changed its acquisition’s name to Standard Bank of West Africa. In 1969, Standard Bank of West Africa incorporated its Nigerian operations under the name Standard Bank of Nigeria. In 1971, Standard Bank of Nigeria listed its shares on the Nigerian Stock Exchange and placed 13% of its share capital with Nigerian investors. After the end of the Nigerian civil war, Nigeria’s military government sought to increase local control of the retail-banking sector. In response, now Standard Chartered Bank reduced its stake in Standard Bank Nigeria to 38%. Once it had lost majority control, Standard Chartered wished to signal that it was no longer responsible for the bank and the bank changed its name to First Bank of Nigeria in 1979. By then, the bank had re-organized and had more Nigerian directors than ever.

In 1982 First Bank opened a branch in London, that in 2002 it converted to a subsidiary, FBN Bank (UK). Its most recent international expansion was the opening in 2004 of a representative office in JohannesburgSouth Africa. In 2005 it acquired MBC International Bank Ltd. and FBN (Merchant Bankers) Ltd. Paribas and a group of Nigerian investors had founded MBC in 1982 as a merchant bank; it had become a commercial bank in 2002.

In June 2009, Stephen Olabisi Onasanya was appointed Group Managing Director and Chief Executive Officer, replacing Sanusi Lamido Sanusi, who had been appointed governor of the Central Bank of Nigeria. Onasanya was formerly Executive Director of Banking Operations & Services.[11]

 

1.2     STATEMENT OF PROBLEMS

For any solution to be preferred for a problem must be properly identified.  Fraud in the banking sector is not committed by the system but people in the system.  For fraud to be perpetrated, there are working conditions and practices that encourage it.  Without stating these problems any effort at curbing fraud will amount to treating the wrong let.  Against this background, the following will be pertinent to stated here

(i)      The remote causes of fraud in the banking sector.

(ii)     The frequency of fraud occurrence in the banking industry

(iii)    The banking practices that encourage fraud.

(iv)    Banks’ and government’s efforts aimed at curbing fraud.

 

1.3     OBJECTIVE OF THE STUDY

This study aims at achieving the following objectives:

(i)      To determine the remote causes of fraud in the banking sector.

(ii)     To determine the frequency of fraud occurrence in the banking industry.

(iii)    To determine banking practices that encourages fraud.

(iv)    To ascertain banks’ and government’s efforts aimed at curbing fraud.

 

1.4     SCOPE OF THE STUDY

Given the current travails of the banking sub-sector, the need to plug all areas of wastages, more than ever before, becomes compelling.  Thus, fraud which has over the years constituted substantial drawn on the vaults of banks and other financial institutions, needs not only be detected on time, but must also be prevented and controlled.  Hence, the importance of this research work, fraud prevention, detention and control in Nigeria banking industry.

 

1.5     RESEARCH QUESTIONS

  • What are the remote causes of fraud in the banking sector?
  • What is the frequency of fraud occurrence in the banking sector?
  • To what extent does banking practices encourage fraud?
  • What are the efforts of banks and government against fraud?

 

1.6     SIGNIFICANCE OF THE STUDY

This research title – fraud prevention, detection and control in Nigerian banking industry is timely and of great importance to the banking sector, the economy and the nation as a whole.  Moreso, now that there are a lot of cases of distress in banks.  This distress stem largely from fraudulent activities being perpetrated by bank officials, sometimes, in connivance with outsiders.

Revelations made by this research will help banks, financial institutions and other fraud-prone institutions curb the menace of fraud.  This is because this study will identify the cause of fraud, and as well as proffer solutions to this cankerworm called fraud.  The various types of frauds and ways to curb tem are also identified by this research work.

This research therefore is of great importance to every bank’s management that want reduce the incidence of fraud in their system to the barest minimum and increase the level of public trust.

In a nutshell, this study can be regarded as a blue print of solutions to frauds.  Students studying accountancy and other finance related courses will find this study relevant especially on how to prevent fraud.  It is also expected that this study will stimulate the interest of more students to further carry out research on this issue thereby widening the basis on which an opinion could be formed on this subject matter.

 

1.7     DEFINITION OF TERMS

          BANKING INSTITUTIONS

Banking institutions are the institutions saddled with the responsibility of rendering financial services.  These include any person or corporations that provide the minimum banking services and which is licensed as a bank by the federal government of Nigeria as a banking institution.  Those minimum banking services include:

  • Acceptance of deposits from customers
  • Making payments locally and outside Nigeria.
  • Granting loans and advances.
  • Trading in securities.
  • Clearing of cheques and similar instruments.

FRAUD

The level of fraud in the country today has assumed an unenviable height.  It has eaten deep into the nation’s Fabrics that no sector is spared.  It has over the time undergone some levels of refinement and sophistication.  Fraud can summarily be described as an act carried out by individual in order to gain some advantages dishonestly.  For an act to constitute fraud, there must be a deliberate intention to deceive and they must be intended to enrich the perpetrator dishonestly.

FINANCIAL CRIMES

The term `financial crimes’ covers offences which are securities-related  and involves the movement, transfer or use of monetary instruments in circumstances which render such act unlawful.  In context of the on-going efforts to sensitize the financial services industry in Nigeria, the above definition has been extended to include any dishonest, unethical or unprofessional conduct which results in financial loss to some one or institution for the benefit of another.

FRAUD IN THE NIGERIAN BANKING SYSTEMS, PROBLEMS AND PROSPECTS (A CASE STUDY OF FIRST BANK OF NIGERIA PLC, AND OCEANIC BANK PLC, ABAKALIKI BRANCH OFFICES)

Download the complete Accounting project topic and material (chapter 1-5) titled FRAUD IN THE NIGERIAN BANKING SYSTEMS, PROBLEMS AND PROSPECTS (A CASE STUDY OF FIRST BANK OF NIGERIA PLC, AND OCEANIC BANK PLC, ABAKALIKI BRANCH OFFICES) here on iProjectTopics. See below for the abstract, table of contents, list of figures, list of tables, list of appendices, list of abbreviations and chapter one. Click the DOWNLOAD FULL WORK BUTTON BELOW CHAPTER ONE  to get the complete project work instantly.

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PROJECT TOPIC AND MATERIAL ON FRAUD IN THE NIGERIAN BANKING SYSTEMS, PROBLEMS AND PROSPECTS (A CASE STUDY OF FIRST BANK OF NIGERIA PLC, AND OCEANIC BANK PLC, ABAKALIKI BRANCH OFFICES)

The Project File Details                                                                                                       

  • Name: FRAUD IN THE NIGERIAN BANKING SYSTEMS, PROBLEMS AND PROSPECTS (A CASE STUDY OF FIRST BANK OF NIGERIA PLC, AND OCEANIC BANK PLC, ABAKALIKI BRANCH OFFICES)
  • Type: PDF and MS Word (DOC)
  • Size: [666 KB]
  • Length: [65] Pages
  • With Reference and Questionnaire
  • Amount: 3000 naira

ABSTRACT

This project, “fraud in the Nigeria Banking Systems problem and prospect a
case study of First Banking of Nigeria plc Abakaliki and Oceanic Bank Plc
Abakaliki branches”, was carried out to examine the various types of fraud as
well as the causes and sources. It was also meant to explore significant effects
of fraud on banks. Finally, the study was equally embarked upon to proffer
possible remedies, detection measures, prevention and control of the subject
matter in the Nigeria Banking system. Data was collected through the
questionnaire (Primary) and interviews as secondary data thus serving the
inductive research method. Statistical analysis techniques such as the chisquare
distribution test- analysis techniques and percentages were adopted to
analyze the data collected after which several findings were made, which
included: the desire to get rich quick accounts greatly for persistent bank fraud
and that the internal control system in the Nigerian banks is weak and
ineffective .After which it was concluded that, the money laundering
(prohibition) Act is the best strategy to combating fraud in the banking
industry.

TABLE OF CONTENTS

Title page i
Certification ii
Dedication iii
Acknowledgement iv
Abstract v
List of Tables/figures ix
CHAPTER ONE
1.1 Background of the Study 1
1.2 Statement of the Problem 7
1.3 Objective of Study 8
1.4 Research Questions 9
1.5 Research Hypothesis 9
1.6 Significance of the Study 10
1.7 Scope of the Study 11
1.8 Limitations of the Study 12
1.9 Definitions of Terms 12
References
CHAPTER TWO
REVIEW OF RELATED LITERATURE
2.1 Fraud Defined 18
2.2 Banking Concepts Defined 20
2.2.1 The Bank 21
2.2.2 The Banker 22
2.2.3 The Bank Customer 23
2.3 Origin of Banking in Nigeria 25
2.4 Types of Fraud 26
2.5 Models and/Or Theories Relevant To the Research
Question and Hypothesis 42
2.5.1 Cause of Fraud in Banks 45
2.6 Effects of Bank Fraud 45
2.7 Fraud Detection, Prevention and Control 49
2.7.1 Fraud Detection 49
2.7.2 Fraud Prevention and Control 50
References
CHAPTER THREE
RESEARCH METHODOLOGY
3.0 Introduction 59
3.1 Research Design 59
3.2 Sources of Data 60
3.2.1 Primary Data 60
3.2.2 Secondary Data 60
3.3 Method of Data Collection 61
3.3.1 Administration of the Questionnaire 61
3.3.2 Interviews and Observation 62
3.4 Population or Study 63
3.5 Sample selection Procedure 63
3.6 Method of Data Analysis 65
References
CHAPTER FOUR
DATA PRESENTATION, ANALYSIS AND INTERPRETATION
4.0 Introduction 68
4.1 Data Presentation 70
4.2 Data Analysis and Test of Hypothesis
-Testing Hypothesis One Using Chi-Square Test 76
4.3 Testing of Hypothesis Two
-Test of hypothesis two Using Chi –Square (X2) Test 84
4.4 Test of Hypothesis Three
– Testing of Hypothesis Three Using Chi-Square Test. 91
CHAPTER FIVE
DISCUSSION AND SUMMARY OF FINDINGS CONCLUSION AND
RECOMMENDATION
5.0 Introduction 98
5.1 Summary of Findings 98
5.2.1 Conclusions 101
5.2.2 Recommendations 103
5.2.3 Suggestion for Further Studies 104
Bibliography
Appendix 1: QUESTIONNAIRE
Appendix II: Further analysis of Hypotheses Two and Three using
correlation and Regression analysis techniques
Appendix III: Summary of Bank Fraud, 2002-2006.

CHAPTER ONE

1.1 BACKGROUND OF THE STUDY
The entire world has become increasingly aware of the destructive
effect of a lack of accountability and transparency in both public and
private life. This awareness is so pervasive throughout the world that
governments, business organizations and non- governmental
organizations alike are involved in crusades to promote accountability
and transparency and prevent corrupt practices in all its ramifications.
These crusades have gathered so much steam that international award
for the “Most corrupt” and least corrupt country” in the world now exist.
It is very unfortunate, and a national embarrassment that our father
land which we hope to give to our children as a legacy has repeatedly
won the former rather than the later price.
The fraudulence for which our nation was given a price is not located in
the sky over our land; it is the aggregation and multiplication of little
acts of fraudulence in our interactions with one another (Ezeogu
2007:10).
The dark days of tyranny, military rule and social enslavement
were thought to be the period in which corruption festered in Nigeria
and fraud became common place, but have you ever thought of the role
some fraud stars played in the inability of some commercial banks to
meet their obligations to its customers, owners, stake holder and the
economy?
Has it ever occurred to you to search out how a sizable proportion
of financial institutions had liabilities exceeding the market value of their
asset, which may lead to ruins and other portfolio shifts and eventually,
collapse of the financial system?
Society has long adopted to plunder the noble Nigerian identity
and from military to civilian regimes, pubic office holders had followed
strictly the unwritten constitution to live up to societal expectations.
Values were waded off in exchange for graft and pecuniary benefits,
millions were defrauded of their rights to good education, basic health,
good roads and electricity, housing has become the preserve of the rich
and professionals have lost chunk of their respectability.
The entire world has become increasingly aware of the destructive
effect of a lack of accountability and transparency in both public and
private life. This awareness is so pervasive throughout the world that
governments, business organizations alike are involved in crusades to
promote accountability and transparency and prevent corrupt practices
in all its ramifications.
Fraud and errors are occurrences and like winds, they blow no
good to any firm, industry, association, business organization and
government. Instead they bring regrets, reduced patronage, losses,
distress and failure to such business and organizations as mentioned
above.
It is not also interesting to know that like the ‘canker worm’, they
have eaten deep into the fabrics of the Nigerian financial institutions
especially the banks.
It is not uncommon to day to hear of fraudulent acts like
uninsured deposits, theft of identity, forged or fraudulent documents,
wire fraud, cover of losses by rogue traders, demand draft fraud, and
payment card fraud, cheque kitting, management fraud, Automated teller
machine fraud etcetera in our banks.
Ojaide (2000:18) posits, “Frauds are acts of dishonesty, deceit,
falsifications and manipulations perpetuated to gain undue monetary
and non- monetary benefits”. He further states that accounting, fraud
and fraudulent practices are illegal acts involving misappropriation of
assets (cash, stocks, book debts, fixed assets) manipulation and
falsification of accounting books and records etcetera. In his opinion, the
get rich quick attitude of many Nigerians, greed, poverty and the falling
standard of living are some of the reasons for the increase in the rate of
fraud and fraudulent practices in Nigeria.
Although, frauds, errors and forgeries in banks are global phenomena,
their growth Nigeria have been astounding. Bank frauds and errors in
general inflict untold hardship on bank owners, staff, customers and
their family members, as most bank failures are always associated with
larger scale frauds.
Frauds and errors and their effects on banks in Nigeria today
created room for doubt on the reliability of financial record and reports
kept by management except perhaps on the very small scale business.
The financial report user is not in a position to process and produce
financial accounting information personally, nor has he the day to day
knowledge of company affairs with which he can use as a base for his
judgment.
Modern day banking in Nigeria can be traced to the period 1892
when the first commercial bank- African Banking corporation- was
established. The bank was the first to open its branch in lagos. The
founder was mess’s Elder Dempster and Co; a shipping firm based in
Liverpool.
On account of difficulties experienced in the area of management, the
bank decided to transfer its interest to Elder Dempster and Co. in 1893.
In response to the changes through management restructuring, the bank
metamorphosed to form a new bank known as the British Bank of West
Africa (BBWA) in 1894, with an initial capital of £10,000. Okoro S. A
(2001:17) affirms that: “The Bank of British West Africa was the first
surviving bank in Nigeria and registered in London a limited liability
company in March 1894 with first Lagos branch being opened the same
year.
Following the establishment of this Lagos Branch, other branches
sprang up in other countries of West Africa like Ghana, free town to
mention but a few. The BBWA later opened its second Nigerian branch in
old calabar in 1900 that is, six years later. During this period of
dynamism, there was complete absence of legislations governing the
banking operations in Nigeria. This culminated in the banking distress
experienced in the 1930s. At least about 21 banks failure were recorded
between 1930 and 1952. In reaction to this ugly development that was
ravaging the banking, the then colonial government set up a commission
of enquiry under sir, patron to investigate the cause and proffer
remedies/solutions. Consequent upon their report, the first banking
legislation was passed in 1952. At this time foreign dominance of the
industrial sector was intense even till after independence. This made the
government to launch the indigenization policy in 1972 which conferred
on the Nigerian Government 40% equity share in all companies
registered in Nigeria. As a result of this enterprise promotion decree (i.e.
indigenization decree), the federal government acquired huge equity
share in the BBWA. Similarly following the decree demand, the BBWA
changed its name to First Bank of Nigeria limited in 1973.
Oceanic Bank Plc is one Nigerians foremost financial services
institution. The Bank was incorporated on March 26 1990 under the
Companies and Allied Matters Act (CAMA) 1990 of Nigeria as a private
limited liability company and was granted a commercial banking license
on April 10 1990. It commenced business on June 12, 1990.
Fourteen years later, on June 4 2004, oceanic Bank converted to a
public liability company. Its shares were listed on the Nigeria’s stock
exchange on June 25, 2004. Over the years, Oceanic Bank has built its
success on excellent service, delivered in a friendly environment through
professional staff, leveraging on world class technology.
Today oceanic Bank services customers spread across tiers of
Government, corporate organizations small and medium enterprises and
individuals. The Bank’s commitment to value creation for all its
stakeholders has earned it a solid reputation as a responsible corporate
citizen and employer of choice.
Recently (in 2010), the Central Bank of Nigeria rescued some nine banks
referred to as “troubled banks” who had been hit by bank and security
fraud to the tune of N620 billion ($ 4.1 billion).
Commercial banks occupy an indispensable position in the
Nigerian Economy. They are the pivot upon which other business firms
and activities revolve and a “circuit Pipe’’ through which all financial
transaction pass. Given the current travails of banking sub- sector the
need to plug all areas of wastages, more than ever before, becomes
compelling.
No where is fraud more serious than in banking, it is the biggest
single cause of bank failure (Nwankwo 1991: 162).
‘‘One of the best ways of combating fraud is to mount an aggressive
enlightenment campaign on the dangers posed by fraud to the economy
and the banking industry, in particular”.
This research work is therefore done/carried out to give an indepth
and unique evaluation of the current state of fraudulent practices
in the commercial banks in Nigeria with special reference to First Bank
plc and Oceanic Bank plc, Abakaliki Branch offices. Hence, in this
project work, the researchers’ attempt is geared towards drawing reader’s
attention to the menace in the industry with a view to assisting
bankers/customers in tackling the dreaded monster in their day to day
transactions.
1.2 STATEMENT OF PROBLEM
The threat posed by the existence of fraud and errors are of great
concern to shareholders, bank customers, the pubic and private
investors, creditors, government agencies and the entire citizenry.
The inability of a bank to meet its obligations to its customers,
owners, stalk holders and the economy occasioned by felt weakness in its
operations which has rendered it either illiquid or insolvent have been
ascribed by many to fraud.
Some argue that the rate of financial impropriety in the Nigerian
financial system is so alarming and is evidenced or caused by poor, weak
and inefficient accounting system. Others say that so many banks are
inadequately computerized and that this has prevented the management
from detecting fraud early enough.
More so, as the ultimate motive of most business are to maximize
profit, but financial embezzlement, capital flight, and other fraudulent
practices result in low profit which in turn could lead to bank distresses.
Equally, non compliance to with the existing laws and legislations
like Banks and Other Financial Institutions Decree(BOFID), money
laundering(prohibition) Act, to mention but a few makes crime detection
cumbersome for the Nigerian commercial Banks. It is on these
aforementioned problems that this research study is built. The
researcher will delve deeply into these matters to enable him establish a
link between fraud and commercial bank performance in Nigeria.
1.3 OBJECTIVE OF STUDY
The study will investigate and identify the root causes and the
effects of fraud on banks operation with a focus on the oceanic Bank Plc
and first Bank of Nigeria Plc Abakaliki Branches. The following objectives
will guide this research.
1. To identify the causes of fraud in the Nigerian banking system.
2. To examine the concept, ‘fraud’, bringing out its various types.
3. To find out the reasons people indulge in fraudulent
practices in Banks and other financial institutions.
4. To determine the dangers or consequences of bank fraud.
5. To identify the existing laws relating to banking and the legal
process for prosecuting fraudsters in banks
1.4 RESEARCH QUESTIONS
The following research questions, which the study will attempt to
answer, have been asked:
What are the causes of fraud in our banks?
To what extent has the management been able to detect fraud and
fraudsters?
Why do people indulge in bank fraud?
What are the dangers of fraudulent acts in banks?
Are there laws and legislation put in place by the government on bank
fraud?
1.5 RESEARCH HYPOTHESIS
In carrying out this research, the following hypotheses have been
formulated.
HYPOTHESIS 1
Ho: The desire to get rich quick does not account for persistent bank
fraud.
H1: the desire to get rich quick accounts for persistent bank fraud
HYPOTHESIS 2
Ho: Anti-money laundering law is not the best strategy to combating
fraud in the banking industry.
H1: Anti-money laundering law is the best strategy to combating fraud
in the banking industry.
HYPOTHESIS 3
Ho: The internal control system in the Nigerian banks is not weak and
in effective
H1: The internal control system in the Nigerian banks is weak and in
effective
1.6 SIGNIFICACNE OF THE STUDY
Everyone needs information so as to be empowered. These include,
the financial system participants, owners of banks and other institutions
and the general public. At the completion of this research, which is
carried out, as a partial fulfillment of the award of Master of Business
Administration (MBA) degree in accountancy, the study is significant in
the following ways and to the following persons as enumerated below.
It is to enable the student/researcher, bank customers and staff
including management to have a thorough idea of fraud.
To empower private and public investors of commercial banks, other
banks and the financial institution in general.
To help students and other researchers get information on their study for
the award of various degrees.
To increase the volume of literature in the various library for library
users.
To help the banks solve of their fraud related problem, if they will have
time to read the recommendations made in this study.
To help the participants and operators- the Central Bank, commercial
Banks, Securities and Exchange Commission (SEC), the Stock Exchange
etcetera access their performance and the efficiency of their banks and
then develop polices that will benefit the generality of the people.
To increase the reliance of the share holders on the best strategy of
combating fraud, that would be recommended in this research.
To stare up research students into carrying out further research studies
on areas not covered by the study.
1.7 SCOPE OF THE STUDY
The study concentrates on Banks as part of the financial
institutions and more specifically, on banks within the Ebonyi state
capital Abakaliki from the period of inception till date (2010/2011); the
banks being first bank of Nigeria plc.
-Oceanic Bank plc
The choices were made, from a sample of fourteen Banks within the state
capital. They are, First Bank of Nigeria Plc, standard Trust Bank Plc,
Union Bank Plc, Hallmark Bank plc, Diamond Bank Plc, platinum Habib
Bank, Plc, Guarantee Trust Bank plc, Zenith Bank plc, Afex Bank Plc,
Guidance express bank plc, oceanic Bank plc, intercontinental Bank Plc,
First inland Bank plc.
1.8 LIMITATIONS OF THE STUDY
The limitations of this research includes, the reluctances of the
staff of the banks met to release the information needed for this study
which was partly due to their busy schedules and the quest to protect
their good will.
Also, the research is limited to the publications of institutions like the
CBN, ICAN, the Banks involved, and the Acts in use, text books, and
Browsed materials from the internet and of course my lecture notes.
Equally, another limitation is the lack of sufficient fund (money),
which relatively affected the mobility of the researcher, the frequency of
interviews discussions, the acquisition of the materials used and the
general delay in the time used to carry out this study.
More so, since the research was carried out within the academic
session, the availability of time was another limitation to this study. This
was made much complex by the tight academic calendar and schedule of
the researcher, who had to also, meet up with his numerous courses
within the same session.
1.9 DEFINITIONS OF TERMS
The following terms as operational in this study are hereby defined.
(I) COMMERCIAL BANKS: They are banks that function to accept
deposit from their customers; provide credit facilities like overdrafts loan
and other advances, cheque transactions, provide agency services,
foreign exchange transactions, investment and portfolio management,
consultancy, save-keeping of assets and other services.
(ii) INDIGENOUS BANKS: These are banks owned and controlled by
either the government or the private citizen’s or both.
(iii) NEW GENERATION BANKS: These are banks established in the
after math of Nigerian independence following the government
deregulation and liberalization of the financial sector in 1986.
(iv) BANK CUSTOMERS: In this study, bank customers refer to any
one who either keeps or maintains an account with the bank or
has any other thing to do with the bank that makes him/her stay
within the bank premises during hours of operation.
(v) BANK DISTRESS: This is the inability of a bank to meet its
obligations to its customers, owners, stalk holders and the
economy, occasioned by felt weakness in its operation which has
rendered it either illiquid or insolvent.
(vi) Money laundering: Simply defined; money laundering implies
hiding, moving and investing the proceeds of criminal
conduct/activities, in series of multiple transactions used to
deceive government authorities as to the origin, existence and
application of illicit /illegal sources of income and the eventual
processing of such income to give it a tog of legitimacy
(vii) EXPATRIATE BANK: This is banks owned and controlled by
foreign investors with profit maximization as their major objectives.
(viii) BANK LEGISLATIONS: these are rules, customs, conventions or
regulations of the bank for observance by its members.
(ix) FINANCIAL SYSTEM: A financial system is a composition of
various institutions, markets, instruments and operators,
collectives segregated into, primary system participants,
financial intermediaries, financial markets, financial
instruments and financial system regulators; that interact
within an economy to provide financial services.
INTERNAL CONTROL
Control is not only internal check and internal audit but the whole
system of controls, financial and otherwise, established by the
management in order to carry on the business of the bank in an orderly
manner, safeguard its assets and secure as far as possible the accuracy
and reliability of its records.
BANK TELLER
Bank Teller is an employee of the banks studied who deal directly
with most customers. In some places, this employee is known as cashier.
REFERENCES
Aguolu, O. (2008), Fundamentals of Auditing, Enugu: Institute for
Development Studies, UNEC P 430.
Chukwu, U. C. (2004), “Auditing principles and practice, Abakaliki; new
concept publishing. PP 16-17.
Central Bank of Nigeria (2007), “A case study of distressed Banks in
Nigeria’’, Abuja: government Press PP. 5-6.
Ezeogu, B. O. (2007), “Accountability and transparency, fraud and fraud
control”, a paper presented at Ebonyi Civil Service Seminar 8,; PP
1-3.
Iyiogwe, S. O. (2002) ,Research methodology, Abakaliki; Willy Rose and
Applessed publishing CO. pp 108-111.
Nwankwo, G. O. (1991), Bank Management: principles and practice,
Lagos: Mouse Publishing (UK) Limited. P162.
Ojaide, F. (2000), “Fraud Detection and prevention- the case of pension
Accounts’ ICAN Vol. 1. P.18.
Onwumere, J. U. J. (2009), Business and economic Research Methods,
Enugu: Vougasen limited PP 25-31.
Perry, F. E. (1983) Dictionary of Bank plymon, London: Mac Donald and
Evans.
The Institute of Chartered Accountants of Nigeria (2009) Audit and
Assurance, Lagos: VI Publishers P 358.

FRAUD AND FINANCIAL MALPRACTICE AS LEADING FACTOR IN BUSINESS FAILURE (A CASE STUDY OF EMENITE INDUSTRIES LTD, ENUGU)

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ABSTRACT

Frauds and financial malpractice as a leading factors in Business failure provides means of appraising company’s performance and diagnosing, its ills and weakness.

The research conducted a critical study on this topic with the intention of finding out the extent to which the company – EMENITE LIMITED ENUGU has carried out efficiently appraisals and high lighting deficiencies which are usually believed as not existing and whether the company EMENITE LIMITED ENUGU is as efficient as it should be.

The researcher also carried out a study to find out the cause of low company performance and how to eradicate the abnormality by applying efficiency in auditing process.

The research work is broken into five chapters. The first chapter gives the general introduction and discussion, the background of the study, statement of problem, significant, limitation and scope of the study.

Chapter two deals with the views of some authorities on the topic or related topics.

Chapter three deals with research design and methodology, area, population, sampling of study.

Chapter four deals with data analysis and testing.

Chapter five deals with finding, implications and conclusion.

The analysis tools that were approved in testing the stated hypothesis were the chi-square (x2)

 

TABLE OF CONTENTS

CHAPTER ONE

1.0     Introduction

  • Background of the Study
  • Statement of Problem
  • Objective of Study
  • Research Question
  • Research Hypothesis
  • Significance of the Study
  • Scope and Limitation of the Study
  • Background of the firm Studied
  • Definition of Terms
CHAPTER TWO

2.0     Review of Related Literature

  • What is Fraud in Business
  • Nature and Types of Frauds
  • Sources, Forms and Causes of Fraud in Business
  • The Effects/Consequences of Fraud
  • The Legal Frame Work and Fraudulent Practices
  • Approaches to the prevention or Minimization –

of Frauds

CHAPTER THREE

3.0     Research Methodology

  • Research Design
  • Area of the Study
  • Population of the Study
  • Sampling Procedures
  • Instruments for Data Collection
  • Validity of the Instrument
  • Reliability of the Instrument
  • Methods of Administration of the Instrument
  • Methods of Data Analysis
CHAPTER FOUR

4.0     Data Presentation

  • Testing of Hypothesis
CHAPTER FIVE

5.0     Discussion, Implication and Recommendation

  • Discussion of Result
  • Implication of the Result
  • Recommendation
  • Conclusion

Bibliography

 

 

CHAPTER ONE

INTRODUCTION

This research work is an attempt to study on fraud and financial malpractice as leading factors in Business failure using Emenite Limited Enugu as a case study.

1.1     BACKGROUND OF THE STUDY

Business can be seen as all profit directed toward providing goods and services to mankind. The business organisation under usual condition of operation is the result of growth because companies starts in a small way and gradually expand. In the growth of any business. Individuals are employed to fill the various position which will help the organisation to achieve its desired objective.

Companies are today going through life threatening challenges which is the culmination of several years of abuse and mismanagement from their employees. Some of the reasons for these anomalies in business trend resulted in the general company down turns, ranging from fraud, misappropriation of fund, lack of accountability and general company crises.

This write up will advantageously help companies on application of rigidly administered monetary policy instruments of their company.

1.2     STATEMENT OF THE STUDY

A company whether small, medium or large in developing country like Nigeria facos special problem of fraud and financial malpractice. Those problems include incomplete recording of accounts, and poor attitude to adhere to the accounting standard and guideline coupled with the waves of corporate crimes. This research work therefore attempts to highlight on these key problem areas that undermine fraud and financial mispratice in a company and make suggestions about their possible solutions.

1.3     OBJECTIVE OF THE STUDY

This study in aimed at finding out the reasons why business fail and how to control them. It is also to undertake what business is and the role it is expect to play in the development of the nation, economy, social and technologically what calibre of people are supposed to be placed in places of authority and trust such as managers, directors, staffs. How can a well managed business encourage investment both from the government and the private individuals.

This research will also help to find out how managers, directors and staff manipulate figures and thereby throwing the internal control system into confusion and leaving the accounting system in shambles. It is also aimed at finding a preventive rather than a corative approach to the fraudulent practice of our industries.

1.4     RESEARCH QUESTIONS

Dear sir / madam,

The researcher is a final year student of institute of management and   technology, Enugu (IMT) In accountancy department. She is conducting research on fraud and financial malpractice as a leading factor in business failure.

The questionnaires below is therefore designed as a tool with which to extend the necessary information needed in carring out the project work and your opinion matters a lot for the success of this study. Your objective information will be highly appreciated and treated confidentially without prejudice.

THANKS,

APPENDIX “B” QUESTIONNAIRES

Please tick good (      ) where appropriate in the boxes provided below.

  1. What is the name of your company? —————————–

————————————————————————–

  1. What is the type of company you run?
  2. Manufacturing
  3. Construction
  4. Other (specify)
  5. Sex
  6. Male
  7. Female
  8. What is your martial status?
  9. Married
  10. Single
  11. What is your qualification?
  12. WASC/SSCE
  13. OND/NCE
  14. HND/BSC
  15. MSC and above
  16. For how long have you been in the company?
  17. 1-5 years
  18. 5 – 15 years
  19. 16 – 30 years
  20. 30 – above
  21. What factor do you think can lead to business failure?
  22. Bad management
  23. Poor internal control
  24. Fraud and financial malpractice
  25. Is there any established procedure for fraud control
  26. Dismissal
  27. Legal action
  28. Suspension
  29. Is there any established procedure for fraud control
  30. Clerks/cashiers
  31. Officers/supervisors
  32. Director/managers
  33. Uncategorized staff
  34. Have your organisation lost any money through fraud
  35. Yes
  36. No
  37. What method do employees use to defraud a business
  38. False account
  39. Forgery of figures
  40. Loans/advances
  41. What are the reasons behind this
  42. Low salary to workers
  43. Desire to get rich
  44. Internal control in weak
  45. Is fraud and financial malpractice a significant factor in business failure
  46. Yes
  47. No
  48. What are the possible consequence of fraud and financial malpractice
  49. Liquidation
  50. Retrenchment
  51. Insolvency
  52. How far has your company gone to check or control fraud
  53. No case of fraud have been noticed
  54. By establishing an internal control
  55. Employment of an Auditor
  56. Apart from fraud and financial malpractice, what other factors can led to business failure.
  57. Bad management
  58. False declaration
  59. Ownership structure
  60. What suggestion have you to make to ensure that fraud and financial malpractice is control if not eradicate from your company? ————————————————————-

—————————————————————————————————————————————————-

1.5     HYPOTHESIS

A research hypothesis is a tentative statement made about a variable which may or may not be true. It is an opinion statement which help, to guide the researcher in his investigation. In the word of Spielgeal (1972) statistical hypothesis is an assumption statement or suggestions about the population under consideration. According to Omololiaye (1986) “hypothesis is a suggested answer to the problem of the research under investigation” whether to accept or reject hypothesis depends on what others said during the research’s findings. For the purpose of this study, two set of hypothesis has been formulated and denoted. Ho for null hypothesis and HI for alternative hypothesis as follows.

HO 1.1 fraud and financial malpractice is of significant factor in business failure.

Hi 1.1 Business failure is not due to economic factor such as depression.

  1. Is fraud and financial malpractice the only cause a business failure?
  2. What method and practice do people use to defraud organisation?
  3. What measure can be taken to control them?
  4. To what extend has fraud and financial malpractice lead to business failure.
  5. What action and regulations have the government taken to eradicates malpractice in business.

1.6     SIGNIFICANCE OF THE STUDY

This research is aimed at highlighting area of problems and to advise solutions. These solutions if properly implemented will bring the government and the sandal public at large to associate themselves with investing in a company. It is however significant to undertake such study because it intend to give the research, a through and full understanding of the subject matter which is title: fraud and financial malpractice as a leading factor to business failure. The research is also for paramount important because it form basis or standard format which is intend to be followed by other student. The government can also use it to improve in its economic projection and plans and adjust some of her economic policies.

1.7     SCOPE AND LIMITATION OF THE STUDY

For the purpose of this research work, the researcher will focus his attention on the study dwells on fraud and financial malpractice as a leading factor to business failure using Emenite Industries Limited Enugu as a case study.

The researcher accoutered and skipped so apply herds of both human and material blending before arriving at the conclusion stage of this work.

The major problem includes

  1. FINANCIAL CONSTRAINTS: A project work is a money consuming venture and it is normally sponsored by well to do individuals, firm and organisation.
  2. TIME CONSTRICTION: The concentration of the researcher has to respond to various demand because each point in time has so many equally weighted competing factors.
  • HUMAN FACTOR: The human factor relates to respondent problem encountered during and after questionnaire distribution.
  1. LITERACY RATE: Some respondents ignored questionnaires required of them.

1.8     BACKGROUND OF THE FIRM STUDIED

Emenite limited company Enugu was incorporated in Nigeria in the year 1963. The company was originally incorporated as Tumbers Asbestors cement company limited Emene Enugu; as asbestor, products manufacturing company. Later in the seventies, the name was changed to turner’s building product limited (Emene) and for the third time to EMENITE INDUSTRIES LIMITED EMENE ENUGU 1988.

The company went into production of asbestors products in 1963 after being commissioned by the then governor of Easter Nigeria Dr. Akanu Ibiam. It was perhaps the first industry to be sited at Emene then, a town in Nkanu Local Government Area but now in Enugu Local Government Area.

The main product line of the company are:

  1. Asbestors roofing sheets
  2. Asbestors ceiling boards
  3. Water pipes

Raw material sources includes

  1. Cement 100% obtained locally
  2. Fibre – 100% obtained overseas
  3. Wodpulp – mixture, previously all imparted but now 70% sourced locally.

In technology, the company is one of the leaders in Nigeria today having powerful installed sheeting machine (Electro mechanical) and sophisticated pipe machine. Other machine include high power over head crances, dust control machine, grading maching, folk lift and so others.

1.9     DEFINITION OF TERMS

FRAUD: Is defined either as misappropriation of cash and good i..e (decollation) or the falsification of accounts unaccompanied by misappropriation.

MISAPPROPRIATION OF CASH: Cash misappropriation is the alternative of cash so that the actual balance presents a different balance. This brought about employees when the hide receipt of cash or falsify payments which are not authorized. Also a cashier can be used the teeming and leading process to misappropriate cash and later covered the receipt embezzled.

MISAPPROPRIATION OF GOODS: Where accurate record of goods in stock are not maintained or properly maintained. There is every possibility that the goods in stock will be misappropriate.

FALSIFICATION OF ACCOUNTS UNACCOMPANIED BY MISAPPROPRIATIONS: This type of fraud is brought about by top officials of the organisation. It is false representation of a matter of fact whether by conduct or misleading allegation or by concealment of that which should have been disclosed which deceived or intended to deceive another so that he should act upon it to his legal infury.

MALPRACTIONS: This can best be described as acts or omission if any functionary company which is contrary to the promotion of safe and sound company practice.

FORENSIC ACCOUNTANT: A PANACEA TO FRAUD DETECTION (CASE STUDY OF SELECTED QUOTED COMPANIES IN NIGERIA)

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PROJECT TOPIC AND MATERIAL ON FORENSIC ACCOUNTANT: A PANACEA TO FRAUD DETECTION (CASE STUDY OF SELECTED QUOTED COMPANIES IN NIGERIA)

The Project File Details                                                                                                       

  • Name:FORENSIC ACCOUNTANT: A PANACEA TO FRAUD DETECTION (CASE STUDY OF SELECTED QUOTED COMPANIES IN NIGERIA)
  • Type: PDF and MS Word (DOC)
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  • Length: [65] Pages
  • With Reference and Questionnaire
  • Amount: 3000 naira

ABSTRACT

The study examined the role of forensic accountant as a panacea to fraud detection adopting some selected quoted companies in Nigeria as my case study. The study aimed at investigating how fraud can be detected and controlled in companies as well as how the internal control system and financial reporting quality can be improved in companies through the forensic accountant. Samples were drawn from the employees of Julius Berger plc, PZ Nigeria plc and UAC foods plc in five departments of the companies using convenience non-probability sampling method. The hypotheses formulated were tested using chi-square test. From the analysis carried out, it was found out that the forensic accountant can detect fraudulent activities in companies as well as control the activities. The study thus concludes that in other for companies to reduce their rate of financial irregularities and be financially efficient, the need for a forensic accountant is important.

TABLE OF CONTENTS

Title page………………………………………………………………………………………………………………I
Approval page………………………………………………………………………………………………………II
Declaration page………………………………………………………………………………………………….III
Dedication page……………………………………………………………………………………………………IV
Certification page…………………………………………………………………………………………………..V
Acknowledgements………………………………………………………………………………………………..VI
Table of contents………………………………………………………………………………………………….VII
List of table…………………………………………………………………………………………………………XII
Abstract…………………………………………………………………………………….………….XIV
Chapter One: Introduction
1.1 Background to the Study……………………………………………………………………………….1
1.2 Statement of the Problem………………………………………………………………………………5
1.3 Objectives of the Study…………………………………………………………………………………6
1.4 Research Questions………………………………………………………………………………………6
1.5 Statement of research Hypothesis………………………………………………………………….7
1.6 Significance of the study……………………………………………………………………………….8
1.7 Scope of the Study……………………………………………………………………………………….8
1.8 Limitations of the study………………………………………………………………………………..9
1.9 Organization structure of the study………………………………………………………………..9
1.10 Operational definition of Terms………………………………………………………………….10
Chapter Two: Literature Review
2.1 Introduction…………………………………………………………………………………………….11
ix
2.2 conceptual framework……………………………………………………………………………….11
2.2.1 Fraud and errors……………………………………………………………………………………….11
2.2.2 Types of fraud…………………………………………………………………………………………..12
2.2.3 Causes of fraud…………………………………………………………………………………………13
2.2.4 Factors influencing the existence of fraud and errors…………………………………….14
2.2.5 Why people commit fraud………………………………………………………………………….14
2.2.6 Forensic accounting………………………………………………………………………16
2.2.7 Evolution of forensic accounting…………………………………………………………16
2.2.8 Characteristics and skills of a forensic accountant………………………………………..20
2.2.9 Significances and relevance of forensic accountant………….………………….23
2.2.10 Forensic accounting objective……………….…………………………………….24
2.2.11 Forensic accounting technique………………….……..…………………….…..25
2.2.11.1 Interview technique ……………………………….……………………………25
2.2.11.2 Data mining with computers …………………………………….………..…….26
2.2.11.3 Document review strategy …………………………………..…………….…… 27
2.2.12 Advantages and disadvantages of forensic accounting………….………..…..…28
2.2.12.1 Advantages of forensic accounting…………………….…………….….…..….28
2.2.12.2 Disadvantages of forensic accounting..………………..……………………..…29
2.3 Theoretical framework….……………………………………………………….……30
2.3.1 Fraud triangle theory………..…………………………………………………….…30
2.3.2. White collar crime …………….……………………………………………………31
2.3.3 Fraud diamond theory……………….…………………………….………………..32
2.4 Empirical Review………..………………….………………………………..……….33
Chapter Three: Methodology
3.0 Introduction…………………………………………………………………………………………….. 49
x
3.1 Research design…………………………………………………………………………………………49
3.2 Research Population…………………………………………………………………………………..49
3.3 Sample and sampling Techniques……………………………………………………………….50
3.4 Research instrument…………………………………………………………………………………50
3.5 Validity and Reliability Research Instrument………………………………………………50
3.6 Data Collection Technique……………………………………………………………………….50
3.7 Data Analysis Techniques………………………………………………………………………..51
Chapter Four: Data Presentation and Analysis
4.1 Introduction…………………………………………………………………………………………..52
4.2 Analysis of data collected……………………………………………………………………….52
4.2.1 Analysis of demographic characteristics of respondents…………………………….52
4.2.2 Analysis of data……………………………………….………………….…….58
4.2.3 Examining the possibility of detecting the occurrence of financial fraud cases… …………………….…………………………………………………………….58
4.2.4 Evaluating the extent of the influence of forensic accountant in financial fraud control…………………………………………………………………….……..61
4.2.5 Investigating the adequacy of internal control system of the company……..…64
4.2.6 Ascertaining the difference between forensic accountant and external auditors…………………………………………………………………………66
4.2.7 Ascertaining the contribution of forensic accounting to improving the quality of financial reporting……………..…………………………………………………….……68
4.2.8 Analysis of chi square statistical test……………………………………………70
xi
4.2.8.1 Test of hypothesis one………………………………………………………….70
4.2.8.2 Test of hypothesis two…………………………………………………………73
4.2.8.3 Test of hypothesis three…………………………………………………………75
4.2.8.4 Test of hypothesis four………………………………………………………….77
4.2.8.5 Test of hypothesis five…………………………………………………………..79
4.3 Description of research instrument used……………………………………………80
4.4 Summary of data analysis…………………………………………………………..81
Chapter Five: Summary, conclusion and Recommendations
5.1 Summary of Findings……………………………………………………………………………….82
5.2 Conclusion………………………………………………………………………………………………83
5.3 Recommendations…………………………………………………………………………………….84
5.4 contribution to knowledge and Suggestions for Further Studies……………………..85
References………………………………………………………………………………………………………….86
Appendix one……………………………………………………………………………………………………..89
Appendix two ……………………………………………………………………………..90
xii
LIST OF TABLES
TABLES
TITLE OF TABLES
PAGES
4.1
name of organization
52
4.2
Gender distribution of the respondent
53
4.3
Marital status of the respondent
54
4.4
Age distribution of the respondent
55
4.5
Academic qualification of respondent
56
4.6
Professional qualification
56
4.7
Distribution of years of services
57
4.8
Departments of respondents
58
4.9
Management level of respondent
58
4.10-4.13
Examining the possibility of detecting the occurrence of financial fraud cases
58-60
4.14-4.17
Evaluating the extent of the influence of forensic accountant in financial fraud control
60-62
4.18-4.21
Investigating the adequacy of internal control system of the company
62-64
4.22-4.25
Ascertaining the difference between forensic accountant and external auditors
64-66
4.26-4.29
Ascertaining the contribution of forensic accounting to improving the quality of financial reporting
66-68
4.30-4.32
Examining the possibility of detecting the occurrence of financial fraud cases for chi-square analysis for hypothesis one
68-70
4.33
Chi-square test for hypothesis one
70
4.34-4.36
Evaluating the extent of the influence of forensic accountant in financial fraud control for chi-square analysis for hypothesis two
70-72
4.37
Chi-square test for hypothesis two
73
4.38-4.40
Investigating the adequacy of internal control system of the company for chi-square analysis for hypothesis three
73-75
xiii
4.41
Chi-square test for hypothesis three
75
4.42-4.44
Ascertaining the difference between forensic accountant and external auditors for chi-square analysis for hypothesis four
75-77
4.45
Chi-square test for hypothesis four
78
4.46-4.48
Ascertaining the contribution of forensic accounting to improving the quality of financial reporting for chi-square analysis for hypothesis five
79-80
4.49
Chi-square test for hypothesis five
81

CHAPTER ONE

1.1 Background of the study
Financial irregularity is a big problem globally and it is of a great concern to the developing nations. Financial irregularities are so common and serious that fraud and corruptions is gradually becoming a way of life and almost every individual cannot be free or clean of it. Individuals get involved in fraud and corrupt practices according to their capacity of office. No money is entirely free as every naira and kobo has it legal use which consequently means that any form of misuse will negatively have an effect on where it ought to be used. This effect can be direct or indirect on companies or the nation at large. Individuals and companies affected negatively by the fraudulent and corrupt act will want to seek redress by using different institutions such as the police and the law court. Hence whatsoever an investigator wishes to do will not be complete if the extent to which the affected companies are not quantified. This and other pecuniary areas are where the service of the expert “forensic accountant” is being engaged in for a long time worldwide and recently in Nigeria.
Forensic accounting evolved as a result of certain emerging fraud related cases. Forensic accounting encapsulates all other investigation related areas in uncovering financial fraud. It is referred to as the tripartite practice of utilizing auditing, accounting and investigative skill to assist in legal matters. Modugu & Anyaduba (2013). According to Okoye & Gbegi( 2013), forensic accounting is an engagement that results from actual or anticipated dispute or litigation.
2
It is an investigative style of accounting used to determine whether an individual or a company has engaged in any illegal financial activity. Forensic accounting can therefore be seen as an aspect of accounting that is suitable for legal review and offering the highest level of assurance. Apostolous & Weber (2000). Forensic accounting is the application of financial skills and investigative mentality to unsettled issues, conducted within the context of the rule of evidence. Arokiasamy & Cristal (2009). Forensic accounting as a discipline encompasses fraud knowledge, financial expertise, and a sound knowledge and understanding of business reality and the working of the legal system. Forensic accounting may be one of the most effective and efficient way to decrease and check accounting fraud. Forensic accounting is described as the integration of an individual’s accounting and auditing knowledge with investigative skills that have been gained from years of practical experience. It is the means by which the forensic accountant carefully examine instructions given by a client, usually through a solicitor, thoroughly investigate those instructions and the underlying circumstances, examine the financial information and any relevant contracts and other agreements, obtain appropriate evidence, prepare any appropriate calculations, form a conclusion and publish the whole in the form of a report suitable for presentation to the court. Forensic accounting consist of two major component which are litigation service that recognizes the accountant as an expert consultant and the investigative services that uses the forensic accountant skill and require court room testimony. The increasing sophistication of financial fraud requires that forensic accounting be added to the tools necessary to bring successful investigation and prosecution of those involved in criminal activities. The focus of this study is to examine the role of forensic accountants in detection of fraud in Nigerian companies.
3
1.1.1 Historical Background of Case Study-Julius Berger Plc, PZ Nigeria Plc and UAC Nigeria Plc.
Julius Berger Plc: The foundation of Julius Berger began in 1965 when a contract to construct the Eko Bridge in lagos state was awarded to it. This was the foundation of Julius Berger commitment to Nigeria following the initial project, the company began to diversify its portfolio and it growth started to run in parallel to the development of Nigeria. In 1970, Julius Berger legal structure was changed into a limited company, later to be transferred into a public limited company listed in the Nigeria stock exchange in 1991. Throughout this time, the role in the development was so evolving, proven to be a company that consistently delivered reliable solution, Julius Berger became a pivotal partner in the building of the country‟s fledging industrial and civil infrastructure, and also a key collaborator in the development of Nigeria‟s new capital Abuja.
Today, Julius Berger maintained it role as an integral part in Nigeria‟s construction industry, laying the foundation of the country economic progress and development. Julius Berger head office is located in Abuja FCT with additional permanent locations in Lagos and Uyo. The company is also represented across the nation in structural engineering and infrastructure works and in southern Nigeria through oil and gas industry project. Currently, Julius Berger board of director is comprised of thirteen members, nine non-executive directors one of whom is an independent director and four executive directors. Developing of complex infrastructure is a key element in Julius Berger core competence. Countless bridges, road system, traffic network and airport among others are been constructed by them.
4
PZ Nigeria Plc: PZ Nigeria plc was founded by Paterson Zochonis (PZ), in 1899 PZ is basically a company that engages in the manufacturing of a lot of product ranging from beverages to household cleaning agent and a whole lot of product. The company‟s brand portfolio includes some of the following Nunu milk, Imperial leather soap, Olympic milk, Coast milk. In 1948, PZ acquired its first soap factory and alongside entered into detergent making and the refrigerator market. In 1975, the company acquired the Cussons group ltd and then changed the name to PZ Cussons Ltd in 2002. PZ Cussons Nigeria plc is the largest subsidiary of the PZ Cussons global group. The company has enjoyed tremendous business success in Nigeria for over a century. This company has twelve members as board of directors of which six are executives and they include Mr. Christos Giannopoulos, Mrs. Yomi Ifaturoti, Mr. Adewale Raji, Mr David Petzer, Mr Alex Goma, and Ms Joyce Coker. And the non-executive directors include Professor Emmanuel Edarien, Mr. Tunde Oyelola, Mr. Muhammed Hayatu, Mr. Lawal Bartagarama and Mrs. Elizabeth Ebi. PZ manufactures the following product among others; Carex soap, Joy soap, Robb, Morning fresh, Robert antiseptic, and many others.
UAC Nigeria Plc: United African Company (UAC) of Nigeria plc is a leading diversified company, operating in foods and beverage, real estate, paints and logistics sectors of the economy. UAC has remained a foremost and active participant in Nigeria‟s economic landscape since 1879. The company‟s brand portfolios includes leading brands such as gala sausage roll, Mr. Biggs, snaps, fun time coconut chips, supreme ice-cream, Delite fruit juice, swam natural spring water, gossy warm spring water, Dulux, grand soya oil and grand coconut oil, vital feeds, livestock feed band sandtex. UAC has evolved into a holding company with strong regional and
5
international partnership in a bid to enhance sustainable growth. The partnership are: UAC food limited, a business partnership between brands limited holding 49% of the equity and UAC controlling 51%: MDS logistics ltd, a joint venture with imperial logistic, which holds 49% equity with UAC holdings the majority stake of 51%: UAC restaurant ltd, where famous brands holds 49% of the equity, while UAC holds the remaining 51%. UAC also operate successful joint venture in the real estate business and technical collaboration in its paint business.
1.2. Statement of the problem
In recent times, various frauds have been committed in different companies, corporate organization in private sector as well as the public sector economy. Okoye & Akamobi (2009), Owojori & Asaolu(2009), Izedonmi & Mgbame (2011), Kasum(2009) as cited by Modugu & Anyaduba (2013) have all acknowledged in their separate works that there is an increasing rate of fraud and fraudulent practices in Nigeria and financial irregularities have become the order of the day in Nigeria. The independence of the internal auditor is of no guarantee because the auditor works as an employee of the company while the independence of most external auditors has already been impaired and does not sufficiently provide a guarantee any more. Irrespective of the presence of both internal and external auditors in companies, fraud is still being perpetuated on a daily basis. As there are more and more development in the information communication technology (ICT) world and other field, so fraudsters continue to groom their tactics towards fraudulent practices. It is now important that forensic accounting is introduced and practiced since external auditors do not or may not have the required training to be able to tackle modern day fraud like white collar crime such as security fraud, embezzlement, bankruptcies, contract dispute and criminal financial transaction; including money laundry by
6
organized criminals. These areas have become a complex area of concern for the accounting profession. Although, there is a general expectation that the forensic accountant can be able to curtail financial irregularities experienced in several companies. However, there has not been any emphasis on a specific way on how the forensic accountant can totally curb financial crime. Thus, the study seeks to fill this gap by providing answers to the following research questions.
1.3. Objectives of the study
The broad objective of the study is to evaluate the role of forensic accountant on detecting financial fraud in Nigerian quoted companies
The specific objectives of the study are to:
i. Examine the possibility of detecting the occurrence of financial fraud through forensic accounting
ii. Evaluate the effectiveness of forensic accounting in financial fraud control.
iii. Identify the predisposing factors that ensure the improvement in financial reporting quality.
iv. Investigate the adequacy of internal control system of selected companies.
v. Ascertain the difference between forensic accountant and external auditors
1.4. Research Questions
This study aims at providing answers to the following highlighted questions based on the research objectives.
i. How does forensic accounting effectively detect the occurrence of financial fraud?
7
ii. To what extent is forensic accounting effective in the control of financial fraud?
iii. How does forensic accounting effectively help in improving financial reporting quality?
iv. How can the forensic accounting ensure improved internal control system?
v. What are the significant difference between forensic accountant and external auditors?
1.5. Statement of Research Hypotheses
The following are the hypotheses formulated to guide the research work.
Hypothesis No.1:
H0: The use of forensic accountant does not significantly reduce the occurrence of financial fraud.
H1: The use of forensic accounting can significantly reduce the occurrence of financial fraud.
Hypothesis No.2:
H0: There is no significant relationship between forensic accounting and financial fraud control in listed selected companies.
H1: There is a significant relationship between forensic accounting and financial fraud control in listed selected companies.
Hypothesis No.3:
H0: There is no significant relationship between forensic accounting and improved financial reporting quality.
H1: There is a significant relationship between forensic accounting and improved financial reporting quality.
Hypothesis No.4:
8
H0: Forensic accounting does not enhance the internal control system of selected companies.
H1: Forensic accounting does enhance the internal control system of selected companies.
Hypothesis No.5:
H0: There is no significant difference between professional forensic accountant and the traditional external auditor.
H1: There is a significant difference between professional forensic accountant and the traditional external auditor.
1.6. Significance of the study
This study will be of relevance to various persons and organization as follows:
 Management: This study will be useful to management of companies in order for them to know the appropriate measures to take in preventing fraud as well as the need for a forensic accountant
 Researchers: Researchers will find it helpful in knowing the relevant areas and issues to look at to ensure that forensic accounting is pivotal in the Nigerian economy.
 The study will also prove useful as a platform for further research work.
1.7. Scope of the study
1.7.1. Sample size
The study involves a sample of three (3) quoted companies listed in the Nigeria stock exchange made up of one Construction Company and two companies involved in food and beverages.
9
1.7.2. Time horizon and Geographical coverage
The structured questionnaires are administered at the Abuja branch of the selected companies. The target respondents are staff members of the companies‟ finance and accounts department. The study period is 2015.
1.8. Limitation of the study
One major constraint to the study is the time range to conduct the study as well as financial constraints. Also sample size forms a constraint in this study as only three quoted companies are considered in this study out of the vast number of companies listed in the Nigerian stock exchange and the findings of the entire companies may not be represented. Thus, generalizations of findings will be highly restricted.
1.9. Organizational structure of the study
The study comprises of five chapters. Chapter one consists of the introduction, statement of the problem, objectives of the study, research questions, research hypotheses, scope and limitation of the study, significances of the study and definition of terms. Chapter two consists of the conceptual clarification in which relevant concepts were explained; theoretical framework n which relevant theories were also considered and the empirical review. Chapter three presents the research methodology used for the study with information on the research design used, the study population, sampling and sampling technique, research instruments, validity and reliability of research instruments, data collection technique and data analysis technique used in the study. Chapter four shows the analysis and presentation of data gathered for the study it also includes
10
testing of formulated hypotheses. Chapter five showed the summary of findings, conclusions, recommendations and suggestions for further studies.
1.10 Operational definition of terms
 Fraud: this is an intentional act by one or more individuals among management employees, or third parties, which results in a misrepresentation of financial statement.
 Forensic Accounting: it can be defined as the integration of accounting, auditing and investigative skills that provides accounting analysis which is suitable to the court and also from the basis for discussion, debate, and ultimately dispute resolution.
 Internal Control: Committee of Sponsoring Organization (COSO) (2003) defined Internal Control as a process, effected by an entity‟s board of directors, management, and other personnel, designed to provide reasonable assurance regarding the achievement of objectives in the following categories; (a) effectiveness and efficiency of operations; (b) reliability of financial reporting; (c) compliance with laws and regulations.
 White collar-crime: Edwin Sutherland in 1939 defines it as “a crime committed by a person of respectability and high social status in the course of his occupation. It is a financially motivated nonviolent crime committed for illegal monetary gain.
 FBI: federal bureau of investigation

EXTERNAL AUDIT A TOOL FOR IMPROVING PUBLIC CORPORATIONS AND PARASTATALS (A CASE STUDY OF THE NIGERIAN COMMUNICATION COMMISSION (NCC), IKOYI, LAGOS)

Download the complete Accounting project topic and material (chapter 1-5) titled EXTERNAL AUDIT A TOOL FOR IMPROVING PUBLIC CORPORATIONS AND PARASTATALS (A CASE STUDY OF THE NIGERIAN COMMUNICATION COMMISSION (NCC), IKOYI, LAGOS) here on iProjectTopics. See below for the abstract, table of contents, list of figures, list of tables, list of appendices, list of abbreviations and chapter one. Click the DOWNLOAD FULL WORK BUTTON BELOW CHAPTER ONE  to get the complete project work instantly.

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PROJECT TOPIC AND MATERIAL ON EXTERNAL AUDIT A TOOL FOR IMPROVING PUBLIC CORPORATIONS AND PARASTATALS (A CASE STUDY OF THE NIGERIAN COMMUNICATION COMMISSION (NCC), IKOYI, LAGOS)

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  • Name: EXTERNAL AUDIT A TOOL FOR IMPROVING PUBLIC CORPORATIONS AND PARASTATALS (A CASE STUDY OF THE NIGERIAN COMMUNICATION COMMISSION (NCC), IKOYI, LAGOS)
  • Type: PDF and MS Word (DOC)
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  • Length: [65] Pages
  • With Reference and Questionnaire
  • Amount: 3000 naira

ABSTRACT

The research centered on External audit as a tool for improving public corporations and
parastatals, the Nigerian Communication Commission as a case study. The main objective that
guided this study was to check if there are financial irregularities in the company and whether
the internal audit department is discharging its responsibilities effectively. In realizing its
objective, the study has employed a case study design which has provided the opportunity to
such techniques as questionnaires and observations in the data collection process. The target
population of this study targeted some NCC employees who formed 43 respondents. The data
obtained in this research provided descriptive statistics and narrations. The study also used a
Single Factor Analysis of Variance (ANOVA) to determine the relationship between the
independent variables and the dependent variable. The study found that management support
had the greatest effect to the external audit operation as an instrument towards improving the
Nigerian Communication Commission (NCC). The study recommends that in order for the
corporation to be effective in its operation and service delivery it needs to pay attention to the
contribution of external auditing on its operations.

TABLE OF CONTENTS

Title Page
Certification
Dedication
Acknowledgement
Abstract
Table of Contents
CHAPTER ONE – INTRODUCTION
1.1 Background to the study
1.2 Statement of the problem
1.3 Objective of the study
1.4 Research Question
1.5 Research Hypothesis
1.6 Scope of the study
1.7 Significance of the study
1.8 Definition of operational terms
1.9 Historical Background of the Nigerian Communication Commission (NCC)
CHAPTER TWO – LITERATURE REVIEW
2.1 Introduction
2.2 Conceptual framework
2.2.1 Objective of Auditing
2.2.2 Purpose of external audit
2.2.3 Qualities of an Auditor
2.2.4 Qualification of an Auditor
2.2.5 Appointment of an external auditor
2.2.6 what the auditor need
2.2.7 Rights and Duties of an Auditor
2.2.8 Independence
2.2.9 Audit report
2.2.10 Nature of Government Parastatals
2.2.11 Auditing Government Corporations
2.2.12 Internal Control and Internal Check
2.2.13 Internal Control in the Public Sector
2.2.14 The Need for Effectiveness and Efficiency in Government Audit
2.2.15 Legal Basis of Government Accounting
2.2.16 Method of keeping records in public corporations
2.2.17 Fraud in Government Parastatals
2.2.18 Corporate irregularities
2.3 Theoretical Framework
2.4 Empirical framework
2.5 Summary of review
CHAPTER THREE – RESEARCH METHODOLOGY
3.1 Introduction
3.2 Research design
3.3 Population of the study
3.4 Sample size determination
3.5 Method of Data Collection
3.5.1 Research instrument
3.5.2 Reliability & validity Test
3.6 Method of data analysis
3.6.1 Decision Criterion for validation of Hypothesis
CHAPTER FOUR – DATA PRESENTATION ANALYSIS AND INTERPRETATION
4.1 Introduction
4.2 Presentation of Results
4.3 Discussion of Results
CHAPTER FIVE – SUMMARY CONCLUSION AND RECOMMENDATION
5.1 Summary
5.1.1 Factors that strengthen External Audit in NCC
5.1.2 Factors that Weaken External Audit in NCC
5.2 Conclusion
5.3 Recommendation
REFERENCES
APENDIX 1 – QUESTIONNAIRE
LIST OF TABLES
Table 3.3.1 Composition of the Targeted population
Table 3.4.1 Sample Size in relation to target population in each category
Table 4.2.1 Analysis of Questionnaire administered, responded to and returned

CHAPTER ONE

INTRODUCTION
1.1 Background to the study
There is general awareness all over the world for the need to pay greater attention to the
improvement of public corporation and parastatals. The reason is obvious, government
constitutes the largest single business entity and her pattern of expenditure through its various
parastatals, agencies and commissions stimulate lot of economic activities. As a result of the
governments’ involvements in economic activities, initiatives are being taken all over the world
towards improving the standards of accounting and auditing departments in its institutions.
The public sector accountant has the responsibility of developing systematic arrangements to
assist management in the performance of the services of the institution while the External auditor
has among other duties, the complementary role to examine whether management actually
performs that efficiently. The External auditor has to satisfy himself that the accounts presented
have been prepared according to statutory and regulatory requirements considering that all
proper accounting practices have been observed throughout the compilation process.
It is a fact that public Corporations have a significant role in improving the wellbeing of the
communities in any nation. In Nigeria, The Nigerian Communication Commission (NCC) falls in
the category of public corporation. These corporation are the ones whose management has a
direct impact on people’s lives in their respective localities (Chacha, M.A,). In this way,
improving the manner in which these local institutions are managed is likely to be significance
not only on the way they deliver goods and services to the population but also provide a good
image of the public sector institutions within and outside Nigeria. Given this importance of
public corporation, in the current moment the government in Nigeria has put much attention on
developing and strengthening the audit department/function in the telecommunication sector. The
logic behind this initiative is that in so doing there is a likelihood of improving the management
of these institutions and hence being able to serve better the people in this era of decentralization.
Therefore this research is set to look at the current development in the management of the public
corporation, especially the initiative to strengthen the external audit function in the public
corporation. In so doing the research aims at assessing the effectiveness of using external audit as
a tool for improving public corporation management in the telecommunication sector.

1.2 Statement of the problem
Corporate fraud, bribes and illegal political contributions constitutes a threat to public confidence
in government parastatals. People have argued that internal audit in companies which
government control or in which they hold majority shares is very weak and inadequate and thus
responsible for the occurrence of corporate irregularities and poor performance.
A weak system of internal control cannot provide sufficient accounting information to safeguard
their assets and ensure effective efficient operations. In this study, the researcher will investigate
the potential effectiveness of external auditors in government parastatals in preventing corporate
irregularities and safeguarding assets.
It is upon this background that this study is conducted with the Nigerian Communication
Corporation as a case study.

1.3 Objective of the study
This research is set to fulfill the following main research objective: To assess the effectiveness of
external audit as a tool for improving public corporations. In order for the study to be able to
fulfill the intention of its main research objective the Nigerian Communication Commission,
Ikoyi, Lagos was selected for that matter. Other specific objectives are:
i. To assess public corporations external audit effectiveness and efficiency in the prevention
of corporate irregularities.
ii. To point out if there is deficiency in the internal control system of public corporations as
well as its implication for top-decision maker.
iii. To check if public parastatals neglect modern techniques of keeping financial records
iv. To make useful recommendation in areas of lapses in their external audit activities.

1.4 Research Question
There are many questions that need to be asked as regards this study. These are likely questions:
i. Is external audit effective enough to prevent corporate irregularities in public
corporations?
ii. Is there deficiency in the internal control system of public corporations?
iii. Do government parastatals neglect modern techniques of keeping financial
records?

1.5 Research Hypothesis
This research tends to achieve it aims by considering the following hypothesis:
i. Ho: External audit is not effective enough to prevent corporate irregularities in
public corporations
H1: External audit is effective enough to prevent corporate irregularities in public
corporations.
ii. Ho: There is no deficiency in the internal control system of public corporations
H1: There is deficiency in the internal control system of public corporations
iii. Ho: Government parastatals do not neglect modern techniques of keeping
financial records
H1: Government’s parastatals neglect modern technique of keeping financial
records.

1.6 Scope of the study
This research study focused on assessing the effectiveness of external audit as a tool for
improving public corporations in Nigeria. In order to realize this focus of the study the Nigerian
Communication Commission (NCC), Ikoyi, Lagos was selected as a case study.

1.7 Significance of the study
The findings of this research will provide the insights on how external audit effectiveness can
improve the public corporations and in particular for the Nigerian Communication Commission
(NCC), Ikoyi, Lagos. It is believed that positive improvement in the public corporations is likely
to benefit the citizens of Nigeria. Therefore, this study provides crucial understanding to the
policy makers and other stakeholders in the Nigerian Communication Commission (NCC), Ikoyi,
Lagos on the role and significance of the external auditing.
The results of the study are significant in the way that they are to a large extent relevant for
influencing the management activities in the external audit of the Nigerian Communication
Commission (NCC), Ikoyi, Lagos and to the external auditors.
For other researchers and those who will be interested with the functioning of the external audit
department, the findings and conclusions drawn in this research may act as part of the reference
materials for the purpose of stimulating debates on the effectiveness of external audit in public
corporations.

1.8 Definition of operational terms
The researcher finds it worthy to define some important terms in the research work for a better
understanding of their meaning and the context in which they are applied in the work.
External audit is an independent examination of the financial statements prepared by the
organization. It is usually conducted for statutory purposes (because the law requires it).
Public corporation is defined as that part of a country’s economy which is controlled or
supported financially by the government. In Nigeria, the public service is a national institution of
excellence that has an important role in the abolition of poverty and acquiring a sustainable
economic growth
Internal Control System: is the whole system of control, finical or otherwise established by
internal check, internal audit and other forms of control
Agencies: is an organization or bureau that provides some service for another
1.9 Historical Background of the Nigerian Communication Commission (NCC)
The Nigerian Communications Commission is the independent National Regulatory Authority
for the telecommunications industry in Nigeria. The Commission is responsible for creating an
enabling environment for competition among operators in the industry as well as ensuring the
provision of qualitative and efficient telecommunications services throughout the country.
Over the years NCC has earned a reputation as a foremost Telecom regulatory agency in Africa.
The Commission is hoping to catalyze the use of ICT’S for different aspect of national
development. The Commission has initiated several programs such as State Accelerated
Broadband Initiative (SABI) and Wire Nigeria Project (WIN) to help stimulate demand and
accelerate the uptake of ICT tools and services necessary for the enthronement of a knowledge
society in Nigeria.
In order to achieve its mandate, the Commission has put in place the necessary licensing and
regulatory framework for the supply of telecommunications services.
Organizational Structure
The Nigerian Communications Commission’s organisational structure is comprised of twenty
(20) departments, including the four (4) departments under the Human Capital & Infrastructure
Group.
The Executive Vice Chairman (EVC) is the Chief Executive Officer of the Commission and
directly oversees ten (10) departments, including the Human Capital & Infrastructure Group.
The Executive Commisioner – Technical Services (ECTS) directly supervises the departments
charged with the oversight of technical standards, spectrum and engineering issues governing the
Nigerian telecommunications industry.
The Executive Commissioner – Stakeholder Management (ECSM) directly supervises the
departments charged with addressing the needs of telecommunications industry stakeholders
including vendors, service providers and consumers.
The Board of Commissioners, of which the EVC and the two Executive Commisioners are
members, is charged with the governance of the Nigerian Communications Commission and has
oversight functions over all of the Commission’s activities.
Below is the Organisational Structure of NCC:
CHAPTER TWO

EXAMINING THE EFFECTS OF INFLATION ON REPORTED PROFITS: IMPLICATIONS FOR DECISION MAKING

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  • Name:EXAMINING THE EFFECTS OF INFLATION ON REPORTED PROFITS: IMPLICATIONS FOR DECISION MAKING
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  • With Reference and Questionnaire
  • Amount: 3000 naira

ABSTRACT

 

The purpose of this study is to examine the effect of Inflation on Reported Profits:
Implication for Decision Making [A survey of financial institutions in Port
Harcourt]. Financial Accounting information is provided to external investors
and to Management. For Management, periodic report are prepared for decision
making purposes while for external investors, a summarized report profits is what
they get. These reported profits are not screened for inflation. Consequently, the
accounting conventions and inflationary rate impact negatively on investment
decisions by external investors of the banks. To achieve these general objectives,
a number of specific objectives were derived directly from the general objectives
and a hypothesis was formulated. These research questions and the hypothesis
guided the development of the instrument tests or items. This instrument is titled
“Effect of Inflation on Decision Making Descriptive Questionnaire”. The Study
findings revealed that: Accounting conventions influence the preparation of
reported profits, thus, creating diversity which is at variance with the objective of
efficient resource allocation; External users of these reported profits rely heavily
on the information they provide for their investment needs; Inflation rate in the
country has impacted negatively on the purchasing power of the Naira; Savings
and investment rates have fallen due to inflation; There is a relationship between
the rate of inflation and fall in the value of the Naira. The study concludes that
there is now more than ever, the need for inflation accounting in reported profits;
the effect of generally accepted conventions on reported profits create a degree of
diversity which is at variance with the objective of efficient resource allocation.
Therefore, reported profits should not strictly adhere to accounting convention
because information provided for management decisions do not adhere to
accounting conventions; There is now need to introduce an Account for Inflation
as done in most advanced countries for example, the UK and USA. In the UK, the
current purchasing power method is used to produce for shareholders a
supplementary statement in terms of value of their investment. There is the need
to do some for investors in this country; Savings and investments will rise again if
investors know what the value of their present investment will fetch in the future;
Operating profits should be decided after charging the value to the business of
assets consumed during the period, this should include holding gains.

 

TABLE OF CONTENTS

– – – i
Certification – – – – – – – – – ii
Approval Page – – – – – – – – iii
Dedication – – – – – – – – – iv
Acknowledgements – – – – – – – – v
Abstract – – – – – – – – – vi
List of Tables – – – – – – – – vii
Table of Contents – – – – – – – – viii
CHAPTER ONE
1.0 Introduction – – – – – – – – 1
1.1 Background of the Study – – – – – – 1
1.2 Statement of the Problem – – – – – – 4
1.3 Objectives of the Study – – – – – – 5
1.4 Research Questions – – – – – – – 5
1.5 Formulation of Research Hypotheses – – – – 6
1.6 Significance of the Study – – – – – – 6
1.7 Scope of the Study – – – – – – – 6
1.8 Limitation of the Study – – – – – – 7
1.9 Definition of Terms – – – – – – – 7
References – – – – – – – – 8
CHAPTER TWO
2.0 Review of Related Literature – – – – – 9
2.1 Theoretical Framework – – – – – – 9
2.2 Inflation and Capital – – – – – – 11
2.3 Best Alternatives – – – – – – – 13
ix
2.4 The Object of Management – – – – – – 14
2.5 Account for Inflation – – – – – – 15
2.6 The Nature of Financial Statement – – – – 16
2.7 Various Reviews – – – – – – – 22
2.8 The Effcts of Inflation – – – – – – 24
2.9 Measuring Changes in the General Level of Prices – – 26
2.10 Causes of Inflation – – – – – – – 29
2.11 Controlling Inflation- – – – – – – 34
2.12 Deflation – – – – – – – – 37
2.13 Effects of Deflation – – – – – – – 38
2.14 Reasons for the Post-War Inflation – – – – 38
2.15 Inflation since 1956 – – – – – – – 40
2.16 Stagflation in the early 1970s – – – – – 40
References – – – – – – – – 42
CHAPTER THREE
3.0 Research Design and Methodology – – – – 43
3.1 Research Design – – – – – – – 43
3.2 Sources of Data – – – – – – – 43
3.3 Area of the Study – – – – – – – 44
3.4 Population of the Study – – – – – – 44
3.5 Determination of Sample Size – – – – – 44
3.6 Sample Technique – – – – – – – 45
3.7 Method of Data Collection/Instrumentation – – – 45
3.8 Data Analysis Techniques – – – – – – 45
3.9 Validity and Reliability of the Measuring Instrument – – 46
References – – – – – – – – 47
x
CHAPTER FOUR
4.0 Data Presentation, Analyses and Interpretation – – – 48
4.1 Data Presentation – – – – – – – 48
4.2 Analyses of Data – – – – – – – 48
4.3 Hypotheses Testing – – – – – – – 53
CHAPTER FIVE
5.0 Summary of Findings, Conclusion and Recommendations – 55
5.1 Summary of Findings – – – – – – 55
5.2 Conclusion – – – – – – – – 56
5.3 Recommendations – – – – – – – 56
Bibliography – – – – – – – – 58
Appendix

 

 

CHAPTER ONE

1.0 Introduction
1.1 Background of the Study
Inflation may occur in one or two possible forms. It may be demand
inflation or it may be cost inflation. According to Maddison (1970:93):
1. Demand Inflation: Takes place at a time of stable prices.
Additional expenditure is generated with the effect that given full
employment, prices of goods and services rises. This will eventually
lead to higher rewards for factors of production as well i.e. wages
and profits will go up.
2. Cost Inflation: This kind of inflation, on the other hand originates
in higher factor prices. Example is in wage awards which are not
justified by increases in the productivity of labour. High costs will
then lead to higher prices of goods and services. Whichever form
inflation may take, however, it will have a snowballing effect i.e. the
inflationary spiral will set to work. Higher prices will lead to
demands by the factors of production for higher rewards to maintain
the real value of their incomes and these higher factor rewards will
mean higher costs of production. And so, it will go on. This is the
main danger of inflation. Once it has started, it is difficult to put a
stop to it without being unfair to one particular section of the
community, namely that section whose incomes have not yet been
adjusted to the higher prices prevailing all round.
Gill (1973:339) posited that inflation means any general
increase in the price level of the economy in the aggregate. He
observed that this macroeconomic concept include certain prices in
the United State. The three main indices of inflation in common use
are:
1. The index of consumer prices
2
2. The wholesale price index and
3. The GNP price labour
This third index reflects the distinction between the real GNP
and changes merely in money GNP. Inflation in whatever form have
certain serious negative effect on decision-making.
Sizer (1989:52) posited that accountant measure profit by
finding the difference between the net asset at the beginning and end
of accounting period. They match the actual revenues of the period
with the actual expenses of the period and to the extent that revenue
exceeds expenses, there is a profit. However, under the historical
cost accounting system the matching process may be of revenue of
the period with cost of earlier periods, they do not necessarily match
current values. Furthermore, the balance sheet is made up of a
mixture of Naira of different periods, depending upon the mix of
assets; the age structure of the assets and depreciation policies.
Thus, in the period of rising prices there would be an
overstatement of profit and an understatement of assets employed.
This situation arises because the output costs of one data are
matched with output revenues of a later date. If assets are shown in
the balance sheet at their historical cost basis and stocks and workin-
progress on a first-in-first-out [F.I.F.O] or similar basis, part of
what accountant calculate as profits will be required to maintain the
capital of the business; infact, part of the profit will be required to
cover the increased cost of replacing fixed assets and stocks which
were bought or produced at prices considerably lower than those
ruling at the date of consumption. If a company distributed as
dividends the whole of its historical cost profit, it will have
insufficient cash left to maintain its present level of stocks and workin-
progress and replace its fixed assets. Furthermore, if reported
3
profits which result merely from a change in the value of money, or
capital gains arising from the same reason are taxed as if they are
real income to the business, then, the ability of the company to
maintain the capital of the business intact and sustain real growth
will be diminished.
Decision-making requires information which is measured on
an appropriate basis. Gluatier and Underdown (1986:35) argued
that the monetary unit of measurement decreases in value because its
purchasing power falls according to the degree of inflation. The
consequences of the instability in the dimension of the unit of
measurement in accounting are that objects and events which were
measured in one period of time cannot be compared with similar
goods and events which were measured in a subsequent period. Yet,
accountants are still unwilling to provide information to external
users about future expectations, which would be useful for decisionmaking,
since this will mean abandoning a tradition based on
objectivity. The development of accounting as an information
science concerned with the needs of decision-makers requires
measurements which are relevant and useful for these needs. In
particular, such measurements should posses a high degree of
predictive ability. Unfortunately, accounting tradition in this
country poses serious obstacles to the use of reported profits for
decision-making by external users.
The two financial institutions to be examined in this study are
First Bank Plc. and Union Bank Plc. These two finance institutions
are quoted on the Stock Exchange and are therefore, deemed to be
investment opportunities. First Bank Plc formally known as British
Bank for West Africa was founded in 1894. Barclays Bank now
known as Union Bank of Nigeria was established in 1917. These
4
two expatriate banks dominated the Nigerian banking scene until
1933 when National Bank of Nigeria was established. The two
banks have since 1972 and 1977 been taken over first by the Nigeria
Government and later privatized to the Nigerian public.
1.2 Statement of the Problem
Financial accounting is concerned with the external requirement of
persons outside the firm as well as with internal requirements of
management. A number of periodic reports are prepared for management
and a summarized annual report is prepared for outside parties. There are a
number of basic concepts employed in financial accounting reporting such
as money measurement, business entity, going concern and cost. The
impact of price level changes, as occasioned by inflation, on accounting
profits attracted increased attention in recent years. These problems arise
because the financial reporting concept is based on these age old concepts
which for long have ignored the presence of inflation and its implication for
decision-making both by management and outside users of reported profit.
Secondly, overstated profits are measured in monetary terms, rising prices
will include outside users to make investment decisions without
appreciating the consequences of the reduced value of their investment.
Third, since reported profits are value of the purchasing power of money
thus, reducing its predictive ability. Fourth, financial institutions, which
benefits from rising prices also suffer from decreases in savings and
investments. This is because people have become used to the idea that
rising prices reduce the purchasing power of their savings and investments.
Fifth, rising prices in Nigeria have led to a fall in export (not crude oil) and
an increase in imports resulting in the inflation of the country’s currency
and this has led to the worsening of the country’s balance of payments, a
5
loss of its international reserves and a constant fall in the international value
of the Naira.
1.3 Objectives of the Study
The main objective of this study is to examine the Effect of Inflation
on Reported Profits, and its implication for decision-making (A survey of
selected Financial Institutions in Port Harcourt). To achieve this main
objective, the following specific objectives shall be used:
(1) To determine the degree of influence of accounting conventions on
reported profits to outside users.
(2) To examine whether reported profits induce outside users to make
investment decisions.
(3) To examine the impact of inflation on the current purchasing power
of the Naira.
(4) To examine impact of inflation on the savings and investment in the
financial institutions studied.
(5) To determine the extent of the relationship between inflation and the
continued fall in the international value of the naira.
1.4 Research Questions
The research question which Baridam (1990:28) called research
objectives were formulated from the specific objectives of the study. These
are:
1. What is the degree of influence of Accounting Convention on the
preparation of reported profits?
2. To what extent do outside users rely on reported profits in making
investment decision?
3. To what extent does inflation rate impact on the purchasing power of
the Naira?
6
4. How does the rate of inflation affect the level of savings and
investment on banks?
5. To what extent is there a relationship between the rate of inflation in
the country and the continual fall in the international value of the
Naira?
1.5 Formulation of Research Hypotheses
H0: There is no significant relationship between the rate of inflation in
the country and the international value of the Naira.
H1: There is a significant relationship between the rate of inflation in the
country and the international value of the Naira.
1.6 Significance of the Study
The study will be significant to the researcher, to Government, to
Management, to the general public and to educationists. To the researcher,
this study will add to his knowledge base in the subject area of the effect of
inflation on reported profit and its implication for decision making. To
Management and Government, this study will spur them to have a rethink
in the need for inflation accounting as is done in most developed
economies. To the general public, the study will help them make more
rational decisions through understanding the value of their future savings
and investments. To educationists, the study will not only serve as a basis
for further research into impact of inflation on investment decisions, but
also add to the existing knowledge base in this crucial economic study.
1.7 Scope of the Study
The scope of this study encompasses not only the effect of inflation
on reported profit, and its implication for decision-making in selected
financial institutions in Port Harcourt, but also, the collection of secondary
7
and primary data, analysis of the collected data and communicating the
findings of the study.
1.8 Limitations of the Study
This study finding is limited by the boundaries of the study, i.e. what
the study will include and what it will leave out. The study will examine
only two banks in Port Harcourt. It will not examine any other financial
institutions other than First Bank and Union Bank in Trans-Amadi Area of
Port Harcourt. Other constraints which the researcher encountered in the
course of conducting the study included money, time, distances traveled to
obtain information, researchable topic and the unwilling co-operation of
respondents. However, these constraints do not in any way affect the major
findings of the study.
1.9 Definition of Terms
(1) Inflation – Any general increase in the price level of the economy in
the aggregate.
(2) D.C.F. – Discount Cash Flow
(3) NPV – Net Present Value
(4) Decision-making – Choice between alternative courses of action
(5) Reported Profit – Annual report of a firm’s performance
8
References
Baridam, D.M. (1990): Research Method in Administrative Science; Port
Harcourt: Belk Publishers Ltd.
Clautier, M.W.E. and Underdown, B. (1986): Accounting Theory and Practice;
London: Pitman Books Limited.
Gill, R. (1973): Economics; New York: Prentice/Hall International Inc.
Maddison, A. (1970): Economic Progress and Policy in Developing Countries;
New York: W. W. Norton and Company.
Ozongwu, O.M. (1992): Guide to Proposal Writing in Social Behavioral; Enugu:
SNAAP Press Ltd.
Sizer, J. (1989): An Insight into Management Accounting; London: Penguin Books
Limited.

EXAMINATION OF INTEGRATED PERSONNEL AND PAYROLL INFORMATION SYSTEM IN THE NIGERIAN CIVIL SERVICE.

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PROJECT TOPIC AND MATERIAL ON EXAMINATION OF INTEGRATED PERSONNEL AND PAYROLL INFORMATION SYSTEM IN THE NIGERIAN CIVIL SERVICE.

The Project File Details                                                                                                       

  • Name:EXAMINATION OF INTEGRATED PERSONNEL AND PAYROLL INFORMATION SYSTEM IN THE NIGERIAN CIVIL SERVICE.
  • Type: PDF and MS Word (DOC)
  • Size: [666 KB]
  • Length: [65] Pages
  • With Reference and Questionnaire
  • Amount: 3000 naira

ABSTRACT

 

This research work tends to examine the Integrated Personnel and Payroll
Information System (IPPIS) in the Nigerian civil service. This is a program
introduced by the Federal Government supported by the World Bank as one of the
measures of Public Service Reform. Prior to the introduction of this scheme
Ministries, Departments and Agencies (MDAs) do receive their recurrent costs on
monthly basis as subvention. The above arrangement gave room for the MDA’s to
disburse money sent to them whenever and however it pleases them. This
therefore according to records led to financial misconduct in the Nigerian civil
service. The huge amount spent on recurrent expenditure, if not monitored and cut
down through appropriate government policy and reform program, Nigeria may
wake up one day to see that Government revenue is spent just in paying salaries at
the detriment of competing needs.
There is need for Nigerian Government to provide accurate and correct number of
civil servants under her care and to an extent minimize budget estimate.
The researcher tried to answer some questions on the reason why Government set
up the IPPIS scheme. The research is also poised to determining the extent to
which the Government is prepared towards actualizing of the IPPIS objectives.
The research tried to examine how safe and reliable the civil servants Personnel
records are with IPPIS program and the extent to which the program will help
Government in planning and budgeting.
In this research survey method was used, in this case the researcher sourced data
from both primary and secondary sources. Questionnaire and Interview methods
were used extensively.
It was found out from the research that Integrated Personnel and Payroll System
(IPPIS) is generally one of the offshoots of the civil service reform program to
ensure transparency and accountability in the Nigerian civil service. However,
Government is not fully technologically prepared for the program and there are
some other challenges that are facing the program, they are both human and
material.
IPPIS if implemented properly and honestly will minimize, if not eliminate fraud
in the civil service of Nigeria, and provide other benefits.

 

TABLE OF CONTENTS

 

Title page —————————————————- i
Approval page———————————————— ii
Declaration ————————————————– iii
Dedication————————————————— iv
Acknowledgement—————————————— v
Abstract —————————————————— vi
Table of Content ——————————————– viii
List of Tables ———————————————— xi
CHAPTER ONE
1.0 Introduction
1.1 Background of the study …………………………..1
1.2 Statement of Problem …………………………… 2
1.3 Purpose of study …………………………………..4
1.4 Research Questions……………………………….. 4
1.5 Research Hypothesis ……………………………. 5
1.6 Scope of the study………………………………….5
1.7 Significance of the study …………………………..6
1.8 Definition of terms …………………………………7
1.9 References ………………………………………9
CHAPTER TWO
2.0 Review of Literature
2.1 History of IPPIS……………………………………….10
2.2 E-Payment System ……………………………………12
2.3 The Nigerian Public Service ……………………………..13
2.4 Public Service Reform …………………………………15
2.5 Payroll Accounting ……………………………………18
2.6 Effect of computer on the Accountant ………………..19
2.7 Personnel/Human resource management ………………21
2.8 The Stakeholders’ Roles in the IPPIS Project …………24
2.9 References ……………………………………………. 30
CHAPTER THREE
3.0 Research Methodology
3.1 Research Design ………………………………………. 31
3.2 Sources of Data ………………………………………….31
3.3 Questionnaire method ………………………………….. 31
3.4 Interview Method…………………………………………32
3.5 Population of the Study ………………………………… 32
3.6 Sample size ……………………………………………….33
3.7 Validity of study ………………………………………….34
3.8 Test Statistics ……………………………………………..34
3.9 References ………………………………………………..36
CHAPTER FOUR
4.0 DATA PRESENTATION AND ANALYSIS
4.1 Presentation and Analysis of Data ………………………….37
4.2 Hypothesis Testing …………………………………………..51
4.9 References ………………………………………………….58
CHAPTER FIVE
5.0 SUMMARY OF FINDINGS, RECOMMENDATION
AND CONCLUTION
5.1 Summary of Findings …………………………………….. 59
5.2 Recommendations ………………………………………… 60
5.3 Conclusion …………………………………………………62
BIBLIOGRAPHY ……………………………………………………………64

 

CHAPTER ONE

1.1 BACKGROUN OF THE STUDY
In Nigeria all the Ministries, Departments and Agencies (MDA’s) draw their personnel
cost from the Consolidated Revenue Fund (CRF). The exert number of Personnel being
paid in the Nation cannot be easily ascertained due to non-availability of required and
necessary information. As a result of none availability of the exert number of Public
servants in the country, it has become difficult for government to have an accurate wage
data for planning and budgeting purpose. The Integrated Personnel and Payroll
Information System (IPPIS) project seeks to resolve this and also reduce the Federal
Government expenditure on Overheads. In 2007, the Federal Government of Nigeria and
the World Bank initiated Integrated Personnel and Payroll Information System.
The Goals set by the Federal Government include the following:
– Implement an Integrated Solution
– Improve human management effectiveness
– Increase confidence in Govt. Payroll cost and expenditure management.
– Significantly improve overall management reporting and planning.
Amongst the objectives of the reforms of Government is to entrench transparency and
accountability in the public service Human Resources (HR) records and payroll
administration. Successive Government has observed gross inadequacies in the payroll
and personnel records in the public service. Several efforts have been made to reduce
these challenges, but it tends to worsen with time, resulting to greater difference in
accessing reliable data for human resources planning and management, chaotic state of
pension administration; ‘ghost worker’ syndrome and various forms of payroll and
credential fraud.
Manual computation of salary and documentation of personnel information has been
compounding the problem of transparency and accountability. This also affects accuracy
in computation of salary hence overpayment or underpayment of salaries, omission of
staff name in payment, wrong calculation of promotion and pension that is due to staff
and Ex-staff as the case may be. With the introduction of the Integrated Personnel and
Payroll Information System scheme, if properly implemented and managed, will go a
long way in eradicating or at least bring the above mentioned problems to the barest
minimum.
1.2 STATEMENT OF PROBLEM
Record showed that the Government of Nigeria spends almost 50 to 60% of its revenue
on Personnel management every year at the detriment of other sectors of the Economy.
According to the Honourable minister of Finance, Mr Olusegun Aganga in his address at
the flag off of Integrated Personnel and Payroll Information System Phase II workshop
held at the Sharaton Hotels Abuja, he said that in 2011 Federal Government Budget was
projected at #4,226.19 billion, comprising #196.12 billion(4%) for statutory transfers;
#542.38 billion (13%) for Debt servicing; #2,481.71 billion (59%) for Recurrent (Nondebt)
expenditure and #1,005.99 billion (24%) for Capital expenditure. This huge bill it
is said if not monitored and cut down through (appropriate government policy and reform
program, we may wake up one day to see that all Govt. revenue is spent in paying
salaries at the detriment of competing needs.
Ghost worker syndrome is not a new thing in Nigerian Public service, where a nonexisting
employee is being paid monthly. There are multiple payments of emoluments to
a single employee and credentials are falsified. People have access to their age of
retirement.
It is a big challenge, that at this age when almost every aspect of the world economy is
computerized, Nigeria is still depending on manual records for her personnel and payroll
information. Workers data are kept in paper files, their salaries are calculated manually
and as such mistakes and fraud in form of overpayment, underpayment and payment of
ghost workers always occur.
Government of Nigeria does not have the accurate number of civil servants and her
budget is always an estimate. This has created some loop holes, whereby some ministries
budget more than they require and use the excess for some other things other than
payment of salary and allowances. Sometimes some will get personnel allocation that is
quite less than what they need and for that reason they place some workers especially the
new ones on allowances for many months thereby subjecting them to unnecessary
hardship.
1.3 PURPOSE OF THE STUDY
(1) To determine the extent to which proper implementation of Integrated Personnel
and Payroll System program will eliminate payroll fraud in the Nigerian civil
service.
(2) To determine the possible effect of Integrated Personnel and Payroll System on
Recurrent Expenditure of the Government.
(3) To ascertain how Integrated Personnel and Payroll System will ensure the safety
of civil servants Personnel information.
(4) To determine the extent to which the Nigerian civil servants personnel records can
be relied upon.
(5) To find out how prepared the Government and other stakeholders are towards
actualization of the Integrated Personnel and Payroll System objective.
(6) To determine the extent to which the Integrated Personnel and Payroll System
program will help the Government in Planning and Budgeting.
1.4 RESEARCH QUESTIONS
(1) How can proper implementation of Integrated Personnel and Payroll Information
System program eliminate payroll fraud in the Nigerian civil service?
(2) What are the possibilities of Integrated Personnel and Payroll Information System
positively affecting the recurrent expenditure of the Nigerian Government?
(3) Can the Integrated Personnel and Payroll Information System ensure the safety of the
civil servants personnel information?
(4) To what extent can the Nigerian civil servants personnel records be relied upon?
(5) How prepared are the Nigerian government and the IPPIS stakeholder towards
actualization of the IPPIS objectives?
(6) To what extent can the Integrated Personnel and Payroll Information System program
help the government in Planning and Budgeting?
1.5 RESEARCH HYPOTHESIS
(1) Ho : Integrated Personnel and Payroll Information System will not properly ensure
civil servants Personnel information safety and integrity
(2) Ho: Proper implementation of Integrated Personnel and Payroll Information
System will not significantly eliminate payroll fraud and will have no
prominent
effect on recurrent expenditure.
(3) Ho: Integrated Personnel and Payroll Information System will not significantly
help the
Government in planning and budgeting.
1.6 SCOPE OF THE STUDY
This work overviewed Integrated Personnel and Payroll Information System (IPPIS) as
an Information and Computer Technology (ICT) system for the reformation of the public
service in Nigeria, its implementation and possible hindrances. The old system of
personnel records, administration of monthly payroll with the new IPPIS system were
thoroughly studied and discussed. Reason/s for Government reverting to the new system
was discussed. The researcher used just small percentage of four Federal Government
Ministries in Enugu that are among the ones already captured in the first phase of the
program for the purpose of the research.
1.7 SIGNIFICANCE OF THE STUDY
(1)The study will enable the Government to put more effort in ensuring a successful
implementation of the program in order to achieve their objective and to guard against
failures, lapses, sabotages and other likely challenges.
(2) It will help workers to plan their income accordingly, prepare and be ready for their
retirement.
(3) This study will establish the fact that IPPIS program has come to improve and perfect
the duties of Personnel and Payroll staff and not to displace them.
(4) This research stands as an aid and basis for future researchers in this area of study.
1.8 DEFINITION OF TERMS
There is need for us to have a clear understanding of some of the key words and terms
that will be used in the course of this study.
i) PAYROLL: – Payroll is the sum of all Financial records of Salaries for an
employee, wages, bonuses and deductions. In accounting, payroll refers to the
amount paid to employees for services they provided during a certain period
of time.
ii) PERSONNEL: – Personnel simply defined according to the Oxford dictionary is
staff; persons employed in any work, especially public undertakings and the
armed forces.
iii) BIOMETRIC DATA: – Biometric data is combination of words and will be
defined separately before summarizing it. According to the Longman
Contemporary English Dictionary –Bio is a form of Life and living thing.
Metric- concerns the system of measurement based on the meter and
kilogram. Data is just fact or information.
For the purpose of this research biometric data is simply Fingerprints and passports
photographs captured during enrollment process.
(iv) STAKEHOLDER: – This can be seen as a person or one who has interest
(stake) in a system or is affected by or who can influence but not directly involved
with the system. Stakeholders in the IPPIS project include the following; Custodian
of the system, Civil servants, civil servants, operators, Personnel and Financial
Information managers in the MDAs, control agencies and third party agencies e.g.
FIRS, BOIR, etc .
(v) CADRE MANAGEMENT: – Cadre is inner group of highly trained and active
people in an organization or establishment as the case may be.
(vi) PROCUREMENT REFORM- Is to obtain especially by effort or careful
attention. In this case, as it is established by the Federal Government Legislative.
(vii) DATABASE- The Librarian’s Glossary compiled by L.M. Harrod defined Data
to be a general term for information, used to distinguish input and output information
from instructions, and also to indicate the absence, or presence, of a certain condition,
such as magnetic field. Base of cause is a centre or point from which a start is made
in an activity, often where supplies are kept and planes are made.
1.9 REFERENCES
Electronic Payment, The cutting edge.
The Guardian.Aug.27,2008.
Government Publication
Fed. Min. of Finance Agenda/Program on IPPIS Phase II.
(Flag off and Sensitization) February 7, 2011.
Government Publication.
Integrated Personnel and Payroll system operational manual.
Office of the Accountant General of the Federation.(OAGF), January 1,2008
Vol. 1.
Haloien, M. O.(1978), Computers and Their societal Impact.
New York: John Willey and Sons.
Harrod , L. M. (1971), The Librarian’s Glossary. London:
Andre Deutch Limited.
The New Encyclopaedia Britannica, Vol.4, Chicago.(1970)
William Perez, Payroll- Payroll Processing.
About.com.Diana van Blaricom (2011

EVALUATION OF VALUE FOR MONEY AUDIT, AS A TOOL FOR FRAUD CONTROL IN THE PUBLIC SECTOR (A STUDY OF POWER HOLDING COMPANY OF NIGERIA ABUJA)

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  • Name: EVALUATION OF VALUE FOR MONEY AUDIT, AS A TOOL FOR FRAUD CONTROL IN THE PUBLIC SECTOR (A STUDY OF POWER HOLDING COMPANY OF NIGERIA ABUJA)
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ABSTRACT

The scope of governmental auditing has been widened over the year by the demand for independent verification of information to the extent that it can no longer be limited to the audit of financial operations, but value for money audit which ensures that the activities and programs are carried out at low cost and high standard. Lack of commitment in cost efficiency to the overall achievement of goals by the managers in the public sector brought the need of this research work titled “Evaluation of value for money audit as tool for fraud control in the public sector”. The aim was to ascertain whether government auditing achieves the purposes for which programs are authorizes and funds released economically and efficiently in accordance with applicable law and regulations. A survey research design was adopted for the study with sample size of 100 respondents randomly sample and stratified from Audit and finance department of PHCN (Abuja). Three hypotheses were tested at 5% level of significance using the analysis of variance (ANOVA) statistics. it was found that value for money audit play a vital role in promoting the effectiveness and efficiency of activities in the public sector the researcher recommend that government should support the implementation of policies formulated to enhance value for money audit in the public sector.

TABLE OF CONTENTS

The title page i
The approval page ii
Certification page iii
Dedication iv
Acknowledgement v
Table of contents vii
List of tables viii
List of figures ix
The abstract x
Chapter One: Introduction 1.1. Background of the study…………………………………………………………….1
1.2. Statement of the problem…………………………………………………………..3
1.3. Research question……………………………………………………………………….4
1.4. Objective of the study…………………………………………………………………4
1.5. Research hypotheses……………………………………………………………………5
1.6. Scope of the study………………………………………………………………………6
1.7. Limitation of the study…………………………………………………………………7
1.8. Significance of the study………………………………………………………………7
1.9. Definition of terms……………………………………………………………………….8
8

Chapter Two: Review of related literature
2.1. Difference between internal auditing and internal auditor…………….10
2.1.1. The need or objective of internal auditing in power sector……………..11
2.2. Difference between external auditing and external auditor……………..12
2.2.1. Objectives of external auditing…………………………………………………….13
2.3. Qualities of an auditor………………………………………………………………….14
2.3.1. Auditors right………………………………………………………………………………….16
2.3.2. Duties of an auditor………………………………………………………………………..17
2.4. Value for money audit as a tool of fraud control…………………………..18
2.4.1. Value for money objectives…………………………………………………..……….…19
2.4.2. Improving value for money audit………………………………………..………….…20
2.5. Problems and prospects of value for money audit…………………………20
2.5.1. Causes of fraud in the public sector………………………….…………………..21
2.5.2. Prevention measures of fraud in the public sector……………………..…23
2.6. Other preventive measures………………………………………….……………………24
2.6.1. Internal auditor’s role in fraud control……………………..……………………24
2.6.2. Fraud control methods………………………………………….……………………….26
2.7. Core of value for money audit…………………………………………………………27
2.7.1. Value for money audit concept……………………………………………………….31
2.7.2. Scope and emphasis……………………………………………………………………….33
2.8. Auditing and value for money……………………………..…………………………34
2.8.1. Steps involved in carrying out value for money audit…………………………36
2.8.2. Public sector audit………………………………………………………………………….36
2.9. Procedures for value for money audit…………………………………………….37
9

2.9.1. Value for money audit technique………………………………………………….39
2.9.2. Value for money review………………………………………………………………….41
2.10. Problems of value for money audit in the public sector………………….42
Chapter Three: Research methodology
3.0 Introduction………………………………………………………………………………………..44
3.1 Research design………………………………………………………………………………44
3.2 Source of data……………………………………………………………………………………46
3.3 Population of the study…………………………………………………………………..46
3.4 Sampling size and techniques…………………………………………………………47
3.5 Instrument for data collection……………………………………………………..48
3.6 Validity for instrument of data ………..………………………………………….49
3.7 Reliability of the instrument data…………………………………………………..49
3.8 Method of data ……………………………………….…………………………………..49
3.9 Method of data analysis……………………………………………………………….50
Chapter Four: Data presentation, analysis and interpretation
4.1. Data presentation and analysis……………………………………………………..53
4.2. Test of hypothesis…………………………………………………………………………63
Chapter Five: Summery of findings, conclusion and recommendation
5.1. Summary of findings………………………………………………………………………75
5.2. Conclusion…………………………………………………………………………………….77
5.3. Recommendation…………………………………………………………………………78
10

BIBLIOGRAPHY………………………………………………………………………….80
APPENDIX / QUESTIONNAIRE……………………………………………..82

CHAPTER ONE

1.1 BACKGROUND OF THE STUDY
Every sector of the economy both the private and the public sector has its own
objectives and goals to achieve. For the public sector of the economy, their goal is
to satisfy the social needs of the citizens and in the effort to achieve these
purposes, auditing more often, play a vital role.
The size and scope of these sectors have sometimes made it clear for the
executor to exercise personal and first hand supervision of operation. It is in this
light that value for money audit established by management is initiated, for any
organization to carry out its business efficiently and effectively, there must be
some factors that must be put in place for the smooth running of the organization
like materials, machines, human labor and money e. t. c.
Auditing is seen to play an intermediary function in between management
and the resources of the organization. It is also fundamental to any business
either the public or private sector, which will help the business to keep its
adequate financial records. These financial records are kept in response to the
demand by a system control which requires that the business enterprise must be
15

carried out in an orderly manner, ensure adherence to management policies, safe
guard the assets and secure possibly the completeness and accuracy of the
records. Irrespective of these facts of system of control established by the
management of the organization, fraud still thrives.
In the early 1970s, the role of the state auditors began to change
dramatically. Changes began in USA, Canada, and in several European countries.
The representative of the people started demanding information on the efficiency
and effectiveness of public expenditure.
In Nigeria no specific legislation has been put in place to empower auditors
to carryout value for money audit. However, the 1999 constitution section 88 (2)
empowered both the two federal house and the state house of assembly to
conduct investigation to expose corruption, inefficiency or waste on the execution
or administration of law within the legislative competence and in the
disbursement or administration of fraud appropriated by it.
Therefore, fraud control has become increasingly important to managers of
various governments in an organization. In general, financial statements fraud has
always weakened investors’ confidence in both private and public sector
16

investment. This is because 1 fraud against an organization reduces the net
income by 1 and services to be provided to people in the case of public sector.
However, value for money audit will be wildly concerned with the economy
and efficiency of an organization and the effectiveness of achieving its desired
objective thereby controlling fraud to evaluate the effectiveness of the internal
control system within the organization.
(BRIEF REVIEW OF THE FIRM, POWER HOLDING COMPANY OF NIGERIA, P H C
N)
The history of electricity in Nigeria can be dated back to the end of the 19th
century when the first generating plant was installed in Lagos in 1898. From then
until the 1950, the platform of electricity development was in the form of
individual electricity power undertaking scattered all over the towns, some of the
few undertaking were federal government bodies under the public works
department, some by the native authorities and others by the municipal
authorities.
1.2 STATEMENT OF THE PROBLEM
17

Fraud is a complex phenomenon. It is rampant in both private and public
sectors of Nigerian economy. In the public sector, value for money audit reports
are mostly unqualified even in a glaring situation or cases of corrupt practice by
the managers that means that auditors especially those in public establishment
compromise their duties or their duties are influenced and threatened in the
performance of their statutory functions.
Therefore these studies tend to find out why there are:
Improper methods of appointment of auditors
Inadequate internal control
Lack of independence of auditors
Untimely and unreliable financial statements
Lack of transparency and inadequate method of accountability
1.3 OBJECTIVES OF THE STUDY
This study tends to find out some of the objectives which will include:
1. To find out the effect of value for money audit in fraud detection and
control in the public sector.
18

2. To find out the relationship between internal control and fraud detection.
3. To determine what extent is the value for money audit relevant to the
effectiveness and control of an organization.
4. To find out why there is lack of transparency and inadequate method of
accountability.
5. To find out why there is inadequate internal control system.
1.4 RESEARCH QUESTION
1. Is there any significant effect of value for money audit in fraud detection
and control in the public sector?
2. Is there any alignment relationship between internal control and fraud
detection?
3. To what extent is the value for money audit relevant to the effectiveness
and control of an organization?
4. What are the causes of lack of transparency and inadequate method of
accountability?
1.5 RESEARCH HYPOTHESIS
The hypotheses are stated in null and alternative forms.
19

Ho1: There is no significant effect of value for money audit in fraud detection
in the public sector.
HA1: There is a significant effect of value for money audit in fraud detection in
the public sector.
Ho2: There is no alignment between internal control and fraud detection.
HA2: There is an alignment between internal control and fraud detection.
Ho3: The value for money audit does not institute financial discipline in
organization.
HA3: The value for money audit institute financial discipline in an organization.
1.6 SCOPE OF THE STUDY
Basically, the scope of this research work is on the value for money audit
in the controlling of fraud, detection and financial crime prevention in our
present day public sector using “power holding company of Nigeria” as a
study. It focuses on the need for auditing and the importance of auditing in
detecting and preventing fraud in other for organizations to ascertain their
problems.
20

The population of study in selected staff in four of the units or department of
the power sector namely the audit unit, finance, account and public relation
department.
1.7LIMITATION OF THE STUDY
Virtually every research work comprises of one limitation or the other.
However during the course of carrying out this research work, a lot of set locks
were encountered which include:
1. Time constant: there was limited time so the topic could not be broadened.
2. Non-challant attitude of some respondent: the response gotten from
some of the staff of the power holding company poses another problem.
Most of them due to lack of knowledge fear to provide information and
also to protect their job due to corruption, they could only give information
which concerns them most.

1.8 SIGNIFICANCE OF THE STUDY
1.There is need to inform the management in the business organization on the
value for money audit as regard to fraud control , detection and prevention in
21

order that the auditor would be giving a maximum co-operation in the
performance of his study.
2. It will also encourage the interest groups in the organization e. g potential
investors, creditors’ e. t. c.
3. It will enlighten the public on the topic and provide further literature in the
field of auditing and investigation.
Also the research work will be handy and serve as reference for further
researches concerning auditors and fraud control, and it will add to our
knowledge generally.
1.9 DEFINITION OF TERMS
Auditing: An independent examination of an expression of opinion on the
fundamental statement of an entity by an appointed auditor (Ihe and Umeaka
2006)
Economy: An organized scientific study of the problem by which scarce
resources which have alternative uses are allocated among competing wants
with the objective of maximizing welfare (Nnamocha 2002)
22

Efficiency: Is the maximization of the ratio of output to input or the
relationship between resources consumed in the process of generating
effective output and output so produced (Norbert 1999)
Effectiveness: Refers to the degree to which the resulting output satisfied
predetermined organization objectives (Norbert 1999)
Internal control system: The whole system of control financial and otherwise
established by management in other to carry out the business of an enterprise
in an orderly and efficient manner (Chukwu 2005: 17)
Management: An applied discipline concerned with the achievement of
organizational objectives (Norbert 1999)
Public sector: The portion of an economy in which the activities are under the
control and direction of the state (Ihe and Umeaka 2006:1)
Private sector: that portion of the economy in which the activities are under
the control and direction of a non- governmental economic unit (Ihe and
Umeaka 2006:2)
Fraud: Refers to intentional act by one or more individual among
management, those charged with governance, employees, or third parties
23

involving the use of deception to obtain an unjust or illegal advantage (Anesike
2009)

EFFECTS OF STRUCTURAL ADJUSTMENT PROGRAMME OF ACCOUNTING PRINCIPLES (A CASE STUDY OF CENTRAL BANK F.C.T ABUJA

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PROJECT TOPIC AND MATERIAL ON EFFECTS OF STRUCTURAL ADJUSTMENT PROGRAMME OF ACCOUNTING PRINCIPLES (A CASE STUDY OF CENTRAL BANK F.C.T ABUJA

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  • Name: EFFECTS OF STRUCTURAL ADJUSTMENT PROGRAMME OF ACCOUNTING PRINCIPLES (A CASE STUDY OF CENTRAL BANK F.C.T ABUJA
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CHAPTER ONE

INTRODUCTION
1.1 BACKGROUND OF STUDY
Before the “Structural Adjustment Programme (SAP)” can be clearly
defined, one must have a better understanding of the situation into which it
was introduced. At the conclusion of a Debate/Symposium on “Devaluation”
held in 1982 at the Institute of International Affairs, the consensus emerged
that the economic problem of Nigeria was structural.
The intention of SAP is to adjust the structure of the Nigerian economy,
but what is the structure of the economy and why does it need adjustment?
The relevant dictionary meaning of the word “structure” is “the arrangement
or interrelation of all part of a whole”.
At the summary of overall economic level which the economist call “The
macro level”, the structure f the economy is its composition as seen through
the shares or proportion of the various component parts or economic
aggregated, in the total sum of goods and services produced in a period
usually a year.
Therefore, the structure of the economy is shown by the shares of the
various economic sectors in the Gross Domestic Product (GDP).
Just like any other theory, accountants have discovered that they need to
make certain assumption before they can prepare financial statements. These
2

assumptions, which underline the preparation of financial statements, are
also known as principles, postulates, conventions, concepts, and standards
etc. The originate from such concepts as entity, going-concern, periodicity
realisation, matching, consistency and historical cost concept.
They have been described as the basic points of agreement upon which
the preparation of financial statement are based. They act as filters in the
process of preparing financial statement and therefore assist immensely in
selecting data to be processed and also indicating the processing method and
thereby affecting the final result.
Accounting Principles are usually rules and conventions, which have
been adopted as a general guide to action by the accountancy profession.
These principles are formulated in such a way that the practical details of
accounting may differ greatly from one company to another. To ensure
acceptance, an accounting principle must be useful in coping with a practical
recording problem, it must be reasonably objective, that is, provide a similar
answer in the hands of qualified practitioners, and it must be feasible, that is,
it should not be expensive to apply.
1.2 STATEMENT OF THE PROBLEMS
This research work tends to give an appraisal on the effect of the SAP on
accounting principle. Exchange rate devaluation was considered a setback in the
progress of the SAP. Therefore the under listed problem was discovered:
3

i. Over emphasis on the restoration of balance of payment
ii. Undermine the economy and limit its role for socio-economic intervention
through a fixation on deregulation, privatisation and instability of the
economy in the name of “free market”
iii. Exacerbate the disparities between rich the poor by facilitating income
concentration by the wealthy and the exclusion of the poor from decisions
and control over resources.
iv. Lack of transparency, accountability and public participation in their design
and implementation.
v. Make many necessities inaccessible to local people as currency devaluations
drastically reduce buying power in local wages.

1.3 OBJECTIVES OF THE STUDY
This study aims to find out the objectives which include;
i. To find out how adopting a more just and equitable approach to resolving
the debt crisis can restore the balance of payment
ii. To find out how to increase the role of socio-economic intervention through
governmental control and stabilize the economy by eliminating free market
trade through inflationary measures like naira devaluation.
iii. To determine what causes inequality in the distribution of income between
the classes of individuals and why the poor are excluded from resources
control and decisions.
4

iv. To find out why there is lack of transparency and accountability in SAP
designs and implementations.
v. To evaluate on the inaccessible necessities of the rural migrants caused by
currency devaluation which decreases the naira value?
1.4 RESEARCH QUESTION
This research attempts to find answers to some nudging questions about the
Structural Adjustment Programme on Accounting Principles. This is with
the view at highlighting some silent reasons responsible for the ineffective
and failing performance of SAP.
Some of the questions to which we seek answers without any form of
prevarication include:
i. Has the Structural Adjustment Programme in commercial sectors
improved accounting performance?
ii. How does the Structural Adjustment Programme in accounting
department of your company affect the profitability of financial
report?
iii. Is there any significant relationship between Structural Adjustment
Programme and Second tier Foreign Exchange Market?
iv. What are the peculiar problems faced by commercial sectors in
implementing the schemes derived from its structural adjustment?
v. Does the Structural Adjustment Programme reduce the hardship of the
common people.
5

vi. What are the causes of lack of transparency, accountability and public
participation in SAP designs and implementations?
1.5 HYPOTHESES OF THE STUDY
Hypothesis is a proposition specifying some form of relationship between
variables, it is merely and evidence for supporting or rejecting one‟s
preconceived ideas or view. Hypothesis are of two types (H1) which is the
alternative hypothesis and it the proposition the researcher which to confirm
from the data. It is always expressed in positive term. The other type (Ho)
which is the null hypothesis and it is the logical converse of the alternate
hypothesis. It is the negation of the alternate hypothesis; the following
hypotheses are formulated as guided to this research studies. However, there are
three hypotheses in this research work.
HO: There is no significant effect of the Structural Adjustment Programme in
the commercial sector on accounting performance.
H1: There is a significant effect of the Structural Adjustment Programme in
the commercial sector on accounting performance.
(1) HO: There is no alignment between structurally Adjustment Programme
and Second tier Foreign Exchange Market.

6

H1: There is an alignment between structurally Adjustment Programme
and Second tier Foreign Exchange Market.
(2) HO: The Structural Adjustment Programme decrease the challenges and
calls for professionalism in management
H1: The Structural Adjustment Programme increases the challenges and calls
for professionalism in management.
1.6 SIGNIFICANCE OF THE STUDY
Structural adjustment Programmes (SAPs) in this study are meant primarily for
accountants and the economic policies for developing countries that have
promoted by the World Bank and IMF since the early 1980s by the provision of
loans conditional on the adoption of such policies. The research study is also
significant to the government by removing “excess” government control and
promoting market competition as part of the neo-liberal agenda followed by the
Bank and, the Enhance Structural Adjustment facility which is an IMF
financing mechanism that aid the support of the macroeconomic policies and
SAPs in low-income countries through loans or low interest subsidies.
SAP policies reflect the neo-liberal ideology that drives globalisation.
The aim to achieve long term accelerated economic growth in poorer countries
by restructuring the economy and reducing government intervention. This is
done by privatising state owned industries, including health sector and opening
up their economies to foreign competition.
7

1.7 SCOPE OF THE STUDY
This study revolves around the effect of Structural Adjustment Programme on
accounting principles, with the Central Bank of Nigeria Abuja, as the case
study. It focuses on the need of the economy to adopt these certain adjustment
programmes to restructure and make policies and schemes that will improve the
economy. The appraisal of the Structural Adjustment scheme is principally
hinged on the problems and challenges , facilities, legal framework, personnel,
the scheme compliance and corruption.
1.8 LIMITATION OF THE STUDY
The limitation involved in the course of this research included hostility and non
co-operation on the part of some of the respondents. The level of ignorance on
economic reformation and illiteracy was very high. Some SAPs officials refused
answering the question they felt would indict them. Also the financial
implication was very high and imposed certain restrictions.
The constraint of time was also a limiting factor as all the areas of interest
were not covered as they would have been adequate.

EFFECTS OF STANDARD COSTING ON THE PROFITABILITY OF MANUFACTURING COMPANIES (A CASE STUDY OF NIGERIAN BREWERIES PLC,AMA, UDI LOCAL GOVERNMENT OF ENUGU STATE)

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PROJECT TOPIC AND MATERIAL ON EFFECTS OF STANDARD COSTING ON THE PROFITABILITY OF MANUFACTURING COMPANIES (A CASE STUDY OF NIGERIAN BREWERIES PLC,AMA, UDI LOCAL GOVERNMENT OF ENUGU STATE)

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  • Name: EFFECTS OF STANDARD COSTING ON THE PROFITABILITY OF MANUFACTURING COMPANIES (A CASE STUDY OF NIGERIAN BREWERIES PLC,AMA, UDI LOCAL GOVERNMENT OF ENUGU STATE)
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ABSTRACT

The topic of this research is effects of standard costing on the profitability of a manufacturing company. The purpose of this study was to discover if the application of standard costing techniques have any effect on profitability, to explore the relationship between standard costing and the profitability of manufacturing companies and also to determine whether standard costing techniques and principles are being adopted and practiced in Nigerian manufacturing companies (Nigerian breweries, Ama Eke, Udi local government of Enugu state). The design of this study is descriptive survey method and the study was conducted at Nigerian breweries, Ama which is the case study of this research work. The instrument of data collection was analyzed using the chi-square method. The researcher discovered the following as her data findings that proper accounting records are kept and are significantly necessary in the management of the company. That the company employs standard costing in costing their product and decisions are made with the standard costing information obtained in the company. That accounting reports are prepared and presented to the company’s management and that actions are taken promptly on the information given in the report. That effective application of standard costing has effect on the profitability of the company. That the company benefit in a significant way through the use of standard costing especially in the improvement of profit. The researcher came to a conclusion that standard costing is widely used in Nigerian manufacturing companies and that standard costing enhances adequate planning, control and decision making processes in the company. That standard costing aids manufacturing companies in the elimination of unprofitable products, provision of costing information and cost control.

TABLE OF CONTENTS

Approval page ii
Dedication- ii
Acknowledgement iii
Abstract iv
CHAPTER ONE
Introduction
1.1 Background of the study 1
1.2 Statement of the problem 3
1.3 Objectives of the study 6
1.4 Research questions – 6
1.5 Hypothesis of the study 7
1.6 Significance of the study 8
1.7 Scope and limitation of the study 9

viii

1.8 Definition of terms 10
References 14
CHAPTER TWO
Literature review
2.1 Concept of standard costing 15
2.2 Features of standard costing 21
2.3 Advantages and disadvantages of standard costing 36
2.4 Concept of profitability 39
2.5 Profit and profitability 42
2.6 Measurement of profit 46
2.7 Areas where standard costing improve profitability 47
2.8 Brief historical background of the case study 54
References 61

ix

CHAPTER THREE
Research design and methodology
3.1 Research design 63
3.2 Sources of data 63
3.3 Research instrument 65
3.4 Reliability /validity of research instrument 65
3.5 Population 66
3.6 Sample size / techniques 67
3.7 Administration of research instrument 69
3.8 Method of data analysis 70
3.9 Decision criterion for validation of hypothesis 70
References 72
CHAPTER FOUR
Data presentation and analysis
4.1 Data presentation 73
x

4.2 Testing of hypothesis 92
CHAPTER FIVE
Summary of findings, conclusions and recommendation
5.1 Summary of findings 102
5.2 Conclusions 103
5.3 Recommendations 105
Bibliography 107
Appendix 109

CHAPTER ONE

INTRODUCTION
1.1 BACKGROUND OF THE STUDY
The effect of standard of standard costing on profitability has been a
problem to manufacturing companies in Nigeria. The standard costing as a
tool for either improving or not improving profitability. Unlike its
contemporaries in the field of science, it deals with human beings and
calculation significant information.
Lucey (2002) defines standard costing as a technique which
establishes pre determined cost estimates of the cost of products and
services and then compares these pre determined costs with actual costs
as they incurred. Standard cost represent am estimated or pre determines
total cost of product per unit for an organization. Adeniji (2009) argues
that the process of estimating the total cost of production per unit is
described as standard costing technique.
Standard costing as a long established concept is the management
function of planning and control. In effect, yardstick has been of vital
importance for planning and control exercise. As a matter of fact, problems
2

associated with production and earning a profit was recognized for many
years before the concept of standard costing was invented. Standard
costing appeared in the early twentieth century when transaction volumes
were overwhelming the record keeping system in the use at that time.
Since then, prevalent use of computer systems and automated data entry
systems have reduced the need for standard costing, though not entirely
eliminated.
These standard costs reveals goals, spur actions and efforts for
effective management and equally provide checks such that exceptional
profit oriented goal performance can be achieved and the reserve adequate
punishment to be exercised for bad performance. Standard cost cause
appraisal to be made over production facilities and form management
intentions and capabilities and is a first step strength and weakness
appraisal. These led to the preference of standard costing system in
1920’s. it was brought into the system such that total variances might be
accumulated as well as detailed variances. These steps gave rise to formal
expression that significant costs were not actual and historical cost but
standard or planning cost and their variances.

3

1.2 STATEMENT OF THE PROBLEM
In Nigeria today, the economy is extremely bad. In this respect, a lot
of measures have been taken to measure the destining economic situation.
Among the measures taken to revamp the economy includes;
Structural adjustment program (SAP)
Second tier foreign exchange market
Ban on importation etc
These measures have adverse effect on the buying attitude of the
consumers. Cost of production has increased in manufacturing sector of
the economy which in effect has resulted to high prices of manufacturing
goods. In effect, no applicable level of demand could be recorded by most
manufacturers as the buyer’s purchasing power could no longer meet up
with the rising price level. Most of the manufactured products were
consumed by civil servants, public servants and other wage earners whose
take home pay pocket can no longer take them home. In this regards,
consumers utilize their little purchasing power mainly on foodstuff to
sustain themselves first before luxury. With the economic reason, greater
efforts should be made to keep cost to the lowest minimum through
4

efficient and effective utilization of both human and material resources.
The above mentioned does not end it up, more problems still come up
from such areas like;
1. Irregular supply of water: The power holding company of Nigeria
(PHCN) does not render adequate services to manufacturers. PHCN will
take off power and the production would stop unscheduled thereby
resulting to much damages which the costs are added to cover all
productions.
2. Inadequate supply of water: water is always in short supply and in most
cases, water board does not supply water manufacturers need it. The
manufacturers resort to buy water needed for their production from the
open market to see the manufacturing activities are going on. In this
respect, the price of getting water is costlier than from water board in
most cases, whether water is supplied or not, water board will require
them to pay a reasonably monthly water rate.
3. Bad roads: in respect of transporting raw materials used from the
extraction area and evacuation of finished goods from the
manufacturing industry to the market where it is demanded, high
5

transport costs are made due to bad roads in Nigeria with special
reference to Eke, Udi LGA of Enugu state in particular.
4. Foreign competition: most of the indigenous manufacturers are not
given protection from foreign competitors and in most cases are
deprived of tax holidays.
There has been decreased profitability resulting from increased costs.
In effect, requires a greater cost reduction and profit optimization. This can
only be achieved through setting reliable standards, ensuring that such
standards are mentioned and variances not adversely very large
(significant) without proper cause. The system helps cost reduction to
increase profitability. Another major problem centers on lack of adequate
control of scarce resources by indigenous manufacturers. Most of the
resources used require special storage facilities where they are stored
before they are utilized to avoid spoilage. In most cases, the storage
facilities might be beyond the reach of some manufacturers. Along the line,
most manufacturers do not have adequate control over the resources as
they are easily impact on the government. Government policies may be
favorable or unfavorable to manufacturers in Nigeria; they can be
evidenced to restriction an total ban as most of them are being imported.
6

The use of unqualified and inexperienced accountants by some
industries pose a greater problems to such industries for the accountant
cannot adequately apply the accounting techniques required of them on
standard costing.

1.3 OBJECTIVES OF THE STUDY
While carrying out this research, the following aspects were borne in mind;
1. To discover if the application of standard costing techniques have any
effect on the profitability of manufacturing companies.
2. To explore the relationship between standard costing and profitability in
manufacturing companies in Nigeria.
3. To determine whether standard costing techniques and principles are
being adopted and practiced in Nigerian manufacturing industries.

1.4 RESEARCH QUESTIONS
1. Does the application of standard costing techniques have any effect on
the profitability of manufacturing companies?
7

2. What are the relationship between standard costing and profitability in
manufacturing companies in Nigeria?
3. Are the principles of standard costing and standard costing techniques
being adopted and practiced in Nigeria?

1.5 HYPOTHESIS OF THE STUDY
To achieve the objectives of this study which is on the effect of standard
costing on the profitability of a manufacturing company, the researcher
formulated three hypotheses that will be tested in the process of this
study. They are as follows;
1. H0: The application of standard costing techniques has no effect on the
profitability of manufacturing companies in Nigeria.
H1: The application of standard costing has effect on the profitability
of manufacturing companies in Nigeria.
2. H0: There is no relationship between standard costing and profitability in
manufacturing companies in Nigeria.
H1: There is a relationship between standard costing and profitability in
manufacturing companies in Nigeria.
8

3. H0: The principle of standard costing and the standard costing technique
are not being adopted and practiced in Nigerian manufacturing
companies.
H1: The principle of standard costing and the standard costing technique
are being adopted and practiced in Nigerian manufacturing industries.

1.6 SIGNIFICANCE OF THE STUDY
It is believed that standard costing aids management to plan for the
future, and if any justification is required for this research project on the
effect of standard costing on the profitability of manufacturing industries,
the view of Robert Appleby, one of the early British industrialist should be
released on. Appleby regards the key to managerial success as the setting
of standards for all business activities and measurement of performance
against the standards. He states that financial measurement should
penetrate into any cranny of the enterprise and in doctrine all management
in their working habit. In this regards, there is need to prove whether
standard costing is a more viable and preferable option to other costing
methods adopted for each products produced. There is a limit to the price
charged to production.
9

In effect, cost should be given maximum attention since revenue
less cost gives a balance of profit. Profit should be increased as it is every
industry is aiming at.

1.7 SCOPE AND LIMITATION OF THE STUDY
This research project is restricted to the manufacturing industries of
Nigerian breweries plc. The researcher focused on the Ama Brewery
located at Eke, udi local government area of Enugu state as this industry
operates under similar conditions as its counterparts within Nigeria an will
present similar problems.
As regarding the limitations on this research project, it would be
impossible to include all manufacturing industries of Nigeria brewery plc at
every location, therefore, this study was limited to Ama brewery, Eke,
Enugu state.
Time constraint was another strong factor that posed as a limitation
to this research because the study was carried out when the researcher
had so much work load. Thus, it was difficult for the researcher to meet up
some of the appointment with respondents.
10

Another limiting factor to this research project was the uncooperative
of some staff(s). Some of the staff(s) of the company taken into
consideration refused to be interviewed for the fear of official reprisal, if
they give out some committed information. This made it difficult for the
researcher to collect much primary information.

1.8 DEFINITION OF TERMS
The concept of standard costing as predetermined or forecast
estimates of cost is wide and varied. The terms used in this research work
intend to have the same understanding with the definition of the standard
cost by the institute of cost and management accounting (ICMA) as “the
predetermined cost calculated in relation to the prescribed set of working
condition. Co-relating technical specification and scientific measurements of
materials, labor and wage rate expected to apply within the period which
the standard relates within an addition of appropriate share of budgeted
overhead. Its main purpose is to provide basis for control through variance
accounting for the valuation of stock and work in progress, and exceptional
11

cases for fixing selling prices. Some of the words used in this research
project are defined as follows;
 Standard costing: implies setting up standard costs for goods and
services.
 Standards an budgets: both standards and budgets are concerned with
setting performance and cost levels for control purposes.
 Costing standards: meaningful standards which can be used for control
purposes rest on a foundation of properly and standardized methods
and procedures and comprehensive information system.
 Material standards: this implies setting the material content of a
product.
 Labor standard: implies predetermining the exact grades of labor to be
used as well the times involved. Planned labor time can be expressed in
standard hours.
 Overhead standard: predetermined overhead absorption rates are the
standards of overhead for each cost center using budgeted standard
hours determined.
12

 Standard hour: this is defined as the quantity of work achievable at
standard performance, expressed in terms of standard unit of work in a
standard period of time.
 Variance accounting: this is an account that centers on future planning
activities of an organization as compared with the historical activities,
the activities being expressed in budgets, standard cost, standard selling
price, standard profit margin and difference between those and the
comparable actual results to be accounted to the management
periodically and the responsibility centers, the analysis centering on the
operating profit variance.
 Variance analysis: it is concerned with the section of variance
accounting that relates to the analysis into constituent section and
variances between planned and actual performance.
 Cost variance: this refers to the difference between the standard
(planned) cost and the comparable actual and historical cost incurred
during the specified time period.
 Controllable variance: it is a cost variance which can be identified as the
primary responsibility of a specified person.
13

 Sales variance: this is the difference between the budgeted value of
sales and the actual value of sales in a given period of time.
 Profit and loss variance: this is the difference between the planned
profit and actual profit and loss.
 Profitability: this means the ability to make profit from all business
activities of an organization, firm, company or an enterprise.
 Profit: this refers to the total income earned by the enterprise during the
specified period of time

EFFECTS OF INFORMATION TECHNOLOGY ON THE EFFICIENCY OF TAX ADMINISTRATION IN NIGERIA (A CASE STUDY OF ENUGU STATE BOARD OF INTERNAL REVENUE)

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PROJECT TOPIC AND MATERIAL ON EFFECTS OF INFORMATION TECHNOLOGY ON THE EFFICIENCY OF TAX ADMINISTRATION IN NIGERIA (A CASE STUDY OF ENUGU STATE BOARD OF INTERNAL REVENUE)

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  • Name: EFFECTS OF INFORMATION TECHNOLOGY ON THE EFFICIENCY OF TAX ADMINISTRATION IN NIGERIA (A CASE STUDY OF ENUGU STATE BOARD OF INTERNAL REVENUE)
  • Type: PDF and MS Word (DOC)
  • Size: [666 KB]
  • Length: [65] Pages
  • With Reference and Questionnaire
  • Amount: 3000 naira

ABSTRACT

This research study examines the Effect of Information Technology on the Efficiency of Tax Administration in Nigeria, a case Study of Enugu State Board of Internal Revenue. Its main objective is to find out whether the application of Information Technology increases efficiency on tax administration. For the purpose of this study, the researcher adopted the method of survey Research Design. Data used in this research were gotten from both primary and secondary sources including questionnaires and textbooks respectively. These data were analyzed and presented in tables. Three (3) hypotheses were formulated and tested using the Analysis of variance(ANOVA) method. The findings of this research tend to show that effective tax administration resulting from the application of Information Technology leads to an increase in tax base as more potential taxpayers are drawn into the tax net when there is a conducive environment. It is recommended in this work that enlightenment campaign be made available for the masses and also adequate training for the tax officials on the use of modern technology

TABLE OF CONTENTS

Cover page i Certification ii Approval page iii Dedication iv Acknowledgement v Abstract

CHAPTER ONE: Introduction 1.1 Background of the study 1 1.2 Statement of the problem 7 1.3 Research Questions 8 1.5 Research Hypotheses 9 1.6 Significance of the Study 10 1.7 Scope of the Study 1.8 Limitation of the Study 10 1.9 Definition of Terms 11

CHAPTER TWO: Review of Related Literature 2.1 Concept of Taxation 13 2.2 Nigerian Tax System 16 2.2.1 Structure of Nigeria Tax System 17 2.2.2 Features of Nigerian Tax System 20 2.2.3 Objectives of Nigerian Tax System 22 2.3 National Tax Policy 25 2.4 Tax Laws 28 2.5 Tax Administration 33 2.5.1 Objectives of Tax Administration 34 2.5.2 Models of Tax Administration 35 2.5.3 Tax Administration 37 2.5.4 Organs of Tax Administration 38 2.5.5 Procedures of Tax Administration 48 2.6 Problems of Tax Administration in Enugu 52 2.7 Information Technology (IT) 54 2.7.1 Application of IT in Tax Administration 56 2.7.2 Benefits of IT in Tax Administration 57 References 59 CHAPTER THREE: Research Design and Methodology 3.1 Research Design 60
9

3.2 Sources of Data 60 3.3 Research Instrument 61 3.4 Reliability/validity of Research Instruments 61 3.5 Population 62 3.6 Sampling Technique and Sample Size 62 3.7 Administration of Research Instruments 65 3.8 Method of Data Analysis 65

CHAPTER FOUR: Data Presentation, Analysis 4.1 Data Presentation 68 4.2 Test of Hypotheses 80

CHAPTER FIVE: Summary of Findings, Conclusion and Recommendations 5.1 Summary of findings 89 5.2 Conclusion 90 5.3 Recommendations 90 Bibliography 93 Appendix 95

CHAPTER ONE

uments listed in the Act.
vii. Capital Gains Tax Act, Cap C1 LFN 2004, which imposes
tax on capital gains arising from the disposal of chargeable
assets (ICAN, 2006)
According to Alhaji Kabir M. Mashi, a core success factor for
any system is its position on administrative issues.
Presently, the tax administration in Nigeria, Enugu state to
be precise, has been riddled with various limiting factors
such as;
I. Weak administrative facilities/ administrative lapses which
could result in situations such as tax evasion and tax
avoidance.
II. Corruption and mismanagement on the part of the tax
officials.
III. The problem of funding the revenue collecting agencies
which negatively impacts on efficiency and performance.
14

IV. Lack of adequate records from the informal sector of the
economy.
V. Inability to identify all taxable persons. (Bird, 1988).
VI. Lack of effective mechanism in place to prosecute cases of
tax evasion.
The rapid growth and development of Enugu State led to an
enhanced increase in population as well as an increasing number
of companies. Tax planning and tax management have
increasingly become complex activities due to growth in business
and the subsequent expansion in scope of operations and fiscal
size. Given the amount of data that needs to be analyzed in order
to assess and compute tax liabilities, it has become imperative
that both tax institutions and companies deploy appropriate
computer programmes in order to enhance tax planning and
administration.
The advent of Information Technology in this era has played a
major role in enhancing economic and business activities of both
the private and public institutions. While it has opened up
opportunities that have gone undiscovered or neglected, it has
saved many organizations millions of perpetual fraud through its
applications. The application of Information Technology has
15

become increasingly necessary in Nigeria‟s tax administration as
the use of Information Technology makes for fast, easy and
accurate computation, storage and presentation/ retrieval of
data/ records.
Certain computer programmes have been created to facilitate
the computation of cumbersome data. Programmes such as
Microsoft Excel (Electronic Spread Sheet), Microsoft Access
(Database) are one of the most common examples. Other
database programmes and accounting packages which allow for
easy calculation and computation of an individual or a company‟s
tax liabilities include Peachtree Accounting, PeopleSoft System,
SQL Database, QuickBooks, Management Information Processing
System, Quikens etc.
Presently, the world has gradually become a global village and
the nexus between Nigeria and the rest of the world is the use of
Information Technology in, practically, every sector of the
economy. Therefore, in order to improve on the efficiency of tax
administration in Nigeria, it will be advisable to apply the use of
Information Technology from the basics of tax collection to the
final stage in Tax Administration.

16

1.2 Statement Of The Problem
For many years, tax administration in Nigeria has been
plagued with problems, most of which can be attributed to the
lack of or inadequate application of Information Technology in tax
administration.
In Enugu State, the tax institutions have not fully embraced
the use of Information Technology for record keeping. According
to BECANS Business Environment Report 1(15) (2007), there is
evidence of a manually compiled database of tax payers. Manual
Compilation involves the use of files/ folders for data storage.
When records are stored in this manner over a long period of
time, retrieval of such records can prove to be very difficult.
Records stored in this manner can be very unreliable as these
records are easily prone to manipulations.
Another major problem can be found in the method of tax
collection. The tax officials are often aggressive as they use
unorthodox methods in tax collection especially at the local
government level.
Furthermore, the identification of taxable persons has
proven to be a herculean task using the manual systems.
17

The thorough application of Information Technology in tax
administration in Nigeria would be a welcome change in the
system as this will greatly enhance the efficiency in tax
administration in Enugu state in particular and Nigeria in
general.
1.3 Objective Of The Study
This research work is aimed at achieving certain objectives which
are stated below:
i. To determine if effective tax administration leads to an
increase in tax base;
ii. To ascertain whether inefficiency in tax administration
creates room for tax evasion;
iii. To find out whether the application of information
technology increases efficiency in tax administration;
iv. To know whether poor remuneration of tax personnel affects
the dispensation of taxation.
1.4 Research Questions
I. Does effective tax administration lead to an increase in
tax base?
II. Does inefficiency in tax administration create an
avenue for tax evasion?
18

III. Does the application of Information technology
increase efficiency in tax administration?
IV. Does poor remuneration of tax personnel affect the
effective tax administration?
1.5 Research Hypotheses
Based on the objectives, the following researches were
formulated:
Hypothesis One
H0- Effective tax administration does not lead to an increase in
tax base.
H1- Effective tax administration lead to an increase in tax base.
Hypothesis Two
H0- Inefficiency in tax administration does not create and avenue
for tax evasion.
H1- Inefficiency in tax administration create and avenue for tax
evasion.
Hypothesis Three
H0- The application of information technology does not increase
efficiency in tax administration.
H1- The application of information technology increase efficiency
in tax administration.
19

1.6 Significance Of The Study
it is hoped that this work will form a major catalyst to
stimulate the initiation of a proper legislative process that will
regulate tax administration in Nigeria, particularly in Enugu
State.
Furthermore, effective implementation of information
technology in tax administration will be of immense benefit to tax
authorities. The use of information technology will invariably
reduce work hours, enhance efficiency and reduce opportunities
for corrupt practices in the system.
Finally, it is believed that the information generated from
this research will enhance the tax payers awareness on tax
issues like tax incentives and penalties for tax related offences
such as tax evasion.
1.7 Scope And Limitation Of The Study
As this research work is focused on the effect of information
technology on the efficiency of tax administration in Nigeria, with
particular reference to Enugu State, the scope of the study will be
limited to the activities of Enugu State Board of Internal Revenue
In the course of carrying out this research work, certain
limitations were encountered, they include the following:
20

I. Lack of access to certain materials needed for the
research.
II. Lacks of co-operation from institutions as certain tax
institutions were not forthcoming with their record
III. Certain libraries did not have contemporary materials
for the researcher to work with.
1.8 Operational Definition of Terms
In order to avoid confusion surrounding the words, the
following technical terms have precisely been defined, as they
relate to the context of the research work.
Tax- An amount of money levied by a government on its citizens
and used to run the government, country, a state, a county or a
municipality/ local government.
Tax Evasion- This is an act whereby the taxpayer can achieve
the minimization of tax through illegal means. It involves outright
fraud and deceit.
Tax Avoidance- This arises in a situation where a taxpayer
arranges his financial affairs in a form that will make him pay the
least possible amount of tax without breaking the law.
Ordinance- A law or rule made by an authority such as a city
government.
21

Stakeholders- Those persons/ entities that contribute to, and
derive benefits from, the country‟s tax system. This includes
every Nigerian citizen and resident, corporate entities,
government at all levels and government agencies.

EFFECTS OF ENVIRONMENTAL ACCOUNTING AND REPORTING ON CORPORATE PERFORMANCE (A STUDY OF SELECTED OIL AND GAS COMPANIES IN NIGERIA)

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PROJECT TOPIC AND MATERIAL ON EFFECTS OF ENVIRONMENTAL ACCOUNTING AND REPORTING ON CORPORATE PERFORMANCE (A STUDY OF SELECTED OIL AND GAS COMPANIES IN NIGERIA)

The Project File Details                                                                                                       

  • Name: EFFECTS OF ENVIRONMENTAL ACCOUNTING AND REPORTING ON CORPORATE PERFORMANCE (A STUDY OF SELECTED OIL AND GAS COMPANIES IN NIGERIA)
  • Type: PDF and MS Word (DOC)
  • Size: [666 KB]
  • Length: [65] Pages
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ABSTRACT

This study examines the Effect of environmental accounting and reporting on corporate performance. The study adopted a cross section descriptive survey research design   and covers a period of ten years.   Data collected were analysed using multiple regression analysis. Finding of the study shows that environmental cost accounting is vital for effective performance of a firm.it was noted in the findings that environmental accounting disclosure enable a firm to fully understand the performance state of the organization, hence, making it possible for the firm to know exactly areas to adjust the activities in order to enhance the performance of the firm. The study recommends that Any firm that aim at continuous survival, profit making and effective performance should always carryout environmental cost analysis in order to know their performance level and results obtained from Environmental disclosure of a firm should never be neglected, since it is the bedrock for knowing much more about a firm’s performance. It was also recommended that managers of firm should always implement information’s obtained from environmental cost analysis in order to know areas to improve or adjust the performance of their firm.

CHAPTER ONE

INTRODUCTION

1.1 Background to the Study

The need for Environmental Accounting has become the concern and focus of nation’s and responsible corporate managements. It became one of the foremost issues on the agenda of nations and businesses earlier in the 1990s and the reasons for these were varied emanating from both within and outside of the firm and particularly at the global level (Okoye and Ngwakwe:2004:220-235). A lot of government enactments, laws and regulations on environmental protection have been made in several nations of the world including Nigeria. In the light of the awakening to environment protection, various laws and regulations such as the Environmental Impact Assessment Act, 1992 and the Department of Petroleum Resources (DPR) Environmental Guidelines and Standards for the Petroleum Industry in Nigeria (EGASPIN: 2002) were enacted. These require corporate managements to consider the environmental implications of all internal decisions of their managements. Also, all organizations monitored by environmental policy agencies in Nigeria are expected to demonstrate much consideration in decision making. Environmentalists agree that it could be more cost efficient and beneficial for companies to acquire pollution prevention or clean technology than those of pollution clean-up. It is also observed that in environmental regulations, there is a shift from the ‘command and control’ approach to market-driven forms in which pollution prevention alternatives are replacing pollution cleaning approach. It follows therefore, that determining the appropriate pollution prevention approach may lead to additional decisions to be taken by management. Such decisions may include selecting capital expenditures, and in the opinion of Shield, Beloff and Heller (1996:5), expenditures such ‘as markets for emissions’ allowances development, may require companies to determine whether it is more cost beneficial to buy or sell these allowances, giving the cost of avoiding the covered emissions.

Environmental issues for purpose of economic and cost accounting have also been controversial even though the topic has been identified for discussions for the past four decades. This is because common criteria for value measurement of non-marketed, non-monetized resources and impact on externalities have not been agreed.

Previously, corporate organizations have ranked business considerations based on profitability. Companies have also recognized all indirect expenditures as overheads without paying attention to the environment. Conventional accounting practice has not recognized environmental accounting for materials, water, energy and other natural resource usage.

Besides, conventional accounting has not provided for such practice and particularly for accounting for impact on externalities. According to B. Field and M. Field (2002), little was recognized of the environmental depletion and degradation to the environment until a few well-meaning people in the developed countries realized that it was no good having great corporate profits and material well-being if they come at the cost of large scale of the ecosystem by which we are nourished. It became clear that degradation, pollution and accelerated destruction of the ecosystem and the depletion of non-renewable environment biodiversity would soon become very dangerous to human existence.  Field and Field,(2002) conclude that, ‘what once were localized environmental impacts, easily rectified, have now become widespread effects that may very well turn out to be irreversible.’

The world at large has need to evaluate, assess and effect accounting reporting for raw materials, energy consumption and use of natural resources which have systematically depleted the environment. Besides, the negative impact on the biodiversity through human and industrial activities and the nations’ need to protect the environment, have made for global regulations. These regulatory environmental laws however, require only voluntary disclosure in financial statements of environmental information on industrial emissions, degradations, industrial wastages and all activities which impact negatively on the environment. As a result of the great impact on the ecology of oil and gas producing environment of the Niger Delta in Nigeria, which has caused political unrest in the area, Owolabi (2007:63) is of the opinion that the political unrest in the Niger Delta cannot be wished away until there is a policy to incorporate environmental concerns into the nation’s oil and gas industry planning, management and decision making. On environmental costs, he concludes that ‘Costs and benefits need to be properly attributed, a clear distinction made between the generation of income and the drawing down of capital assets through resource depletion or degradation.’

Notable studies in environmental accounting are the Ontario Hydro Full Cost accounting (1993) and the AT & T Green Accounting of the U.S. Environmental Protection Agency (1993). Also, the industrial green substance emissions (Carbon dioxide, Methane and Hydro fluorocarbons) and the penalties resulting from the Kyoto Protocol (December 1997) have made it a requirement for corporate organizations to take serious considerations and actions on corporate capital projects and investments.

In the light of the background of increasing environmental attention, and the fact that the oil and gas sectors having profound production impact on the environment, the study explores the effect of environmental accounting and reporting on corporate performance.

1.2     Statement of the Problem

Environmental accounting involves the process of communicating the social and environmental effects of organizations’ economic actions to particular interest group within society and to society at large. As such it involves extending the accountability of organizations (particularly companies) beyond the traditional role of providing a financial account to the owners of capital, in particular, shareholders. Such an extension is predicated upon the assumption that companies do have wider responsibilities than simply to make money for the shareholders (Grayet al, 1987). In this case it is a comprehensive approach to ensure good corporate governance that includes transparency in its social activities.

The problem is that conventional approaches of cost accounting have become inadequate since conventional accounting practices have ignored important environmental costs and activities impacting consequences on the environment. Corporate neglect and avoidance of environmental costing leave gap in financial information reporting. There is no completeness and correctness of fair view to users of financial information, such as shareholders, environmental regulatory agencies, environmentalists and potential financial investors. For example, degradation or other negative impact on the environment could affect corporate financial statement such as create actual or contingent liabilities and may have adverse impact on asset values of the company. Consequential effect on corporate organizations may result in incurring future capital expenditure and cash flows which may impinge on going concern as balance sheet secured loans may not be secure after all if land values for instance are affected by environmental factors. Also, the limited awareness of environmental costing principles and methodology has become an important issue to be addressed. If vital environmental issues and activities are not disclosed, financial statement cannot be said to reveal state of a ‘true and fair view of affairs’ and such has impact on a firm. It is important too, to note that ethical investors will only invest in ethical companies and therefore, will watch out for these ethically responsible companies. Due to this problems which has impact on corporate organization, this study will therefore, evaluate the effect of environmental accounting and reporting on corporate performance.

 

 

  • Objectives of The Study

The objective of this study is to ascertain the effect of environmental accounting and reporting on corporate performance.  Other specific objectives are as follows:

  1. To ascertain the kind of effect environmental cost have on cooperates firm profit making.
  2. To ascertain the extent environmental cost affects profit making of a firm.
  3. To determine the level the performance of a corporates firm can be affected by environmental cost.
  4. To identify the role of environmental cost disclosures on corporate performance.
  5. To investigate the level which environmental accounting and reporting enables cooperates firm to manage their resources.

1.4     Research Questions

To enable the researcher obtain relevant information from the respondent, the following research questions were designed and posed:-

  1. What kind of effects does environmental cost have on profit making of a cooperate firm?
  2. To what extent does environmental cost affect profit making of a firm?
  3. To what level can the performance of a corporates firm be affected by environmental cost?
  4. What is the role of environmental cost disclosure on corporate performance?
  5. To what level can environmental accounting and reporting enables corporate firms to manage their resources?

 

1.5     Research Hypotheses

The following five (5) hypotheses are formulated to test each of the responses of the respondents to the research questions raised.

H01: There is no significant effect of environmental cost on profit making of a corporate firm.

H02:  No significant relationship exists in environmental cost and the extent of profit making of a firm?

H03: There level of performance of corporate firms is not significantly affected by environmental cost.

H04: Environmental cost disclosure in a corporate firm has no significant role on the performance of a firm.

H05: Environmental accounting and reporting has no significance in a corporate firm’s resource management.

1.6 Significance of the Study

This will be of benefit to corporate firms in helping them to engage and adequately provide environmental protection agenda in their internal policies on investments and projects which impact on environment. This approach will facilitate protection of the eco-efficiency and competitiveness among corporations in all productive sectors of the economy. The study will facilitate environmental cost reporting responsiveness and disclosure to investors and environmental regulatory bodies. It will assist in efficient cost valuation of environmental remediation and compensation to affected communities particularly the Oil & Gas areas of the Niger Delta in Nigeria by corporate bodies impacting on the environment. A design and conceptual bases for environmental cost accounting and disclosure in corporate financial statement will facilitate efficient valuation of degradation in affected communities. Besides, it will also be beneficial to corporate organizations as ethical investors and the environmentally conscious general public will watch out for ethical responsible companies. This study will assure commitment of the corporate organizations in Nigeria to international agreements on environmental regulations which will in turn assure sustainable development of environment and the eco-system in Nigeria. It will further enable corporate firms to effectively manage their resources and indicate area in which they can improve in their level of performance.

1.7 Scope of the Study

The scope of the study covers the effect of environmental accounting and reporting on corporate performance. It also covers ten (10) years (2003-2012) of financial environmental accounting effect of three quoted oil and Gas Company and the effect on the performance of these corporate firms.

1.8 Definition of Terms

The following operational terminologies used in the study are defined in order to enable a clear understanding of various accounting terms used in the study.

Environmental accounting in the context of national income

This type of accounting, as used in this study refers to natural resource accounting. These entail statistics about a nation’s or regions consumption of natural resources. It also takes into account the extent, quality and valuation of natural resources which are either renewable or non-renewable.

Environmental accounting in the context of financial accounting

This refers to the preparation of financial reports to external users using international financial reporting standard (IFRS).This is financial reporting to external users conveying the impact on environment and activities impacting on eco-efficiency.

 

Environmental accounting as an aspect of management accounting

This was used in this study refers to how environmental accounting in aspect of accounting management helps business managers in making capital investment decisions. This entails costing determinations, process/product design decisions, performance evaluations and a host of other forward-looking business decisions. It also conveys impact on the environment.

Environmental Cost Accounting

This is a term used to refer to the addition of environmental cost information into existing cost accounting procedures and/or recognizing embedded environmental costs and allocating them to appropriate products or processes.

Full Cost Accounting

This as used in the study is a term often used to describe desirable environmental accounting practices. In management accounting ‘full costing’ means the allocation of all direct and indirect costs to a product or product line for the purposes of inventory valuation, profitability analysis and pricing decisions.

Life Cycle Assessment

This is a holistic approach to identifying the environmental consequences of a product, process, or activity through its entire life cycle and to identifying opportunities for achieving environmental improvements.

Life Cycle Cost Assessment

This is a term that highlights the costing aspect of life cycle assessment. It is regarded as a systematic process for evaluating the life cycle costs of a product, process, system, or facility by identifying environmental consequences and assigning measures of monetary value to those consequences.

Societal Costs: Are those costs impacted on the environment which results from company’s production activities. These costs do not directly affect the company’s bottom line. Societal costs are also known as external costs or externalities.

Costs allocation: refers to accounting procedures and systems for identifying, measuring and assigning costs for internal management purposes.

Capital budgeting: which is also known as Investment Analysis is the process of determining a company’s planned capital investments.

EFFECTIVENESS OF PROFIT PLANNING IN NIGERIAN ORGANISATIONS

Download the complete Accounting project topic and material (chapter 1-5) titled EFFECTIVENESS OF PROFIT PLANNING IN NIGERIAN ORGANISATIONS here on iProjectTopics. See below for the abstract, table of contents, list of figures, list of tables, list of appendices, list of abbreviations and chapter one. Click the DOWNLOAD FULL WORK BUTTON BELOW CHAPTER ONE  to get the complete project work instantly.

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PROJECT TOPIC AND MATERIAL ON EFFECTIVENESS OF PROFIT PLANNING IN NIGERIAN ORGANISATIONS

The Project File Details                                                                                                       

  • Name: EFFECTIVENESS OF PROFIT PLANNING IN NIGERIAN ORGANISATIONS
  • Type: PDF and MS Word (DOC)
  • Size: [666 KB]
  • Length: [65] Pages
  • With Reference and Questionnaire
  • Amount: 3000 naira

CHAPTER ONE

INTRODUCTION
1.1 BACK GROUND OF THE STUDY
In modern economies, prices are generally expressed in
units of some form of currency. Although, prices could be quoted
as quantities of other goods and services (BARTER SYSTEM).
Prices are sometimes quoted in terms of vouchers such as trading
stamps. Price sometimes refers to the quantity of payment
requested by a seller of goods or services rather than the actual
payment amount.
One of the most crucial operating decisions management
must make is establishing a setting price for its products but this is
quiet unfortunately that many firms are still mismanaging pricing
causing lots of money and anticipated profit to be unexplored and
wasted.
In many financial transactions, it is customary to quote prices
in other ways. The requested amount is sometimes called the
asking or selling price, while actual payment may be called the
transaction or traded price.
However in explaining the importance of pricing, Egbunike
(2007:83) sustained that setting the price for an organizations

2

product or service is one of the most difficult, due to some number
of variety of factors that must be considered. The primary decision
arises in virtually all types of organization, just to mention but a
few of them such as manufacturers set prices for their products,
they manufacture, merchandising companies set prices for their
goods, service firms set prices for such services as insurance
policies, bank loans etc.
A company’s survival and profitability depends upon its pricing
decisions, thus price is the only element in the marketing mix that
produce s revenue and thus ensures profit ability (kotler and keller
2006:475) Price adopted by firms must be able to cover all cost in
the long run as well as to leave a profit margin to reward
management.
The Price of a Product has a direct relationship with many
operations of the firm’s activities. A price decision will affect
demand and this in turn affects the revenue generated by the firm.
Similarly, a firm which makes profit has the propensity of
attracting more new capital. This shows that the public has
confidence in the ability of the firm to yield return to them. So, the
performance of management is usually measured by the amount

3

of revenue it generates to satisfy the share holders of the
organization.
The actual process of profit planning involves looking at several
key factors relevant to operational expenses. Putting together
effective profit plans requires looking at such expenses as labour,
raw materials, facilities maintenance and upkeep and the cost of
sales and marketing efforts.
It is evident that management has a big responsibility before
them in setting and adopting the most advantageous pricing policy
and the most effective profit plan for their firms, since prices are
not set arbitrarily therefore management must focus on all the
important factors in setting its price. Thus, it has become
imperative to investigate the effectiveness of pricing policy and
profit planning in Nigerian organizations.
In the course of this study, two companies would be examined:
Vintage Nigeria plc, ijanikin Lagos, manufacturers of vintage
beauty products and cosmetics (e.g. body creams, relaxers,
shampoos, etc) was established in the year 1992, and also,
Ojukwu pen farms, producers of poultry proceeds (eggs and
chickens) and farm proceeds and has been in existence since
1987.

4

1.2 STATEMENT OF THE PROBLEM
Hilton (1991:201) observed that both the market forces of
demand and supply and the cost of production have a Significant
bearing on determining prices. Equally he explained that there are
other variables that influence pricing decisions according to him,
this includes: Manufacturer’s pricing objective, economic situation,
level of competition, and availability of close substitute.
a. For pricing to be effective, firms must incorporate all these
factors in selecting the most advantageous price for its product. At
times, firms are not in the habit of considering these factors and
this has led to the shutting down of many factories, downsizing of
workforce and in most cases, winding up of firm’s (Hilton,
1991:201).
b. Profit plan are made in form of budget and they help firms to
forecast the level of profit, cost and revenue, they intend to
generate in order to gain competitive advantage. Unfortunately
many firms still do not prepare these plans, thus, this has led firms
undertaking unplanned ventures resulting in escalation and
inability of firms to foresee shortage in resources or finance or
personnel needed in the future operation of the firm. Where no

5

plans exist, there will be no basis for firm to compare or evaluate
their performance.
c. Based on the foregoing, the problem of this study is in three
(3) folds.
1 The failure of some firms to incorporate factors such as
economic situation, level of competition, availability of close
substitute, among others in their pricing decisions, may have
resulted to the minding up of several small scale manufacturing
firm (SSMF) in Nigeria.
2. It has been shown in accounting literatures that profit planning
is a potential tool for achieving profit objectives and efficiency.
Which small scale manufacturing firms seems to ignore the use of
profit planning (or budget) in their operations. This has led to far
reaching problem such as huge unforeseen operating cost as well
as shortages in good financial and human resources.
3. Most importantly, the problem that stringated this study is the
knowledge gap, that is, it looks as if small scale manufacturing
firms are not aware that pricing policy and profit planning impact
positively on profit performance.

6

1.3 OBJECTIVES OF THE STUDY:
This research is aimed at achieving the following objectives.
(i) To determine if pricing decision (s) can make an impact on
a firm’s profit and efficiency.
(ii) To investigate if profit planning (or budgeting) can result in
cost reduction and increased profit performance.
1.4 RESEARCH QUESTIONS
1. Does pricing decision(s) make an impact on a firm’s profit and
efficiency?
2. Does profit planning (or budgeting) help in cost reduction and
increased profit performance?

1.5 FORMULATION OF HYPOTHESES.
To achieve the objective of the study, the following hypotheses
are formulated.
HYPOTHESIS ONE
Ho – Pricing Policy of a firm has no influence on the degree to
which a firm can achieve optimum profitability.
Hi – Pricing Policy of a firm has influence on the degree to
which a firm can achieve optimum Profitability.

7

HYPOTHESIS TWO
Ho – Effective profit planning has no effect on the profit
performance of a firm.
Hi- Effective profit planning has a major effect on the profit
performance of a firm.
1.6 SCOPE OF THE STUDY
Since no single research can validly cover all areas of the topic
the researcher tends that thrust of this project will be limited
within the scope of how management’s performance of small scale
manufacturing firms are influenced by the choice of its pricing
policy and its profit planning. The study will focus primarily on
small scale manufacturing firms in Lagos state to be precise and
its environs from where the manufacturing firms of this study are
drawn to enable the researcher carryout on extensive investigation
on this subject. The companies to be studied are: vintage Nigeria
plc ijanikin Lagos and Ojukwu pen farms igbesa Ogun state.

1.7 LIMITATION OF THE STUDY
The researcher is limited by time constraints. Since the
semester is very short and has a bulk of academic exercise.

8

The researcher is also constrained by unavailability of funds
required for an extensive research of this magnitude.
Finally and importantly, most small scale manufacturing firms
that were studied lack adequate and organized accounting and
decision making system, poor organizational chart and structure
also their general unwillingness to corporate or give out
information, all, these married the effectiveness of this research.
1.8 SIGNIFICANCE OF THE STUDY
This research will serve as a guide to firms in setting the most
advantageous pricing policy giving its individual unique situation
which will enhance profitability in the short and long run situation.
It will help them to avoid choosing arbitrary prices without
considering its distinctive situation and important factors.
It will serve as a guide in choosing pricing strategy which
strikes a balance between what the consumers wants to pay for a
product and the price the firm is willing to sell; also this research
will expose them (the firm) to the need for accounting information
in carrying out this decision.
The research work will also be useful for the economy in the
sense that if firms have substantial control over price setting, then

9

their pricing behavior can influence national output/income and
hence community welfare.
Finally, the research work will be useful for those carrying on
further research on this or related topic.
1.9 DEFINITION OF TERMS.
PRICING POLICY: It is a guiding philosophy or course of action
designed to influence and determine pricing decisions. Pricing
policies set guidelines for achieving objectives.
PROFIT PLAN: The profit plan is the operating plan detailing
revenue expenses and resulting to net income for specific period
of time. It is the firm’s optimal plan in the light of management
expectation in future.
COST: Expenses incurred to procure something which may be
labour, material, facilities or resources
PROFITABILITY: This is the capacity or potential of an
organization to make profit
PRICE: This is the amount of money charged for a product or
service, or a value that a consumer exchanges for the benefits of
having or using a product or service.

10

VARIABLE COST: They are cost that varies with level of
production. They are constant per unit but vary with total
production.
PRODUCT: This can be seen as any item, sub-assembly or cost
unit manufactured or sold by an organization.
MARKETING MIX: This is the combination of the four primary
elements that comprises of a company’s marketing programmes
which are price, place, product, and promotion (advertising).

EFFECTIVENESS OF PRICING POLICY AND PROFIT PLANNING IN NIGERIAN ORGANIZATIONS: A PERFORMANCE APPRAISAL OF SOME SELECTED MANUFACTURING FIRMS.

Download the complete Accounting project topic and material (chapter 1-5) titled EFFECTIVENESS OF PRICING POLICY AND PROFIT PLANNING IN NIGERIAN ORGANIZATIONS: A PERFORMANCE APPRAISAL OF SOME SELECTED MANUFACTURING FIRMS. here on iProjectTopics. See below for the abstract, table of contents, list of figures, list of tables, list of appendices, list of abbreviations and chapter one. Click the DOWNLOAD FULL WORK BUTTON BELOW CHAPTER ONE  to get the complete project work instantly.

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PROJECT TOPIC AND MATERIAL ON EFFECTIVENESS OF PRICING POLICY AND PROFIT PLANNING IN NIGERIAN ORGANIZATIONS: A PERFORMANCE APPRAISAL OF SOME SELECTED MANUFACTURING FIRMS.

The Project File Details                                                                                                       

  • Name:EFFECTIVENESS OF PRICING POLICY AND PROFIT PLANNING IN NIGERIAN ORGANIZATIONS: A PERFORMANCE APPRAISAL OF SOME SELECTED MANUFACTURING FIRMS.
  • Type: PDF and MS Word (DOC)
  • Size: [666 KB]
  • Length: [65] Pages
  • With Reference and Questionnaire
  • Amount: 3000 naira

CHAPTER ONE

INTRODUCTION

  • BACK GROUND OF STUDY

One of the most crucial operating decisions management must make is establishing a setting price for its products but this is quiet unfortunately that many firms are  still mismanaging pricing causing lots of money and anticipated profit to be unexplored and wasted.

However in explaining the importance of pricing, Egbunike (2007:83) sustained that setting the price for an organizations product or service is one of the most difficult, due to some number of variety of factors that must be considered. The primary decision arises in virtually all types of organization, just to mention but a few of them such as manufacturers set prices for their products, they manufacture, merchandising companies set prices for their goods, service firms set prices for such services as insurance policies, bank loans etc.

A company’s survival and profitability depends upon its pricing decisions, thus price is the only element in the marketing mix that produce s revenue and thus ensures profit ability (kotler and keller 2006:475) Price adopted by firms must be able to cover all cost in the long run as well as to leave a profit margin to reward management.

The Price of a Product has a direct relationship with many operations of the firm’s activities. A price decision will affect demand and this in turn affects the revenue generated by the firm. Similarly, a firm which makes profit has the propensity of attracting more new capital. This shows that the public has confidence in the ability of the firm to yield return to them. So, the performance of management is usually measured by the amount of revenue it generates to satisfy the share holders of the organization.

It is evident that management has a big responsibility before them in setting and adopting the most advantageous pricing policy and the most effective profit plan for their firms, since prices are not set arbitrarily therefore management must focus on all the important factors in setting its price. Thus, it has become imperative to investigate the effectiveness of pricing policy and profit planning in Nigerian organizations.

 

  • STATEMENT OF THE PROBLEM

Hilton (1991:201) observed that both the market forces of demand and supply and the cost of production have a Significant bearing on determining prices. Equally he explained that there are other variables that influences pricing decisions according to him, this includes: Manufacturer’s pricing objective, economic situation, level of competition, and availability of close substitute.

For pricing to be effective, firms must incorporate all these factors in selecting the most advantageous price for it’s product. At times, firms are not in the habit of considering these factors and this has led to the shutting down of many factories, downsizing of workforce and in most cases, winding up of  firm’s (Hilton, 1991:201).

Profit plan are made in form of budget and they help firms to forecast the level of profit, cost and revenue, they intend to generate in order to gain competitive advantage. Unfortunately many firms still do not prepare these plans, thus, this has led firms undertaking unplanned ventures resulting in escalation and inability of firms to foresee shortage in resources or finance or personnel needed in the future operation of the firm. Where no plans exist, there will be no basis for firm to compare or evaluate their performance.

Based on the foregoing, the problem of this study is in three (3) folds.

Firstly, the failure of some firms to incorporate factors such as economic situation, level of competition, availability of close substitute, among others in their pricing decisions, may have resulted to the minding up of several small scale manufacturing firm (SSMF) in Nigeria.

Secondly, it has been shown in accounting literatures that profit planning is a potential tool for achieving profit objectives and efficiency. which small scale manufacturing firms seems to ignore the use of profit planning ( or budget) in their operations. This has led to far reaching problem such as huge unforeseen operating cost as well as shortages in good financial and human resources.

Thirdly, and most importantly, the problem that stringated this study is the knowledge gap, that is, it looks as if small scale manufacturing firms are not aware that pricing policy and profit planning impact positively on profit performance.

1.3   OBJECTIVE OF THE STUDY:

This research is aimed at achieving the following objectives.

(i)     To establish the efficiency and effectiveness of pricing policy in selected firms.

(ii)    To find out the various factors that influence pricing decisions in selected firms.

(iii)   To determine if pricing decision (s) can make an impact on a firm’s profit and efficiency.

(iv)   To investigate if profit planning (or budgeting) can result in cost reduction and increased profit performance.

(v)       To make recommendation based on the findings of this study to the management of firms.

1.4   FORMULATION OF HYPOTHESES.

To achieve the objective of the study, the following hypotheses are formulated.

 

HYPOTHESIS ONE

Ho – Pricing Policy of a firm has no influence on the degree to which a firm can achieve optimum profitability.

Hi – Pricing Policy of a firm has influence on the degree to which a firm can achieve optimum Profitability.

 

HYPOTHESIS TWO

        Ho – Effective profit planning has no effect on the profit performance of a firm.

Hi- Effective profit planning has a major effect on the profit performance of a firm.

1.5   SCOPE AND LIMITATION OF THE STUDY

Since no single research can validly cover all areas of the topic the researcher tends that thrust of this project will be limited within the scope of how management’s performance of small scale manufacturing firms are influenced by the choice of its pricing policy and its profit planning. The study will focus primarily on small scale manufacturing firms  in Anambra state Awka to be precise and its environs from where the manufacturing firms of this study are drawn to enable the researcher carryout on extensive investigation on this subject. The companies to be studied are: Crescent spring waters Awka and winco foam limited Agu Awka.

 

1.5.2                LIMITATION OF THE STUDY

The researcher is limited by time constraints. Since the semester is very short and has a bulk of academic exercise.

The researcher is also constrained by unavailability of funds required for an extensive research of this magnitude.

Finally and importantly, most small scale manufacturing firms that were studied lack adequate and organized accounting and decision making system, poor organizational chart and structure also their general unwillingness to corporate or give out information, all, these married the effectiveness of this research.

1.6   SIGNIFICANCE OF THE STUDY

This research will serve as a guide to firms in setting the most advantageous pricing policy giving its individual unique situation which will enhance profitability in the short and long run situation. It will help them to avoid choosing arbitrary prices without considering its distinctive situation and important factors.

It will serve as a guide in choosing pricing strategy which strikes a balance between what the consumers wants to pay for a product and the price the firm is willing to sell; also this research will expose them (the firm) to the need for accounting information in carrying out this decision.

The research work will also be useful for the economy in the sense that if firms have substantial control over price setting, then their pricing behaviour can influence national output/income and hence community welfare.

Finally, the research work will be useful for those carrying on further research on this or related topic.

1.7   DEFINITION OF TERMS.

PRICING POLICY: It is a guiding philosophy or course of action designed to influence and determine pricing decisions. Pricing policies set guidelines for achieving objectives.

PROFIT PLAN: The profit plan is the operating plan detailing revenue expenses and resulting to net income for specific period of time. It is the firm’s optimal plan in the light of management expectation in future.

COST: Expenses incurred to procure something which may be labour, material, facilities or resources

EFFICIENCY: Ability to work or produce well, without wasting time or resources.

EFFECTIVENESS: Producing the intended result.

FIXED COST: Cost that remains constant within a level of production. It does not vary with production.

MARKETING MIX: The combination of the far primary element that comprises a company’s marketing programme which are price, product, place and promotion (advertising)/

VARIABLE COST: They are cost that varies with level of production. They are constant per unit but vary with total production.

STRATEGY: Strategy is a general statement of the vary in which an organization plans to achieve its objectives. The strategy contains the basic approach but not the details of how a firm plans to attain its objective.

SHORT RUN: It is a period of time that is less than one year. The firm is unable to vary all its input in this span of time.

LONG RUN: It is a period of time sufficiently long to allow the firm to change the physical amounts of all resources in its production. It is usually five (5) years and above.

REFERENCES

Egbunike. P.A; (2007) Management Accounting” 1st Ed. onitsha, Frances New Dawn.

Hilton, W.R; (1991) “Managerial Accounting” 6th Ed. U.S.A, Voult Hoffmann Press Inc.

Kotter, P. and K.L. Keller (2006) Marketing Management. 1st Ed. New York, Pearson Prentice Hall Inc.

EFFECTIVE INTERNAL CONTROL AS AN AID TO MANAGEMENT EFFICIENCY (A CASE STUDY OF NIGERIA BOTTLING COMPANY) (N.B.C) OWERRI

Download the complete Accounting project topic and material (chapter 1-5) titled EFFECTIVE INTERNAL CONTROL AS AN AID TO MANAGEMENT EFFICIENCY (A CASE STUDY OF NIGERIA BOTTLING COMPANY) (N.B.C) OWERRI here on iProjectTopics. See below for the abstract, table of contents, list of figures, list of tables, list of appendices, list of abbreviations and chapter one. Click the DOWNLOAD FULL WORK BUTTON BELOW CHAPTER ONE  to get the complete project work instantly.

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PROJECT TOPIC AND MATERIAL ON EFFECTIVE INTERNAL CONTROL AS AN AID TO MANAGEMENT EFFICIENCY (A CASE STUDY OF NIGERIA BOTTLING COMPANY) (N.B.C) OWERRI

The Project File Details                                                                                                       

  • Name:EFFECTIVE INTERNAL CONTROL AS AN AID TO MANAGEMENT EFFICIENCY (A CASE STUDY OF NIGERIA BOTTLING COMPANY) (N.B.C) OWERRI
  • Type: PDF and MS Word (DOC)
  • Size: [666 KB]
  • Length: [65] Pages
  • With Reference and Questionnaire
  • Amount: 3000 naira

ABSTRACT

Effective Internal Control as an aid to management efficiency is critical review of this research work. From the analysis also, it was found that a number of managerial problems such as inadequate account records, inefficient accounting procedures, unqualified personnel fraud etc are faced due to lack of effective internal control. Over 80% do not have a well designed internal control system and these limits the success and growth of a business enterprise. Most recommended to these problems is the need to be enlightened about the importance efficiency- check and internal audit but the whole system of control, financial and otherwise established by management in order to carry on the business on the business a company in an orderly manner, safeguard accuracy and reliability of its records. Awoyemi E. O (1990). The study also sought to know the effect of not having internal control in the management decision and profit level that though the lasting of hypothesis with use of satisfied data.

TABLE OF CONTENTS

Title page

Approval page

Dedication

Acknowledgement

Abstract

Table of contents

 

CHAPTER ONE: Introduction

1.1  Background of the study

1.2  Statement of the problem

1.3  Purpose of the study

1.4  Research questions

1.5  Research Hypothesis

1.6  Significance of the study

1.7  Scope of the study

1.8  Limitation of the study

1.9  Operational definition of terms

 

CHAPTER TWO

Review of Related Literature

2.1  Brief history of Nigerian bottling company

2.2  Purpose of internal control

2.3  Meaning of internal control

2.4  Features of a good internal control system

2.5  Types of internal control

2.6  Internal control as an aid to management efficiency

 

CHAPTER THREE

3.1  Research design

3.2  Population and sample size

3.3  Sources of data

3.4  Techniques of data collection

3.5  Data collection procedure

3.6  Data Analysis techniques

 

CHAPTER FOUR

PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA

4.1  Data presentation

4.2  Data analysis

4.3  Hypothesis Testing

 

CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1  Summary of findings

5.2  Conclusion

5.3  Recommendation

Bibliography

Appendix

CHAPTER ONE

INTRODUCTION

 1.1    BACKGROUND OF THE STUDY

The need for study in this area comes from the fact that internal control is a very important management function, however not much has been done to view its impact on business. It has to be understood that without effective internal control, there can be no successful business. This may explain why some business enterprises are higher than those of a similar enterprise and to a larger extent, why many public enterprise and parastatals fail.

The purpose of internal control is to help to ensure that operations and performance conform to the plans. It follows therefore that effective control is not possible without planning and planning without a complementary control system is pointless. In organizational system, control is exercised by the use of information frequently of a financial nature.

Internal control is beginning to find more dept in the subject of management accounting, especially as part of the theory of control in Accounting. Since control system are established by management to assists in achieving the orderly and efficient conduct of business and improve the negative effects on the health of the business. It can then be argued that effective internal control is a key to organizational performance.

 

 1.2. SCOPE OF THE STUDY

Accounting as far back as 4500 BC was practiced as stewardship accounting where land owners would appoint people known as stewards to manage their land for them. This form of recording remained primitive until in recent times when stewardship accounting gave way for financial accounting during the industrial revolutions.

Management Accounting is another aspect of accounting that got its impetus from Industrial Revolution and analysis to emphasizing detailed information for decision making. Today most enterprise is operating by limited companies which are owned by their shareholders and managed by directors appointed by the shareholders.

The entire purpose of internal control therefore is to establish a system where by though ownership is separated from management; owner will be left in no doubt that their resources are effectively managed.

 

 1.3     STATEMENT OF THE PROBLEM

Having seen that there are currently an increase in the fraud were embezzlement, errors and other irregularities and that there are strong need for organizations to have a strong internal control system that can minimize the acts, it then becomes necessary to carry out this research.

 

1.4   PURPOSE OF THE STUDY                     

The purpose or goals of the study are outlined below:

1.      To examine and analyze the existing internal control system of the Organization.

2.      To determine if internal control is existing and the effect of the system on the organization’s performance.

3.      To go further in determining whether the existing system of control is adequate.

4.      To outline the benefits to the organization if it uses standard internal control system.

 

1.5   RESEARCH QUESTION     

  1. What is the meaning of internal control?
  2. Of what purpose is it to a company’s growth?
  3. What are the features of a good internal control?
  4. Is there any aids of internal control to management accounting?

 

 1.6     HYPOTHESIS

HYPOTHESIS 1

HO: The internal control system in Nigeria Bottling

Company is not an aid to management efficiency.

H1: The internal control system in Nigeria Bottling      Company is an aid to management efficiency.

 

1.7   OBJECTIVES OF THE STUDY

According to feral (1998) the major objective of the study are outlined below:

  1. Safeguard the assets of the enterprise from all forms of misuse fraud and errors by workers and managers who convert it for personal use.
  2. Establish and maintain the accuracy and reliability of accounting data, information an d records, to minimize embezzlement of funds and other forms of fraud.
  3. Promote operational efficiency and effectiveness as a key to profit making.
  4. Seek, encourage and obtain adherence to prescribed management policies and methods, good internal control system goes a long way to achieve this purpose.

 

1.8    LIMITATION OF THE STUDY

This study focus on the effect of effective internal control on management efficiency, the company being Nigeria Bottling Company Ltd (N B C) Owerri. It is hope that this study would provide a useful link between the quality of internal control that exist the company and performance of the company with regard to profit making which for the purpose of the study is assumed to be the primary motive of an enterprise. Attempt should be made where possible to extend the analysis to other companies where this would result in a more balanced deduction.

It must be noted that certain factors, which could have  an impact on company’s performance, may not in any where be linked with the quality of controls that exist such factors as political environment in which the company exist and the impact of some government actions and policies are of few examples. This study must as matter of fact exclude these factors.

 

 1.9    SIGNIFICANT OF THE STUDY

In the era of rapid expansion of the number of companies in the economy, there is an increase pressure for companies to perform. These pressures in turn create room for such practices that could tremendously expose companies to risk of failure even as they provide profit incentives. Such practice would of course over-ride controls which have previously been instituted by managements desire to make profit through practice that may in the long run create adverse control problems.

The need for strong management commitment to strong control environment now cannot be over emphasized and will in fact, increase as more companies spring up.

EFFECT OF MICRO-FINANCE BANKS ON ENTREPRENEURSHIP GROWTH IN NIGERIA

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PROJECT TOPIC AND MATERIAL ON EFFECT OF MICRO-FINANCE BANKS ON ENTREPRENEURSHIP GROWTH IN NIGERIA

The Project File Details                                                                                                       

  • Name: EFFECT OF MICRO-FINANCE BANKS ON ENTREPRENEURSHIP GROWTH IN NIGERIA
  • Type: PDF and MS Word (DOC)
  • Size: [666 KB]
  • Length: [65] Pages
  • With Reference and Questionnaire
  • Amount: 3000 naira

ABSTRACT

This study examines the effect of tax administration and revenue on economic growth of Nigeria. To achieve the

objective of this paper, data was collected from primary and secondary sources. The secondary sources were

from scholarly books and journals while the primary source involved a well structured questionnaire of three

sections of sixty five items with an average reliability of 0.78. The data collected from the questionnaire and

secondary data were analyzed using relevant regression analysis. The results reveal that there is a significant

relationship between there is significant relationship between Personal income tax revenue (PITR) and per capita income, Company income Tax Revenue and Gross Domestic product of Nigeria, VAT revenue and PCI of

Nigeria, Petroleum Profit Tax revenue and GDP of Nigeria and tax administration and Gross domestic product of

Nigeria. Hence, the study concludes that tax administration and revenue does affect the economic growth ofNigeria for the period under study. The paper recommends amongst others that more reforms in the tax

administrations and collection is needed so as to eliminate, if possible the areas that can cause revenue leakage as

a result of loopholes in tax collection and remittances from the authorities, and this is capable of limiting the

economic growth of the nation. Keywords: Taxation, Economic Growth, Tax Administration, Tax Revenue

 

TABLE OF CONTENTS

Certification                                                                              i

Dedication                                                                                 ii

Acknowledgement                                                                    iii

Abstract                                                                                     iv

Table of content                                                                        v-vi

 

CHAPTER ONE: Introduction

1.1        Background of  the study                                                    1

1.2        Statement of the research problem                                             3

1.3        Research objectives                                                              4

1.4        Research questions                                                              5

1.5        Research hypothesis                                                            5

1.6        Significance of the study                                                     6

1.7        Scope of the study                                                                7

1.8        Definition of terms                                                               8

 

CHAPTER TWO: Literature review

2.1        Conceptual review of the study                                          10

2.2        Theoretical review of the study                                          22

2.3        Empirical review of the study                                                      27

 

CHAPTER THREE: Research methodology

3.1       Introduction                                                                           38

3.2        Research design                                                          38

3.3        Research population                                                            38

3.4        Sampling techniques and sampling size                                     38

3.5        Method of data collection                                                    39

3.6        Model specification                                                              39

3.7        Measurement of variables                                                  40

3.8        Method of analysis                                                               40

 

CHAPTER FOUR: Data Presentation, Analysis and Interpretation

4.1        Descriptive Analysis                                                            42

4.2        Correlation Matrics                                                              43

4.3        Effect of personal income tax                                    44

 

CHAPTER FIVE: Summary, Conclusion and Recommendation

5.1        Summary of research finding                                                       46

5.2        Conclusion                                                                             46

5.3        Recommendation                                                                  48

 

BIBLIOGRAPHY                                                           50

APPENDIX                                                                     53-54

CHAPTER ONE

INTRODUCTION

  • BACKGROUND OF THE STUDY

 

Tax is defined as money that has to be paid to the government by the people according to their profits on goods and services provided. Chris and Elizabeth (2001) also defined taxes as a forced proportional contribution from persons and property levied by virtue of its severity for the support of government and for all public needs. (Cited in Angahar and Alfred 2012).

The serious decline in price of oil in recent years has led to a decrease in the funds available for distribution to the federal and state Government. The need for state and local governments to generate adequate revenue from internal sources has therefore become a matter of extreme urgency and important. This need underscores the eagerness on the part of state and local governments and eve the federal government to look for new sources of revenue or to become aggressive and innovative in the mode of collecting revenue from existing sources. (Afuberoh and Okoye 2013).

Aguolu (2014), states that though taxation may not be the most important source of revenue to the government in terms of the magnitude of revenue derived from taxation, however, taxation is the most important source of revenue to the government, from the point of view of certainty, and consistency of taxation. Aguolu (2014) further mentioned that taxation is the most important source of revenue to the government. Owing to the inherent power of the government to impose taxes, the government is assured at all times of its tax no matter the circumstances. (Cited in Afuberoh and Okoye 2013).

The desire to uplift one’s society is the first desire of every patriotic citizen. Tax payment is the demonstration of such desire. The payment of tax is a civic duty and an imposed contribution by government on their subjects and companies to enable her finance or run public utilities and perform other social responsibilities. (Adebisi and Gbegi 2013).

The tax administrations in Nigeria are weak, corrupt and nontransparent (Kiabel 2009). This inefficiency reflects on the mix of taxes and the faulty design in their structure and in there operational systems (Kiabel 2009). The tax administration is also affected by policies relating the salary, the attitude, the reward and the punishment system of personnel. The tax administration in Nigeria is driven by detailed revenue targets not by tax laws and accounting records. The tax officials are allowed to earn money and still meet their revenue targets. Many things are done through negotiation rather than basis of information processing (chartered institute of Taxation of Nigeria).

In addition, low tax compliance is a serious issue in Nigeria, limiting the capacity of the government to raise revenue for development purposes. It is commonly acknowledged that many factors contribute to this weakness such as corruption, weak legal system, high marginal tax rate, paucity of adequate information, accounting system and ineffective tax administration (chartered institute of Taxation of Nigeria Website). However, it has never been easy to persuade tax payers to comply with requirement of tax system.

Furthermore, taxpayer tends to have low level of literacy, low tax morale and negative attitude towards government. (UNSW law Research paper no 2009-17). It is therefore felt that personal income taxation in Nigeria requires radical handling to ensure that a large chunk of the taxable population does not escape tax. An effective tax system, aside from maximizing revenue for development is expected to be well structured and managed with a feeling of common purpose, joint responsibility or obligation amongst the taxable person in a country.

From the foregoing, the future prospects of the study can be established. A key component of any tax system is the manner in which it is administered. No tax is better than its administration, so tax administration matters a lot. An essential of objective tax administration is to ensure the maximum possible compliance by tax payers of income.

In summary therefore, according to Chris and Elizabeth (2011) tax has three basis features namely; a compulsory levy imposed by government, or local authority, for public purpose and to encourage social justice. A tax according to Ayua (2016) is not a voluntary payment but a compulsory pecuniary burden placed on taxpayer for the benefit of the society.

Generally, taxation can be describe as a form of levy imposed on all residents living and nonresidents doing business within a tax jurisdiction. It is a civic and patriotic responsibility of citizens to pay taxes imposed which also come to the government as income or revenue yielding device to finance the provision of socio-economic and infrastructural amenities and also to enhance industrial efficiency.

 

 

 

 

  • STATEMENT OF THE PROBLEM

 

Tax collection no doubt pose lots of challenges in the tax system, the Nigeria situation in general and Ogun state in particular, seems unique when viewed against the scale of corrupt practices prevalent in country. Under direct taxation as practiced in Nigeria, the major problem lies in the collection of the taxes especially from the self-employed such as the businessmen, contractors, doctors, accountant, architects and traders in shop among others in Ogun state. As observed by Ayua (2011), civil servants and other salaried workers are the only class of people that actually pay tax in Nigeria. However, even among the salaried workers, he added, many have turned the statutory personal allowances and relief into a fertile ground for reducing taxable income. Almost all tax payers are married with four children. Similarly, despite the provision meant to plug loopholes through which taxable persons can minimize tax liability, the self-employed persons employ all kind of schemes to escape tax liability and make one wonder whether there are still any tax official working in that capacity.

The Nigerian tax system also lacks competent and honest administrators. The problem of tax avoidance and evasion has reached an alarming proportion. The need to improve the administration of our tax system cannot be over emphasized. Hence, this study aims at examining the impact of personal income tax administration on Nigeria economy.

  • OBJECTIVES OF THE STUDY

 

The major focus of this study is to examine the impact of personal income tax administration on Nigeria economy. Accordingly, among other reasons, the objectives of this study include the following:

  1. To examine the nature of tax administration in Nigeria.
  2. To identify the impediments to effective and efficient tax administration.
  • Determine the effectiveness of personal income tax collection.
  1. Identify the possible causes of ineffective tax collection system.

 

  • RESEARCH QUESTIONS

 

  1. Is the collection of personal income tax effective?
  2. What are the possible causes of ineffective tax system?
  • What are the possible ways of ensuring an effective tax system in the state?

 

 

 

  • STATEMENT OF HYPOTHESES

The hypotheses for the study are stated here and they are stated in null forms

H0: Personal income does not contributes significantly to Nigeria revenue.

H1: Personal income contribute significantly to Nigeria revenue.

H0: There are no problems associated with personal income tax administration in Nigeria.

H1: There are problems associated with personal income tax administration in Nigeria.

  • SIGNIFICANCE OF THE STUDY

 

Although several research works have been carried out on the personal income tax administration in Nigeria but most have not researched on the performance and contribution of personal income tax to the Nigeria revenue profit. This study will broaden this area of research and lay more emphasis on problems and laws revolving around facing personal income tax administration in Nigeria. The possible prospects of personal income tax in Nigeria will also be thoroughly examined and investigate the techniques that are involved in the administration of person income tax in Nigeria which has been neglected by past researchers.

  • SCOPE OF THE STUDY

 

The population of this study is large, but due to certain factors such as time, financial, and academic constraint, this research work will concentrate only on the staff of Ogun State Board of Internal Revenue.

  • DEFINITION OF TERMS

 

Tax: A tax can be defined as a compulsory levy imposed by public authority on incomes, consumption, and production of goods and services.

Basis period: This refers to the accounting period of a business where income is assessable to tax in the year of assessment.

Earned Income: This refers to the income derived by an individual from a trade, business, vocation, or employment as well as incomes derived from a previous employment by a way of pension.

Assessment: This refers to the procedure by which tax payable by taxable person or company is computed.

Tax avoidance: This is considered as a way of identifying the loopholes in the tax laws and then takes advantages of such loopholes to reduce the tax payable.

Tax evasion: This is a deliberate act on the part of the tax payer not to pay tax.

Pay as you earn (PAYE): This means that tax is deducted from the income of an employee at source. The tax deducted is then remitted to the relevant tax authority on a monthly basis.

EFFECT OF MICRO-FINANCE BANKS ON ENTREPRENEURSHIP GROWTH IN NIGERIA

Download the complete Accounting project topic and material (chapter 1-5) titled EFFECT OF MICRO-FINANCE BANKS ON ENTREPRENEURSHIP GROWTH IN NIGERIA here on iProjectTopics. See below for the abstract, table of contents, list of figures, list of tables, list of appendices, list of abbreviations and chapter one. Click the DOWNLOAD FULL WORK BUTTON BELOW CHAPTER ONE  to get the complete project work instantly.

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PROJECT TOPIC AND MATERIAL ON EFFECT OF MICRO-FINANCE BANKS ON ENTREPRENEURSHIP GROWTH IN NIGERIA

The Project File Details                                                                                                       

  • Name: EFFECT OF MICRO-FINANCE BANKS ON ENTREPRENEURSHIP GROWTH IN NIGERIA
  • Type: PDF and MS Word (DOC)
  • Size: [666 KB]
  • Length: [65] Pages
  • With Reference and Questionnaire
  • Amount: 3000 naira

ABSTRACT

This study examines the Effect of Microfinance Banks on Entrepreneurship Growth in Nigeria. Data for the study were sourced from secondary sources and the period of that research spans from 2005 to 2017. The study uses ordinary Least Square regression to analyze results of the study. Findings from the study show that there is no significant relationship between microfinance banks and entrepreneurial activities.

TABLE OF CONTENTS

Title Page                                                                                                                                i

Certification                                                                                                                            ii

Declaration                                                                                                                              iii

Dedication                                                                                                                              iv

Acknowledgements                                                                                                                v

Abstract                                                                                                                                  vi

Table of Contents                                                                                                                   vii

 

CHAPTER ONE: INTRODUCTION       

1.1       Background of the Study                                                                                          1

1.2       Statement of the Problem                                                                                           3

1.3       Objectives of the Study                                                                                              4

1.4       Research Questions                                                                                                     4

1.5       Statement of Hypotheses                                                                                            4

1.6       Significance of the Study                                                                                           5

1.7       Scope of the Study                                                                                                     5

1.8       Limitations of the Study                                                                                             6

1.9       Justification of the Study                                                                                           6

1.10     Definition of Terms                                                                                                    6

 

CHAPTER TWO: LITERATURE REVIEW                                                                 

2.1       Introduction                                                                                                                8

2.1.1    Concepts of Microfinance Bank                                                                                 8

2.1.2    Concept of Entrepreneurship                                                                                      9

2.1.3    Types of Microfinance                                                                                                12

2.1.4    Conceptualizing Entrepreneurship Growth                                                                13

2.2       Theoretical Literature Review                                                                                    14

2.2.1    The Economic Perspective on Entrepreneurship                                                         15

2.2.2    Modern Theory of Entrepreneurship                                                                          16

2.2.3    Innovation Theory of Entrepreneurship                                                                      17

2.3       Empirical Review                                                                                                        18

 

CHAPTER THREE: RESEARCH METHODOLOGY

3.1       Introduction                                                                                                                20

3.2       Area of Study and Coverage                                                                                      20

3.3       Model Specification                                                                                                    20

3.4       Evaluation Procedure                                                                                                  21

3.5       Source of Data                                                                                                                        21

3.6       Evaluation Based on Economic Criteria                                                                     21

3.7       Evaluation Based on Statistical Criteria                                                                     21

3.8       Evaluation Normality Test Based on Econometric Criteria                                        22

 

CHAPTER FOUR: RESULTS AND ANALYSIS OF FINDINGS

4.1       Introduction                                                                                                                25

4.2       Analysis of Regression Coefficients                                                                           26

4.3       Economic Criteria                                                                                                       26

4.4       Statistical Criteria                                                                                                       27

4.5       Econometric Criteria                                                                                                   29

CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS    

5.1       Summary                                                                                                                     32

5.2       Recommendations                                                                                                      33

5.3       Conclusion                                                                                                                  34

References                                                                                                                              35

CHAPTER ONE

INTRODUCTION

1.1       BACKGROUND OF THE STUDY

In consonance with the Millennium Development Goals (MDGs) of the United Nations, which include reduction elimination of poverty and disease, the Federal Government of Nigeria poverty eradication programmes. The strategies of previous  governments  to  address poverty  include  establishment  of  Peoples  Bank  of  Nigeria  (PBN), Community  Banks  (CBs),  Family  Economic  Advancement programme  (FEAP),  Better  Life  for  Rural  Women  Programme among others. These strategies   were unsuccessful because they were seen as programmes meant to distribute money to politicians. Since  the  1980‟s  Non-Governmental  Organizations  (NGOs) have  emerged  in  the  country  to  champion  the  cause  of  the  micro entrepreneur with a shift from the supply-led approach to the demand driven  strategy.  The  number  of  NGOs  involved  in  micro  finance activities has increased significantly in the recent times due largely to the  inability  of  the  formal  financial  sector  to  provide  the  service needed by the low income groups, the poor and entrepreneurs (Central Bank of Nigeria)CBN 2008.

The  micro-finance firms  fund their  operations  from  the  grants, interest  on  loans  and  contribution from  members.  They however, have limited outreach due largely to the unsustainable nature of their funds. The Central Bank of Nigeria (CBN) in accordance with section 28(1) of the CBN Act No 24 of 1991 (as amended) provides the framework guideline for micro finance banks in Nigeria.

The guideline recognizes  the  existing  information  institutions  and  brings  them  within  the  supervisory purview  of  the  CBN  would  not  only  enhance  monetary  stability,  but also  expand  the  financial  infrastructure  of  the  country  to  meet  the financial  requirements  of  the  micro,  small and  medium  enterprises (MSMEs)  and  also  entrepreneurship.  Such a policy would create vibrant micro finance sub-sector that would be adequately integrated into the mainstream of the national financial system and provide the stimulus for growth and development.  It would also harmonize operating standards and provide a strategic platform for the evolution of micro finance institutions. On the  other  hand,  entrepreneurship  has  been  seen  as  the engine  of  Nigeria  economy.  Right from 1960  when  Nigeria  got  her independence,  the  federal  Government  of  Nigeria  has  taken  bold steps  to  empower  entrepreneurship  using  monetary,  fiscal  and industrial policies. All the policies failed to yield a positive result owing to lack of transparency, accountability and trustworthiness of their leaders and those entrusted with those responsibilities. According to the  United  Nations  Institution  Development organization  (UNIDO  1969:100)  Nigeria  is  among  the  countries classified  as  developing. The organization further defined a developing economy as an economy where there is acute shortage of natural resources and also where there is dearth of trained manpower to manage the available scarce resources.

However, the report is not entirely true of the Nigerian economic system  firstly,  Nigeria  is  rich  in  natural  resources  such  as  mineral deposit (crude oil, coal and tin ore etc.) and fertile land for agriculture among others.  Secondly,  Nigeria  as  at  the  period  of  the  UNIDO  report  (1969) had about three tertiary institution responsible for man power training and development.

Failure to empower  small  business  and  entrepreneurship  fully or transparently  will  increase  poverty  and  escalate  unemployment which  according  to international labour organization (ILO 2017)  is  already  growing  by  more  than  3 million  people  or  approximately  25%  annually  while  the  economy grows by 6% or 3% when discounts for population.

In  the  light  of  the  foregoing  for  Nigeria  to  be  able  to  produce future  and  efficient  multinational  SMEs  and  entrepreneurship  fully supported and financially and technically empowered by government, growing from grass roots,  transcending  their territory  can eventually become  Nigeria’s  symbol  of  economic  power  and  prosperity. Adequately making use of financial institutions, entrepreneurs in Nigeria will be doing very well and this should be the role of microfinance institution in Nigeria.

 

1.2       STATEMENT OF THE PROBLEM

In  a  general  sense  it  is  essential  to  recognize  the  effect  of micro-finance institutions towards the development of entrepreneurship  in Nigeria.  However, if the micro-finance firms perform up to expectation, entrepreneurship will experience tremendous growth. The  problem  of  this  study  therefore  is  to  critically  look  at  the gradual growth of entrepreneurship in Nigeria and the causes of it.  In this, entrepreneurship in Nigeria is not developing as expected as a result of so many problems facing it.  It  is  resulted  from  lack  of financial  motivation  and  encouragement  among  entrepreneurs  in Nigeria.  These may lead to low productivity and turnover in industry.

These  problems  go  a  long  way  to  stifle  their  growth  and development,  thereby  limiting  their  potential  contributions  to  the development of the national economy.

 

1.3       OBJECTIVES OF THE STUDY

The main objective of this study is to examine the effect of micro finance banks on entrepreneurship growth.

Other specific objectives include:

  1. To examine the effect of microfinance banks on the growth of entrepreneurial activities in Nigeria.
  2. To investigate the activities of microfinance banks on entrepreneurship financing.

 

1.4       RESEARCH QUESTIONS

This research project will be developed from the following research questions;

  1. What is the effect of microfinance banks on entrepreneurship growth?
  2. What is the effect of microfinance banks on the growth of entrepreneurial activities in Nigeria?
  • What are the activities of microfinance banks in entrepreneurship financing?

 

1.5       STATEMENT OF HYPOTHESIS

Drawn from the research questions marshaled above and the objectives that this research aim to achieve, the following hypotheses have been formulated to help in the conduct of veritable and worthwhile research

         There is no significant relationship between microfinance banks and  entrepreneurship growth.

There is significant relationship between microfinance banks and entrepreneurship  growth.

There is no significant relationship between microfinance banks and entrepreneurial  activities.

There is significant relationship between microfinance banks and entrepreneurial activities.

There is no significant relationship between microfinance banks and entrepreneurial financing.

There is significant relationship between microfinance banks and entrepreneurial financing.

 

1.6       SIGNIFICANCE OF THE STUDY

This study dealt primarily with the examination of the effect of micro-finance firms on entrepreneurial growth.

Therefore,  this  study  will  be  useful  to  stakeholders  of  microfinance  firms  and  also  to  entrepreneurs  in  Nigeria.  It will help organizations involved in the advancement of entrepreneurs in formulating development programmes and policies. It will also provide necessary professional advice to organizations involved in the advancement of small business enterprises in Nigeria. It  will  also  be  useful  to  educationists,  scholars  and  students who wish to carry out further research on the subject matter or even produce  textbook  to  add  to  existing  literature  on  the  topic.

 

1.7       SCOPE OF THE STUDY

This study covers the effect of Micro-finance banks with great emphasis laid on Entrepreneurship growth in Nigeria from 2005-2017

 

1.8       LIMITATIONS OF THE STUDY

However, a study of this nature cannot be carried out without some limitations some of  the problems were, insufficient data, there was  also  difficulty  in  convincing  some  of  the  respondents  of  Micro-finance  Bank  to  supply  the  needed information.  There was problem of finance in carrying out this research due to poor economic situation in the country.

 

1.9       JUSTIFICATION OF THE STUDY

This study is a build-up on the previous investigations by various scholars and researchers on the effect of microfinance banks on entrepreneurship growth and is aim at building up on the lapse of previous investigations.

The importance of this study lies in identifying the previous problems that have bedeviled the effectiveness of the microfinance banking system.

More so, the study will add to knowledge on how Nigeria policy makers can grow economy through their support on entrepreneurship growth in Nigeria which have been identified as the momentum for Nigeria economic growth (Onuoha2017).

Thus, the justification of the research. The finding of the research will therefore provide a veritable base for the effective functioning of microfinance to the growth of entrepreneurial activities.

 

1.10     DEFINITION OF TERMS

Growth: An increase in amount, size, or degree or importance of something.

Development: The gradual growth of something so that it become bigger, stronger or more advanced.

Micro-credit:  Small loans made to low-income individuals to sustain self-employment or to start up very small business.

Small-scale: Small scale are those enterprises that have relatively little capital investment that produces in small share of the market, that employ not more than fifty workers.

Industry:  A group of firms that produce similar products or services.

Entrepreneur:  The  Oxford  Advanced  Learners  dictionary defined  entrepreneur  as  a  person  who  makes  money  by  starting  or running businesses which involves taking financial risks.

Enterprise: This is a term in the commercial world used to describe a project or venture undertaken for gain.

EFFECT OF FINANCIAL STATEMENT FRAUD ON ORGANISATIONAL PERFORMANCE: A CASE STUDY OF SELECTED DEPOSIT MONEY BANKS IN NIGERIA

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PROJECT TOPIC AND MATERIAL ON EFFECT OF FINANCIAL STATEMENT FRAUD ON ORGANISATIONAL PERFORMANCE: A CASE STUDY OF SELECTED DEPOSIT MONEY BANKS IN NIGERIA

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  • Name: EFFECT OF FINANCIAL STATEMENT FRAUD ON ORGANISATIONAL PERFORMANCE: A CASE STUDY OF SELECTED DEPOSIT MONEY BANKS IN NIGERIA
  • Type: PDF and MS Word (DOC)
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ABSTRACT

This study examined the effect of financial statement fraud on organisational performance. Specifically, in actual fact, dependence on the information provided in financial statements constitutes one of the greatest global challenges for businesses. Return on Assets (ROA) was obtained from the financial statements of Nigeria Banks from year 2000 to 2015 in order to measure their financial performance,multiple regression analysis model was used to determine the effect of independent variables on the dependent variable. All the above findings on the classification of causes of fraud are caused by management, technological, legal, personal and social.The study found out that the Y-intercept was 0.426 for all years. It was recommended that Deposit money banks management should come up with a policy which clearly indicates steps to be taken on any staff found committing fraud.This will help reduce internal fraud which is more elaborate in the bank than external.

TABLE OF CONTENTS

Title Page                                                                                                                                i

Declaration                                                                                                                              ii

Certification                                                                                                                            iii

Dedication                                                                                                                              iv

Acknowledgements                                                                                                                v

Abstract                                                                                                                                  vi

Table of Contents                                                                                                                   vii

List of Tables                                                                                                                          ix

List of Figures                                                                                                                         x

CHAPTER ONE:  INTRODUCTION

  • Background of the Study                                                                                          1
  • Statement of the Problem                         2
  • Objectives of the Study 4
  • Research Question             4
  • Statement of the Hypothesis             4
  • Significance of the Study             5
  • Scope of the Study                         5
  • Justification of the Study 5
  • Definition of Terms             6

CHAPTER TWO:  LITERATURE REVIEW

2.1       Introduction                                                                                                                7

2.2       Conceptual Framework                                                                                               7

2.3       Theoretical Framework                                                                                               14

2.4       Literature Review                                                                                                       21

CHAPTER THREE: RESEARCH METHODOLOGY

3.1       Introduction                                                                                                                46

3.2       Research Design                                                                                                         46

3.3       Population of the Study                                                                                              46

3.4       Sample of the study                                                                                                    46

3.5       Data Collection and Research Instruments                                                                47

3.6       Data Analysis                                                                                                              47

3.7       Limitations of the Study                                                                                             48

CHAPTER FOUR

4.1       Introduction                                                                                                                49

4.2       Data Analysis and Interpretation                                                                                50

4.4       Discussion of Findings                                                                                               53

CHAPTER FIVE:  SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1       Summary of Findings                                                                                                 55

5.2       Conclusions                                                                                                                 55

5.3       Recommendations                                                                                                      56

5.4       Suggestions for Further Studies                                                                                 57

Reference                                                                                                                    58

Appendix                                                                                                                    65

 

LIST OF TABLES

Table 4.1: Fraud and Forgery cases and amount of money lost by Nigerian Banks

(2000-2015).                                                                                                   49

Table 4.2: Model Summary.                                                                                                    51

Table 4.3: Summary of One-Way ANOVA results of the regression analysis

between financial performance of Nigerian Banks and its determinants.       51

Table 4.4: Regression coefficients of the relationship between financial performance

of Nigerian banks and the four predictive variables.                                       52

  

LIST OF FIGURES

Fig.1:   Application of Routine Activity Theory in crime                                                       16

Fig 2:   Fraud Triangle Theory                                                                                                18

Fig 3:   Fraud Diamond Theory                                                                                              20

CHAPTER ONE

INTRODUCTION

1.1       Background of the Study

As a countermeasure to high profile accounting scandals and business collapses, among the most notable being Enron in 2001, the Sarbanes Oxley Act was passed by the United States of America congress in 2002. The purpose of the Act is to add strength to a public company’s internal control mechanism and financial reporting, which in turn will lead to greater transparency in financial statements (Agami, 2012). In Malaysia, corporate financial scandals such as those committed by Transmile Group Berhad, Tat Sang Holding and Megan Media Holdings Berhad, (2007) have diminished the firms’ value and shareholders’ wealth. This has possibly had a negative impact on foreign direct investments. Concomitant with the financial and nonfinancial damage, the faith and reliance of the public in the accounting and auditing profession will be destroyed by financial statement fraud (KPMG, 2012).

PricewaterhouseCoopers (2011) discloses that one of the most challenging issues for businesses globally is fraud. Notwithstanding the imposed regulation and legislation or the control mechanisms implemented by the companies, the intensity of economic crime and the concomitant financial and non-financial damage remains unchanged. In fact, as reported by PricewaterhouseCoopers (2007), out of every two companies worldwide, one had been a target of economic crime within the preceding two years.

In response to the aforementioned crisis, the improvement of financial statement fraud controls and the integrated strategies of prevention, detection and action to response to financial statement fraud are important for reducing financial statement fraud. These strategies need to be practised at all levels in corporations and supported by a board of directors, audit committee oversight, executives, chief executive officer, chief financial officer, chief operating officer and accountants through internal audit, compliance and monitoring functions (KPMG 2007).To date, most discussions have stressed prevention and detection strategies that can be used to mitigate financial statement fraud. Although previous academic researchers did not examine the actual practices of financial statement fraud controls in commercial companies, it is suggested that an improvement in such control is required. Johl et al. (2013) studied the actual practice of internal control that is related to financial statement fraud. By using Malaysian evidence, Johl et al. (2013) found little attention had been given to examining internal audit’s contribution towards financial reporting quality. In relation to this, the present research focuses on the practices of financial statement fraud control in the context of Malaysian commercial companies and provides qualitative evidence of qualitative aspects of financial statement fraud control.

1.2       Statement of the Problem

In capital markets, financial statement provided by the companies should be fair, efficient, transparent and free from any misleading information. Financial statements or financial reports are supposed to be tools upon which users can rely when making investment decisions. Therefore the dissemination of financial statement information from companies should be timely, accurate, complete and free from any material misstatements. This is very important for investors to be able to determine their investment decisions and trading strategies Ravisankar, et al. (2016). However in reality, the reliability of financial statement information seems to be questioned by investors and public due to previous financial statement fraud cases. In actual fact, dependence on the information provided in financial statements constitutes one of the greatest global challenges for businesses (PWC, 2012). Thus, the research found financial statement fraud has become a serious problem and tends to be extensive and momentous which requires improvement in financial statement fraud control due to the huge impact of financial statement fraud losses.

According to ACFE (2012), financial statement fraud cases triggered the greatest median loss at $1 million despite the small number of cases involved in the research investigation.

The issue is serious as the actual level of economic crime and the associated financial and non-financial damage has been reported to be on the rise as the number of financial statement fraud cases has increased since 2003 (PWC, 2012).

ACFE (2012) revealed that globally an average organisation is estimated to lose 5% of its revenue each year due to significant frauds which also include financial statement fraud. If this rate of loss is applied to 2011 Gross World Product, this causes an anticipated fraud loss of $3.5 trillion (ACFE, 2012). The impact is that financial statement fraud cases have resulted in financial losses, a loss of shareholder value and bankruptcies (Center for Audit Quality, 2010). As such, it leads to the question what is lacking in the internal control system adopted by the companies?

Strategies in detecting and preventing fraud cases have been presented in the literature (Vaughan, 2007; Wells, 2007; KPMG, 2009; PWC, 2012; Rejda, 2013). However, the investigation of the actual practices of financial statement fraud control to provide improvement appears from the literature to be very limited. Most of the related literature is from professional bodies such as Institute of Internal Auditors (IIA), American Institute of Certified Public Accountants (AICPA), Association of Certified Fraud Examiners (ACFE), KPMG and PricewaterhouseCoopers (PWC). Hence, in this research, improvements for financial statement fraud control and the awareness of financial statement fraud control will be suggested.

 

1.3       Objectives of the Study

The main objective of this study is to examine the effect of financial statement fraud on organisational performance.

  • To determine the effect of financial statement fraud on organisational performance;
  • To examine the relationship between bank fraud and organisational effectiveness;
  • To investigate the relationship between bank fraud and organisational survival.

1.4      Research Questions

Specifically, the research focuses on the following questions which are related to financial statement fraud on organisational performance:

  • What are the effects of financial statement fraud on organisational performance in Nigeria Banks?
  • What is the relationship between bank fraud and organisational effectiveness?
  • What is the relationship between bank fraud and organisational survival?

1.5       Statement of Hypothesis

A research hypothesis is a generalized and verifiable statement about a state of phenomena which may be true or false. Therefore, these research null hypotheses will be empirically tested in this research work.

Hypothesis One

Ho:      There is no significant relationship between bank fraud andorganisational performance.

Hypothesis Two

Ho:      There is no relationship between bank fraud and organisationalperformance.

 

 

1.6       Significance of the Study

The recommendations in this research work will provide effective roles for company management to improve financial statement fraud control and thus provide a monitoring tool for deposit money bank.

Considering that the management of a company as well as its auditors has to play vital roles in protecting the shareholders’ interests, financial statement fraud control and strategies would create awareness within corporations of financial statement fraud. These strategies will also help businesses (1) to identify fraud in a timely manner and minimize the resulting damage, (2) to enhance the reliability of financial statements and increase shareholder value, and (3) to conduct their business ethically. The contribution of this research would enhance the upgrading of the Standard of Procedures and Internal Control System in organizations that reflect strong management practices towards reducing any financial statement fraud.

1.7       Scope of the Study

Conceptually the study covers the effect of financial statement fraud on organisational performance which is concerned in Nigeria. In which Nigeria Banks was used as a case study. However, the research was limited to Nigeria Banks in Ibadan due to the schedule of researcher is from year 2000 to 2017.

1.8       Justification for the Research

Research into fraud and financial statement fraud in particular, is difficult as fraud is usually a hidden activity. Higson (2010) found management reluctant to report suspected fraud because of its imprecise definition, vagueness over directors’ responsibilities and confusion about the reason for reporting fraud. The Committee of Sponsoring Organisations of the Treadway Commission report found that most audit reports issued in the year prior to the fraud coming to light were unqualified (COSO 2009); therefore, qualified audit reports do not adequately quantify the impact of financial statement fraud. Fraud Advisory Panel (2009) figures suggest that UK fraud involving false accounting peaked in the early 1990s, falling until 1996 when reported cases of false accounting rose again, though not to the same level. Similar data available for Australia suggest that financial statement fraud peaks in times of recession (Fraud Advisory Panel 2009).

1.9       Definition of Terms

Fraud: Fraud refers as an international misrepresentation of financial information by one or more individual among management, employees or third parties. Fraud also defined as misappropriation, theft or embezzlement of corporate assets in the particular economic environment.

Bank: It is a place where money and other things are kept.

Financial Statement: A yearly book that contains summarized information of the form’s affairs organized systematically.

Audit: A person assigned to carry-out an independent examination of evidence supporting the financial statement of an organization.

Corporate Governance: A set of process, customs, policies, laws etc affecting the way a corporate is directed, administered or controlled.

Financial Statement Fraud: The deliberate misrepresentation of financial condition of an enterprise accomplished through the intentional misstatement of amount in the financial statement to deceive financial statement users.

EFFECT OF CORPORATE SOCIAL RESPONSIBILITY ON PROFITABILITY OF LISTED DEPOSIT MONEY BANKS IN NIGERIA

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PROJECT TOPIC AND MATERIAL ON EFFECT OF CORPORATE SOCIAL RESPONSIBILITY ON PROFITABILITY OF LISTED DEPOSIT MONEY BANKS IN NIGERIA

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  • Name: EFFECT OF CORPORATE SOCIAL RESPONSIBILITY ON PROFITABILITY OF LISTED DEPOSIT MONEY BANKS IN NIGERIA
  • Type: PDF and MS Word (DOC)
  • Size: [666 KB]
  • Length: [65] Pages
  • With Reference and Questionnaire
  • Amount: 3000 naira

ABSTRACT

Although an enormous body of literature has emerged concerning the nexus between corporate
social responsibility and profitability, actual empirical research designed to test the multitude of
definitions, propositions, concepts and theories that have been advanced has produced mix
results. In addition, much of the research done in the area has been incomplete and simplistic in
methodology and epistemology. Many of the methodological quagmires in studying the nexus
between corporate social responsibility and profitability stem from the fluid nature of the subject.
With the increased concentration on the corporate social responsibility, firms are not only
required to focus narrowly on generating profit returns for shareholders, but also asked to take
responsibility for firms‘ other stakeholders. Hence, both having a decent social responsibility
performance and adding profitability is significant for companies to achieve sustainable success
in the long-term. This study therefore examines the effect of corporate social responsibility on
the profitability of listed deposit money banks in Nigeria. It uses panel data from 14 listed
deposit money banks over a period of 10 years (2006-2015) and tests for statistical significance
using analysis of variance and multiple regression analysis. The results show that corporate
social responsibility has significant and positive effect on net profit margin, return on total assets
and return on equity, which were used to proxy for profitability. The study concludes that
corporate social responsibility has positive and significant influence on profitability. The study
recommends that banks should continue to invest in corporate social activities as much as
practicable because they result into long run increase in profitability. Also, bank managers
should leverage on social responsibility expenditures by ensuring that they are linked to
profitable operations.

TABLE OF CONTENTS

Title page i
Declaration ii
Certification iii
Approval page iv
Dedication v
Acknowledgements vi
Table of Contents vii
List of Tables xi
List of Figures xii
List of Appendices xiii
Abstract xiv

CHAPTER ONE: INTRODUCTION
1.1 Background to the Study 1
1.2 Statement of the Problem 8
1.3 Statement of Research Questions 11
1.4 Objective of the Study 12
1.5 Research Hypotheses 12
1.6 Scope of the Study 13
1.7 Significance of the Study 13

CHAPTER TWO: LITERATURE REVIEW
2.1 Introduction 15
2.2 Conceptual Framework 15
2.2.1 Corporate Social Responsibility 15
2.2.2 Net Profit Margin 22
2.2.3 Return on Total Assets 23
2.2.4 Return on Equity 24
2.2.5 Firm Size 25
2.2.6 Leverage 25
2.2.7 Interest Rate 26
2.3 Theoretical Review 27
2.3.1 The Classical View 27
2.3.2 The Socioeconomic View 27
2.3.3 Theory of Maximized Profits for Shareholders 28
2.3.4 Stakeholders Theory 29
2.3.5 Good Corporate Citizens Theory 29
2.3.6 Minimum Requirement of Morality Theory 29
2.3.7 Theories of Corporate Social Disclosure 30
2.3.8 Social Accounting and General Systems Theory 30
2.3.9 Legitimacy Theory 31
2.3.10 Political Economy Theories 32
2.3.11 Rationality Theory of Corporate Social Responsibility 33
2.4 Empirical Literature Review 34
2.4.1 Corporate Social Responsibility and Net Profit Margin 34
2.4.2 Corporate Social Responsibility and ROA and ROE 36

CHAPTER THREE: METHODOLOGY
3.1 Introduction 39
3.2 Population and Sample Size of the Study 39
3.3 Model Specification 40
3.4 Variables Definition and Measurement 41
3.5 Methods of Data Collection 42
3.6 Data Analysis Techniques 42
3.7 Diagnostic/Post Estimation Tests 43

CHAPTER FOUR: DATA ANALYSIS AND INTERPRETATION
4.1 Introduction 44
4.2 Descriptive Statistics 44
4.3 Diagnostic Tests Results 45
4.3.1 Multicollinearity 45
4.3.2 Serial (Auto) Correlation 47
4.3.3 Heteroskedasticity 47
4.3.4 Stationarity 49
4.3.5 Hausman Specification Test 49
4.3.6 Normality 50
4.3.7 Granger Causality 50
4.4 Regression Results 51
4.4.1 Effect of CSR on NPM 51
4.4.2 Effect of CSR on ROTA 52
4.4.3 Effect of CSR on ROE 53

4.5 Testing of Hypotheses 54
4.6 Summary of Findings 54

CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.1 Summary 56
5.2 Conclusion 57
5.3 Recommendations 57
5.4 Suggestions for Further Research 57
5.5 Contributions to Knowledge 58

REFERENCES 59
APPENDIX A 67
APPENDIX B1 71
APPENDIX B2 72
APPENDIX B3 76
APPENDIX B4 77

CHAPTER ONE

INTRODUCTION
1.1 Background to the Study
The primary objective of a firm is to maximize shareholders‘ value by producing goods and
services that meet the needs of the society. The economic operations of firms have drawn
significant attention of their stakeholders, for example, employees, suppliers, unions, customers,
investors, creditors, regulators and directors. These stakeholders now demand more transparency
and accountability from firms by mounting considerable pressure on them to carry the society
along in their economic decisions. Corporate Social Responsibility (CSR) refers to the practice
whereby corporate entities voluntarily integrate both social and environmental issues into their
business decision making and operations. However, CSR in recent times implies that companies
voluntarily integrate social and environmental concerns in their operations and interaction with
stakeholders. However, some arguments suggest that CSR is just a reminder that the quest for
profit should be considered alongside social and environmental considerations (Manuel & Lúcia,
2007). Branco and Rodrigues (2008) hold the view that CSR is analyzed as a source of
competitive advantage and not an end in itself.
In effect, the concept of CSR has evolved from being regarded as detrimental to a
company‘s profitability, to being considered as somehow benefiting the company as a whole, at
least in the long run. Corporate managers have found a need that the environment in which they
operate should be catered for because their intermediate and macro environments have a direct
impact on the attainment of their corporate goals, objectives and mission statements. Therefore,
the purpose of profit-making organizations is to maximize profit through optimal utilization of
available resources. It is important to note that profitability is an important factor to companies,
because it is one of the major purposes for which companies are established. In the emerging
global economy, where the Internet, the news media and the information revolution shed light on
business practices around the world, companies are now frequently assessed on the basis of their
environmental stewardship in addition to their ability to make profit. Partners in business and
consumers want to know what is inside a company. This transparency of business practices
means that for banks in Nigeria, CSR is no longer a luxury but a necessity.
Mazurkiewicz (2004) recognizes that the concept of CSR has been developing since the
early 1970s. Therefore, there is no single, commonly accepted definition of CSR. There are
different perceptions of the concept among stakeholders. CSR in banking sector is aimed
addressing the peculiarity of the socio-economic development challenges of the country (e.g.
poverty alleviation, health care provision, infrastructure development, education, etc.) and would
be informed by socio-cultural influences (e.g. communalism and charity). They might not
necessarily reflect the popular western standard or expectations of CSR (e.g. consumer
protection, fair practice, green marketing, climate change concerns, and social responsible
investments).
Companies are assumed to be socially responsible because they anticipate a benefit from
their actions. Examples of such benefits might include reputation enhancement, the ability to
charge a premium price for its outputs, or the use of CSR to recruit and retain high quality
workers. These benefits are presumed to offset the costs associated with CSR, since resources
must be allocated to allow the firm to achieve CSR status, while a key indicator to determine the
true worth and value of modern organizations is their ability to give back to the society part of
their income through some mutually beneficial initiatives (Nkanbra & Okorite, 2007).
There is no doubt that CSR is becoming indispensable, though involuntary, in the
contemporary business world as societal needs are making it imperative for the corporate
organizations to be sensitive to happenings in their environment, which ensure more
understanding and good relationship between the organization and the society they exist, since
CSR contributes to the wellbeing of the citizenry (Obaloha, 2008). CSR is one of the most
dynamic, complex and challenging areas that business leaders face (Gwynne, 2009). It is
arguably one of the most critical issues in business-society relationship thus bringing public
interest companies under pressure to take active role in making the society a better place to live
in.
The concept of CSR is also regarded as having emerged from the environmental
perspective which is about how to manage physical resources so that they are conserved for the
future. Therefore, CSR is about the economic performance of the organization itself. CSR calls
for economic growth that can relieve the great poverty of less developed countries, based on
policies that sustain and expand the environmental resource base. Nigerian banks responded to
CSR over the years when they recognized their obligations to the banks‘ stakeholders and to the
society since CSR enhance their reputations. Elkington (2008) asserts that companies should not
only focus on enhancing its value through maximizing profit and outcome but concentrate on
CSR issues equally. In line with Elkington (2008) assertion, Nigerian banks have spent billions
of naira as their contribution towards addressing the peculiarity the social economic development
challenges of the society. The principal beneficiaries of banks‘ CSR policies are in the areas of
healthcare, education, security, housing, agriculture, arts and tourism, sports, charity
organizations, religion, social clubs, government agencies, youth development and public
infrastructure development.
Profitability is the final measure of economic success achieved by a firm in relation to the
capital invested in it. This economic success is determined by the magnitude of the net profit
(Pimentel, Braga & Casa Nova, 2015). To achieve an appropriate return over the amount of risk
accepted by the shareholders, is the main objective of firms operating in capitalist economies.
After all, profit is the propulsive element of any investments in different projects. The
assessment of profitability is usually done through the ROA (Return on Assets = Net
Income/Total Assets) and ROE (Return on Equity = Net Income/Equity), which is the ultimate
measure of economic success. Financial ratios are a class of financial metrics that are used to
assess a business’s ability to generate earnings as compared to its expenses and other relevant
costs incurred during a specific period of time. For most of these ratios, having a higher value
relative to a competitor’s ratio or the same ratio from a previous period is indicative that the
company is doing well.
The profitability of firms is of vital importance for investors, stakeholders and economy
at large. For investors, the return on their investments is highly valuable and a well performing
business can bring high and long-term returns for their investors. Furthermore, profitability of a
firm will boost the income of its employees, bring better quality products for its customers, and
have better environment friendly production units. Also, more profits will mean more future
investments, which will generate employment opportunities and enhance the income of people.
Profitability is the ability of a business to earn a profit. A profit is what is left of the revenue a
business generates after it pays all expenses directly related to the generation of the revenue,
such as producing a product, and other expenses related to the conduct of the business activities.
Profitability is the primary goal of all businesses. Without profitability the business will not
survive in the long run. So measuring current and past profitability and projecting future
profitability is very important. Profitability is measured with income and expenses. Income is
money generated from the activities of the business. Expenses are the cost of resources used up
or consumed by the activities of the business.
Whether you are recording profitability for the past period or projecting profitability for
the coming period, measuring profitability is the most important measure of the success of the
business. A business that is not profitable cannot survive. Conversely, a business that is highly
profitable has the ability to reward its owners with a large return on their investment. Increasing
profitability is one of the most important tasks of the business managers. Managers constantly
look for ways to change the business to improve profitability. A variety of profitability
ratios (decision tool) can be used to assess the financial health of a business. These ratios, created
from the income statement, can be compared with industry benchmarks. Also, income statement
trends (decision tool) can be tracked over a period of years to identify emerging problems.
Profitability is seen as a measure of economic success achieved by a company in relation
to the capital invested in it (Pimentel et al., 2005). To achieve an appropriate return over the
amount of risk accepted by the shareholders, is the main objective of companies operating in
capitalist economies. After all, profit is the propulsive element of any investments in different
projects. The assessment of profitability is usually done through the ROA (Return on Assets =
Net Income / Total Assets) and ROE (Return on Equity = Net Income / Equity), which is the
ultimate measure of economic success.
In order to measure the profitability of a company, the most usual indicator is the return
over equity (ROE), which is obtained by divided the net profit over the total shareholder‘s
equity. However some of the companies in the studied sample had very small values for equity
(sometimes even negative values), so in order to go around this problem the return over assets
(ROA) could be used as a measure of profitability. This indicator is obtained by dividing the net
profit of the period by the total assets of the company. Unlike the ROE the ROA is not a measure
of firm‘s efficiency to generate profit from the invested capital, thus it cannot be used to compare
the company‘s performance against other kinds of investments, such as bonds. Also ROA is not
the best indicator in order to compare the performance of companies in different industries, since
the scale factors and capital requirements may differ, however this ratio is good to compare the
profitability between companies inside the same sector.
The ROA can be used on my research because all the companies of the sample operate in
the same industry. Thus by analyzing the different ROA of the firms I will be able to verify if the
profitability is in some way related to the liquidity levels. The ROE would not provide a good
comparison because the small and the negative equity levels of some companies would generate
distorted indicators of profitability. The ROA is calculated by dividing the net income of each
period over the total assets of the companies. Since both numbers could be easily found on the
financial statements on the annual reports it was hard to make a table with this ratio.
Deposit money banks (DMBs) are resident depository firms which have liabilities in the
form of deposits payable on demand, transferable by cheque or otherwise usable for making
payments (OECD, 2015). DMBs are financial intermediaries, providing funds for deficit sectors
and collecting funds from surplus sectors. A key function of DMBs is to mobilize savings for
investment. The importance of DMBs in influencing economic growth is widely acknowledged.
Blum, Federmair, Fink and Haiss (2002) identify the role of DMBs in facilitating technological
innovation through their intermediary roles. DMBs also ensure efficient allocation of savings
through identification and funding of entrepreneurs with the best chances of successfully
implementing innovative products and services.
Deposit money banks in Nigeria have evolved over the years. Commencing in 1892, the
pioneer banking company in Nigeria namely the Africa Banking Corporation was absorbed by
the British Bank of West Africa (BBWA) in 1894 enjoyed virtual monopoly of banking business.
This period up to 1952 was characterized by the absence of banking legislation in Nigeria and
also said that anybody could set up a banking company provided he/she is registered under the
companies‘ ordinance. The dominant banking institutions were foreign commercial banks
operating mainly to serve the trade financing requirement of their country‘s industrial sector.
Being foreign based, it was believed that indigenes were discriminated against in respect of
banking credit facilities. The belief, coupled with ―free-for-all‖ operation environment and ease
with which bank were incorporated-―cases of easy come– easy go‖ was experienced in Nigerian
Banking Sector. In this era banks failed in social responsibility. This problem faced led to the
agreement between government officials and representative of banks that there was need for
legislations and establishment of control measures for banking operation. The period 1958-1969
witness an era of banking regulations consolidation. It gave birth to the establishment of and
commencement of the Central Bank of Nigeria. Today the Nigerian Banking Industry is made up
of twenty four commercial banks with First Bank of Nigeria Plc recognized by the CBN as one
of the leading banks in the country.
DMBs ensure that there is adequate flow of money in circulation to service the needs of
the economy and facilitate the transfer of money between economic units (Ogege & Shiro,
2013). The system also helps to mobilize the collection and storage of savings (Nzotta, 2014).
The non-provision of finance can retard economic growth and development. Thus, DMBs play a
very significant role in economic growth, development and social mobilization. In Nigeria, the
bank failures of the 1990s and their resultant consequences on other sectors of the economy
brought hardship and business failures which in turn brought to the fore the strategic relevance of
DMBs. It should be noted also that DMBs play very important roles in the transmission of
monetary policies. This is made possible by the fact that the assets and liabilities of DMBs form
a good part of the money supply though the money multiplier process. Nigeria has 21 DMBs of
which 15 are listed on the floor of the Nigerian Stock Exchange. They are Access Bank,
Diamond Bank, Ecobank, First City Monument Bank, Fidelity Bank, First Bank of Nigeria,
Guaranty Trust Bank, Skye Bank, Stanbic IBTC Bank, Sterling Bank, Union Bank of Nigeria,
United Bank for Africa, Unity bank, Wema Bank and Zenith Bank.
1.2 Statement of the Research Problem
In Nigeria, deposit money banks are at the heart of several socially responsible activities, such as
donations to tertiary institutions, health institutions, promoting friendly and clean environment
and developing human capital. Whether these activities contribute to bank profitability, there are
limited interests by scholars and policy makers to examine this question. There is also additional
demand on the part of society for deposit money banks to continue to do more in the areas of
social causes.
It is desirable to state that the nexus between corporate social responsibility (CSR) and
profitability has come a long way (Dodd, 1932; Jarrell & Peltzman, 1985; Hoffer et al., 1988;
Preston & O‘Bannon, 1997; Waddock & Graves, 1997; Griffin & Mahon, 1997; McWilliams &
Siegel, 2000 and Simpson & Kohers, 2002). The empirical studies on CSR and profitability link
have never been in agreement, as some studies find negative correlation, some find positive
correlation, while others find no correlation at all.
The viewpoint for positive correlation between CSP and CP suggests that as a bank‘s
explicit costs are opposite of the hidden costs of stakeholders, therefore, this viewpoint is
proposed from the perspectives of avoiding cost to major stakeholders and considering their
satisfaction (Cornell & Shapiro, 1987). In addition, this theory further infers that commitment to
CSR would result in increased costs to competitiveness and decrease the hidden costs of
stakeholders. This argument is meaningful and reasonable, as good relationships with employees,
suppliers, and customers are necessary for the survival of a bank. Bowman and Haire (2005)
point out that some shareholders regard CSR as a symbolic management skill, namely, CSR is a
symbol of reputation, and the bank reputation will be improved by actions to support the
community, resulting in positive influence on sales. Therefore, when a bank increases its costs
by improving CSR in order to increase competitive advantages, such CSR expenditure can
enhance bank reputation, thus, in the long run, profitability can be improved, though short run
profits are sacrificed.
The viewpoint for negative correlation between CSR and profitability suggests that the
fulfillment of CSR will bring competitive disadvantages to the bank (Aupperle et al., 2005)
methods or need to bear other costs. When carrying out CSR activities, increased costs will result
in little gain if measured in economic interests. When neglecting some stakeholders, such as
employees or the environment, result in a lower CSR for the enterprise, the profitability may be
improved in the short run. Hence, Waddock and Graves (2007) indicate that this theory was
based on the assumption of negative correlation between CSR and profitability. Some other
studies suggest that CSR is not related to profitability at all. Ullmann (2015) points out that there
is no reason to anticipate the existence of any relationship between CSR and profitability, as
there are many variables in between the two. On the other hand, the issue of CSR measurement
may also cover the link between CSR and profitability (Waddock & Graves, 2007). McWilliams
and Siegel (2000) also suggest that the relationship between CSR and profitability would
disappear with introduction of more accurate variables, such as the research and development
strength, into the economic models.
Also, scholarly works on the association between corporate social responsibility and
profitability have produced mixed results. Some studies conclude that a positive nexus exists
(Bolanle, Olanrewaju & Muyideen, 2012; Graves & Waddock, 1994; McGuire, Sundgren &
Schneeweis, 1988; Moskowitz, 1972; Muhammad, Saleh & Zulkifli, 2011; Roberts, 2002;
Roman, Hayibor & Agle, 1999; Simpson & Kohers, 2002; Uadiale & Fagbemi, 2012). Some
other studies conclude a negative link (Mwangi, 2013; Palmer, 2012). Yet, others query the
existence of such a relationship completely (McWilliams & Siegel, 2001; Margoslis, Elfenbein
& Walsh, 2007; Tsoutsoura, 2004). The empirical studies conducted in developed countries on
the relationship between CSR and profitability is essentially of two distinct categories (Margolis
& Walsh, 2007). The first category considers the short-run financial impact if the company is
involved in either socially or irresponsible actions. The results are mixed. For instance, Wright
and Ferris (1997) find negative relationships, while other researchers find positive relationships
(Hall & Rieck, 1998; Posnikoff, 1997; Wright & Ferris, 1997 and Teoh et al., 1999).
The second category, examines the relationship of CSR and profitability in the long-run,
using accounting and market based measurements. The findings are also mixed. Various studies
report a negative relationship between CSR and profitability (Moore, 2001; Vance, 1975), while
other studies reveal a neutral or no relationship (Mahoney & Roberts, 2007; McWilliams and
Seigel, 2000; Patten, 1991; Alexander & Buchholz, 1978). Most of the prior studies found a
positive relationship between CSR and CP. Again, stakeholder theory suggests that Corporate
Social Performance (CSP) is positively associated with CP (Freeman, 1984 and Donaldson &
Preston 1995). Moskowitz (1972) finds a positive relationship between socially responsible
business practices and corporate equity returns.
Muhammad, Saleh and Zulkifli (2011) conclude that there is a positive and significant
link between CSR and Profitability. Two of the CSR dimensions, namely employee relations and
community involvement were found to be positively related to financial performance. The results
also reveal that there is limited evidence of the relationship between CSR and CP in the long
term. Bolanle, Olanrewaju and Muyideen (2012) examine the relationship between corporate
social responsibility and profitability in the Nigerian banking industry using First Bank of
Nigeria (FBN) Plc as the case study. They conclude that there is positive relationship between
banks CSR activities and profitability. This study is different from current study because it is a
case study while current study is a longitudinal study. Uadiale and Fagbemi (2012) examine the
impact of CSR activities on financial performance measured with Return on Equity (ROE) and
Return on Assets (ROA). The results show that CSR has a positive and significant relationship
with the financial performance measures. This study uses non-financial services firms and is
therefore different from current study which uses deposit money banks.
Mahbuba and Farzana (2013) examine the relationship between CSR and profitability in
Bangladesh and conclude that 90.7% of the variation in profit after tax is explained by the
benefit accrued from corporate social responsibility. Mahbuba and Farzana (2013) study is also
different from current study for three reasons. First, the study was done in Bangladesh while
current study is a Nigerian study. Second, their study was done for 10 years (2002-2011), while
the current study covers 15 years (2001-2015). Third, Mahbuba and Farzana (2013) study used
profit after tax as proxy for profitability, this study uses net profit margin, return on assets and
return on equity as proxies for profitability.
Arising from the lack of consensus on the findings of the previous empirical studies on
the impact of CSR on the profitability of corporate enterprises and the fact that none of these
studies comprehensively modeled all the listed deposit money banks in Nigeria; there is a gap in
the academic literature that needed to be filled. It is within this context that this study examines
the impact of CSR on the profitability of listed deposit money banks in Nigeria. Consistent with
literature, this study expects that in the long run CSR will have positive impact on the
profitability of the firm.

1.3 Statement of Research Questions
In the light of the foregoing, the research questions of this study are articulated as follows:
(i) What effect does corporate social responsibility has on the net profit margin of listed
deposit money banks in Nigeria?
(iv) How does corporate social responsibility affects the return on assets of listed deposit
money banks in Nigeria?
(v) Does corporate social responsibility affects the return on equity of listed deposit money
banks in Nigeria?

1.4 Objective of the Study
The main objective of the study is to examine the effect of corporate social responsibility on the
profitability of listed deposit money banks in Nigeria. The specific objectives of the study are to:
(i) Examine the effect of corporate social responsibility on the net profit margin of listed
deposit money banks in Nigeria.
(ii) Examine the effect of corporate social responsibility on the return on total assets of
listed deposit money banks in Nigeria.
(iii) Assess the effect of corporate social responsibility on the return on equity of listed
deposit money banks in Nigeria.

1.5 Research Hypotheses
In order to achieve the specific objectives of this research, the following research hypotheses
have been formulated to be tested in the study:
H1: Corporate social responsibility has no significant effect on the net profit margin of listed
deposit money banks in Nigeria.
H2: Corporate social responsibility has no significant effect on the return on total assets of listed
deposit money banks in Nigeria.
H3: Corporate social responsibility has no significant effect on the return on equity of listed
deposit money banks in Nigeria.

1.6 Scope of the Study
The study focuses on the nexus between corporate social responsibility and profitability of listed
deposit money banks in Nigeria. It covers a period of ten years (2006-2015) for the 15 listed
deposit money banks in Nigeria. The period of investigation is significant in many respects: first,
the period witnesses the global financial crisis of 2007/2008 and therefore it will be interesting to
investigate whether the crisis affected corporate social responsibility activities of listed deposit
money banks in Nigeria; second, since the 2015 financial data of the banks are published, 2006
2015 represent the most recent data in respect of the financial performance of listed deposit
money banks in Nigeria.

1.7 Significance of the Study
The study is expected to make contributions to knowledge in a number of ways. The outcome of
this research will provide information about CSR in relation to corporate institutions especially
the listed deposit money banks in Nigeria. It is also expected that the results of this study would
produce relevant material for scholarly discourse in management science relating to corporate
social responsibility and profitability. Another benefit is that in a truly global economy, deposit
money banks in Nigeria would be more responsible and become citizens. Banks would more
easily and willingly respond to the social needs of the societies where they operate.
The findings generated in this study are useful in testing the existing theories under
extreme conditions not present in developed economies where most of the prior studies were
carried out. Current and potential investors are supplied with information to help them make
good investment decisions. The findings and conclusion may enable the regulators to know the
nature of demand placed on deposit money banks in Nigeria and ways banks have responded to
them.
The work is important to the government, host communities and non-governmental
organizations involved in development programmes. This study fills literature gap by
investigating the effects of CSR on profitability of deposit money banks. The results provide
useful evidence to other emerging sectors such as insurance, which is closely related to deposit
money banking sector.

EFFECT OF CORPORATE GOVERNANCE MECHANISMS ON TAX AVOIDANCE IN DEPOSIT MONEY BANKS IN NIGERIA

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ABSTRACT

The issue of corporate tax avoidance hasreceived vast empirical examination in Western academe. This vast examination has however not been echoed in respect of research interest ontax avoidance in corporate entities in Nigeria.This study therefore sought to provide empirical evidence on whether internal corporate governance mechanisms such as board size, board independence,board ownership,high ownershipconcentrationas well as interactions between high ownership concentration with board size and independence are significantly associated with corporate tax avoidance in deposit money banks (DMBs) in Nigeria. A sample of fourteen out of the fifteen listed DMBs on the Nigeria stock exchange (NSE) as at December 2014 were examined. Data for the study were sourced solely from secondary sources in the form of annual financial statements of the studied DMBs for the period 2006 to 2014. In order to tackle the issue of endogeneity, arising from simultaneity in studies related to corporate governance outcomes, the Arellano-Bond Generalized Method of Moments (GMM) estimation technique was used. The study found that increase in last period‟s board ownershipsignificantly increased tax avoidance in the studied DMBs in the current period. Furthermore, increased board independence in the immediate preceding period was found to significantly decrease tax avoidance inthe DMBs in the current period. However, the relationship between board independence and tax avoidance in the DMBs is significantly moderated by high ownership concentration. Overall, the study concluded that internal corporate governance mechanisms combine to significantly affect tax avoidance in the DMBs. In light of the findings, the study therefore recommended thatin order to facilitate goal alignment between the interests of directors and that of DMB owners, in respect of tax avoidance, ownersinstitute more share-based remuneration for executive directorsand encourage non-executive directors to take up some minimum number of shares during their tenure. This will have the combined effect of incentivizing the board to render strategic advice on and implement more tax reduction strategies.It is also recommended that investors should look to DMBs in Nigeria that have block and or institutional owners whose holdings average at around 27%. This is because DMBs with such ownership pattern have a stronger leeway in influencing board advisory and monitoring capacity in relation to corporate strategies such as tax avoidance.

TABLE OF CONTENTS

Title Page……………………………………………………………………………………..i Declaration Page……………………………………………………………………………..ii Certification Page……………………………………………………………………………iii Dedication……………………………………………………………………………………iv Acknowledgements……………………………………………………………………………v Abstract ……………………………………………………………………………………..iiv Table of Contents…………………………………………………………………………….ix List of Tables………………………………………………………………………………….x List of Appendices……………………………………………………………………………xi

CHAPTER ONE: INTRODUCTION 1.1 Background to the Study………………………………………………………………….1 1.2 Statement of the Problem………………………………………………………………….7 1.3

Research Questions …………………………………………………………………..….12 1.4

Objectives of the Study…………………………………………………………………..13 1.5

Research Hypothesis……………………………………………………………………..14 1.6

Scope of the Study……………………………………………………………………….15 1.7

Significance ofthe Study…………………………………………………………………15

CHAPTER TWO: LITERATURE REVIEW 2.1 Introduction…………………….…………………………………………………………17 2.2 Concept of Tax Avoidance….……….……………………………………………………17 2.2.1

Methods of Tax Avoidance…………………………………………………………….23 2.2.2

Motives for Tax Avoidance…………………………………………………………….30 2.2.3

Measuring Tax Avoidance……………………………………………………………..32 2.3

Concept of Corporate Governance….………………..…………………………………..35
2.3.1 Corporate Governance Mechanisms……………………………………………………36
2.4 Review of Empirical Studies……………………………………………………………..45 2.4.1

Corporate Governance Mechanisms and Corporate Tax Avoidance……………………46 2.4.2

Firm-specific Characteristics and Corporate Tax Avoidance…………………………..51 2.5

Consequences of Corporate Tax Avoidance……………………………………………..57 2.6

Theoretical Framework…………………………………………………………………..60

CHAPTER THREE: RESEARCH METHODOLOGY 3.1 Introduction……………………………………………………………………………….64 3.2 Research Design………………………………………………………………………….64

3.3 Source of Data and Method of Collection ……………………………………………….65

3.4 Population and Sample …………………………………………………………………..65

3.5 Method of Data Analysis …………………………………………………………………66

3.6 Variables, Measurements and Model Specification………………………………………68

CHAPTER FOUR: DATA ANALYSIS AND INTERPRETATION

4.1 Introduction………………………………………………………………………………74

4.2 Descriptive Statistics……………………………………………………………………..74

4.3 Correlation Statistics………………………………………………………………………78

4.4 Robustness Tests…………………………………………………………………………80

4.5 Analysis of Results……………………………………………………………………….83

4.6 Tests of Hypotheses………………………………………………………………………85

4.7 Discussion of Findings……………………………………………………………………87

4.8 Implications of Findings…………………………………………………………………90

CHAPTER FIVE: SUMMARY, CONCLUSIONS AND RECOMMENDATIONS

5.1 Summary…………………………………………………………………………………92

5.2 Conclusions………………………………………………………………………………93

5.3 Limitations of the Study…………………………………………………………………..94

5.4 Recommendations………………………………………………………………………..96
5.5 Areas for Further Research……………………………………………………………….97
REFERENCES.…………………………………………………………………………….. 98 APPENDIX………………………………………………………………………………….114
xii
List of Tables Table 4.1: Descriptive Statistics………………………………………………………….81 Table

4.2: Correlations……………………………………………………………………85 Table

4.3: Summary of OLS Results &Robustness Tests….……………………………88 Table

4.3: Summary of GMM Regression Results……………………………………….91

CHAPTER ONE

INTRODUCTION 1.1 Background to the Study

Taxes are a fundamental revenue source for governments the world over. They represent a recognized compulsory contribution by individuals and corporate entities towards governance, development and maintenance of physical infrastructure as well as a tool of bridging income inequities. They are also a means by which the social contract between the State and the citizenry is being nourished and facilitated (Christensen & Murphy, 2004). Taxes also happen to be the most important, sustainable and predictable source of public finance for almost all countries (Action Aid, 2013). Thus properly harnessing amounts collected via taxes is a major concern for governments.
In assessing the extent to which a country has harnessed and financed its economy through taxation, an often used measure is the tax to GDP ratio. Scholars have however noted that the tax to GDP ratio for the developing world as a whole is relatively low when compared to what obtains in the developed economies. For instance, according to Fuest and Riedel (2009) the tax to GDP ratio for developing economies was on average approximately 12-15% as at 2005. Conversely, for the developed economies, the average for the same year was quoted as approximately 35%; a figure more than twice what obtained in the developing climes. More recent reports show some improvement in the ratio but given the potential the region has for increased tax revenue, the improvement has not been found to be impressive. For instance, a report by the International Tax Compact, ITC (2010), noted that while tax revenues in Organization for Economic Cooperation and Development (OECD) countries amounted to almost 36% of gross national income in 2007, the share in selected developing regions was estimated to be around 23% for Africa (in 2007) and 17.5% for Latin America (in 2004).

Specifically focusing on Nigeria, as at January 2014, tax revenue to GDP ratio stood at 20% (Premium Times, 2014). However with the rebasing of Nigeria‟s GDP in 2014, which saw the country‟s GDP increase from N42.3 trillion to N80.3 trillion, making Nigeria Africa‟s largest economy, Nigeria‟s tax revenue to GDP ratio fell from 20 % to 12 %. Out of the said 12 %, only 4% was attributable to non-oil revenue. This led to a call by the then Minister of finance on the need for the taxing authorities to redouble their revenue generation efforts (Premium Times, 2014). This call by the minister as well as the assertion by Oxfam (2014) that widening income disparities are the second greatest worldwide risk in 2014, underscore the need to look deeper into the various sources of development finance, especially taxation. The highly volatile nature of oil revenue- which the Nigerian economy depends on to a large extent should, arguably, also serve as an added impetus towards looking for ways to better harness other revenue sources such as taxes.

In exploring how to better harness tax revenues, it has been documented world over that, two major activities; perpetrated by both individuals and corporations, have continued to represent a great threat to amounts of revenue collected through taxes. In addition, the said issues feature prominently in equity and efficiency related discourse. The duo of issues are tax evasion and tax avoidance. While both are aspects of tax non-compliance, the delineating feature between the two lies in the fact that tax evasion is deemed out rightly illegal while by definition tax avoidance is not. However notwithstanding the delineating line between the two, in advanced economies, the duo have been given serious consideration by their governments, through the relevant agencies. Furthermore, the two issues have sparked much research; ranging from investigating their determinants- both for individuals and for corporations examinations of the attendant consequences engendered by their continued flourish.

The question of what factors explain the ability of firms and corporations to avoid taxes is of particular interest to researchers. The reason for much of the focus on tax avoidance as opposed to tax evasion is because evasion as a criminal act has to be proven by court. Thus using the term avoidance is seen as less dyslogistic. In however considering corporate tax avoidance as a research issue, researchers such as Shackelford and Shevlin (2001) have earlier questioned the applicability of models of individual tax evasion and avoidance such as the Allingham and Sandmo (1972) framework in explaining and predicting corporate tax avoidance. They argued that the separation of ownership and control, a hallmark of corporate entities, means that existing individual tax non-compliance frameworks cannot adequately explain same for corporations. In furtherance of the argument, Slemrod (2004) stated that this same separation of ownership and control means that shareholders need the corporation to engage in some level of avoidance. Thus, ininvestigatingwhat factors explain tax avoidance by firms and corporations, earlier studies on corporate tax avoidance focused primarily on examining whether firm-specific characteristics such as size, leverage, growth, profitability,amongst others could explain the tax avoidance phenomenon for business entities (e.g., Gupta & Newberry, 1997). These earlier studies however failed to consider agency issues in their analyses. Pointing out why failing to do so is an anomaly, Desai and Dharmapala (2006, 2007) argued that since decisions about corporate tax avoidance are made by firm managers, then the analysis of such decisions is thus embedded in an agency framework.
The agency framework is one that argues that managers are risk averse and self-serving in nature and that this risk averseness as well as self-serving nature means that managers will not typically act or make decisions in the best interest of owners. To ensure goal congruence between management and shareholders or owners, the framework suggests that managers should be both incentivized and monitored. Corporate governance mechanisms represent the means by which monitoring managers can be achieved. Corporate governance mechanisms can however be internal or external. The internal mechanisms are those that have to do with the efficacy of the board of directors in appropriately advising on and overseeing the design and implementation of business strategies that will ensure that managers maximize shareholder wealth. In addition, such internal mechanisms include the role that shareholders themselves play in ensuring goal alignment. Prescriptions that have to do in particular with size, independence, remuneration and financial expertise of the board have therefore featured prominently in the various codes of corporate governance that have been issued both nationally and internationally as guides to what constitutes “best practice” in oversight. On the other hand, external governance mechanisms include all other stakeholder monitoring. Therefore mechanisms such as government regulation, debt covenants, takeovers, financial analysts and the like are all aspects of external governance. Internal governance mechanisms have, in particular, been touted to be foremost amongst the monitoring mechanisms that can ensure goal alignment between owners and managers. This is thought to be so because the board of directors is responsible for the strategic direction of the company. Charting a course for effective tax management is one of such strategic direction. Therefore, like any other board room stratagem, managing taxes requires a laid down philosophy which is usually determined by the board; documented, communicated and implemented as overall corporate strategy (Erle, 2007). Thus, board related governance mechanism such as size, independence, and ownership, amongst others can arguably play a key role in determining a company‟s tax planning.

Board size simply refers to the number of persons that constitute the board of directors of a corporate entity. The number of persons that constitute the board of directors is thought to influence the advisory capacity of the board as well as its monitoring effectiveness. However, what constitutes the optimal board size to achieve this effectiveness has been a subject of debate. While some argue that a large board is more desirable because the larger the number on the board the more the level of diversity, skill and expertise; others argue that larger boards stifle discussion, therefore smaller boards are more effective because communication within a smaller group is easier (Jensen, 1993). Given that managing the tax expense (tax avoidance) is thought to be beneficial for corporate owners, this study therefore finds it necessary to examine whether board size as an internal governance metric affects tax avoidance by deposit money banks (DMBs) in Nigeria. Board independence, the proportion of members of the board who are non-executive directors, is another internal governance metric that influences board oversight. For this reason the codes of corporate governance give it categorical mention. Empirical studies to date, are however yet to consistently document either significant associations or signs when relating board independence to corporate outcomes. The intuition that board independence can influence tax avoidance by DMBs is however appealing. This is because in relation to other firm performance metrics such as profitability and firm value, it has been argued that the independent judgments that non-executive directors can bring to bear on corporate outcomes enhances oversight. Whether this is so in relation to tax avoidance by Nigerian DMBs is however an empirical question that is yet to be examined.

Ownership structure dimensions such as having an individual with sizeable number of shares in a company (block shareholding), the level of managerial shareholding as well as the ownership of shares by other corporate bodies (institutional shareholding) are also regarded as key internal governance mechanisms that ought to provide effective oversight over management. This position arises from the fact that in the modern day corporation,which has a multitude of owners and whereby the manager is not an owner,the self-serving behavior of the manager needs to be checked. Therefore, agency theorists such as Jensen and Meckling (1976), Fama (1980) as well as Fama and Jensen (1983) have all posited that making the manager a co-owner and having concentrated ownership in the form of either a block holder or an institutional shareholder, or both, should give all such owners additional motivation to more regularly appraise management; thereby ensuring goal convergence. Tax avoidance is, in most instances, likely to benefit the shareholders. Therefore, the preceding arguments are compelling enough for the researcher to also conjecture that ownership plays a role in determining some amount of tax avoidance at the corporate level. This study is motivated by the fact that even though several studies abound on the corporate tax avoidance phenomenon, only a handful are on developing countries. In addition, only few present evidence from Nigeria. Furthermore, of the studies which examine the issue for Nigeria, to the best of the researchers‟ knowledge only Ekoja and Jim-Suleiman (2014) examined the issue for banks. Their study however only provided evidence as to how an external governance mechanism; competition, plays a role in determining Nigerian banks‟ tax avoidance. Major failures in internal corporate governance mechanisms are thought to be one of the principal factors that have continually undermined bank performance (Sanusi, 2012).
The Nigerian banking sector tends to be a key driver of activities in the corporate sector. This it achieves primarily through its principal role in financial intermediation. An OECD (2009) report also suggests that banks are particularly creative in structuring tax avoidance schemes both for themselves and their clients. These features of banks as well as differing arguments in the literature (e.g. Adams & Mehran, 2003; Becher & Frye, 2008) as to whether internal corporate governance mechanisms are actually effective in regulated entities such as banks, serve as motivation for this study to examine to what extent corporate governance mechanisms-specifically internal ones- determine tax avoidance for DMBs in Nigeria. 1.2 Statement of the Problem Tax avoidance has, especially in the last decade or so, come under increased scrutiny and criticism by governments, the media, aid groups as well as the general public. The reason for this is because even though tax avoidance in itself is not an illegality, as the law has not made it so, the amounts of revenue thought to have been lost through various ingenious avoidance activities world-wide have become an issue of concern. For instance, the Task Force for Financial Integrity and Economic Development, a global coalition of non-profit groups that campaign for transparency in the financial system, put the global foreign aid budget at $1 billion per year while it estimated that the developing world loses $1 trillion every year through evasion and/ avoidance, corruption as well as money laundering (Reuters, 2013). The Global Financial Integrity (GFI), another advocacy group, in its 2012 report, estimated that $5.86 trillion moved from developing countries to tax havens over the period from 2001 to 2010 with outflows from Nigeria alone amounting to a princely $129 billion. This princely sum earned the nation seventh spot on the GFI‟s top ten list of developing countries with the highest illicit outflows. A further breakdown of the components of the illicit outflows shows that the greatest part (i.e. 60% – 65%) was as a result of tax avoidance(Philippines Star, 2013).

Arising, in part, from concerns over the aforementioned lost amounts of revenue; researchers have also upped the ante on the analysis of tax avoidance. While however still acknowledging the legality of tax avoidance, several researchers such as Potas (1993), Christensen and Murphy (2004), Fuest and Riedl (2009), Sikka (2010), Prebble and Prebble (2013) and Fischer (2014), amongst others, bring to the fore the argument that the legality of a phenomenon does not necessarily translate to that phenomenon being fair or ethically and morally acceptable. This argument is particularly evident regarding the phenomenon of tax avoidance. This is because tax avoidance contributes to a situation whereby tax payers of the same income bracket will not pay taxes on the same marginal tax rate. This has the effect of making the tax system appear unfair to those who are unable to avoid taxes.
Research on corporate tax avoidance in comparison with that of tax avoidance by individuals could however be said to be of relatively recent focus. The said recent focus of research on the phenomenon has also tended to be conducted principally in developed climes. The earlier empirical studies on corporate tax avoidance such as Gupta and Newberry (1997) had focused more on the interplay between firm-specific characteristics such as size, leverage, profitability, capital intensity, amongst others in determining corporate tax avoidance. Given that the results on the association between the studied firm-specific characteristics and tax avoidance turned out to be far from consistent (e.g., Richardson&Lanis, 2007 and Hsieh, 2012); researchers further broadened the scope of investigation, on the determinants of corporate tax avoidance, to include other factors such as corporate transparency (Wang, 2010), CEO/manager effects (Dyreng, Hanlon &Maydew, 2010; Chyz, 2010), ownership structure (Badertscher, Katz &Rego, 2009; Chen, Chen, Cheng &Shevlin, 2010), external auditor effects (Mcguire, Omer & Wang,

2010; Huseynov&Klamm, 2012), incentives (Philips, 2003; Armstrong, Blouin&Larcker, 2012) and a host of other characteristics. The basis for broadening of the scope of investigation has however been questionedby Hanlon &Heitzman (2010). They contend that the choice, by researchers,of what variables to study as determinants of corporate tax avoidance has seldom been backed by theory. Thus, in order to provide a theoretical base for the study of corporate tax avoidance, a relatively young but burgeoning literature which seeks to situate the determinants of corporate tax avoidance within an agency theoretical framework has emerged. According to Hanlon and Heitzman (2010), theoretical arguments for the study of corporate tax evasion and avoidance as agency issues have been pioneered by Crocker and Slemrod (2004), Slemrod (2004), as well as Chen and Chu (2005). The pioneers however failed to back their arguments with empirical data. Thus other researchers have sought empirical evidence in support of the framework. Specifically Desai and Dharmapala (2007), Minnick and Noga (2010), Khaoula and Ali (2012), Zemzem and Ftouhi (2013), Khaoula (2013) and Armstrong, Blouin, Jagolinzer and Larcker (2015) are amongst a spate of relatively recent researches that have directly examined the interplay between corporate governance mechanisms and tax avoidance.
A common theme across the aforementioned studies that directly relate governance mechanisms with corporate tax avoidance is that while they refer to governance broadly, they habitually study only board related mechanisms to the detriment of other governance mechanisms. Governance is a myriad of mechanisms which are both external to the corporation as well as internal to it. For instance, shareholder and stakeholder monitoring, competition, the markets for both managerial and corporate control as well as debt covenants are all governance mechanisms. Therefore narrowing such a multi-faceted concept down to only board mechanisms does not appropriately proxy the phenomenon. The said empirical studies have also not been consistent in documenting either significant associations or similar signs of association in their studies. One possible reason for the inconsistencies may be because none of the past studies has considered whether interactions with other variables are the actual force behind the effects of the studied mechanisms on tax avoidance. As Hermalin and Weisbach (2003) and Adams, Hermalin and Weisbach (2010) point out, the effect of board mechanisms on firm performancemay not be direct. Therefore failure to take this into consideration is likely to distort interpretations. In this study, it is therefore proposed that concentrated ownership moderates the relationship between board structure proxies such as size and independence on corporate tax avoidance. Considering this moderating effect is important because shareholders with concentrated ownership (blocks and institutions) usually leverage upon their concentrated holdings to either directly sit on the board of directors or indirectly have a representative as director (La Porta, Lopez-de-Silanes, Schleifer&Vishny, 1998). This representation on the board is likely to affect both board advisory capacity (size) as well as monitoring capacity (independence). Furthermore, Connelly, Hoskisson, Tihanyi and Certo (2010) have argued that concentrated ownership leads to concentrated decision rightsand this leads to superior monitoring.
Localizing the focus to Nigeria, the researcher observes that the discourse as well as study of corporate tax avoidance is yet to gather full momentum. Most existing studies such as AbdulRazaq (1985), Alabede, Ariffin and Idris (2011) and Ibadin and Eiya (2013), to name a few, focused on examining individual tax compliance issues. This is despite assertions by researchers such as Adegbie and Fakile (2011a, 2011b), that in Nigeria, the contribution to overall tax revenue by companies has continually fallen far short of expectations. This lack of research momentum may however be, in part, because evidence on whether Nigerian corporations actively engage in tax avoidance schemes, is largely anecdotal; evasion headlines seem to feature more prominently (see for example news on Proshare website accessed by the researcher on 15/03/2013, about tax evasion by petroleum companies as well as a This Day online news report accessed on the same date on the issue of evasion in the automobile industry in Nigerian). The anecdotal nature of narrations on the extent of corporate tax avoidance in Nigeria is however not surprising. This is because the very nature of tax avoidance demands some degree of obfuscation (Desai &Dharmapala, 2006; 2007; 2009a). Thus as a research issue corporate tax avoidance is only very recently receiving academic interest in Nigeria with studies such as James and Igbeng (2014) and Ekoja and Jim-Suleiman (2014). The James and Igbeng (2014) study however merely gave a theoretical exposition of the matter which is to a large extent a re-echo of Desai and Dharmapala (2007). Ekoja and Jim-Suleiman (2014) on the other hand studied the effect of competition on tax avoidance by Nigerian deposit money banks (DMBs) and reported the surprising result that competition alone explains 100% of the variation in Nigerian DMBs tax avoidance; a situation that is hardly plausible for social science phenomena. Their results are therefore suggestive of either measurement issues that have to do with the proxies used by the study or data inaccuracies.
The focus of this research was therefore on furthering study on the agency theory perspective of tax avoidance. In order to achieve this the association between corporate governance mechanisms and tax avoidance in Nigerian DMBs was examined. The research focused on banks because differing regulation meant their exclusion from analysis by several past international studies on corporate tax avoidance (e.g., Zimmerman, 1983; Taylor &

Richardson, 2011; Abdul Wahab, 2011) while in Nigeria, to the best of the researchers‟ knowledge only Ekoja and Jim-Suleiman (2014) have previously studied tax avoidance by banks. It seems therefore that the financial sector has not been adequately covered by researchers in relation to tax avoidance. Studying the sector is important because Minnick and Noga (2010), have earlier posited that different companies with different governance structures are likely to choose different tax management strategies. Given this assertion, it may therefore be misleading to assume that the empirical results of studies of some corporate sectors will hold for other sectors. Providing sector-specific contexts to show the interplay between governance and tax avoidance is therefore necessary. Consequently, the study sought to fill the gap on the determinants of corporate tax avoidance in DMBs in Nigeria. In particular, this was done by examining the extent to which internal corporate governance mechanisms play a role in determining corporate tax avoidance in DMBs in Nigeria. To realize this board size, ownership and independence as well as high block ownership concentration were studied. The interactions between concentrated ownership and board size as well as board independence were also examined. In addition the study sought to fill the gap on available research from the developing world; more so, with specific reference to the literature gap on corporate tax avoidance in Nigeria. The study also covered the banking sector, a part of the financial services sector that has been relatively understudied in relation to the tax avoidance phenomenon.

1.3 Research Questions To facilitate inquiry the following research questions were raised:

i. Does board size have a significant effect on corporate tax avoidance among DMBs in Nigeria?
ii. Does board independence have a significant effect on corporate tax avoidance among DMBs in Nigeria?
iii. Does high ownership concentration have a significant effect on corporate tax avoidance among DMBs in Nigeria?
iv. Does board ownership have a significant effect on corporate tax avoidance among DMBs in Nigeria?
v. Does high ownership concentration significantly moderate the relationship between board size and tax avoidance among DMBs in Nigeria?
vi. Does high ownership concentration significantly moderate the relationship between board independence and tax avoidance among DMBs in Nigeria?
1.4 Objectives of the Study The overall objective of this study is to determine to what extent internal corporate governance mechanisms determine tax avoidance in Nigerian deposit money banks. The specific objectives of the study are to:
i. assess whether board size has a significant effect on corporate tax avoidance among DMBs in Nigeria.
ii. ascertain whether board independence has a significant effect on corporate tax avoidance among DMBs in Nigeria.
iii. estimate whether high ownership concentration has a significant effect on corporate tax avoidance among DMBs in Nigeria.
iv. evaluate whether board ownership has a significant effect on corporate tax avoidance among DMBs in Nigeria.
v. examine whether high ownership concentration moderates the relationship between board size and tax avoidance among DMBs in Nigeria.
vi. examine whether high ownership concentration moderates the relationship between board independence and tax avoidance among DMBs in Nigeria.

1.5 Statement of Hypotheses In line with the aforementioned objectives of the study, the following hypotheses; stated in null form,were formulated for testing: Ho1: board size has no significant effect on corporate tax avoidance among DMBs in Nigeria. Ho2: board independence has no significant effect on corporate tax avoidance among DMBs in Nigeria. Ho3: high ownership concentration has no significant effect on corporate tax avoidance among DMBs in Nigeria. Ho4: board ownership has no significant effect on corporate tax avoidance among DMBs in Nigeria. H05: the relationship between board size and tax avoidance among DMBs in Nigeria is not significantly moderated by high ownership concentration. H06: the relationship between board independence and tax avoidance among DMBs in Nigeria is not significantly moderated by high ownership concentration.

1.6 Scope of the Study This study empirically examined the effect of internal corporate governance mechanisms on corporate tax avoidance in Nigeria. The study covered only listed Deposit Money Banks (DMBs) in Nigeria. The focus on banks was in part, hinged on the role of banks as financial intermediaries in the economy. This role therefore means that banks tend to drive activities in the corporate sector. There are also assertions that banks structure transactions both for customers and themselves that are likely to facilitate tax avoidance (OECD, 2009). The study covered the period 2006 to 2014. The year 2006 was chosen as a base year so as not to allow the effects of the 2005 banking sector consolidation exercise to distort results while 2014 represents the latest year beforethe CBN classification of some DMBs as strategically important (CBN 2014a). The new classification, effective March 1, 2015 imposes stringent requirements on the said banks in respect of liquidity and capital adequacy requirements. The requirements are likely to affect some financial statement items and therefore introduce some distortion in analysis. The period overlaps with the 2001-2010 previously noted by the GFI (2012) report as the period in which Nigeria lost substantial revenue through avoidance activities. 1.7 Significance of the Study The study is significant for the following reasons:
Firstly, taxes are a key source of revenue for governments and often feature prominently in government‟s income redistribution function. Government, through its relevant tax agencies, is therefore interested in identifying which characteristics matter most in determining cross-sectional differences in tax avoidance for corporate bodies such as the banks that were studied. The findings of the study that revealed significant associations between internal corporate governance mechanisms and corporate tax avoidance in DMBs in Nigeria will therefore aid government in designing proper policy both in respect of corporate governance and in respect of tax avoidance. Secondly, researchers are interested in understanding determinants of corporate tax avoidance.The study serves to add to the overall existing literature on the determinants of corporate tax avoidance by filling the gaps on corporate tax avoidance research in the developing world as well as in relation to documenting results from one class of highly regulated entities- banks. Thirdly, in terms of theory, the research is significant for its contribution to the agency theoretical perspective in relation to corporate tax avoidance. In its barest form, the agency perspective does not consider interactions. The study has modified the framework to reflect the fact that highly concentrated ownership interacts together with specific board mechanisms to be effective in ensuring goal congruence. Fourthly, shareholders wish to know whether the management appointed by them is properly controlling the organizations expenses; in this case taxes, in the direction of increasing shareholder wealth. Since the study focused on the effect of corporate governance mechanisms on tax avoidance, the study will benefit shareholders by showing them which internal governance mechanisms they should pay more attention to in their desire to achieve more effective tax outcomes such as avoidance.

E-TAX, A SOLUTION TO TRADITIONAL TAX SYSTEM IN NIGERIA

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PROJECT TOPIC AND MATERIAL ON E-TAX, A SOLUTION TO TRADITIONAL TAX SYSTEM IN NIGERIA

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Download the complete Accounting project topic and material (chapter 1-5) titled THE ROLE OF FINANCIAL ANALYSIS IN MANAGEMENT CONTROL here on iProjectTopics. See below for the abstract, table of contents, list of figures, list of tables, list of appendices, list of abbreviations and chapter one. Click the DOWNLOAD FULL WORK BUTTON BELOW CHAPTER ONE  to get the complete project work instantly.

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PROJECT TOPIC AND MATERIAL ON THE ROLE OF FINANCIAL ANALYSIS IN MANAGEMENT CONTROL

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CHAPTER ONE

1.0 Introduction
1.1 Background to the study
The political, economic and social development of any country depends on the amount of revenue generated for the provision of infrastructure in that given country. According to AZUBIKE (2009), tax is a major player in every society of the world. The Nigerian tax system is lopsided and dominated by oil revenue. According to Statistics from the Central Bank of Nigeria (2000), oil and gas exports accounted for more than 98 percent of export earnings and about 83 percent of federal government revenue, as well as generating more than 40 percent of its GDP. It also provides 95 percent foreign exchange earnings. Therefore, a highly lucrative means of generating the amount of revenue needed for providing the necessary infrastructure for our country through tax is no doubt through a well-structured tax system.
According to the Presidential Committee on National tax policy (2008), the central objective of the Nigerian tax system is to contribute to the well-being of all Nigerians directly through improved policy formulation and indirectly though appropriate utilization of tax revenue generated for the benefit of the people. Over the years our tax system has not been able to reach these perceived objectives as a result of some setbacks and challenges some of which include lack of stewardship amongst tax payers, multiplicity of taxes, complex tax payment system and tax offsetting, lack of technological exposure, tax evasion, corruption, government instability
2
which instigates noncompliance with relevant tax laws, poor information base and record keeping etc.
Technology is influencing our lives and continues to change the way we do things from the simple day to day activities to the complex and less routine task. The impact of technology can be felt in every area of our lives such as education, entertainment, communication, commerce including taxation. Information Technology (IT) is a very crucial component of tax administration reform as it enables tax administrators to better gather and analyze information, to proactively manage workload and resources, to foster a co-operative engagement with taxpayers and to standardize the treatment of tax payers and thus facilitate the uniform application of the law (USAID leadership in public financial management). The use of IT to aid tax administration is the initiative that gave birth to the now popular E-tax system today
The integration of information technology in tax administration in the form of E-tax known as electronic taxation has proved to be a master tool in combatting the challenges of any tax system as it provides information, education and support to tax payers and facilitates compliance and administration. It basically involves the automation of core tax processes. The E-tax systems are often thought of solely as IT support to taxpayer services. It should be clear, however, that E-tax systems do more than provide information, education, and assistance to taxpayers due to its unique components such as electronic registration and filling, automatic updates of taxpayer information etc. It also guarantees reduced cost of administering taxes. According to the World Bank and PwC Paying Taxes Report 2013, sixty six economies had fully implemented electronic filing and payment of taxes as at 2010.Also, twenty of them adopted the system in the past seven years.
3
The Federal Inland Revenue board and state board of internal revenue as well as local government revenue committees are saddled with the responsibility of administering taxes at the federal, state and local levels respectively. The Nigerian government through these public boards has made efforts to restructure the tax system in a well-structured and coordinated manner. One of this is the implementation of an electronic tax system called the ‗integrated tax administration system‘ which if implemented properly would enhance compliance and eliminate the problem of tax information and statistics. With this new reform, the government aims at capturing more companies and individuals in the tax net so as to increase revenue derived from taxes as well as stabilize the economy.
The E-tax system is however expected to promote efficiency, accountability, compliance and also curb leakages in the Nigerian tax system. The system will go a long way in lightening the work load of the tax payers and reducing operational cost .E-tax if adopted well have an overall positive impact on the tax system.
1.2. Statement of the Problem
The Nigerian tax system which is made up of tax policy, laws and administration has faced so many challenges over the years which have brought about inefficiency and increased administrative cost. The amount of revenue to be derived from taxation in every nation is completely dependent on the tax system put in place. This probably influenced the decision of the Federal Government of Nigeria (FGN), which in 1991 set up a Study Group on the Review of the Nigerian Tax System and Administration so as to optimize revenue from various tax sources.
4
In a FIRS press release, it was reported that approximately 12 billion naira traditionally vanishes into the pocket of individuals not to mention the problems of complexity of payment, unavailability of tax statistics and information, and also poor technological exposure on the part of both tax payers and tax authorities.
The introduction of E-tax has done more good than harm since its adoption into the tax system. The system as practiced by other countries such as Malaysia, Slovenia, Germany, America and so many others has helped reduce time to comply with the 3 main taxes(profit, labor and consumption) as well as provided reliable and accurate tax statistics. The Joint Tax Board, the Federal Inland Revenue Service and some State Internal Revenue Service have or are in the process of implementing electronic tax systems. Whilst the initiative is commendable it is important to note that there are expected challenges facing the adoption of this system that could put a strain on the already flawed tax system.
E-tax when if administered properly can be the solution to the irregular tax system in operation in Nigeria. Hence the aim of this study is to evaluate the benefits of e-tax and proffer it as a solution to the Nigerian tax system.
1.3 Research Objectives
The aim of this study is to analyze and evaluate the draw backs facing the legal tax system prevailing in our country and combat these challenges with a well-structured electronic tax system. The goals of this research work are as follows;
 To identify and understand the weaknesses of the traditional tax system in Nigeria
 To evaluate and analyze E-tax, its origin and benefits over the years and proffer it as a solution to the traditional tax system
5
 To highlight the challenges and risks of adopting an electronic tax system in the country
 To suggest ways to overcome these challenges so as to achieve positive changes in the traditional tax system which will lead to overall increased returns and tax efficiency.
1.4 Research Questions
 What are the events that led to the questioning of the prevailing tax system in Nigeria?
 What are the challenges that have been identified and traced to the traditional tax system on account of the events above?
 What is E-tax all about and to what extent has it benefited other economies on its adoption?
 What are the expected challenges of E-tax in its bid to eliminate the challenges observed in the traditional tax system in Nigeria?
 How can we overcome these challenges and create a good E-tax system that will improve the effectiveness and efficiency of the traditional tax system in Nigeria?
1.5 Research Hypothesis
The hypothesis on which this study is based is stated in the null and alternative form as follows;
i. H0; There are no problems with the traditional system of taxation in Nigeria
H1; there are problems with the traditional system of taxation in Nigeria
ii. H0; The adoption of E-tax will not provide significant solution to the identified problems with the traditional system of taxation in Nigeria
6
H1; the adoption of E-tax will provide significant solution to the identified problem with the traditional system of taxation in Nigeria
iii. H0; There are no expected challenges and risks in the adoption of a good E-tax system
H1; There are expected challenges and risks in the adoption of a good E-tax system
iv. H0; Strategic efforts are not required by the FIRS in overcoming these challenges for the smooth adoption and sustenance of a good E-tax system
H1; Strategic efforts are required by the FIRS in overcoming these challenges for the smooth adoption and sustenance of a good E-tax system
1.6 SIGNIFICANCE OF THE STUDY
This research will a useful guide in the appraisal of the traditional tax system in Nigeria as related to the electronic system of taxation and therefore will be beneficial to the various existing tax authorities in Nigeria, policy making government officials at all level as well as tax payers and the general public. The work may also serve as knowledgeable information to other economies regarding evolution and changes in tax system, Also researchers who wish to undergo research work in this area will be interested in this research project.
1.7 SCOPE OF THE STUDY
The research will be centered on the Nigerian tax system, its strengths and weaknesses as well as the benefits and solutions an E-tax system could offer. It would contain a detailed analysis of
7
how to adopt and maintain a good E-tax system as a means of improving on the traditional tax system as well as encouraging tax compliance amongst tax payers.
1.8 LIMITATIONS TO THE STUDY
The research is centered on the Nigerian economy therefore it is limited to tax system in Nigeria. Several limiting factors such as a limited sample size, difficulty in attaining data from corporate bodies as well as unfriendly tax authority policies were encountered during the research process. However the process was completed. Also unawareness as regards the research topic was a hindrance to the researcher especially in obtaining data.
1.9 ORGANIZATION OF THE STUDY
This study is made up of five chapters. Chapter one gives the general introduction to the study. Chapter two deals with literature review of related works on the benefits of adopting E-tax. It also explains the theoretical framework of the study and definition of terms. Chapter three expresses the research methodology. Chapter four is use to present and analyze quantitatively the effects of adopting E- tax system, also in this chapter the result are interpreted. Chapter five gives the summary, conclusions and recommendation of the study
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1.10 DEFINITION OF TERMS
The familiarization by users of this study with the following terms will facilitate understanding of the concept and body of the research work
TAXATION this refers to a compulsory levy imposed on a subject or upon his/her property by the government to provide security, social amenities and other amenities for the well-being of the society.
TAX SYSTEM: this refers to a system which consists of the laws, policies and administration of taxes put in place for effective tax assessment and collection
TRADITIONAL TAX SYSTEM: This refers to the legal system of assessing and collecting taxes manually without the use of Information communication technology
E-TAX: This can be defined as the information technology that allows for the automation of core tax processes.
TAX AUTHORITY: They are the bodies charged with the administration of taxes in Nigeria
REVENUE: This can be defined as the funds generated by government to meet their proposed expenditure and strategic targets for a given year.
FIRS: Acronym for Federal Inland Revenue Service. This is one of the federal ministries, departments and agencies charged with the responsibility of assessing, collecting, and accounting for the various taxes to the federal government.
9

DEVELOPING EFFECTIVE STRATEGY FOR PENSION ADMINISTRATION IN THE NIGERIAN PUBLIC SECTOR (A STUDY OF PENSION COMMISSION RIVERS STATE, NIGERIA)

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PROJECT TOPIC AND MATERIAL ON DEVELOPING EFFECTIVE STRATEGY FOR PENSION ADMINISTRATION IN THE NIGERIAN PUBLIC SECTOR (A STUDY OF PENSION COMMISSION RIVERS STATE, NIGERIA)

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  • Name: DEVELOPING EFFECTIVE STRATEGY FOR PENSION ADMINISTRATION IN THE NIGERIAN PUBLIC SECTOR (A STUDY OF PENSION COMMISSION RIVERS STATE, NIGERIA)
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ABSTRACT

This research work is designed to develop effective strategy for pension administration in the Nigeria public sector, using pension commission as a study. The research work reveals how some retirees are forced to continue to work throughout their life, not out of choice but for lack of means of sustenance at old age. The sources of data collection for this work are primary and secondary sources, the researcher in this process of data collection for the research regarded the questionnaire to serve as the most important instrument used in the research, and the data gathered from questionnaire are analyzed by simple percentage, the chi-square techniques was employed to test the hypothesis and interpret the information for better understanding. The findings reveal that, a noneffective and efficient strategy of pension administration can be likened to poor pension administration and budgeted income to pensioners is not implemented as at when due. The implication were that, committees should be set up to audit the performance of pension boards and other pension bodies and responsibility should be assigned to the right people who must have access to the right information concerning retires and also retirees should not solely depend on pension after retirement, alternate plans should be made from day one of the start of one’s working years, this could include setting aside a percentage of one’s salary in anticipation of retirement.

TABLE OF CONTENTS

Title Page—————————————————————-i
Approval Page———————————————————-ii
Dedication—————————————————————iii
Acknowledgement—————————————————–iv
Abstract——————————————————————v
Table of content——————————————————–vi
List of table————————————————————–vii

CHAPTER ONE
1.0 Introduction ——————————————————-1
1.1 Background of the study —————————————-1
1.2 Statement of the problem —————————————3
1.3 Objective of the study ——————————————–4
1.4 Test of Hypotheses ————————————————4
1.5 Research Questions————————————————-5
1.6 Significance of the study ——————————————-5

1.7 Scope of the study—————————————————7
1.8 Limitation of the study———————————————–7
1.9 Definitions of terms ————————————————–8
CHAPTER TWO
LITERATURE REVIEW
2.0 Introduction ————————————————————10
2.1 Historical Development of Pension Administration and
reform in Nigeria ————————————————————14
2.2 Nigeria Private Sector ————————————————–17
2.3 The Udoji Pension Reforms ——————————————–19
2.4 Survivor Benefits ———————————————————28
2.5 Computation of retirement benefits ———————————-31
2.6 Factors attributable to poor pension Management in the Nigeria
public Sector ———————————————————————34
2.7 Strategies for Effective pension Administration in the Nigeria public
sector ——————————————————————————–37
2.8 The National Pension Commission {PENCOM} ————————–43
CHAPTER THREE
RESEARCH DESIGN AND METHODOLOGY
3.0 Introduction ——————————————————————–56
3.1 Research Design ————————————————————–57
3.2 Area of Study ——————————————————————57
3.3 Source of Data —————————————————————–58
3.4 Population of Study ———————————————————–59
3. 5 Determination of Research Instrument ———————————60
3.6 Sampling Procedure ———————————————————-61
3.7 Administration of Research Instrument ———————————-62
3.8 Method of data analysis —————————————————–62
CHAPTER FOUR
DATA ANALYSIS AND PRESENTATION
4.0 Introduction ——————————————————————63
4.1 Data presentation and analysis ——————————————-63
CHAPTER FIVE
SUMMARY, CONCLUSION, RECOMMENDATION
5.1 Summary of Finding ———————————————————-80
5.2 Conclusion ———————————————————————84
5.3 Recommendations ———————————————————–85

Bibliography ———————————————————————–87
Appendix I ————————————————————————–89
Appendix ii ————————————————————————–90

CHAPTER ONE

4. Enable providers of pension, plans quickly to improve the flexibility and appropriateness of today`s product.
However, it is the researcher`s belief that greater attention to ethical and social responsibilities will improve the way pension funds are managed and ministered.
1.7 SCOPE OF THE STUDY
This project work is concerned with an effective strategy for pension administration in Nigeria public sector. The work will be limited with pension commission (PENCOM) and with other relevant areas such as pension scheme for civil servants, pension governance, Nigeria Social Insurance Trust Fund, Contributory pension scheme.
1.8 LIMITATIONS OF THE STUDY
1. Developing effective strategy for pension administration in the Nigeria public sector (a study of pension commission) has not been an easy task due to inaccessibility to some relevant materials most managers of government prostrate perceived this research work as adding their companies thereby withholding vital information.
Consequently, some staff of the pension bodies was reluctant to discuss the subject freely.
2. Time factor is also another problem, which affected the compilation of this work, despite the high scheme in the school; period allocated for the project work must be strictly worked towards.

3. The incessant bombing in the country thereby posing everybody a prime suspect also was one of the limitations.

1.9 DEFINITION OF TERM
1. PENSION: is a fixed sum paid regularly to a person, typically given retirement from service.
2. PENSION FUND: is any plan, fund or scheme which provides retirement income.
Pension should not be confused with severance pay; the former is made in regular installments while the later is paid in one lump sum.
3. RETIREE: is one who has retired from active working life. Retirees receive pension. 4. GRATUITY: is money given to an employee in return for service(s) at retirement. 5. LUMP SUM: is a single payment for a number of separate items, money paid in full rather than in several smaller amounts. 6. ANNUITY: is any terminating stream of fixed payments over a specified period of time. 7. PENSION ADMINISTRATION: is the management of pension funds and fairs. 8. PRE-REQUISITE: is a thing required as a condition for some other things to happen or exist.

9. PUBLIC SECTOR: is the part of an economy concerned with providing basic government services. These include services such as Police, Hospitals, Schools, Military and Public transport.

CORPORATE SOCIAL RESPONSIBILITY AND PERFORMANCE IN NIGERIAN DEPOSIT MONEY BANKS

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PROJECT TOPIC AND MATERIAL ON CORPORATE SOCIAL RESPONSIBILITY AND PERFORMANCE IN NIGERIAN DEPOSIT MONEY BANKS

The Project File Details                                                                                                       

  • Name: CORPORATE SOCIAL RESPONSIBILITY AND PERFORMANCE IN NIGERIAN DEPOSIT MONEY BANKS
  • Type: PDF and MS Word (DOC)
  • Size: [666 KB]
  • Length: [65] Pages
  • With Reference and Questionnaire
  • Amount: 3000 naira

ABSTRACT

The study entitled “Corporate Social Responsibility and Performance in Nigerian Deposit Money Bank” was designed to examine the impact of Corporate Social Responsibility (CSR) on the performance of Nigerian Deposit Money Bank. Three research hypotheses were formulated in a null form. The aim was to examine to what extent CSR proxies vis-a-vis Community Corporate Social Responsibility (CCSR), Charity Contribution (CC) & Human Resources Development (HRM) have impacted on the performance variable Return On Equity (ROE). The population of the study comprises all the banks that survived the recapitalization exercise. A sample of seven banks was selected using judgmental approach. This approach seemed appropriate in selecting the sample size since set of criteria were laid down and is only those that met the conditions were selected. The study adopted descriptive research design as a research method. A set of model was formulated to address the stated problem. Multiple regression models were used to test the hypotheses at 5% significance level. All the hypotheses were rejected as all the proxies(independent variables) were found to have statistical significant impact on the performance variables at 5% significance level. The study recommends that a dialogue should be made with the business world and other stakeholders in determining common standards, reporting mechanisms and the extent to which they should be responsible.

TABLE OF CONTENTS

TITLE PAGE – – – – – – – – – I
DECLARATION – – – – – – – – – II
CERTIFICATION – – – – – – – – – III
DEDICATION – – – – – – – – – IV
ACKNOWLEDGMENT – – – – – – – – V
ABSTRACT – – – – – – – – – VI
TABLE OF CONTENT – – – – – – – – VII

CHAPTER ONE: INTRODUCTION
1.1 BACKGROUND TO THE STUDY – – – – – – 1
1.2 STATEMENT OF THE PROBLEM – – – – – – 3
1.3 OBJECTIVE OF THE STUDY – – – – – – 4
1.4 RESEARCH HYPOTHESES – – – – – – 5
1.5 SIGNIFICANCE OF THE STUDY – – – – – – 5
1.6 SCOPE OF THE STUDY – – – – – – – 6

CHAPTER TWO: LITERATURE REVIEW
2.1 INTRODUCTION – – – – – – – – 7
2.2 CONCEPT OF CORPORATE SOCIAL RESPONSIBILITY – – – 7
2.3 ETHICAL ISSUES ON CORPORATE SOCIAL RESPONSIBILITY – – 13

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2.4 ARGUMENT AGAINST CORPORATE SOCIAL RESPONSIBILITY – – 21
2.5 STRATEGIC ROLE OF CORPORATE SOCIAL RESPONSIBILITY – – 26
2.6 CORPORATE SOCIAL RESPONSIBILITY DISCLOSURE – – – 28
2.7 ACCOUNTING FOR CORPORATE SOCIAL RESPONSIBILITY – – 31
2.8 DIFFICULTIES IN REPORTING SOCIAL RESPONSIBILITY ACCOUNTING 49
2.9 IMPACT OF CORPORATE SOCIAL RESPONSIBILITY ON FIRM VALUE 50
2.10 IMPACT OF CORPORATE SOCIAL RESPONSIBILITY ON CUSTOMER
SATISFACTION – – – – – – – – 51
2.11 THE ROLE OF GOVERNMENT IN CORPORATE SOCIAL
RESPONSIBILITY DISCLOSURE. – – – – – 53
2.12 THEORETICAL FRAMEWORK – – – – – – 57

CHAPTER THREE: RESEARCH METHODOLOGY
3.1 INTRODUCTION – – – – – – – – 70
3.2 RESEARCH METHOD USED – – – – – – 71
3.3 POPULATION AND SAMPLE TECHNIQUE – – – – 72
3.4 METHOD OF DATA COLLECTION – – – – – 74
3.5 MODEL SPECIFICATION – – – – – – 74
3.6 TECHNIQUE OF DATA ANALYSIS – – – – – 75
3.7 JUSTIFICATION OF THE RESEARCH DESIGN ADOPTED – – 76
3.8 SUMMARY – – – – – – – – 77

9
CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS
4.1 INTRODUCTION – – – – – – – – 78
4.2 BASIC SAMPLE STATISTICS – – – – – – 80
4.3 CORPORATE SOCIAL RESPONSIBILITY AND NIGERIAN BANKS’
PERFORMANCE – – – – – – – – 82
4.4 DISCUSSION OF MAJOR FINDINGS – – – – – 84

CHAPTER FIVE: SUMMARY, CONCLSUION AND RECOMMENDATIONS

5.1 SUMMARY – – – – – – – – 86
5.2 CONCLUSIONS – – – – – – – – 87
5.3 LIMITATION OF THE STUDY – – – – – – 88
5.4 RECOMMENDATIONS – – – – – – – 89
BIBLIOGRAPHY – – – – – – – 92
APPENDICES – – – – – – – – 101

CHAPTER ONE

Background to the Study

Corporate Social Responsibility (CSR) is a business approach that views respect
for ethics, people, communities and the environment, as an integral strategy that increase
value added, and thus, improves the competitive position of a firm. It is a comprehensive
set of policies, practices and programmes that are integrated throughout business
operations and decision making processes.

Dare (2004) noted that, there is a growing global trend towards both government
mandated and voluntary corporate disclosure of information on the environmental,
labour, human rights, and social impacts of business practices. The goal of this reporting
grouped here under the rubric of Corporate Social Responsible (CSR) reporting, is to
generate new and better information on the performance of Nigerian money deposit
banks. This is aimed at supporting more informed decision-making by key shareholders,
and ultimately to create new incentives for banks to reduce adverse impacts of their
activities.
Over the past decade; a growing number of banks have recognized the business
benefits of Corporate Social Responsible (CSR) policies and practices. Their
experiences are bolstered by a growing body of empirical studies that CSR has a positive
impact on business economic performance and is not detrimental to shareholder value.

11
Banks also have been encouraged to adopt or expand CSR efforts due to the result of
pressures from customers, suppliers, employees, communities, investors, activist
organizations and other stakeholders. As a result, CSR has grown dramatically in recent
years, with banks of all sizes and sectors developing innovative strategies. Banks have
come to realize that CSR is good for business, since it increase productivity, contribute
to competitiveness and creates a positive corporate image in the eyes of consumers,
investors, employees and community at large.

By the same token, socially responsible business, with a purpose beyond making
profit, can have a positive social, economic and environmental impact by helping to
improve working and surrounding conditions. Corporate Social Responsibility could be
viewed as a symbolic relationship that exists between a firm and all the stakeholders.
Ramanathan (1976), stated that there exist a social contract between the organization and
society. Jaggi and Zhao (1996), agreed with the social view when they argue that
organization do not exist in a vacuum, but are part of society, which creates and support
them. They affirm that social environment is a part of the total environment in which
business operates.

Researchers have shown that being socially responsible improves business
financial health. Its reputation is promoted thereby providing it with an edge over its
competitors (Nendu and Urieto, 1988).
In addition, the Federal Government of Nigeria decided to set up the Federal
Environmental Protection Agency (FEPA) as stipulated in Decree 58 of 1988 to protect

12
the potential dangers that industrial activities may pose to the environment and the
society at large, (Obeya, 1991). This Decree was later amended by Decree 59 of 1992. It
was this decree that created the first provided guidelines for environmental regulation in
Nigeria

1.2 Statement of the Problem

Nigeria is a former crown colony of Britain and almost every law has been
inherited from the British. Financial reporting in Nigeria is guided mandatorily by the
Companies and Allied Matter Act (CAMA) 1990, the Statement of Accounting
Standards issued by the Nigeria Accounting Standards Board, the Banking Act 1991 (for
banking institutions) the Insurance Act 1993 (for insurance Banks) the Income Tax
Ordinance 1984 (for all banks and public enterprises), the Security and Exchange Rules
and Regulation 1990 (for public limited banks) and Stock Exchange Rules and
regulations.

As far as Corporate Social Responsibility is concerned, most of the compelling
pressures mounted on organization to engage in CRS may not necessary applicable to
banks operating in Nigeria. Local consumer and civil society pressures are almost non
existent and law enforcement mechanisms have been weak and inefficient (Limbs and
Fort, 2000; Oyejide and Soyibo, 2001, and Ahunwan, 2002).
According to Idoko (1998) despite the fact that Corporate Social Responsibility is
increasingly being recognized as an effective means of decreasing costs and

13
strengthening market share, there has been reluctance by many Deposit Money Banks in
Nigeria to adopt these practices for a number of reasons. First, many banks do not fully
understand what Corporate Social Responsibility is or how it can be practiced to
improve their bottom lines and reduce risk and liabilities. Second, there are few local
experts in Nigeria that could assist banks to implement Corporate Social Responsibilities
measures, making the cost of consulting prohibitive, especially for smaller businesses.
Third, transparency and disclosure of information has generally not been a requirement
from governments and shareholders in Nigeria.

If these banks want to compete in the global market place, however, they must
begin making changes and incorporating Corporate Social Responsibility measures. It is
against this backdrop that this study is undertaken in an attempt to ascertain the impact
of Corporate Social Responsibility on the performance of Nigerian Deposit Money
Banks.

1.3 Objective of the Study

The main objective of the study is to examine the impact of corporate social
responsibility on the performance of Nigerian Deposit Money Banks. Other specific
objectives include:
1. To find out the impact of charitable contribution on return on equity of Nigerian
Deposit Money Banks.

14
2. To determine the effect of community corporate social responsibility on return
of equity of Nigerian Deposit Money Banks.
3. To find out the impact of human resources management on return on equity of
Nigerian Deposit Money Banks.

1.4 Research Hypotheses

In line with the objectives of the study, the following hypotheses were formulated
in null form:
1. Charitable contribution has no significant impact on the return on equity of
Nigerian Deposit Money Banks.
2. Community Corporate Social Responsibility has no significant impact on the
return on equity of Nigerian Deposit Money Banks.
3. Human Resources Management has no significant impact on the return on equity
of Nigerian Deposit Money Banks.

1.5 Significance of the Study

Corporate Social Responsibility reporting assumes that the banks are socially
conscious to discharge their social obligations for the well being of the stakeholders and
society in general. Hence this study will be relevant to the following groups of people:
i. Governments and its agencies will find the work very interesting as it will help
strategize effective ways of regulating environmental, labour and social impacts
of industry. Governments appear to be particularly interested in disclosure system

15
that may also be more cost effective, flexible, and decentralized, and that build on
market mechanism and public participation.
ii. The study will benefit the consumers since they are among the public that have
growing concern about the environmental and social impacts of the products they
buy, the places they work and the communities they live in, which led to new
demands for corporate disclosure.
iii. Investors have increasingly urge banks to demonstrate their social and
environmental performance to investors – both traditional mainstream investors
and growing numbers of socially responsible investors will highly benefit from
this study.
iv. Corporate organization will find the study useful in the process of developing
reporting systems, measuring performance, and tracking changes over time can
support the development of information systems that improve internal
management of risks, stakeholders etc.
v. The study will add to the empirical evidence on Corporate Social Responsibility
and accountability literature in Nigeria.

1.6 Scope of the Study

The study title Corporate Social Responsibility and Performance of Deposit
Money Banks in Nigeria was designed to cover a period of five years (2004 – 2008).
Due to circumstances beyond our control, the study focused on 9 banks out of the 20
banks listed in the Nigerian Stock Exchange

CAUSES AND EFFECTS OF TAX EVASION AND AVOIDANCE ON THE ECONOMY (A CASE STUDY OF BOARD OF INTERNAL REVENUE IN, ABIA STATE)

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PROJECT TOPIC AND MATERIAL ON CAUSES AND EFFECTS OF TAX EVASION AND AVOIDANCE ON THE ECONOMY (A CASE STUDY OF BOARD OF INTERNAL REVENUE IN, ABIA STATE)

The Project File Details                                                                                                       

  • Name: CAUSES AND EFFECTS OF TAX EVASION AND AVOIDANCE ON THE ECONOMY (A CASE STUDY OF BOARD OF INTERNAL REVENUE IN, ABIA STATE)
  • Type: PDF and MS Word (DOC)
  • Size: [666 KB]
  • Length: [65] Pages
  • With Reference and Questionnaire
  • Amount: 3000 naira

ABSTRACT

This study was on the causes and effect of Tax Evasion and Avoidance on the economy (Board of Internal Revenue in Abia State). The major objective of the study is to identify the causes and effect of Tax Evasion and Avoidance in the state and how it is done. It also the aim of the study to suggest ways of at least minimizing this ugly incidence in the state, and the study sought the opinions of the staff (Senior and Junior) of the organization. The population size of the research work is 120 which includes the senior official and some staff of inland revenue department of ministry of finance make up the sample frame. The sources of this data was both primary and secondary source which includes interview, questionnaire, textbook, internet search, newspaper etc. The researcher uses simple percentage method in analyzing the data and the major findings is that the imposition of high tax rate will drastically reduce the level of income and profit on the part of the tax payer. From the findings, the researcher, therefore recommends that government should find a way of checking and balancing tax payments so as not to discourage tax payment on the part of the payers.

TABLE OF CONTENTS

Title page                                                                i

Approval page                                                         ii

Dedication                                                               iii

Acknowledgement                                                 iv

Table of content                                                      v

Abstract                                                                  viii

 

CHAPTER ONE

1.0   Introduction                                                    1

1.1   Background of the study                                1

1.2   Statement of problems                                   6

1.3   Objective of the research                                7

1.4   Research questions                                        8

1.5   Significance of the study                                9

1.6   Scope of the study                                        10

1.7   Limitation of the study                                  11

1.8   Definition of terms                                          12

 

CHAPTER TWO

2.0   Literature Review                                           16

2.1    Preamble/Introduction                                 16

2.2   Conceptional Framework                               19

2.3    Current literature based on theories/

models and research method                         24

2.4    Summary of the literature review                 27

 

CHAPTER THREE

3.0   Research Methodology                                    29

3.1  Design of the study                                         29

3.2   Area of the study                                            30

3.3   Population of the study                                  30

3.4   Sample/Sampling techniques                        30

3.5   Method of data collection                               32

3.6  Validity/Reliability of instrument                  33

3.7   Distribution and Retrieval of instrument      34

3.8   Method of analysis                                          35

 

CHAPTER FOUR

4.0   Data presentation and analysis                     36

4.1   Data presentation and interpretation           36

4.2   Findings                                                          45

4.3   Discussion of the findings                              47

 

CHAPTER FIVE

5.0   Summary, Conclusion and Recommendations        50

5.1   Summary of findings                                      50

5.2   Conclusion                                                      52

5.3   Recommendations                                          54

5.4   Implication of the findings                              56

5.5   Suggestion for further studies                       56

References                                                      58

Appendix A                                                     59

Appendix B                                                     60

Questionnaire                                                 61

CHAPTER ONE

INTRODUCTION

BACKGROUND OF THE STUDY

Tax is one o the main source of Government Revenue. It is a strong social and economic tool of the government in regulating the economy and maintaining health social like of the citizens. Tax can be defined as a compulsory payment by individual and companies to the state to enable her attain the National goals objectives. Tax is a non-punitive but compulsory levy by the Government on properties and income of individuals and corporations within the territory. The money raise there of constitutes part of source of finance for general government expenditure in the economy. According to Aguei (1983:276) tax is the transfer of resources from the private to the public sector in order to accomplish some of the Nation’s Economic and Social Goals. It is levy imposed by the government on the income profit or wealth of an individual, partnership and corporate organization. Tax is therefore the system whereby individual are assessed and the final collection of the money for and on behalf of the government. It is a machinery through which Income Earner is obliged to pay a fraction of his income to the government.

There are various type of Taxation which could be classed under two main headings: direct and indirect tax. These two types of tax may be distinguished in terms of the possibility of shifting the tax burden. However, taxes according to Economist is classified whether the tax is proportional, progressive or regressive. The importance of taxation in Nigeria arises out of the important roles, which the government in the light of numerous imperfections and short coming that often beset the economy has to play in order to ensure greater economic development, transformation and growth. Other objective of taxation include influencing economic activities in the country, to bridge the gap between the rich and the poor, to curtail consumption of undesirable and harmful goods and services to combat inflation, to encourage investment to protect infant industries and as well as correct the country’s balance of payment.

However, this phenomenon is not restricted to any part of the world. In New Zealand, the loss of revenue resulting from tax evasion and avoidance is a problem that has been described as “Reaching epidemic proportions”. The unfortunate aspect of this phenomenon is that the rate of this happening in the developing countries is always higher than what is obtained in developed countries.

According to Onoginwa “Personal Income Tax Evasion is generally over 50% in Nigeria compared to about 14% in U.K.” both rich and the poor embrace this chronic problem in the state with literate population and professionals in the state been the big avoiders. Whereas evaders can be found among payer and trader, having carefully examined the above trend of events, the researcher then decides to carry out evasion study to unmask the causes and effect of tax evasion and avoidance on personal income of Board of Internal Revenue in Abia State with a view of finding solution to them.

PROFILE OF BOARD OF INTERNAL REVENUE IN ABIA STATE

Taxation in Abia State is not quite different from of Nigeria as a country but there are certain peculiar features in her profile so as to give detail understanding of the state in her Revenue generating effort that we have decided in the state.

Prior to 1st April 1959, the direct tax ordinance Native Authorities assessed and collected income tax from Africans resident within their area of jurisdiction Non-Africans were subjected to the Income Tax ordinance operated by the federal government through its regional office.

With the Nigeria (constitution) order in council 1954 power was given to each region or deriving income there from. Eastern region became effective from 1st April year. This law brought pay-as-you-Earn (PAYE) of tax collection in operation.

The Raisman Fiscal Commission also applied to eastern region. To complete the Act, Eastern Nigeria passed the finance law 1963. This law was to fill the gaps which the federal legislation could legislate on example assessment appears machinery, the machinery for collection and the rates of tax.

With the end of the civil war and the creation of three states has produced new law. The South Eastern (Cross Rivers and Akwa-Ibom) and the Eastern Central States. With the promulgation of South East State edict No. 6 of 1969, the Board of Internal Revenue was established as a statutory body to take charge of tax amended the edict. Since then there has been certain amendments of the state increase.

STATEMENT OF THE PROBLEM

Tax has been a powerful instrument of revenue generation in Abia State of which tax evasion and avoidance are the major problem that obstructs the maximum collecting of tax. Highly technical problems besieging the Board of Internal Revenue in the state such as lack of encouragement by the government to tax payer, poor tax administration, unforced penalties on the tax defaulters which make tax law seemed to be useless and most importantly, logistics and zeal to enforce tax payer.

Therefore inefficiency of taxation system in the state deprive the government the ability to produce the citizen with the basic necessities of life.

Since the problem has been identified, the researcher considers it necessary to survey as much as possible to find solution for solving these problems of tax evasion and avoidance in Abia state and Nigeria in general.

OBJECTIVE OF THE STUDY

The broad objective of this study is to find out why people evade and avoid tax and suggest ways of minimizing the practices in Abia State. The broad objective is broken down to the following specific objective:

To establish the existence of tax evasion and avoidance on the revenue generated in Abia State.

To examine relationship between tax rates, tax evasion and tax avoidance.

To proffer solution to the problem of tax evasion and avoidance.

To investigate why people evade and avoid tax.

To determine the effect of tax evasion and avoidance on the revenue generated in Abia State.

 

RESEARCH QUESTIONS

In the course of this study, the following research questions shall be examined:

Is the existence of loopholes in the Nigerian tax law system an opportunity for tax avoidance?

Is there any effect of tax evasion and tax avoidance on the Nigeria economy?

How can tax evasion and tax avoidance by minimized and eliminate in Abia State?

 

THE SIGNIFICANCE OF THE STUDY

This work is importance in many respects. It is therefore, intended that a successful completion of this project help in reducing and even eliminates the problems associated with taxation. Therefore the significance of this study are as follows:

It will help to inform the tax payers of the numbers of benefits gained by paying tax.

The project will as well highlight on the importance of high efficiency and effectiveness required of tax officials.

The study will also be of immense benefit to the government by alerting them on the war against tax evasion and avoidance and impose the necessary penalty on any offender.

The study will help to suggest ways of removing inherent bottleneck in taxation.

Finally, the study is useful to individual, tax authority and government in general.

 

SCOPE OF THE STUDY

The scope of this study covered the cause and effects of Tax Evasion and Avoidance on the economy Tax Board of Internal Revenue in Abia State and is of the view that this will bear good result.

LIMITATION OF THE STUDY

In a study of this nature, a lot of limitations are bound to come-up, the work is limited by finance. The researcher needs to travel to different local government headquarters, the state capital Umuahia for the necessary data. This is money consuming hence might have hindered the effectiveness of carrying out the research.

LITERATURE: Due to the lack of the relevant books in the school library, the researcher had to travel to many other institutions to gather the necessary textbooks, journals, publications etc for the research work.

TIME: The researcher faced the research problem of inadequate time.

DATA COLLECTION: I must confess that access to data collection was not an easy task. However, the employees of the Board of Internal Revenue were very co-operative. The problem I encountered in data collection was as a result of creation of new Local Government Area.

Also all data pertaining to revenue of the state since the creation of Abia State from Imo State have disappeared.

RESPONDENTS ATTITUDE: The researcher was faced with problems of getting the actual information from the public since they think it is revenue of assessing their liabilities. The pretest set back of this research is the most of the interviewed official (Tax Officials). The tax officials were afraid that the result of the research could be used to expose their corrupt practices.

 

DEFINITIONS OF TERMS

Below are the meanings of the following concepts as applicable to the study;

TAX ASSESSMENT: This is the process of ascertaining the amount of tax for which an individual or company is liable to pay.

TAX COLLECTION: This is the process of receiving or gathering taxes from tax payer.

TAX DELINQUENCY: This refers to the failure to pay a tax obligating on the date it is due.

TAX DRIVE: This means raid carried out by tax officials aimed at collecting tax revenue due to government from tax payer.

TAX EVASION: This is a willful and deliberate violation by a tax payer to escape a legal tax obligation by failing to report a source of income or seeks to reduce his tax liability by understating a source of income to the Tax Authority.

TAX AVOIDANCE: This is a situation by which a tax payer take advantage of the weakness or loopholes in the tax system in order to pay less tax than he ought to have paid.

TAX RELIEFS: These are allowance to a tax payer on his circumstance prevailing in the preceding year of assessment such as personal allowance, children allowance, relatives and dependent allowances etc.

TAX LIABILITY: This is the total amount of tax an individual or company is supposed to pay.

TAX PAYABLE: It is any amount of tax an individual should actually pay. It is also tax liability less any tax credit or withholding tax.

DIRECT ASSESSMENT: This involves the assessment of self employed, e.g. trade, business, profession or vocation.

RELEVANT TAX AUTHORITY: This is the authority that could impose and collect on the income of a taxable person for a year of assessment.

YEAR OF ASSESSMENT: This is a period of twelve months commencing is 1st January to 31st December.

DIRECT TAX: These are tax levied on factors of production. The burden of direct tax falls on the producer.

INDIRECT TAX: This is the type of tax that is levied on goods and services. The burden of indirect tax fall on the final consumer.

BUDGETING AS AN INSTRUMENT OF INTERNAL CONTROL IN A MANUFACTURING ORGANIZATION

Download the complete Accounting project topic and material (chapter 1-5) titled BUDGETING AS AN INSTRUMENT OF INTERNAL CONTROL IN A MANUFACTURING ORGANIZATION here on iProjectTopics. See below for the abstract, table of contents, list of figures, list of tables, list of appendices, list of abbreviations and chapter one. Click the DOWNLOAD FULL WORK BUTTON BELOW CHAPTER ONE  to get the complete project work instantly.

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PROJECT TOPIC AND MATERIAL ON BUDGETING AS AN INSTRUMENT OF INTERNAL CONTROL IN A MANUFACTURING ORGANIZATION

The Project File Details                                                                                                       

  • Name: BUDGETING AS AN INSTRUMENT OF INTERNAL CONTROL IN A MANUFACTURING ORGANIZATION
  • Type: PDF and MS Word (DOC)
  • Size: [666 KB]
  • Length: [65] Pages
  • With Reference and Questionnaire
  • Amount: 3000 naira

ABSTRACT

An efficient budgeting control system is one that produces the desired result. A balanced budget is the one that produces no variances but to achieve this, we are left to contemplation rather than a reality. This has become the problem of most of our manufacturing concerns in Nigeria. This study investigated the budget control and execution in manufacturing concerns in Nigeria with a view of appraising their efficiency. Out of a population of one hundred and fifty six drawn from the manufacturing concern, seventy eight were selected as the sample size using statistical sample tools (Taro Yamani). A questionnaire was designed and distributed to elicit information from the sample population; also data was sourced through primary and secondary sources. These data collected were presented and analyzed by means of tables and percentages. The hypotheses adduced were tested using such tools as chi-square. It was observed that manufacturing concerns do plan their profit so as to minimize losses though the procedure is not religiously carried out. However, it was discovered that the procedure is inadequate and inefficient. An inadequate budget procedure and execution causes a high accumulation of inventory thereby tying down the capital which could have yielded greater profit to the organization. Therefore there is need for the proper control of budgets in manufacturing concerns as to minimize losses and maximize profits.

TABLE OF CONTENTS

Approval Page ii
Dedication iii
Acknowledgement iv
Abstract v
CHAPTER ONE: INTRODUCTION
1.1 Background of the Study 1
1.2 Statement of the Problem 3
1.3 Objective of the Study 4
1.4 Research Question 4
1.5 Hypotheses of the Study 5
1.6 Significance of the Study 6
1.7 Scope of the Study 7
1.8 Limitation of the Study 7
1.9 Definition of Terms 8
References 9
CHAPTER TWO: REVIEW OF RELATED LITERATURE
2.1 Definition of Budget Manual 10
2.2 Reasons for Budgeting 11
2.3 Budget and Budget Planning 12
2.4 Fixed and Flexible Budget 13
2.5 Master Budget 14
2.6 Cash Budget 17
2.7 How to Prepare A Budget 20
2.8 Problems of Budgeting 25
2.9 Effective Internal Control System 26
2.10 Tools of Internal Control System 37
References 39
CHAPTER THREE: RESEARCH METHOLOGY
3.1 Research Design 40
3.2 Sources of Data 40
3.3 Research Instrument 41
3.4 Reliability/Validity of Research Instrument 42
3.5 Population 42
3.6 Sampling Size/Technique 43
3.7 Administration of Research Instrument 47
3.8 Method of Data Analysis 48
3.9 Decision Criterion for Validation of Hypothesis 49
CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS
4.1 Data Presentation 50
4.2 Analysis of Questions 51
4.3 Test of Hypotheses 72
CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS
5.1 Summary of Findings 83
5.3 Conclusion 84
5.4 Recommendations 86
Bibliography 88
Appendix 1 91
Appendix 2 92

CHAPTER ONE

INTRODUCTION
1.1 BACKGROUND OF THE STUDY
According to Enudu (1999), the business environment is characterized by
a lot of uncertainties ranging from such factors as: Economic environment,
political and legal factors, social environment, supply and demand forces,
competition, consumers’ attitude and technological changes.
A critical look at the performances of some of these manufacturing
business organizations will reveal a lot of business failures as a result of lack of
proper planning against these uncertainties.
According to Drury (2000), proper planning of business helps in reducing
uncertainties thereby providing the management of these enterprises with a clear
direction by determining their courses of actions in advance.
According to Pandey (2010), for any enterprise to achieve these goals and
objectives, they must be managed effectively and efficiently. Management is
efficient if it is able to accomplish the objectives of the enterprise and becomes
effective when it accomplishes the objectives with minimum efforts and costs.
One of the ways in which the management can achieve these objectives is
though profit planning and control or budgeting.
According to Nweze (2011), Budgeting in its true word is the design of
the future state of an entity and the effective ways of bringing it about.
Budgeting or planning involves the determination of the future course of actions
for accomplishing the objectives of the enterprise.
According to Lucey (2002), the main purpose of budget planning is to
provide the necessary guidelines for making decisions. With the proper budget
planning, the enterprise can no longer be under the mercy of whims of Fickle
economic and social forces thereby relying on the ability to sense what is
required. (Nweze 2011).
The value of budgeting control of any organization can never be over
emphasized as these organizations and companies have limited resources and
these scarce resources impose limits on the number of extent and range of end
result the organization was set out to achieve.
According to Nwoha and Ekwe (1999), some of these goals include
maximizing profit or achieving some satisfactory level of performance, profit
satisfaction achieving continual growth or ensuring the survival of the
organization avoiding risk in making investment and performing a social
services desired by others.
According to Nweze (2011), A budget therefore co-ordinates the separate
plans of different departments in an organization be it manufacturing concerns
or non-manufacturing concerns and provides means of bringing both the
marketing, production and financial activities of the organization together.
The proper co-ordination of the various activities of these organization
especially manufacturing concerns by their management is the main concern of
this study.
1.2 STATEMENT OF THE PROBLEM
Having stated earlier according to Enudu (1999) that the business
environment is full of uncertainties as a result of such factors; socio-economic
issues, political unrest, demand and supply forces, legal issues and
technological changes all these affect the management of any organization in
one way or the other thus needed attention for proper management.
You would equally recalled that organizational goals and objectives are
numerous but the means or resources for satisfying these needs are limited, at
times not available hence needed control to satisfy the high priority areas.
These problems enunciated above have led the researcher to find answers
to such questions as follows:-
 Do manufacturing companies in Nigeria do Budgeting?
 If they do, what are the types of budgeting usually employed by them?
 The type used or applied does it enhances their profit planning strategies?
1.3 OBJECTIVES OF THE STUDY
According to Pandey (2010), Budgeting was undertaking with the
following objectives in mind.
 To find out whether or not manufacturing business organizations control
their levels of profit making and the means used to achieve this.
 To examine whether the manufacturing business concerns in Nigeria
plans their profits hence their losses are unnecessarily large in relation to
their budget estimate
 To identify the types of budgeting in some of the manufacturing business
concern in Nigeria that enhance efficiency
1.4 RESEARCH QUESTIONS
 Does the manufacturing business organization control their levels of
profit making and the means used to achieve it
 Does manufacturing business concerns in Nigeria plans their profit hence
their losses are unnecessarily large in relation to their budget estimate
 Does the types of budgeting in some of the manufacturing business
concern in Nigeria enhance efficiency
1.5 HYPOTHESES OF THE STUDY
To identify the achievements of the desired objectives, the following
hypotheses are formulated:
H0: Represents Null Hypothesis
H1: Represents Alternate Hypothesis
HYPOTHESIS I
H0: Manufacturing business organization do not control their levels of profit
making and the means used to achieve it
H1: Manufacturing business organization do control their levels of profit
making and the means used to achieve it
HYPOTHESIS II
H0: Manufacturing business concerns in Nigeria do not plan their profit hence
their losses are unnecessarily large in relation to their budget estimate.
H1: Manufacturing business concerns in Nigeria do plan their profit hence
their amount of losses are not unnecessarily large in relation to their
budget estimate.
HYPOTHESIS III
H0: The type of budgeting in some of the manufacturing business concern in
Nigeria is not efficient.
H1: The type of budgeting in some of the manufacturing business concern in
Nigeria is efficient.
1.6 SIGNIFICANCE OF THE STUDY
According to Nweze (2011), Budgeting is very important especially at
this time of our economic development at this time of our economic
development is that?
a. It will show why profit planning is very vital for any manufacturing
establishment that wishes to survive.
b. It will help them to determine and maintain an acceptable level between
high profit and low profit at a given time thus leading them to attain the
various organizational goals and objectives.

1.7 SCOPE OF THE STUDY
According to Enudu (1999), it is expected that a study of this will entail
visits to 36 states in the country to elicit information from numerous
manufacturing concerns. But this was not possible because of some constraints
such as time and money.
1.8 LIMITATIONS OF THE STUDY
As a result of these constraints (time and money) this study was limited to
manufacturing concerns in the old Eastern states which includes; Enugu,
Anambra, Abia, Ebonyi; and Imo state with hope that the conclusions reached
in the course of the study would apply to other manufacturing business in
Enugu State at AMA Breweries Plc. Enugu in particular.
Another limiting factor was the literacy level of the respondents. Out of
78 respondents sample their opinions, 2 of them were sceptical as regards given
out useful information on the budget planning of this organization. This was a
result of dishing out useful data to their competitors in the same manufacturing
industries or business.

1.9 DEFINITION OF TERMS
EFFICIENT: A firm is said to be efficient if it can manage their resources well
EFFECTIVENESS: This entails proper co-ordination of these limited
resources in form of both human and material resources to combat their
responsibilities
PLANNING: The design of a desired future state of an entity and the effective
ways of brings it about.
GOALS: Performances can be defined as the assessment of the company
towards reaching the targeted goals and objectives.

BUDGETING AND BUDGETARY CONTROL AS TOOLS FOR ACCOUNTABILITY IN GOVERNMENT PARASTATALS

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PROJECT TOPIC AND MATERIAL ON BUDGETING AND BUDGETARY CONTROL AS TOOLS FOR ACCOUNTABILITY IN GOVERNMENT PARASTATALS

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  • Name:BUDGETING AND BUDGETARY CONTROL AS TOOLS FOR ACCOUNTABILITY IN GOVERNMENT PARASTATALS
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ABSTRACT

This research work was focused on investigation on the use of budgeting and budgetary control as tools for accountability in government parastatals. ( A case study of Enugu State Housing Development Corporation). Budgetary control is a quantitative expression of plane of action prepare in advance of period to which it relate. The organization is face with the problem of lack of budgeting while planning and controlling their activities. The objective of the study is to determine if budgeting and budgetary control affect the quality of services delivery in government parastatals. The research also aims at determining if budgetary control contribute to the improvement of management efficiency and high productivity. Data were collected from primary and secondary source. Secondary source of data were collected from textbooks, periodic articles and journals. Questions were distributed as well as personal interviews with functional and departmental heads were conducted. The sample size of 60 were used and was chosen among the number of department / section using Bowleys proportional allocation formula Data were analyzed using table and simple percentage, hypothesis were tested using chi-square statistics. We discovered among other things that budgeting and budgetary control affect the quality of service delivery in government parastatals. It was also revealed that budgeting and budgetary control contributes to the improvement of management efficiency and high productivity. In line with the above, we recommend among other things that the budget plan and preparation should be a corporate duty of the unit heads with head of department in the corporation, improving legislation, realistic budget target. Adherence in the budgeting provision should be practiced by top management.

TABLE OF CONTENTS

Title Page i
Approval page ii
Dedication iii
Acknowledgement iv
Abstract v
CHAPTER ONE
1.0 Introduction 1
1.1 Background of the study 1
1.2 Statement of the problem 4
1.3 Objectives of the study 4
1.4 Research Question 5
1.5 Hypotheses of the study 5
1.6 Significant of the study 6
1.7 Scope and Limitation – 7
1.8 Definition of terms 8
Reference 9

viii

CHAPTER TWO
2.0 Review of related literature 10
2.1 Budgeting and budgets 10
2.2 Typology of budgets for planning and control 19
2.3 Features of budget 21
2.4 Fundamentals of budgeting and budget
Administration 28
2.5 Preparation of budgets 29
2.6 Budgeting controls 37
2.7 Innovation in the area of budget
Zero- Based Budgeting (ZBB) 42
2.8 Enugu State housing development corporation
Historical background 50
References
CHAPTER THREE
3.0 Research design and methodology 55
3.1 Research design 55
3.2 Source of data 56
3.3 Research instrument 57
3.4 Reliability/ validity of research instrument 58
3.5 Population of the study 58
ix

3.6 Sample size/ technique 59
3.7 Administration of research instrument 61
3.8 Method of data analysis 61
3.9 Decision criterion for validation of hypotheses 62
CHAPTER FOUR
4.0 Data presentation & analysis 64
4.1 Data presentation 64
4.2 Testing of hypothesis 83
CHAPTER FIVE
5.0 Summary of findings, conclusion and
Recommendation 95
5.1 Summary of findings 95
5.2 Conclusion 96
5.3 Recommendations 97
Bibliography
Appendix

CHAPTER ONE

1.0 INTRODUCTION
1.1 BACKGROUND OF THE STUDY
The efficiency and effectiveness of the operations of a business
depends on the control available to management in almost every business
organization, there are a number of activities going on at the same time such
as producing, purchasing, distributing, selling and financing a product.
These are interrelated in such a way that they affect the attainment of the
organization goals.
The institution of cost and management accountant(ICMA)defined
budget as a financial or quantitative statement prepared and approved prior
to defined period of time of the policy to be pursed during the period for the
purpose of attaining a given objectives. It may include income, expenditure
and the employment capital.
Therefore in order to achieve these objectives or goals, the
organization must economize resources and discover the means of achieving
these goals. These goals can only be realized when the property planned use
of available resource are controlled and co-ordinated effectively. Thus a
system of managing a business by making forecast of the different activities
and applying a financial to each forecast becomes imperative. These forecast
2

are guided by the information and adoption of planned system such as
techniques in budgeting , variance analysis. Etc.
Pandy (2008) defines budgeting control as the establishment of
departmental budget relating the responsibilities of the executive to the
requirement of a policy, and the continuous comparison of actual budgeted
result either to secure by individual actions. The objective of that policy is to
provide a firm basis for its revision.
Osisoma, (2000) opined that budgeting is a systematic and formalized
approach for accomplishing the planning, co-ordination and control
responsibilities of management. It is a process of preparing in advance of the
period to which it relates a summary statement of plans expressed in
quantitative terms, which if utilized with sophistication and good judgment,
would enhance the attainment of an organization’s objectives. A budget
therefore, is a plan quantified in monetary terms, prepared and approved
prior to a defined period of time, usually showing planned income to be
generated and /or expenditure to be incurred during that period, and the
capital to be employed to attain a given objectives.
A budgetary control is described by lucey, (2002) as a quantitative
expression of a plan of action prepared in advance of the period to which it
relates. Budget may be prepared for the business as a whole, for
3

departments, for functions such as sales and production, or for financial and
resources items such as cash, capital expenditure, manpower, purchase. Etc.
the process of preparing and agreeing budgets is a means of translating the
overall objectives of the organization into detailed, feasible plans of action.
It is therefore, germane to say that the level of importance that is attached in
this plan and effort made in controlling the finance differ in organizations.
Once the goals are set, which must be based on the detailed analysis of
feasibility within the content of the political and social value the plans will
enable it to strive towards its attachment.
Often than not when these plans are put into operation, conditions
prevail which trends to cause deviation from the plan and corrective
measures are always taken to steer the business back on the right track. The
process already mentioned as it is applied entailed budget and its control.
And to lend credence to goal congruence suitable techniques should be
applied to specific areas that need special attention hence measurement of
budgeted with actual to arrive at the finance cannot be over emphasized. A
business is said to be on the right track if the outcome of the budgeted
estimate is favorable as against the actual. The little that is said concerning
this project has encompassed all avenues in which the subject can aid
4

management decision, rather it should be seen as a guide for people
business.
1.2 STATEMENT OF THE PROBLEM
The growth of the business hinges, or better put, rests squarely units
budgetary control system or techniques hence they are considered as a vital
tools in any business situation. This study then is aimed at assessing and
evaluating the event to which budgetary control has been a tool for the
growth and global realization of any organization.
Lack of budgets in planning and control has required in the
indiscriminate use of fund meant for more viable activities. Again the
inability of many companies to plan and accomplished budget goals is
traceable to their inability to apply controls in their budget system.
Budgetary goals are not realized due to low level of understanding of
the budget system by middle and low level of management staff. Other
problems are shortage of stocks and shut down. These and many more are
some of the problem of lack of budgeting control.
1.3 OBJECTIVE OF THE STUDY
The primary purpose of this study is four fold. They include the
following:
5

i. To determine if budgeting and budgetary control affect the quality
of service delivery in government parastatals.
ii. To determine if there is a connection between the type of budget
implemented and their actual performance.
iii. To determine whether or not budgetary controls as a management
tools contribute to the improvement of management efficiency and
high productivity.
iv. To find out the use of the budgetary controls as an appraisal
parameter for assessing managers budget.
1.4 RESEARCH QUESTIONS
i. Does budgeting and budgetary controls affect the quantity of services
delivery in government parastatals.
ii. What are the connection between the type of budget implemented
and their actual performance?
iii. How can budgetary control as management tools contribute to the
improvement of management efficiency and high productivity?
iv. How can budgetary control be used for assessing Manager’s budget?
1.5 HYPOTHESIS OF THE STUDY
1. H0: Budgeting and budgetary control does not affect the quantity of
services delivery in government parastatals.
6

H1: Budgeting and budgetary control affect the quantity of
services delivery in government parastatals.
2. H0: Budgeting and budgetary control does not contribute to the
improvement of the management efficiency and high productivity.
H1: Budgeting and budgetary control contribute to the
improvement of the management efficiency and high productivity.
3. H0: Budgeting and budgetary control is not used for assessing
manager’s budget.
H1: Budgeting and budgetary control is used for assessing
manager’s budget.
4. H0: There is no connection between the type of budget implemented
and actual performance.
H1: There is connection between the type of budget implemented
and actual performance.
1.6 SIGNIFICANCE OF THE STUDY
Budgeting and Budgetary control is a function that is very important
and of great significant to any of organization. It is not peculiar to only the
manufacturing organization but also necessary to service of the government.
7

The study will contribute towards enhancing profits of the
organization, business or an individual. It will help to control one’s income.
Budgeting is necessary to make matters simple and hence life easy to handle.

Budgeting guides people towards the allocation of money in different
sectors, such as food, shelter, clothing, household expenses, medical care,
utilities etc.
In case of an annual budget of a nation budgeting makes a blueprint
of the overall funds that the concerned government will spend on various
sectors, the kinds of tax that would be levied and how the prices of essential
commodities would increase or decrease in the month ahead.
In summary, this study will be a guide to scholars, researchers or
writers who may wish to carry further study on budget and its control
apparatus.
1.7 SCOPE AND LIMITATION OF THE STUDY
This study is aimed at finding out the impact of budget and
budgetary control in Enugu State Housing Development Corporation.
The limiting factors are that of availability of data which might be
difficult to obtain following the trend of the attitude of Nigerians with
regards to giving out information. Time constraints are also a limiting factor
8

in undertaking this study. The availability time and short period of the study
made it difficult for the researcher to carryout a wider and more through
work on the issue, at the same time carryout academic activities.
Also literature on the topic as it relate to government parastatals
is very few.
1.8 DEFINITION OF TERMS
The following are defined in the work:
BUDGET: Budget simply means estimate of income and expenditure,
which are planned by the organization for a specific future. In Britain, it
means the annual statement made to the house of commons by the
chancellor of the exchequer, giving details of the government financial plans
for the coming year.
BUDGETING CONTROL: This means a system of managing a
business by making forecasts of the different activities and applying of
financial value to each forecast. Actual performance is subsequently with the
estimate.
THE BUDGETING PERIOD: The budget period coincides with
accounting period. The period varies according to different organization.
9

THE MASTER BUDGET: This is a total budget package which
effectively combines in one statement, the sells, expenses, production and
cash budget of an organization.
VARIANCE: This is the difference between the estimates and actual
result.

BANK FRAUD AND ITS EFFECT ON BANK PERFORMANCE IN NIGERIA

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PROJECT TOPIC AND MATERIAL ON BANK FRAUD AND ITS EFFECT ON BANK PERFORMANCE IN NIGERIA

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  • Name: BANK FRAUD AND ITS EFFECT ON BANK PERFORMANCE IN NIGERIA
  • Type: PDF and MS Word (DOC)
  • Size: [666 KB]
  • Length: [65] Pages
  • With Reference and Questionnaire
  • Amount: 3000 naira

 

ABSTRACT

Fraud is an epidemic dimension that has eadteenp into the banking sectaosr well as the entire economy. Its deavstating effect manifests itself in the deteriorating balance sheet of banks as well as in economic backwardness. As a result, measures to eradicate fraud in banking sector become a central focus of the government and the monetary authorities. It wasstatghaisinbackdrop that

this study was aimed at providing empirical evidence on the effect of fraud on performance of banks.  Data  for  the  analyses  were  obtadinferom  primary  data  throughquestionnaires  and secondary  data  from  NigeriaDeposit  Insurance  Corpoartion  (NDIC)  Annual  Report.  Four hypotheses were formulated to access the impact of looting of fund, social and environmental factors, motivation andgovernment effort on effect forfaud on banks performance in Nigeria.

These  were  tested  with  simple  pertcaegnes  and  ch-si quare  (x2)  statistical  technique  at  5% significance level. Resuslst howed that lack of adequate motivation is not a major cause of fraud in banks, ol oting of fund by bank managers adnidrectors constitutes the major form of fraud in Nigeria, government  effort  and  its  agencies  haveantievgely  impacted  on  combatinfgraud  in  Nigeria and environmental or social factors have negative impact on bank fraud. On the basis of findings, it is recommended thgaot vernment should make their impact to blet infecombating

fraud by establishing more agencies for combating frauds. Those managers and director  involved in looting of fund should be persecuted to serve as a deterrent to subsequently once. In addition,  bank  staff  should  be  properly  screened  to  ttehsetir  morality and  integrity  before recruitment.  Adequate  internal  control  systemshould  also  be  establish  to  have  check  and balancesamong bank staffI.t is envisaged that if all these are put in place, fraud will be reduced

to its barest minimum therebreystoring confidence to bank customers.

 

TABLE OF CONTENTS

Cover    « « « « « « « « « « « « « « « « « « « « « « « « « «

Approval page « « « « « « « « « « « « « « « « « « «

Certification « « « « « « « « « « « « « « « « « « «

Dedication « « « « « « « « « « « « « « « « « « « «

Acknowledgement « « « « « « « « « « « « « « « « «

Abstract   «   «   «   «   «   «   «   «   «   «   «   «   «

List of tables  «  «  «  «  «  «  «  «  «  «  «  «  «  «  «

Table of content

CHAPTER ONE: INTRODUCTION

Background of the study« « « « « « « « « « « « « «

Statement of the problem«  «   «   «   «   «   «   «   «   «   «

Objectives of the study « «   «   «   «   «   «   «   «   «   «   «   «

1.4 : Research Questions «  .«..  «   «   «   «   «   «   «   «   «

1.6 : Scope of the study « « « « « « « « « « « « « « «

1.7 : Significance of the study «    « « « « « « « « «

1.8 : Limitation of the study  «   «   «   «   «   «   «   «   «   «

CHAPTER TWO: REVIEW OF RELATED LITERATURE

2.1: Empirical study  «   «   «   «   «   «   «   «

2.2: Theoretical framework « « « « « « « « «

2.2.1: Causes of bank fraud« « « « « « «

2.2.2: Categories of bank fraud« « «« « « « « «

2.2.3: Types of fraud « « « « «« « « « «

Fraud and its effects  « « « «

Government attempt to prevent bank fraud.. «   «   «  «  

2.2.7: Fraud resolution « « « « «« « « « « « « «

CHAPTER THREE: RESEARCH METHODOLOGY

Research design« « « «

Population of the study « « « « « « « « « « «

Sample size determination« «  «   «   «   «   «

Technique of analysis       .« «.« «.« « « « « «

CHAPTER FOUR: PRESENTATION AND ANALYSIS OF DATA

4.1 Data presentation«   «   «   «   «   «   «   «   «   «

Test of hypotheses

Interpretation of result « «  «  «  «  «  «  «  «  «  «  «

CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS

5.1: Summary of findings « « « « « « « « « « « « «

Appendix i

Appendix II    «

Appendix III   «   «   «   «   «   «   «   «   «   «   «   «

CHAPTER ONE

INTRODUCTION

  • : BACKGROUND OF THE STUDY

 

The significance of the banking sector in any country stems from its role of financial mobilization  from  surplus  to  deficit  unitp, rovision  of  a  competent  payment  system  and facilitation  of  the  implementation  of  monetary  policies.  In  intermediatiboann, ks  mobilize savings from the surplus units of the economy and channel these funds to the deficit unit, particularly private business enterprises, for the purposes of expanding their productive capacity.

The banking sector has become one ofmthoest crtiical sectors in the economy with wide effect on the level and direction of economic growth and transformation and on such economic variables as the rate of unemployment and inflation which directly athffeclitves of our people.

Today, the very integrity and survivability of these laudable functions of Nigerian banks have been deteriorated in view of incessant frauds and accounting scandals.

 

Fraud however has been defined by many scholar s   O   X   I   L   G   L   S   H

 

trick deliberately pra F   W   L   F H  G         L  Q         R   U   G  H  U         W  R         J   D  L  Q                  V I   U   D  X  G                                            L  V                             G   H   V   F   U   L   E H  G    D  V          µ

a person or group of persons with tinhteention of altering facts in order tobtoain undue personal

 

P   R   Q   H   W   D U  \         D  G  Y  D  Q  W  D  J  H  ¶               $   Q   R   W   K H  U                                                  V

 

camouflage, or exclusion of the truth for the purpose of dishonesty/stage management to the financial damage of an individual or an orgzaantion. Going by the definition of the chambers universal learners dictionary Kirkpatrick (1985) define fraud as any person who pretends to be something that he is not is a fraud, a snare, a deceptive, trick, cheat and a swindler.

 

Having explained what fraud is, it is pertinent to define bank fraud which is the subject matter of this study; however bank fraud is the use of fraudulent means to obtain money, asostehtesr, or

property owned  or  held  by  a  financial  institution,  or  to  aoibnt money  from  depositors  by

 

fraudulently representing to be a bank or financial institution. For an action to constitute fraud there must be a dishonest intention and the action must be intended to benefit the perpetrators to the detriment of another peorns.

Going by the definitions, frauds in Nigeria cannot be restricted to the banks alone. A lot of fraudulent activities are prevalent in Nigerian economy ranging from bloody killings, ritual, kidnapping, robberies, forgery, misappropriation, cheating, gaanndgsters and looting. Bank fraud  ranges  from  accou-notpening,  money  transfer  fraud,  cheque  kiting,  telex  fraud,  money laundering fraud, computer fraud, loans fraud and the likes.

According to Oseni (2006) the incessant frauds in the banking industryetatirneggto a level at

 

which many stakeholders in the industry are losing their trust and confidence in the industry. Corroborating  the  view  of  Oseni,  Idorlo(2010),  stressed  that  the  spate  of  fraud  in  Nigerian banking  sector  has  lately  become  a  source  obfaerrmassment  to  the  nation  as  apparent  in  the seeming attempts of the law enforcement agencies to successfully track down culprits. Although the incidence of frauds is neither limited to the banking industry nor peculiar to Nigeria economy, however the higrhate of fraud within the banking indus,trcyalls for urgent attention

with a view to finding solutions.

 

Fraud in its effect reduces organizational assets and increases its liabilities. With regards to banking industry,it may engender crises of confidenacme ong the banking public, impede the going concern status of the bank and ultimately lead to bank fa(Ailudreeyemo,2012).

 

According to kimani (2011) `A way of making money is to stop losing it. The level of fraud in the present day Nigeria has assumedepaindemic dimension. It has eaten deep into every aspect of our life to the extent that a three years old child talks aboutth4e19n,ame give to the newly discovered advanced fee fraud that is hunting our nation.

In  July  2004,  central  bank  of  Nigeria  (CB) Nunveiled  new  banking  guidelines  designed  to consolidate  and  restructure  the  industry  throumgehrgers  and  acquisition.  Basnkand  Other Financial Institutions Ac(tBOFIA) 1991, section 15, waaslso designed to prevent fraud and to make Nigeria banks more competitive and able to play in the global market.

The Nigeria Deposit Insurance Corporation (NDIC) 2007 annual report and statement of  accounts report that cases of attempted frauds and  ifeosrgienr  insured  banks,  as  at  2007 exceeded what was recorded in the year 2006. For instance, the NDIC report for 2007 disclosed that a total of 1,553 reported cases of attempted sfranud forgeries involving over symbols•10

billion compare with 1,193 reprtoed cases offraud and forgeries involving •4,832.17 billion  in

 

the year 2006. The foregoing statistics clearly unfolds the extent to which fraud had had eaten deep into the financial strength benefit the perpetrators to the department of another person.

Today, banks cannot withstand the growing pressure of competition among various banks due to the monster called bank frauds. If this act of fraud is not taerdr,esit might delete our resources because foreign investors might not find it wise to transascint ebsus via our banks.

1.2 : STATEMENT OF THE PROBLEM

 

Banks generally have been experiencing fraud since its evolution. This affects the performance

 

and the profitabiltiy of banks and may possibly ldeato distres.s The inability to identify the

 

immediateand remote causes of continuous cases of bank frauds in virtually all banks in Nigeria is one of the problems brought to b.are

Fraud is a major challenge to the entire banking industry; no bank is immuitnaentdo in  all facets  of  life  (Olorunsegun,   201)0.  The  banking  public  expects  accountability,  fairness, transparency in their day operation for effective intermediation.

Though there were known cases of fraud in the sector, one major question still remain

 

unanswered  which  is  what  is  the  nature  and  rdeinffte ways  through  which  fraud  can  be

 

perpetuated in banks. It is asserted by Adeyemo (2012) that fraud in the bank is possible with corroboration  of  an  insider.  The  banks  aerxepected  to  ensure  that  they  carry  out  their responsibilities with sincerity ofuprpose which is devoid of fraudulent practices. This is relevant

if the banking sector is to gain public trust and goodwill.

 

Another problem is that the government and its agencies have not put enough effort in the prevention and control of bank fraud Ninigeria; otherwise the level of bank fraud would have reduced  to  a  bearable  level.  Agencies  limkeoney  laundering  Actwhich  helps  to  place surveillance on any account through which such excess cash deposits or withdrawals are made, Nigeria Deposit InsurancCeorporation which is involved in managing bank distress, failed banks and financial malpractices in banks Awcthich was vested with powers to recover the debts of failed banks, dishonored cqhuees Act which affects banks in their collection and  payment  of cheques on behalf of their customers and Bill of Exchange Act which helps to collect  the proceeds of trade bills of exchange and cheques are not putting enough effort in the prevention

and control of bank fraud that is the reason why bank fraud is inncgredaasyi  by day in Nigeria.

 

However, environmental or social factors pose a problem in the activities of banking industry as they contribute to bank fraud in Nigeria. Environmental factors are those that can be trace to the

 

immediate and remote environmeonft the bank these factors are manifest in  the  following manne;r the desire to get rich quick slow and complex legal process, poverty and the widening gap between the rich and the pocoor,mpetition among bank staff, the desire to belong to any  social classj,ob insecurity, peer group pressure and societal expectations.

1.3 : OBJECTIVES OF THE STUDY

 

The general objective of this study is to identify bank fraud and its effect on bank performance in Nigeria but thegeneralobjectives of this study ar;e

  1. To identify the causes of bank fraud in Nigeria.

 

  1. To identify the forms of bank fraud in

 

  1. To examine hte efforts of government and its agencies in the prevention and control of bank fraud in
  2. To examine the extentot whichenvironmental or social cfatorscontributed tobank fraud

 

in Nigeria.

 

1.4 : RESEARCH QUESTIONS

 

The following research question guided this study;

 

  1. What are the actual causes of bank fraud in Nigeria?

 

  1. In what way do directors/ managers contribute to bank frauds in Nigeria?

 

  1. What arethe efforts of government and its agencies on bank fraud in Nigeria?

 

  1. What constitutesenvironmental or social factors of bank fraud in Nigeria?

 

1.5 : RESEARCH HYPOTHESES

 

The following research hypothesis were formulated and later tested. They include;

 

H0: Lack of adequate motivation is not a major cause of fraud in banks.

 

H1: Lack of adequate motivation is a major cause of fraud in banks.

 

H0Looting of fund by bank manager/directors does not constitute the major form of fraud in Nigeria.

H1: Looting of fund by bank manager /directors constitutes the major form of fraud in Nigeria.

 

H0Government effort and its agencies have negatively impacted on combating of fraud in Nigeria

 

 

H1: Government effort and its agencies hapvoesitively impacted on combating of fraud in Nigeria.

H0; Environmental or social factors does not have a negative impact on bank fraud.

 

H1; Environmental or social factors have positive impact on bank fraud.

 

1.6 : SCOPE OF THE STUDY

 

This studycenters on fraud in the Nigeriananbking industry with a keeinnterest onfive ( 5 ) insured bankswith datacovering 2002-2011. The fiveinsured banks coveredincludes First Bank of Nigeria Plc, Union Bank ofNigeria Plc, United Bank for Africa PlcD, iamond Bank Plc, Zenith Bank Plc, all in Enugu state, Oparah AvenueraBnch. To achieve the objectives of this  study,  primary  and  secondary  data  weurseed.  One  hundred  and  twenty  five  ()125

questionnaires were administered to the study respondents thapt uwrpeoresively selected from five (5) insured banks in Enugu.

1.7 : SIGNIFICANCE OF THE STUDY

 

This researchwork will be beneficial to the following groups;

 

(A)   BANKS AND FINANCIAL INSTITUTIONS

 

It will be beneficial to the authorities concern with banking operation, managements, staff customers and prospective investors in the industry so as to identify the various(tmhefat,ns

 

embezzlement, forgeries e.t.c) employed in defrauding banks adnednttoifyi the cause of frauds in banks inNigeria.

(B)   GOVERNMENT

 

The government will find this work relevant to future policy and decision making with particular to restructuring its agencies for better performance in detaching frauds in Nigeria banks.

(C)    GENERAL PUBLIC

 

The study will be useful to the general public because the banking industry touches the life of everyone in an economy. Banks all over the world have contributed immensely to the economic growth  and  development  of  nations.  As  such,  problems  sucfhrauads which  can  hinder  the smooth operation of the bankiningdustry should be viewed with all seriousness in other not to intercept or destroy the rate of development.

(d)   Academia

 

It will also be beneficial to people who which to carry out further research in this area, to find this work relevant in their research.

1.8 : LIMITATION OF THE STUDY

 

Bank fraud and its effectnothe performance of bankiss an extensive topic that may inlveo

 

commercial banks and community banks. The researcher will like to touch all aspeacntskinofgb

 

activities, but for lackof time and financial constraints, the researclihmeirt his work to frauds in five (5) insuredbanks.

 

1.9 : DEFINITION OF TERMS FRAUD

Fraud can be defined asdeaceit or trick deliberately practiced in order to gsaoinme advantages dishonestly.

BANK FRAUD

 

Bank fraud is defined atshe use of fraudulent means to obtain money, assets, or other property owned  or  held  by  a  financiainl stitution,  or  to  obtain  money  from  depositors  by  fraudulently representing to be a bank or financial institu.tion

NDIC

 

This is an acronym foNr igeria Deposit Insurance Corporat.ioInt is specially charged with the responsibility of protecting depositorbsy insuring customers deposit to the tune of N200,000.

AUDITORS REPORT ON CORPORATE GOVERNANCE IN NIGERIA NON-FINANCIAL INSTITUTION A CASE STUDY OF GUINNESS NIGERIA PLC

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PROJECT TOPIC AND MATERIAL ON AUDITORS REPORT ON CORPORATE GOVERNANCE IN NIGERIA NON-FINANCIAL INSTITUTION A CASE STUDY OF GUINNESS NIGERIA PLC

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  • Name: AUDITORS REPORT ON CORPORATE GOVERNANCE IN NIGERIA NON-FINANCIAL INSTITUTION A CASE STUDY OF GUINNESS NIGERIA PLC
  • Type: PDF and MS Word (DOC)
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ABSTRACT

The major corporate collapses and related frauds which occurred in Nigeria and around the world have raised doubts about the credibility of the operating and financial reporting practices of companies in Nigeria.

This stirred a number of professional and regulatory organizations to recommend reforms that will improve transparency in financial reporting and thereby increase audit quality and corporate governance practices.

Although evidence of corporate governance practices and audit report exists from developed economies, very scanty studies have been conducted in Nigeria where corporate governance is just evolving. Therefore, this study provides evidence on corporate governance, audit report, and firm related attributes from a developing country, Nigeria. Logistic regression was used in investigating the questions that were raised in the study. Findings from the study show that ownership by non-executive director has the possibility of increasing the quality of audit report.

Evidence also exist that size of the company and business leverage are important factors in audit report for companies  on the Nigerian Stock Exchange. The study suggests that the composition of non-executive directors as members of the board should be sustained and improved upon in order to enhance audit quality.

 

 

CHAPTER ONE

  • INTRODUCTION

According to McConomy and Bujaki, 2000), there has been a considerable debate in recent times concerning the need for strong corporate governance globally (,with countries around the world drawing up guidelines and codes of practice to strengthen governance (Cadbury, 1997, Corporate Governance Code of Nigeria, 2005). The rationale for this emphasis can be linked to increased concerns over the integrity of securities markets (International Federation of Accountants-IFAC, 2010; Millstein, 1999).

Good corporate governance by boards of directors is recognized to influence the quality of financial reporting, which in turn has an important impact on investor confidence (Levitt, 1998 and 2000). Studies have shown that good governance reduces the adverse effects of earnings management as well as the likelihood of creative financial reporting arising from fraud or errors (Beasley, 1996; Dechow, et al., 1996; McMullen, 1996).

Traditionally, the external auditor has also played an important role in improving the credibility of financial information (Mautz and Sharaf, 1961; Wallace, 1980).

In recent times, a series of well-publicized cases of accounting improprieties in Nigeria has captured the attention of investors and regulators alike. The search for means to ensure reliable and high financial reporting has largely focused on the structure of audit report. The auditing profession has been proactive in attempting to improve audit report by issuing standards focused on discovery and independence. As a result, there has been a concerted effort to devise ways of enhancing independence (Corporate Governance Code of Nigeria, 2005; Blue Ribbon Committee, 1999). The profession has also responded to denigrations on audit report. It emphasized that, by its nature, the inherent limitations of an audit make it impossible to eliminate the risk of audit failure (Ricchiute, 1998; IFAC, 2009). The effect of sound governance practices on the quality of financial reporting has recently received attention from researchers, particularly in the United States (McMullen, 1996; Beasley, 1996; Beasley, et al., 2000; Abbott, et al., 2000). The main focus of these studies is the relation between audit committees and fraudulent financial reporting, with results generally supporting a negative relation between an active audit committee and the likelihood of a company being cited for fraudulent reporting. While these results provide evidence from a strong and sophisticated capital market environment, very little research has been conducted in countries where capital markets are less developed and where governance mechanisms are still evolving. However, sound corporate governance practices are equally, if not more important, in countries that are attempting to gain credibility among global investors.

This is particularly so in Nigeria as the country attempts to regain investor confidence following widely reported financial crises.

 

1.2 STATEMENT OF THE PROBLEM                                    

The weakness of corporate governance has proved to be the most important factor blamed for the corporate failure consequences from the economics and corporate crises. There is much that can be done to improve the integrity of financial reporting through greater accountability, the restoration of resources devoted to audit function, and better corporate governance policies (Saudagaran, 2003). Concerns have also emerged about reduced audit report. Economist (2004) noted that there are questions about the independence of the “Big 4” and suggested that concentration is lowering the quality of audits. Therefore, our study extends and contributes to the body of research using Nigerian data to investigate the likely impact of audit report and governance related attributes.

This study is motivated by the interest surrounding the appropriateness of reforms instituted by corporate governance code in Nigeria in response to the corporate failures, global best practice and their implied efficacy in the face of significant implementation and audit report. We investigate empirically the relationship of attributes in the code in improving financial reporting quality.

 

1.3 OBJECTIVES OF THE STUDY

This study specifically identified the following objectives:

  1. To examine if board independence affects audit report.
  2. To investigate if non-executive directors’ ownership affects audit

report.

iii.     To examine if executive directors’ ownership and audit report

  1. To identify the structure of the CEO/Chairmanship of companies in Nigeria; and
  2. To examine the relationship between board compositions, ownership, institutional structures, CEO Chairmanship and firm characteristics on audit report.

 

1.4 RESEARCH QUESTIONS

The main research problem is broken down into sub-problems stated as research questions, which guided the study. Attempts were made in the course of the research to resolve the following questions which are raised:

  1. Does board independence have any relationship with audit report?
  2. Does non-executive directors’ ownership affects audit report?

iii.     Is there a relationship between executive directors’ ownership and audit report?

 

1.5 RESEARCH HYPOTHESES

The null hypotheses stated below, were tested in order to provide answers to the research questions mentioned.

Hypothesis 1:

H (0): There is no significant relationship between boards

independence and audit report.

H (1): There is significant relationship between board’s independence and audit report.

Hypothesis 2:

H (0): There is no significant relationship between non-executive directors’ ownership and audit report.

H (1): There is significant relationship between non-executive directors’ ownership and audit report.

Hypothesis 3:

H (0): There is no significant relationship between executive directors’ ownership and audit report.

H (1): There is significant relationship between executive directors’ ownership and audit report

 

1.6 SIGNIFICANCE OF THE STUDY

The importance of auditing can be illustrated under the principal-agent relationship. The demand for external audits is directly related to the fact that it is the directors (the agents) who prepare the financial statements, which is primarily based on cost reasons. Therefore, this study is expected to provide useful insight into improving audit report. This study contributes to the audit literature as it provides additional empirical evidence on the impact of the size of audit firm on the level of audit report. The study also reflects the quality of audit report in Nigeria. This study will be useful to stakeholders in the Nigerian Stock Exchange (NSE), as it provides evidence on the relationship between audit report and the reform instituted by them in formulating the Code of Corporate Governance for listed companies in Nigeria.

 

1.7 SCOPE OF THE STUDY

This study is premised on the appraisal of audit report and corporate governance in Nigeria. Therefore, data on corporate organisations in Nigeria were sought in providing answers to the problems and questions that have been raised in this research work. The study focuses on Guinness Nigeria plc.

 

 

1.8 LIMITATION OF STUDY

This study is also limited to one organisation basically because of certain factors.

These factors include;

  1. Finance: Lack of finance was a major handicap in this research project. This is a result of the huge transport cost involved in the collection of information necessary for the work.
  2. Time: Time equally posed a very big constraint in this research work in the sense that the time for the study was limited and could not accord the researcher the opportunity to cover some other organisation that could be involved in the research.
  3. Accessibility: During the course of this research project, the researcher found it very difficult to have access to the population of interest and as a result, not all the desired information was collected since enough visit was not made.
  4. Reluctant attitude of Respondents: The research work was equally saddled with the problem of the reluctant attitude of respondents who found it difficult to avail the researcher with information necessary for the work for fear of exposition.

1.9 RESEARCH METHODOLOGY

The hypotheses formulated for this study will be carried out using primary data and secondary data. The primary data consists of self-administered questionnaires and personal interviews, while the secondary data consists of data from various journals, magazines, annual reports of banks, the internet and other literatures. Data collected will be gathered, presented and analyzed accordingly using chi-square. Data will be presented using tables and percentages.

AUDITOR’S LEGAL RESPONSIBILITY AND ITS EFFECT ON ACCOUNTING PROFESSION

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PROJECT TOPIC AND MATERIAL ON AUDITOR’S LEGAL RESPONSIBILITY AND ITS EFFECT ON ACCOUNTING PROFESSION

The Project File Details                                                                                                       

  • Name: AUDITOR’S LEGAL RESPONSIBILITY AND ITS EFFECT ON ACCOUNTING PROFESSION
  • Type: PDF and MS Word (DOC)
  • Size: [666 KB]
  • Length: [65] Pages
  • With Reference and Questionnaire
  • Amount: 3000 naira

ABSTRACT

The study investigate auditor’s legal responsibility and its effect on accounting profession. A survey research design was adopted in the course of the study. The study used a sample size of 49. The total population from which the samples size was derived are the population who of legally registered and practicing accounting firm. Questionnaire was the main data collection instrument used for the collection of field data from the respondents. Field data were collected from respondent in three different states (Anambra state, Enugu and Akwaibom state)   all in south east and south south Geo-political zones of Nigeira. The field data collected from the respondent were all presented in tables and analysed using mean, standard deviation and analysis of variance (ANOVA). The finding shows that auditor’s legal responsibilities such as detection of fraud, prevention of fraud and error etc have positive effect on accounting profession. The result also indicated that  auditors play vital role in auditing financial record of organization in other to  balance financial account, check and detect financial fraud and also authenticate the  correctness of financial information passed to it end users as one of the functions of the legal responsibilities of auditors in accounting profession. It is recommended in the research that auditors should be conscious of their legal responsibilities in accounting profession during auditing activities, it was also recommended that auditors should be free from the influence of internal or external factors which could affect their profession negatively, hence, auditors should always authenticate financial statements in order to be credible in accounting profession.

CHAPTER ONE

INTRODUCTION

1.1 Background to the Study

Auditing is a systematic examination of books, accounts, documents and vouchers of an organization to ascertain how far the financial statements present a true and fair view of the concern. It also ensures that the books of accounts are properly maintained by the concern as required by law. Auditing is defined as a systematic and independent examination of data, statements, records, operations and performances (financial or otherwise) of an enterprise for a stated purpose. In any auditing the auditor perceives and recognizes the propositions before him/her for examination, collects evidence, evaluates the same and on this basis formulates his/her judgment which is communicated through his/her audit report [www.wikipedia.org]. Auditors’ auditing of a financial record provides third party assurance to various stakeholders that the subject matter is free from material misstatement. The term is most frequently applied to audits of the financial information relating to a legal person. Other areas which are commonly audited include: internal controls, quality management, project management, water management, and energy conservation. As a result of an audit, stakeholders may effectively evaluate and improve the effectiveness of risk management, control, and the governance process over the subject manner.

That an auditor has the responsibility for the prevention, detection and reporting of fraud, other illegal acts and errors is one of the most controversial issues in auditing, and has been one of the most frequently debated areas amongst auditors, politicians, media, regulators and the public (Gay et al, 2013). This debate has been especially highlighted by the collapse of both small and big corporations across the globe. The auditing profession in Nigeria has caught the media’s attention following financial scandals in some of the Nigerian banks such as Intercontinental Bank, Oceanic Bank, Afribank, and Bank PHB among others.

Organisations’ management has control over the accounting systems of the organisation and is not only responsible for the financial reports to investors, the owners of the organisations, but also has the authority to determine the precise nature of the representations that go into the reports. It is the responsibility of the management of the organisation that is vested with the preparation and presentation of the financial statement of the organisation to the stakeholders, which may need such information to guide them in their decision making (Chukwuncdu, 2009). To increase the confidence of investors and creditors in financial statements, they are provided with an independent and expert opinion on the fairness of the reports. This expert opinion will be initially provided by one or more stockholders, who will be designated by the other stockholders to perform the task as representatives of the rest of the stockholders.

This mark the beginning of the auditing profession as it quickly emerged to meet market needs for their services. It became necessary that legislation will be soon required to permit persons other than stakeholders to perform the audits, giving rise to the formation of auditing firms. These developments resulted in demand for the services of specialists in bookkeeping and in auditing. Thus the institutionalization of audit as a profession will be then merely a matter of time.

Unfortunately, the spate of corporate failures, financial scandals and audit failures has led to an increase and significant criticism and litigation against the auditing profession (Maccarrone, 2011, Dan et al,2007). Audit is a formal examination, correction, and official endorsing of financial accounts, especially those of a business, undertaken annually by an Accountant. The accounting profession in Nigeria has been under intense pressure due to rising public expectations which is as a result of series of financial failures that occurred during the recessionary years of the late 80’s and the early 90’s (Ekwueme, 2000:14). These financial failures happened too quickly after an unqualified’ audit report was issued by the external auditors. Koh and Woo (2012), noted that in recent years, some spectacular and well-publicized corporate collapses and the subsequent implication of the reporting auditors have highlighted the audit expectation gap. In reality, the unqualified opinion is wrongly seen as a certification that the firm or enterprise is solvent, liquid and has the capacity to adapt to the dynamics of the environment. Any subsequent failure of business resulting from management misjudgement, fraudulent practice, economic instability, inconsistency in micro and macroeconomic policies etc are viewed as failures of auditors (Adeniji, 2011:510).

The role of auditors is crucial in today’s corporate world is especially due to the separation of ownership from management as a result of numerous shareholders in companies. The auditors are usually perceived as independent and as a result users rely on audit reports because they expect auditors are unbiased (Nagy, 2010:4). The Auditor’s role is carried out to add credibility to the financial information released after the end of a company’s financial year. This credibility is, however, called into question after some spectacular and well-publicized corporations (for example Enron and WorldCom in USA) collapsed shortly after an unqualified (in other words “clean”) audit report had been issued (Lee, Gloeck and Palaniappan, 2007:1).

These events have thrown the accounting profession into a spotlight. Ekwueme (2000) explained that shareholders and most of the general public feel that as a result of the collapse of banks and firms, the auditor’s safeguard are worthless.

These perceptions draw a line that needs to define the role of the auditor in protecting the interest of shareholders and ensuring that there is good corporate governance. Owners of business need auditors, more than ever, to detect and prevent fraud. Perhaps, this is due to the expanding nature of modem day businesses. Clients need value added and not an auditor that will vouch and does the normal trade test (Nwokolo, 2012:25). Additionally, auditors have been known for high integrity and objectivity as well as their commitment to public interest. In relation to this view, Hillier (2000) stated that diverse clients now expect them to provide more services than just performing statutory audit and attesting to the credibility of financial statements. The society wants their franchise to include detection of fraud and exposure of all corrupt practices that are likely to vitiate the fortunes of corporate entities. The difference between the actual nature and objective of an audit and that perceived by the users of audited

financial statements has led to the concept of “audit expectation gap”. This study examines the opinion of auditors, clients and users of financial statement on their various understanding of the legal responsibilities of auditors or audit reports in Nigeria and the consequences on the accounting profession.

1.2 Statement of Research Problem

Auditing standards are important to the user of accounting reports such as banks, host community, shareholders, government, creditors etc. The standards explain the legal responsibility and independence of the auditor from the point of view of management and shareholders. International standards have been formulated to harmonize auditing practices between different nations and are to be applied where there are no local standards. In Nigeria, the International Standards on Auditing (ISA) are mandatory for the companies quoted on the Nigeria Stock Exchange (NSE) where Nigerian Auditing Standards do not exist. In both  public and private sector an increased interest  in audit, inspections and oversight of the public sector is  noted by many scholars( Gendron et al., 2007; Hood et al., 1999;Guenin- Paracini & Gendron,2010). This increase is not merely  driven by efficiency considerations but also by confidence that external audit of the public  sector which also contributes to the overall legitimacy of the democratic society. But due to the peculiarity of the Nigerian environment on July, 2006 nine (9) Nigerian Standards on Auditing (NSA) were issued. These claimed priority over the ISAs in the Nigeria context. The objective of the audit of financial statements is to enable the auditor to express an opinion on whether the financial statements were prepared, in all material respects, in accordance with an identified financial reporting framework. The auditor’s opinion is intended to enhance the credibility of the financial statements which is a legal responsibility of an auditor. To achieve these objectives there are legal responsibility such as auditor independence, objectivity, integrity, confidentiality and technical standard required that should be satisfied according to the International standard of accounting and NSAs. It has been asserted that many Nigerian auditors are not complying with the general auditing standard, legal responsibility, field work standards, reporting standards and that there is a need for guidelines for applying the broad concept of these legal auditing responsibility requirement to Nigerian circumstances. Against this backdrop, the paper is therefore to examine auditor’s legal responsibility and it effect on  accounting profession.

1.3 Objectives of the Study

In order to effectively arrive on sound and reliable research, the main objective of the study is  to ascertain the legal responsibilities of auditor and the effect it will have on accounting profession. Other specific objective that guides the study is to examine the extent.

  1. Auditor’s expression of opinion on financial statement affect accounting profession.
  2. Auditor’s independence affects accounting profession.
  3. Auditor’s detection of fraud affects accounting profession.
  4. Auditor’s detection of error affects accounting profession.
  5. Auditor’s prevention of fraud affects accounting profession.
  6. Auditor’s prevention of errors affects accounting profession.

1.4 Research Questions

In other to gather relevant responses from the respondent the following research questions are   posed guild the study as follows:-

  1. How does auditor’s expression of opinion on financial statement affects accounting profession?
  2. To what extent do auditor’s independence affect accounting profession?
  3. To what extent do auditor’s detection of fraud affects accounting profession?
  4. To what extent do auditors detection of error affect accounting profession?
  5. To what extent do auditor’s prevention  of fraud affect accounting profession?
  6. To what extent do auditor’s prevention of errors affects accounting profession?

1.5 Research Hypotheses

H01:  Auditor’s expression of opinion on financial statement do not significantly affects accounting profession.

H02: Auditor’s independence during auditing do not significantly affect accounting profession

H03:  Auditor’s detection of fraud do not significantly affects accounting profession

H04:  Auditors detection of error significantly does not affect accounting profession.

H05:  Auditor’s prevention of fraud do not significantly affect accounting profession.

H06:  the prevention of error by auditor’s significantly do not  affects accounting profession.

 

 

 

1.6 Scope of the Study

The scope of this study covers the appraisal of auditor legal responsibilities and the consequences on the accounting profession. The main concern of this research is to establish whether those areas of concern, (areas that brought about the creation of misunderstanding of the legal responsibilities of auditor s and the audit profession) could be identified and measures could be taken to either eliminate them or reduce them to the barest minimum.

This study also focus on professional Accountants from all the recognized accounting bodies including practicing and non- practicing accountants in Anambra State, Awka Ibom state and Lagos state.

  1. 7 Significance of the Study

The research findings of this study are of immense benefit to public and private firm. It will be of  help in understanding of the statutory objectives of internal audit in order to reduce any unreasonable expectations of the external auditor. The research is also significant since it will help to maintain public confidence in financial statements and protect public interests on accounting profession. The research on the other hand, will also help accounting profession to redefine the role of auditors because of the changing nature of the business environment and it will establish the relationship between auditor’s responsibility and the effect it will have on accounting profession.  The finding of the research will serve as a source of reference for fellow researcher and enable governmental and non-governmental sectors to value the role play by auditors in accounting profession.

1.8 Limitation of the study

The study was faced with some limitations such as  geographical area, getting  certified accounting firm professionals  and finance. In respect to geographical area, the problem of locating the respondent in their various offices was another limitation faced by the researcher.  Getting certified accounting firm  professional was another limitation  which was faced by the researcher since some of the  certified  professionals are not stationary and are not in the same location. Another limitation faced is the difficulty in getting responses of the respondents.

In surmounting this limitation, the researcher decided to use University environment in these geo-political zones in order to easily enable her to get the certified professionals. The researcher also explained in the detail the aim of the study and logically convinced the respondent to respond to the research questions.

AUDITING AS A TOOL FOR EFFECTIVE INTERNAL CONTROL SYSTEMS IN THE NIGERIAN HOSPITALITY INDUSTRY (A CASE STUDY OF BENUE HOTEL MAKURDI, BENUE STATE, NIGERIA)

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PROJECT TOPIC AND MATERIAL ON AUDITING AS A TOOL FOR EFFECTIVE INTERNAL CONTROL SYSTEMS IN THE NIGERIAN HOSPITALITY INDUSTRY (A CASE STUDY OF BENUE HOTEL MAKURDI, BENUE STATE, NIGERIA)

The Project File Details                                                                                                       

  • Name: AUDITING AS A TOOL FOR EFFECTIVE INTERNAL CONTROL SYSTEMS IN THE NIGERIAN HOSPITALITY INDUSTRY (A CASE STUDY OF BENUE HOTEL MAKURDI, BENUE STATE, NIGERIA)
  • Type: PDF and MS Word (DOC)
  • Size: [666 KB]
  • Length: [65] Pages
  • With Reference and Questionnaire
  • Amount: 3000 naira

ABSTRACT

For any organization to achieve its goals there must be an effective control mechanism. Internal control exists for the purpose of giving an organizational sense of direction and allowing for its growth. The study therefore sought to find out the role auditing (internal audit) functions play in controlling the activities of a corporate organization with special emphasis on Benue Hotel Makurdi, Benue State, Nigeria. To achieve the above objective, primary data was obtained as questionnaires were distributed to the members of staff of the hotel. It was discovered that the internal audit department plays a major role in controlling the activities of the organization thereby making its control system very effective. It is recommended that internal audit departments should seek to create awareness about its functions and importance to the staff of the organization. It is also recommended that internal audit departments should carryout regular review of the internal control systems in the hospitality industry.

CHAPTER ONE

INTRODUCTION

1.1          BACKGROUND OF THE STUDY

Hotel management today occupies a very crucial position in the economic activities in most countries of the world. It is regarded as the pivot of overall economic growth hence it occupies a central position in tourism activities.

The hospitality industry anywhere in the world is aimed at creating a conducive environmental capital of providing leisure services, which are captivating and satisfying at a price. It has been discovered in recent years that to create such an atmosphere, a lot of professionalism and control has to come into focus and of course ensure continuity through generations of good returns on investment. Prominent among such professionalism control activities of the internal control system which must be treated with all its antecedence.

The place or position of internal control in any Hotel or leisure services cannot be over emphasized. This is because internal control for Hotel industries or services and any other business concern is very fundamental. A weak internal control system of any hotel can hamper general acceptability, profitability or continuity just as a good internal control system of any hotel can ensure its wide acceptability, profitability that it can continue to exist and to remain in the industry or business and make profit, the internal control system have been to be set in consonance with perceived value of the offer for the system.

Auditing provides a basic tool upon which internal control system of any business concern including Hotel or leisure business is developed and implemented. The word Audit is derived from a Latin world “Audire” which means to hear! And audit has been defined as “an independent examination of a set of financial statements of an organization and the expression of opinion on the financial statements by an appointed auditor in compliance with statutory provisions and his terms of appointment”.

Due to the expansion in Hotel activities, there occurs a widening gap between management and the actual field of operations these increased responsibilities allow for the auditor to fill the gap between the management and the actual field of operations whereby he carries out the policies of the management. He is therefore responsible for the management to carryout out his multifarious duties of detecting and correcting errors and at same time providing the essential link within the entire organization.

The primary responsibility of safeguarding the assets of concerns and preventing and detecting errors and fraud rests on management, therefore the Auditor is expressing his opinion concerning the fairness of management representations, expects the company’s accounting department to produce financial statements that management can believe are proper, complete and free of internal errors. The responsibility of management does not end with the initial installation of a system of internal control. The system must be under constant surveillance to determine:

  1. That prescribed policies are being interpreted properly and are being carried out.
  2. That change in operating conditions has not made the procedure cumbersome, obsolete or inadequate.
  • That where breakdown in the system appear effective, corrective measures are promptly taken.

There exists the human tendency to relax and depart from the original designed high standards of procedure. Because of this tendency, it is management responsibility to maintain adequate review of the system of internal control. There must be means developed for checking and appraising the effectiveness of the system in actual operation. One of the basic tool or means for effective review or implementation of the system of internal control is internal Auditing. Review may be performed by the company’s management or others the audit department or outside service agencies.

1.2          STATEMENT OF THE PROBLEM    

                The internal system of any hotel or organization is set to safeguard assets from waste, prevent fraud and avoid inefficient use of resources, promote accuracy and reliability in the accounting records, encourage and measure compliance with policies and evaluate the efficiency to operations. Internal Auditing as a tool helps in ensuring an effective implementation of a good system of internal control. The auditor may experience some problems while doing his work and some of these problems may prevent him from performing his work efficiently.

Specifically the problems perceived which prompted the researcher into this study are as follows:

  1. Internal auditors often have the problems of carrying out their functions effectively due to interference from management. They are employees of the organization, hence independence may be difficult to achieve as an employee, and the auditor would find it difficult to present a free and fair view of the organization for fear of victimization.
  2. Internal auditors are believed to be window dressers; they are accused of conniving with management to cheat. The problem now arising as to the role of the auditor as regard misappropriation and mismanagement.
  • Sometimes management fails to exercise promptness in implementing the suggestions of the internal auditors and this tends to constitute a problem.
  1. Vigilance and carefulness is often ignored by some auditors thereby leading to errors, which is a problem.

While many experts have conducted studies on the effectiveness of auditing as a tool for internal control of many organizations or establishments, there is still the need for more literature on the subject to unveil the role of internal audit in effective implementation of internal control system hence an appeal for this topic.

1.3          SCOPE OF THE STUDY

This research work is limited in scope to Benue Hotel makurdi, Benue State. More so, since the study tries to investigate the role of internal auditing as a tool for effective internal control it is limited to the concept of internal auditing only.

1.4          RESEARCH OBJECTIVES

                They objectives here are achieved in the research work

  1. To investigate whether auditing (internal auditing) has effectively contributed to the internal control system of Benue Hotel Makurdi.
  2. To discharge the manager from interfering into the independence of internal auditors so that they can carry out their jobs without fear or favor.
  • Help to show ways in which some errors can be detected or prevented.
  1. To encourage management in implementing the suggestions and recommendations of the auditors promptly.

1.5          RESEARCH QUESTIONS

In trying to survey the effectiveness of auditing as a tool for internal control the following questions will be looked at:

  1. Is internal audit a tool for effective implementation of a good internal control system?
  2. What are the major problems faced by audit departments in relations to the effective and efficient discharge of duties?
  • There is the believe that, internal auditors connive with management to steal money. What can be said about this?
  1. How independent is the internal auditor since he or she is an employee of the organization?
  2. What are the qualifications necessary for one to be an internal auditor? Does he or she actually get all the information, explanation and document necessary to assist him in carrying out this function effectively?

1.6          KEY WORDS

For an effective apprehension of the objective and direction of this work, the following operational definition of terms is attached:

Audit: An independent examination of a set of financial statements of an organization and the expression of opinion on the financial statements by an appoint auditor in compliance with statutory provisions and his terms of appointment.

Auditor: A competent and impartial critic appointed to verify financial or other accounting statements and to satisfy that the statement exhibit a true and fair view of the state of affairs of the business or organization concerned.

Audit Trial: The tracing to transactions sequentially through the system from their source to their completion or vice-versa, whereby, the auditor may ascertain whether the internal control in operation is satisfactory or whether further investigations may be necessary

Audit Report: This is the statutory final product of the audit process and it contains the auditor’s opinions as to whether the accounts shows a true and fair view and comply with CAMA, 1990

Organizational Chart: A planned functional guideline in the form of a chart showing the segregation of duties and division of responsibilities.

Internal Control: It is not only defined as internal check or internal audit, but the whole system of control both financial and otherwise established by the management to safeguard its assets and secure as far as possible the accuracy and reliability of its records.

Internal Audit: It has been defined as an independent appraisal of activities within an organization for the review of operations as a service to management. It is a management control that functions by measuring and evaluating the effectiveness of other controls.

Fraud:  It is an intentional act by way of cheating with the aim of gaining undue advantage.

True and Fair View: A set of financial statement are said to be free and fair if all relevant and appropriate accounting standards have been followed, no material misstatement of facts or amounts is seen. All the relevant information has been fairly and fully disclosed.

Error: A thing done wrongly. A mistake which is unintentional

System: An assembly of components or parts that work together as whole to achieve a given aim.

AUDIT ATTRIBUTES AND FINANCIAL REPORTING QUALITY OF LISTED BUILDING MATERIAL FIRMS IN NIGERIA

Download the complete Accounting project topic and material (chapter 1-5) titled AUDIT ATTRIBUTES AND FINANCIAL REPORTING QUALITY OF LISTED BUILDING MATERIAL FIRMS IN NIGERIA here on iProjectTopics. See below for the abstract, table of contents, list of figures, list of tables, list of appendices, list of abbreviations and chapter one. Click the DOWNLOAD FULL WORK BUTTON BELOW CHAPTER ONE  to get the complete project work instantly.

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PROJECT TOPIC AND MATERIAL ON AUDIT ATTRIBUTES AND FINANCIAL REPORTING QUALITY OF LISTED BUILDING MATERIAL FIRMS IN NIGERIA

The Project File Details                                                                                                       

  • Name:AUDIT ATTRIBUTES AND FINANCIAL REPORTING QUALITY OF LISTED BUILDING MATERIAL FIRMS IN NIGERIA
  • Type: PDF and MS Word (DOC)
  • Size: [666 KB]
  • Length: [65] Pages
  • With Reference and Questionnaire
  • Amount: 3000 naira

ABSTRACT

External auditors conduct an independent examination of a firm‟s financial statements, records and supporting documents and give opinion about the truth and fairness of the reports, and that the report is free from material misstatements and errors. While, this can be considered as a good control mechanism for ensuring the quality of corporate financial reporting, there is a great concern by the regulatory authorities and other stakeholders in view of the corporate scandals and failures that adversely affect corporate entities in recent times in Nigeria. This study examined the impact of audit firms‟ attributes on financial reporting quality of quoted building material firms in Nigeria. The study employed correlation research design using a sample of four listed building material firms for the period of ten years (2002-2011). Ordinary Least Square (OLS) multiple regression technique was employed in the analysis of the panel data collected for the study. The study found that audit compensation and audit firm independence have significant positive impact on the financial reporting quality of quoted building material firms in Nigeria at 99% confidence level. The finding suggested that, audit compensation and provision of non-audit services in the quoted building material firms in Nigeria have improved the quality of their financial reporting during the period under review. The study recommends that, policy makers (SEC and FRC) should make policies that would strengthen the auditors‟ independence in the building material firms in Nigeria. It is also recommended that SEC and FRC should make it a policy that public companies, especially building material firms, should consider in employing their auditors an optimal compensation.

TABLE OF CONTENTS

Title Page—————————————————————————————————i
Declaration————————————————————————————————ii
Certification———————————————————————————————-iii
Dedication————————————————————————————————-iv
Acknowledgements—————————————————————————————v
Abstract—————————————————————————————————-vi
Table of Contents—————————————————————————————vii
List of Tables———————————————————————————————xi
CHAPTER ONE: INTRODUCTION
1.1 Background to the Study————————————————————————1
1.2 Statement of the Problem———————————————————————–6
1.3 Research Questions——————————————————————————8
1.4 Objectives of the Study————————————————————————-8
1.5 Hypotheses of the Study————————————————————————9
1.6 Scope of the Study——————————————————————————-9
1.7 Significance of the Study———————————————————————-10
CHAPTER TWO: LITERATURE REVIEW
2.1 Introduction————————————————————————————-12
2.2 Concept of Financial Reporting Quality—————————————————-12
2.3 Audit Firm Characteristics——————————————————————–26
2.4 Review of Empirical Literature————————————————————–30
viii
2.5 Theoretical Framework of the Study——————————————————–44
2.6 Chapter Summary——————————————————————————48
CHAPTER THREE: RESEARCH METHODOLOGY
3.1 Introduction————————————————————————————-49
3.2 Research Design——————————————————————————–49
3.3 Population and Sample of the Study———————————————————50
3.4 Sources and Method of Data Collection—————————————————-51
3.5 Technique for Data Analysis—————————————————————–51
3.6 Variables Measurement and Models Specification—————————————-52
3.7 Robustness Test——————————————————————————–55
3.8 Chapter Summary——————————————————————————56
CHAPTER FOUR: RESULTS AND DISCUSSIONS
4.1 Introduction————————————————————————————-57
4.2 Descriptive Statistics—————————————————————————57
4.3 Correlation Results—————————————————————————–60
4.4 Regression Results and Hypotheses Testing————————————————62
4.5 Discussion of Major Findings—————————————————————-68
4.6 Policy Implication of the Findings———————————————————–70
4.7 Chapter Summary——————————————————————————70
CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS
5.1 Summary of Findings————————————————————————–71
ix
5.2 Conclusion————————————————————————————–72
5.3 Recommendations——————————————————————————72
5.4 Areas of Further Research——————————————————————–74
Bibliography———————————————————————————————75
Appendix————————————————————————————————-84

CHAPTER ONE

INTRODUCTION
1.1 Background to the Study
The main objective of financial reporting is to provide high quality financial information about economic entities that is useful for economic decision making. According to International Accounting Standard Board (IASB), (2008), high quality financial reporting is critical to investors and other stakeholders in making investment, credit and similar decision. An important variable of financial reporting that is usually used as a yardstick of financial reporting quality is accounting earnings, as it is reported in the published financial report of firms is expected to provide a timely and reliable input to potential investors, shareholders, creditors, employees, management, financial analysts, regulators and other stakeholders for efficient economic decisions.
The issue of quality financial reports is of tremendous concerns not only for the final users, but the entire economy as it affects economic decisions which may have significant impact. However, managerial opportunistic behaviors as well as unethical accounting practices are identified as major challenge to the quality of accounting earnings and financial reporting quality (Shen & Hsiang-Lin, 2007). According to their study of some accounting scandal and collapse of some corporate entities (Enron, Worldcom, Xerox and Parmalat), earnings manipulation and artificial transaction are responsible for the scandal and the collapse of those entities. Moreover, most of the Chief Executive Officers (CEO) and Managers of the collapsed entities are found involved in earnings management through structuring and artificial transactions with related parties which affected earnings and financial reporting adversely (Shen and Hsiang-lin, 2007). Earnings management as a prime factor that impairs quality of earnings is regarded as unethical and includes using managerial judgments and dearth in regulation (Bello, 2010). In a study of financial reporting quality, Shehu (2012) opined
2
that quality financial reporting could be achieved by full disclosure and higher level of transparency; and regarded corporate transparency as the widespread availability of relevant and reliable information about the periodic performance that is free from errors and misstatements. Therefore, the quality of financial reporting is to promote transparency and deliver high quality Annual Report through comprehensive disclosure (Shehu, 2012). As such regulators and financial statements analysts as well as auditors should ensure that financial statements information is true, fair and free from opportunistic and unethical judgments, which destroy the quality of financial reporting.
It is in view of the importance of quality financial reporting that the International Federation of Accountants (IFAC) and its audit arm International Auditing and Assurance Standards Board (IAASB), stated that audit services is an assurances service that the financial statements prepared by the managers is true and fair, and free from intentional and unintentional errors and misstatements, and conform to the relevant rules and regulations guiding the preparation and presentation of accounting information (IAASB, 2013). According to IAASB, global financial stability is supported through high quality reporting, which could be achieve through high quality audits that can help foster trust in the quality of reporting. It also highlights the importance of audit quality and its relevance to all stakeholders in the financial reporting supply chain.
One of the critical roles of auditors is that, they assure confidence to financial statements users about the reported information. Audit services have been critical to financial reporting quality since industrial revolution (that is, separation of ownership from management). However, the ability of auditors or audit firm to provide high audit quality capable of producing high financial reporting quality is attributed to some certain features of the audit firm, these features are auditor
3
independence, audit compensation, audit firm type and size and joint audit services (DeAngelo, 1981 & Krishnan, 2003). For instance, Brown, Falaschetti and Orlando (2006) state that auditor independence improve the quality of financial disclosures based on the evidence from the recent governance scandals around the world. They further lament that a widely held belief emerged that letting auditors consult for audit-clients compromises auditors’ independence and thus diminishes the quality of earnings reports. This is also supported by most of the regulations; for instance it forms part of the provision of Sarbanes-Oxley (SOX) Act of 2002, which restricted auditors from providing non-audit services to their clients (Brown et al, 2006). On the other hand, auditor’s independence with regard non-audit services which lead to non-audit fees can improve the quality of financial reporting (Arrunada, 1999). According to him, if informational inputs for producing the audit services intersect those for producing the non-audit services, then the jointly producing audit and non-audit services can improve financial reporting quality by facilitating scope economies. However, managers are using their capacity to threaten auditors with the loss of non-audit business; in this regard, jointly producing audit and non-audit services increases the pressures the managers can place on auditors to endorse compromised financial statements (Arrunada, 1999).
Similarly, compensation to auditors is found to be related with financial reporting quality (DeAngelo, 1981); according to this belief, quality may decrease with fee dependence if marginal forces associated with managerial influence overwhelm those associated with the scope of activities involved (Frankel, Marilyn and Karen, 2002; Francis, 2004). On the contrary, audit compensation is used as a measure of audit quality, based on this view; audit fees reflect additional audit effort which led to a higher level of audit quality (DeAngelo, 1981; Carcello, Hermanson, Neal & Riley, 2002). In this context, audit fees and non-audit fees relate to knowledge spillovers that is, transfers
4
of knowledge from non-audit to audit services. Moreover, increase in audit fees as a result of non-audit services may enhance auditor’s incentives to stay independence.
Another audit firm characteristic commonly associated with the financial reporting quality is audit firm size (that is, Big 4). Audit firm type is conceived as financially independent and highly experienced, thus less likely to be subjected to any pressure from the clients “to look the other way” in their role in discovering accounting irregularities (DeAngelo, 1981). Moreover, Big 4 auditors have more to lose should a scandal arise, in that their brand names and reputations are more valuable compared with small non-Big 4 audit firms. For instance, Becker, Defond, Jiambalvo and Subramanian, (1998), and Francis, Maydew and Sparks (1999) opined that Big 4 audit firms have shown to have higher accrual quality (Financial reporting quality) as measured by lower absolute values of discretionary accruals, and their clients are less likely to manage earnings.
Audit firm characteristics with respect to clients include the joint audit, to ensure objective financial reporting and financial reporting quality as well. Joint audits create more differences in auditor choice and potentially in the level of earning quality than under non-joint audit. Based on joint audit perspective, DeAngelo (1981) states that audit performed by two audit firm produce the highest quality financial reporting, while the lowest level of quality occurs when a single audit firm is responsible for the audit engagement.
Therefore, this study is motivated by the critical role that the auditors have in corporate financial reporting with regard accounting irregularities and misstatements including earnings management,
5
which impair, financial reporting quality and threaten the going concern of corporate entity. The study however, focuses on the major audit firm attributes (audit compensation, non-audit services, audit firm type and the provision of joint audit). These attributes are considered as determinants of audit quality which has defect linkage with the financial reporting quality.
Nigeria like other countries of the world witnessed corporate scandals and failures, such as Oceanic Bank, Societe Generale Bank, Savannah Bank and Cadbury Plc, which are not pointed by the financial reports in spite of the auditor’s endorsement. That financial reports are true and fair, and conform to the relevant rules and regulations; and the actual transactions. Building material firms are critical to the economic development of any country; this sector is not being given adequate attention in terms of researches on financial reporting quality particularly in relation to auditors’ characteristics. Specially, building material firms are characterized with heavy machineries, large volume of transactions and large volume of accruals. These features are potentials for hiding accounting irregularities, misstatements and earnings management, which affect financial reporting quality adversely. Therefore, the need for quality financial reports in the recent times and the negative consequences of poor quality reporting prompted the study of financial reporting quality of building material firms in Nigeria.
1.2 Statement of the Problem
Financial reports are supposed to provide relevant information to the external parties of an organization. It is thus important that financial reports provide truthful and accurate financial information to enable shareholders and other interested parties to make decision wisely. Lack of accuracy in financial reporting will lead shareholders and prospective investors to make wrong
6
judgment about the organization. Incidentally, the heavy reliance placed on accounting numbers (as it measures the direction of business entity as well as decision base by different users of accounting information, Kothari, et al., 2000; and Bello, 2010) has provided an incentive for managers to manipulate earnings to their own advantage. This manipulation that is not supposed to go unchecked by auditors has often led to the eventual collapse of firms of various sizes and even called to questions the integrity of auditors and characteristics of audit firms.
The credibility of financial information is vital to the growth of nay economy. Auditors on their part are expected to be independent and objective in the discharge of their responsibilities (Adelaja, 2009), because as the report of external auditors in corporate financial statement is seen as providing key assurance and protecting the interest of shareholders (Gallegos, 2004). However, as O’Connor (2006) noted, one of the most vexing problems in the financial world today is the emphasis placed on ensuring the independence of external auditors as a result of recent corporate Scandals. Beatties and Fearnley (2002) opined that after the collapse of Enron it was generally believed that rendering of non-audit services compromised the independence of external auditors. In the real world, when business entities collapse the consequences are usually enormous. The oversight function of the auditor is placed under scrutiny when a business whose financial statement once showed no indication of any failure suddenly becomes bankrupt. As a follow up to the oversight function, the independence of the auditor in such circumstance would be in doubt.
Many studies like DeAngelo, (1986) Jones, (1991) and Dechow, Sloan, & Sweeney, (1995), Ashbaugh et al., (2003) have been conducted on the relationship between audit firm characteristics and quality of financial reporting. The studies are however based largely on US and European data, thus
7
reflecting the advanced economies environment. Few of the studies such as Semiu and Kehinde (2011), Semiu and Johnson (2012) and Umar (2012) used data from emerging economies such as like Nigeria. Little is known about the relationship between audit firm characteristics and firms reporting quality in developing markets such as those in Nigeria particularly, using data on building materials firms. It is therefore pertinent to conduct a study that will fill this literature gap. Moreover, this study used four audit firm chrematistics variables to investigate their effects on the financial reporting quality of building materials firms in Nigeria. Hence gap to be filled in the literature because most of the studies in this area focused on usually one aspect of audit firm characteristics.
1.3 Research Questions
It is in view of the problems stated above the following research questions are raised:
i. How does audit firm independence affect the quality of financial reporting of quoted building material firms in Nigeria?
ii. What is the effect of audit firm independence on the quality of financial reporting of quoted building material firms in Nigeria?
iii. Does audit firm type have any impact on the quality of financial reporting of quoted building material firms in Nigeria?
iv. What is the effect of joint audit on the quality of financial reporting of quoted building material firms in Nigeria?
1.4 Objectives of the Study
8
The overall objective of the study is to examine the impact of audit firms‟ characteristics on the financial reporting quality of quoted building material firms in Nigeria. The specific objectives are to:
i. Determine the impact of audit fee on the financial reporting quality of quoted building material firms in Nigeria.
ii. Assess the effect of audit firm independence on the financial reporting quality of quoted building material firms in Nigeria.
iii. Assess the impact of auditor type on the financial reporting quality of quoted building material firms in Nigeria.
iv. Examine the impact of joint audit on the financial reporting quality of quoted building material firms in Nigeria.
1.5 Hypotheses of the Study
In line with the objectives of this study, the following hypotheses are formulated in null form;
H01: Audit compensation has no significant impact on the financial reporting quality of quoted building material firms in Nigeria.
H02: Audit firm independence has no significant impact on the financial reporting quality of quoted building material firms in Nigeria.
H03: Auditor type has no significant impact on the financial reporting quality of quoted building material firms in Nigeria.
H04: Joint audit has no significant impact on the financial reporting quality of quoted building material firms in Nigeria.
9
1.6 Scope of the Study
This study focuses on audit firms’ characteristics and the quality of financial reporting, within the context of listed building material companies in Nigeria. The study covers the period of ten years, from 2002-2011. Financial reporting quality is represented by earnings quality which is proxied by absolute discretionary accruals of the quoted building material firms during the period covered by the study. On the other hand, audit firm characteristics in this study covers audit compensation/fees, audit firms’ independence, auditor type and joint auditors.
1.7 Significance of the Study
This study is significant in light of the recent search by regulators for measures that could protect and improve the financial reporting quality in the corporate world. It is also a response to the current call by the IAASB’s Framework for Audit Quality which, include raising awareness of the key elements of audit quality; encouraging key stakeholders to explore ways to improve audit quality; and facilitating greater dialogue between key stakeholders on the topic (IAASB, 2013). Moreover, the IAASB framework for audit quality attributed the primary responsibility for performing quality audits to auditors, and emphasized that audit quality is best achieved in an environment where there is support from other participants in the financial reporting supply chain. Hence, this study is an effort towards such direction.
The study is also significant as it focused on issues related to audit firm characteristics that are threatening the survival of audit firms of all sizes, on one hand and the going concern of corporate
10
entities on the other hand. Therefore, the study is of importance in ensuring the credibility of financial information not only for the purpose of pointing the tendencies of corporate scandals, but most importantly the survival of their accounting and audit profession and the development of healthy financial and capital market. The study is therefore of immense value to auditors, regulators, managers, professional accounting bodies, existing and potential shareholders and researchers.
The findings from this study could assists auditors in their duties and responsibilities with regards financial reporting, as to the factors that are of eminent importance in achieving high audit quality and high financial reporting quality. The study will also offer important input to serve as a strong base for the regulators and professional accounting bodies to establish policies relating to type of audit firm characteristics, audit fees, non-audit services and joint audit. This is important because most of the issues in this area are based on anecdotal evidence, particularly in Nigerian context since evidence regarding these issues has been relatively limited. The study therefore hopes not only to help enrich the literature, but also provides important quantitative information for policy formulation.
The findings from the study could educate both existing and potential shareholders of building material firms in Nigeria on the audit firm characteristics that improve the quality of financial reporting (with respect to audit firm characteristics). The study is also of great importance to researchers, as it provides empirical evidence on the relationships between audit firm characteristics and the quality of financial reporting from listed building material firms in Nigeria.

ASSESSMENT OF PAYMENT SYSTEM IN THE CENTRAL BANK OF NIGERIA.

Download the complete Accounting project topic and material (chapter 1-5) titled ASSESSMENT OF PAYMENT SYSTEM IN THE CENTRAL BANK OF NIGERIA. here on iProjectTopics. See below for the abstract, table of contents, list of figures, list of tables, list of appendices, list of abbreviations and chapter one. Click the DOWNLOAD FULL WORK BUTTON BELOW CHAPTER ONE  to get the complete project work instantly.

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PROJECT TOPIC AND MATERIAL ON ASSESSMENT OF PAYMENT SYSTEM IN THE CENTRAL BANK OF NIGERIA.

The Project File Details                                                                                                       

  • Name: ASSESSMENT OF PAYMENT SYSTEM IN THE CENTRAL BANK OF NIGERIA.
  • Type: PDF and MS Word (DOC)
  • Size: [666 KB]
  • Length: [65] Pages
  • With Reference and Questionnaire
  • Amount: 3000 naira

ABSTRACT

The economy is predominantly cash based, reflecting the preference of economic agents and the weakness of the legal system to enforce contracts. The unintended social and economic cost are the risks and inconveniences associated with cash transactions such as armed robberies use of counterfeit banknotes as well as the inconvenience of carrying large quantities of currency notes. This study assessed the payments system in the central bank of Nigeria is undertaken to establish whether or not a relationship exist between payments system and economic development in Nigeria. It provides an overview, structure and development of the Nigeria payments system. It evaluates the role and highlights the problem of establishing an efficient payments system in Nigeria. This study administered survey questioners to the central bank officials. The findings of the study reveal that; the payment system has promote effective transaction in the banking system, the payment system tools such as ATM card, e-payment, debit note etc have promoted the economic growth in Nigeria, The payment system in Nigeria is easy to use (user friendly), the CBN regulates, monitors and enforces the payment system in the Nigerian banking sector, there are challenges facing the use of payment system in Nigeria, the CBN has made enough efforts in promoting effective use of payment system, there are uniform standards in banking sector for the use of payment system, the Federal government micro finance policies enhance the economic growth through the payment system, the payment system promotes economic growth through the use of IT and adequacy of electrical power supply promote the effectiveness of payment system. Based on the above findings, the study recommended that the Central Bank should continue to improve the use of ATM, improve the central payment system for more efficiency and encourage the populates on the use of ATM. In addition, more introduction of IT to the payment system in order to reach the local level.

TABLE OF CONTENTS

PRELIMINARY PAGES
Title Page i
Certification ii
Dedication iii
Acknowledgements iv
Abstract v
Table of Contents vi
CHAPTER ONE
INTRODUCTION
1.1 Background information/statement
1.2 Statement of the Problem
1.3 Objectives of the Study
1.4 Research Questions
1.5 Research Hypothesis
1.6 Significance of the Study
1.7 Scopes of the Study
1.8 Organization of the Study
1.9 Definition of Terms
vii
CHAPTER TWO
LITERATURE REVIEW
2.1 Conceptual Clarification
2.2 Theoretical Framework
2.3 Empirical Reviews
CHAPTER THREE
RESEARCH METHODOLOGY
3.1 Research Design
3.2 Research population
3.3 Sample and Sampling Technique (s )
3.4 Research Instrument (s)
3.5 Validity and Reliability of Instruments
3.6 Data Collection Technique(s)/ method(s) of Data Collection
3.7 Data Analysis Technique(s)
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
4.1 Introduction to Data Analysis
4.2 Analysis of all Data Collected
4.3 Description of Research Instruments used in the Analysis and why each is used for purpose it is used for
4.4 Summary of Data Analysis and the result achieved
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATIONS
viii
5.1 Summary of Findings
5.2 Conclusion
5.3 Recommendation
5.4 Research for further studies
Bibliography
Appendix I: (Research Questio

CHAPTER ONE

1

CHAPTER ONE
1.1 Background Information/Statement
The payment system consist of institutions, set of instruments and procedures through which financial obligations are discharged by economic agents. An efficient payment system ensures that financial with minimum delay and cost to the economy. It is therefore, imperative for the financial architecture to be developed to engender and efficient payment system that guarantees that transaction are concluded efficiently and at minimum risks.
The payments system is an important anchor for economic and social development in any economy. An efficient payments system enhances the operation of a market economy and assists in the maintenance of monetary and general economic well-being though the transmission of money that over time, it has become a core function of central banks worldwide to ensure the efficiency, integrity and safety of the payments system by instituting, in collaboration with other key stakeholders in the payments process, sound operating policies and practices.
Malosh (2004) sees payments system as a mechanism that facilitates intermediation through the transfer and the processing of the value of money from the payer (buyer) to the payee (seller) in the process of exchanging goods and services. The system invariably includes not only the instruments, such as cheques, money orders, wire transfers, electronic transfers and other payment instrument, but also organization, operating, procedures and information, and communication agreement that are used in initiating and transmitting payment instruction from one party to another in settling obligation. The payment system enables the financial sector to serve the real sector, and there for its development sophistication is a necessary precondition for the business development both domestically and internationally. Payment instrument are of many forms such as cash, cheques, traveler‘s cheques, money orders, debit and credit cards, wire transfers, mobile phones, automated clearing house transfers, point of sales and automated teller machines (ATMs)A stable financial system is a prerequisite for growth and development. Some of the major criteria for a stable financial system are the existence of efficient financial markets and financial instruments as well as efficient payment and settlement system. A well functioning payment system is of primary importance, especially in the implementation of monetary policy, particularly, in liquidity management.
2
Typically, banks are better equipped to play the rule of payment intermediaries because they hold account of those who engaged in economic activates, and also provide the liquidity for the entire economy. In most developing economies, effort are geared towards improving the payments system in order to expedite the processing of payments, reduce the risk and uncertainty associated with non-cash payment, facilities the adoption of indirect instrument of monetary policy, and depend financial market. In Nigeria the central Bank of Nigeria (CBN), has taken giant steps to ensure the smooth running of the payment system. Some of the action taken includes the establishment of clearing houses across the country and sponsoring of legislations aimed at ensuring the soundness and stability of the banking system. The legislation includes the promulgation of dishonored cheques offences Act and Failed bank financial Malpractice in banks Acts. In order to reduce the settlement circle, the CBN introduced the Magnetic Ink Character Recognition (MICR) processing, fully automated the cheques clearing system for the Lagos clearing zone and most recently, introduce a new clearing and settlement arrangement that segregated banks into ―settlement and non-settlement banks‖. The introduction of the wide area network in the banking system has also reduced to cycle-time for intra-bank settlement
In Nigeria today, cash is the more popular form of payment for consumers but cash is the most costly and list profitable payment instrument. The use of cheque as a payment instrument is not a widespread practice due to a number of reasons, including back of trust in, and dishonesty on the part of the issue of the cheque and the non-enforcement of the Dud Cheques Acts, which criminalize the issuance of cheque on unfunded accounts in Nigeria. The challenge to the central Bank of Nigeria and other stakeholders in the financial industry is how to enhance the use and acceptance of other forms of payment instrument in Nigeria. Efforts must be made to enhance the use of wire payments, debit and credit cards other electronic instruments, in order to reduce the over reliance on cash as the major means of payment.
1.2 Statement of the Problem
While remarkable improvements have been made to date to improve and develop a viable and reliable payments system, the system is still bedeviled by several problems which have continued to militate against its optimal operational, growth and development. The economy is predominantly cash based, reflecting the preference of economic agents and the weakness of the legal system to enforce contracts. The unintended social and economic cost are the
3
risks and inconveniences associated with cash transactions such as armed robberies use of counterfeit banknotes as well as the inconvenience of carrying large quantities of currency notes. For individuals, the cost of cash transaction lies in the frequently trips to banks as well as time lose as a result of long period of waiting. For the monetary authority, the cost lies in frequent printing of bank notes arising from the short life circle of note and the cost of moving large amount of cash to banks around the country. Vanguard Nigeria had reported new economy policy that will help to save Nigeria over N192bn. According Vanguard, CBN said, that the cost of processing, handling and managing cash, if not checked, will cost Nigeria about N192 billion by next year.
CBN‘s Deputy Director, Currency Operations, Mr. Albert Ikmseedun, who disclosed this at a sensitization programme on the proposed cashless economy policy for the Muslim community in Lagos, said it was high time Nigerians embraced the new cashless policy due to the high cost of cash to the financial system.
He said the disadvantages of transacting businesses with cash, outweighs its advantages, noting that in 2009, the total cost spent on cash-in-transit was N27.3 billion, while cash processing stood at N69 billion.
He appealed to residents of Lagos State to embrace the new policy when it becomes functional in the state, adding that the new policy would in the long run, help to bridge the gap between lending and deposit rates in the country. According to Ikmseedun, the policy does not mean that cash would no longer be in existence in the country, but that it was aimed at moderating the volume of cash in the system. He identified robbery, high cost of processing cash, revenue leakages, and inefficient treasury management, among others, as some of the negative side of a cash-based economic system.
He said: ―If there is reduced cash in the system, banks would be able to compete favorably. There are so many alternative payment systems in Nigeria which are even more convenient and safe, but people are not using them. With the improvement in communication in the country, there have been a lot of improvements in the payment system. Cashless Lagos does not mean there would not be cash in Lagos again, but it is an industry collaborative effort aimed at executing the payment transformation plan of the state. We are going to significantly increase the amount of Point of Sale (PoS) terminals in the state. We chose to start from Lagos because over 50 per cent of the money supply in the country ends up in this
4
state. If it works here, then it can work in any other part of the country. The market is in Lagos and Lagos is mini-Nigeria‘‘.
1.3 Objectives of the Study
The general objective of the study is examining payment system and financial intermediation as it affects economic growth, bearing in mind with the following specific objectives:
i. To establish a relationship between payments system and economic development in Nigeria.
ii. To examine the structure and development of the Nigeria payment system.
iii. To evaluate the role of the central bank of Nigeria in the payment system.
1.4 Research Questions
Some of the pertinent questions the study will find solution to are:
I. Does any relationship exist between payment system and economic development in Nigeria?
II. What are the structures and development of the Nigeria payment system?
III. Does the central bank of Nigeria have any relationship with the payment system?
1.5 Research Hypothesis
Attempts were made to test the study within the following hypothesis:
H0: payment system has no significant relationship with economic development in Nigeria
HI: payment system has significant relationship with economic development in Nigeria.
1.6 Significance of the Study
The study is significant to many, particularly those persons or corporate bodies whose businesses relate to financial intermediation. Those that will benefit from this study include the following: all financial institution like commercial, development and community banks-this study will enable such banks to manage their credit effectively. Organizations that are
5
involved in cash management –the study will enable such organization to manage cash effectively so that the issue of cash shortage may not arise.
-students carrying out research in this field will benefit from this study, as it will be a stepping stone to their work
-the general public engage in commercial banking activities will benefit from this study in the sense that they will be rest assured that their moneys are in safe hands when banked.
1.7 Scope and Limitation of the Study
The study will be restricted to the central bank of Nigeria. There are 25 (twenty five) departments in the central bank of Nigeria grouped in order of related performance and job descriptions (JDs)to facilitate smooth operations and management of those department. The formation of these directorates also reduced the pressure that would have brought to bear on the chief executive (the governor CBN) each directorate is headed by deputy governor (D/G).
In the course of this study the researcher encountered some constraints which militate against the study. Nevertheless the researcher was able to manage the difficulties.
Some of such problem includes:
i. Insufficient and scarce related materials
ii. Insufficient funds to carry out the research beyond the scope of this study: most especially during the period of economic recession in Nigeria.
iii. There are equally the problems of time constraint which chocked the period of this study or investigation ought to have been done.
iv. Uncooperative and intimidating attitude of some unfriendly Nigerians during the quest of interview militated against the speed of time.
1.8 Organization of the study
The study is organized into five chapters. Chapter one introduces the study by giving the background information, research problem, objectives, research questions, research hypothesis and significance of study. Other areas in this chapter are scope and limitation of study, organization of the study and definition of terms. Chapter two deals with the review of
6
relevant literature on payment system in Nigeria as it affects economic development. Chapter three consist of the research methodology, population, design, sample and sampling techniques for carrying out the secondary and primary data collections and how results were analyzed. Chapter four presented data and its analysis as well as hypothesis testing and discussion of findings. Chapter five states the conclusion drawn from the research findings and recommendations.
1.9 Definition of Terms
Payment: this is an amount of money that is paid or is due to be paid. it is an act of paying money.
System: A system is a complex whole formed from related parts. It is a combination of related parts organized into a complex whole. it is a set of organs or structures in a body that have a common function.
Bank: A Bank is financial intermediary that transfers money from surplus economic units to deficit economic unit. It is a business that keeps money for individual people or companies, exchanges currencies, makes loans, and offers other financial services.
Central Bank: it is a financial institution whose function is to regulate monetary activities, in a country. It is responsible for the issue of bills and for controlling the flow of currency in an economy.
Economy: it refers to efficiency and conservation of effort in the operation or achievement of something.
Development: this is an event causing change: an incident that causes a situation to change or progress. It is a process of change: the process of change and becoming larger, stronger, or more impressive, successful or advanced or of causing somebody or something to change in this way.
Financial Intermediation: is a productive activity in which an Institutional unit Incurs liabilities on its own account for the purpose of acquiring financial assets by engaging in financial transactions in the market; the role of financial intermediaries is to channel funds from lenders to borrowers by Intermediating between them.

APPRAISAL OF FINANCIAL MANAGEMENT PRACTICES IN A MANUFACTURING INDUSTRY

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PROJECT TOPIC AND MATERIAL ON APPRAISAL OF FINANCIAL MANAGEMENT PRACTICES IN A MANUFACTURING INDUSTRY

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  • Name: APPRAISAL OF FINANCIAL MANAGEMENT PRACTICES IN A MANUFACTURING INDUSTRY
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TABLE OF CONTENTS

 

Title page

Approval page

Dedication

Acknowledgement

Table of contents

Proposal

 

CHAPTER ONE

1.0. Introduction

1.1. Background of study

1.2. Objectives of study

1.3. Statement of problems

1.4. Scope of study

1.5. Research questions

1.6. Hypothesis

1.7. Significance of study

CHAPTER TWO

  • Review of literature
    • Evaluating financial performance of a company
    • Accounting systems
    • Accounting procedures
    • Internal control systems in accounting procedures
    • Summary

CHAPTER THREE

  • Research methodology

3.1  Research design

  • Area of study
  • Population of study
  • Sample and sampling procedures
  • Instrument for data collection
  • Validation of the instrument
  • Reliability of the instrument
  • Method of data collection or administration of instrument
  • Method of data analysis

CHAPTER FOUR

  • Date presentation and analysis

4.1  Test of hypothesis

4.2  Summary of results

CHAPTER FIVE

  • Discussion, implication, recommendation

5.1  Discussion of result

5.2  Conclusion

5.3  Implication of the result

5.4  Recommendations

5.5  suggestions for further research

5.6  limitation of the study

Bibliography

 

CHAPTER ONE

1.0       INTRODUCTION

Almost all kinds of business activities directly or indirectly involve the acquisition and use of funds.  There exists an inseparable relationship between finance on the hard and production and other functions on the other.  In a business set up, the functions of recruitment and promotion of employees are clearly the work of the personnel department.

Sales promotion policies come within the functions of the marketing department.  These activities performed by these departments (personnel and marketing departments) require outlay of funds and therefore affect resources.  The finance function of raising and using money although has a significant effect on other functions but it need not necessary limited the general running of the business.  Generally firms formulate their policies (marketing productions, personnel and other policies) most of the time, to tally with the financial resources of the company available to them.

The word “Finance” is viewed from different perspective by different group thus: –

  1. A layman sees finance as the volume of money in his prose, vault and at the bank.
  2. Investors sees finance as the provision of funds as at the time it is need for investment. It goes beyond coursing and applying the fund for profit maximization as well as the state of sharing the profits.
  3. Academic sees finance as the science of fund management.

The investor view about finance shall be upheld in this write up.  This because it emphasizes on profit making for the maximization of shareholders wealth.  Wealth maximization is one of the corporate financial objectives of a firms.  This can only be achieved by efficient and effective management of the company’s resources.

Financial management involves all the activities that are concerned with planning cash and credit requirement, including the effective control of the financial resources

The activities could be segregated as follows

  1. Forecasting the future availability of and requirements of cash
  2. Converting forecasts into plans and budgets
  • Planning the appropriate capita structure
  1. Raising of cash from outside the business
  2. Controlling cash balances and flows in accordance with plans and changing circumstances
  3. Investing surplus fund

In financial planning, this involves estimating and

planning of the future flow of cash receipt and disbursements. Also this is useful in raising of funds organizing and ensuring that funds necessary for carrying on the operation of planning is available.  The wise use of funds by allocating such funds ensuring efficient use of funds.

In financial controlling, monitoring financial operations to ensure that cash flows are proceeding according to plan.

As a company is part of financial community, its financial management can be fully interpreted only within the context created by the workings of financial institutions and markers.

The variables considered in the framework of financial management are:

  1. The financial goals of the company
  2. The valuation of the company and the extent to which this valuations uninfluenced by company decision.
  3. The means of measuring the performance of the company. When it goals have been identified and the method of valuation chosen, the company’s performance must be monitored and measured accordingly.

The researcher here wants to access the financial health of

a manufacturing industry, its strengths, weaknesses, recent performances, future prospects and the implementation of its financial policies.  This involves a review of the financial policies.

This involves a review of financial statements followed by careful consideration of their use in evaluating financial performance.

 

ASSESSING THE FINANCIAL HEALTH OF A

MANUFACTURING COMPANY

The most important source of information for evaluating the financial health of a company is its financial statement consisting of a balance sheet and a income statements. EAGLE CEMENT is a public liability company and as required by law, it is expected to submit her annual account to the registrar, corporate affairs commission, Abuja.  The account so prepared is for the consumption of many interest group like: the shareholders, tax authorities, investors, creditors etc.

For the purpose of evaluating the financial health of the company (EAGLE CEMENT), the use of financial statement for 1999 year shall be reviewed and analyzed.  See chapter four on data presentation and analysis.

1.1       BACKGROUND OF STUDY

The research work is based on the NIGERIAN CEMENT Company Plc. Nkalagu in Ebonyi State.  As miller puts it, “we cannot understand the attitude of either management of workers unless they are seen in their historical context”.  Here the history of NIGERCEM Nkalagu is briefly narrated and derived from the management audit enquiry of NIGERCEM, 1976.

The history of NIGERCEM dates back to colonial days in Nigeria.  I the early thirties of this century, several district officers, geologists had report tot he existence of large deposits of limestone in Nkalagu area – various over sees had as a result of this shown interest in working of deposit.

On 23rd August, 1954, the Nigerian government signed an agreement with F. L Smith and company for the erection of a cement works at Nkalagu.  By the same agreement, F. L. Smith and company limited as managing agents.  The Nigerian Cement Company Limited, Nkalagu was incorporated on 13th Novemenber 1954 to operate this cement project.  Mr. E. E. Sabben – Clare became the first chairman of the board of directors.

On December 20, 1957, the governor general of Nigeria, Sir, James Robertson, opened the factory officially.  Commercial production commenced on 1st January, 1958.

Once of such investors is flour mills of Nigeria which Chief Emmanuel Ukpabi said arrears of staff salaries alone in Nigrecem in conservatively put at N1.4billion according to him. Liabilities to individuals and corporate bodies are estimated at several billions of naira.  He recalls that there had been desperate move by cement importing companies to either buy wholly or acquire majority shares of ailing cement manufacturing firms.  But they all shunned Nigercem because of the said liabilities.

Nigercem owned by the five south-eastern states ran into hitches from the late 80’s due mainly to gross mismanagement.  The development led to break down of three of firms vital machines which remained unserviceable with the only functional one operating at low capacity for some time until it finally got grounded.  The south-east governors who are the major investors in the company had also contemplated many options aimed at reviving the company.

At recent meeting of the five south-eastern governors in Owerri the Imo State capital, various options for the revival of Nigercem topped the agenda of their parley.  The host governors Achike Udenwa who spoke with news men said Nigercem will be privatized if the governor’s ratify is being considered for privatization.  The government of the five eastern states are already considering this in order to improve efficiency and productively.

The chairman of Nigercem “Nze Clement Maduako noted that eastern Rukeem company limited producers of Eagle Cement, was the major shareholder in the privated Nigercem with a controlling share of 60 percent.  Expressing confidence on the ability of new management to kick-start Nigercem now called Eagle Cement again, he said the new board has the first general manager of the cement company as member, while another employee of the company is expected to join the six-member board.  Member of board, who emerged from the election conducted by the 165 shareholder in attendance were Nze Maduako, chairman; captain I.A Hastrup, Mr. H.N Onugbogu, Mr. Coran Wejdmark, Mr. S.A Oludemi and Dr. J.O Ojukwu.

The plant stopped production in 1999, but had a text run in 2001 for only three months in preparation for the privatization.  Some of shareholders who spoke said they had not been paid for the past 40 months and pleaded with the new board to consider clearing the arrears then works commences in the factory.

 

1.2       OBJECTIVE OF THE STUDY

The overall purpose of the study is to understand the financial management practices that equips them with the conceptual and analytical knowledge requires to make skillful, informed, sound, objective and reliable decision of the company.  Specifically the objective of the study on this project is stated as follows:

  1. To evaluate the financial performance of EAGLE CEMENT Company.
  2. To evaluate the management levels of control of financial performance of the company.
  3. To identify the accounting systems and procedures and check whether the financial polices of the company are implemented accordingly.
  4. To prefer solution to ineffectiveness in financial management of the company.

 

 

 

1.3       STATEMENT OF THE PROBLEM

 

  1. It is believed from the evaluation of financial status of the company that the company is not financially healthy.
  2. It is also established that there is inefficient and ineffective management of the company’s resources
  3. It equally discovered that the financial policies are not properly implemented.
  4. Exposing financial fraud noticed. It include as follows:
  5. Cash advance

Staff and management do apply for cash advance but over spend the amount approved for them only to come back to claim a very huge amount as their balance

  1. Car repairs:

Outside, manager do not allow their official  cars to be repaired by the company’s employed mechanics.  They prefer repairing it outside only to present an inflated biill to the company payment

 

  • The provision that all purchases should be routed through the purchasing department is just in principle not in practice.
  1. Price invoicing:

The company allows suppliers to inflect the prices of their suppliers because of the interest some of them have.

  1. price variation:

Some supplier do after some months of supply sent a price increase to the company for items already supplied and the company will honour such claim.

  1. Supply of item, which do not agree with the specification of item actually required by the company.
  • Contract prices are unjustifiable inflated
  • Cheque exchange granted to some staff or managers take more than one year before it is redeemed.

 

1.4       SCOPE OF STUDY

The study covers the area relating to financial manger of EAGEL CEMENT.  It also touched on the effective implementation of financial policies of the company.

 

 

1.5       RESEARCH QUESTIONS

  1. What are the levels of the financial management control of the company?
  2. What are your accounting system and procedures relating tot he receipt and disbursements of the company money?

 

1.6       HYPOTHESIS

  1. Financial management practices EAGLE CEMENT COMPANY are not in line with the approved policy
  2. The accounting procedures are not in line with the approved policy
  • The internal control system of the company are not in line with the establishment system.

 

1.7       THE SIGNIFICANCE OF THE STUDY

  1. The study will reveal the ineffectiveness of financial management practices in the company
  2. The study will equally reveal the weaknesses in the internal control system of the company
  3. The study will also over haul the accounting procedures of the company as to see how adequate they are.

APPRAISAL OF BUDGETARY SYSTEM IN THE PUBLIC SECTOR (A CASE STUDY OF MINISTRY OF FINANCE, OKE-MOSAN, ABEOKUTA)

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  • Name: APPRAISAL OF BUDGETARY SYSTEM IN THE PUBLIC SECTOR (A CASE STUDY OF MINISTRY OF FINANCE, OKE-MOSAN, ABEOKUTA)
  • Type: PDF and MS Word (DOC)
  • Size: [666 KB]
  • Length: [65] Pages
  • With Reference and Questionnaire
  • Amount: 3000 naira

 

CHAPTER ONE

INTRODUCTION
1.1 Background to the Study

Planning and control are major activities of management in all organization and
budgets are central to the process of planning and control. Budgeting and
budgetary control both at management and operational level look at the future lay
down what had to be achieved while control checks whether or not the plans are
realized and put into effect corrective measure where deviation or short or short
fall is occurring-Budgeting control is not a new technique. It has a profit as the
motivating force to known how performance increases. Budgetary control is
therefore the system of management control and accounting in which all the
operations are forecasted and planned in advances to the extent possible and the
actual result compared with the forecasted and planned ones.

In brief it is a system to assist management in the allocation of responsibility and
authority, to provide it with aid for making, estimating and planning for the future
and to facilitate the analysis of the between estimated and actual performance.
In order that budgetary control may function effectively, it is necessary that the
concern should develop proper basis of measurement or standard with which to
evaluate the efficiency of operations a system of standard costing.
Beside this, the organization of the concern should be so integrated that all lines of
authority and responsibility are laid, allocated and defined. This is essential since
the system of budgetary control postulate separation of functions and division of
responsibilities and thus requires that the organization shall be in such be planned
in such a manner that everyone from the managing director down to the shop
foreman will have his duties properly defined.

Budgetary control is an important aspect of financial planning and control. If
properly applied it will help in keeping operation and production of good and
service in line with plans. When establishing budgets, standard must be used and it
is this standard that will serve as a yard stick for measuring actual result. This in
effect means that budgetary control system is operated simultaneously with system
of standard costing because both systems are inter-related.

It is important that budgetary control reports are consistent with the assigned
responsibility of each level of the organization and that a budget holder is only
held responsible for their incurrence. Thus, if responsibility accounting is to be
controllable and uncontrollable. Responsibility Accounting is a system of
accounting in which cost and revenue are analyzed in accordance with areas of
personal responsibility accounting. Once the plans for the department have been
agreed and embodied in a budget, the budgetary control process begins.
A well established and fully understood system of budgetary control also
facilitates the application of the principle of management by objective. In that
sense, efforts are made to see that those who would implement the budgets
understand what their goals are, what actions contribute to the achievement of
these goals and when they have been accomplished.
This is objective can only be achieved when both the management and staff
participation and full Co-operation are ensured so that strict adherence to
management policy is achieved. Managers should be made to see that budget are
measure of standard which be seen as a motivational factors.
Budgetary control system serve as a control mechanism which harmonizes both
individual and group objectives with be organization objectives with be
organization objective to ensure Co-operation of management and staff which in
turn bring about utmost success of control.

Brown and Howard (1984) as cited in Mohammed (2011) stressed that
organizational goals or objectives to be achieved there must be an efficient
budgetary control system.
They enumerated the point that budgetary control is not only an accounting excise
but a fool of management at all levels.
The most important of all uses of budgetary control is its motivational aspect that
is bought but by the involvement of lower and middle management with the
preparation of budgets which performance can be judged.
Therefore, for the effective and efficient utilization of an organization resources
and objection for such organization to be achieved, the executives need to fully
understand the essentials of budgetary control.

1.2 Statement of the Problem
Nigeria Public Sector as a whole has not grown remarkably over the years due to
factors such as dummy budgetary control, neglect by the sector from over
dependence on crude oil, collapsing infrastructure among others.
Although, the Nigeria Government maintains that the industry is the main is the
main instrument for rapid growth structural change and self sufficiency, it had
however unwillingly pursued policies which had impaired the performance of
same industry (Akintoye 2008) as cited in (Mohammed 2011). Therefore, the
problems which this write-up identified and aimed at proffering solution to are;
1. Lack of adequate and realistic data for proper budgetary control.
2. Lack of financial planning and control Public sector parastatals.
3. The non-challant attitude being paid to budgetary control in the Public sector.

1.3 Objectives of the Study
The main objective of this study is to look into how the Public sectorcompanies
apply the techniques control in their daily activities and its possible contributions
to the overall performance of the company. For this objective to be realistic,
attention would be paid to the followings;
1. To know how budgetary control can enhance public sector performance.
2. To identify the problem being encountered in the implementation of these
control.
3. To suggest possible solution to problems/challenges on implementation of
budgetary control.
4. To identify different human aspect of budgetary control.

1.4 Research Questions
This study intends to provide answers to the following questions:
1. To what extent does human factor affects budgetary control?
2. Is there any problem being encountered as regards budgetary control in
public sector?
3. It there any significant relationship between budgetary control and public
sector performance?

1.5 Research Hypothesis
In order to answer research question and achieve objectives of the study, the
following research hypothesis were formulated:
Hypothesis 1
Ho: Human factors affects budgetary control in public sectors
Hi: Human factor does not affect budgetary control in public sectors
Hypothesis 2
HoThere is no significant relationship between budgetary control and Public sector
performance.
H1: There is significant relationship between budgetary control and Public sector
performance.
Hypothesis 3
Ho: Public sector encounters problem as regards budgetary control
Hi: Public sector do not encounter problem as regards budgetary control

1.6 Significance of the Study
The study is necessitated by the need to undertake an in-depth appraisal of
corporate performance and budgetary control in selected Public sector companies
in Nigeria as to gauge their effectiveness. The curiosity and interest of writing this
topic was developed from the heart of the researcher due to problems being
encountered in the organization corporate performance. Therefore, the researcher
has concluded to present a study on ‘‘The effect of budgetary control on the
performance of Public sector companies in Nigerian”
It is therefore of the opinion of the study that the finding of this study shall be
beneficial ways:
1. It will highlight usage of budgetary control system where the organization
is having problems and suggest ways of solving them.
2. It will communicate the overall objectives of the organization to its
employees.
3. It wills assist managers in their effective and efficient planning, controlling
and decision making.
4. It will be used for further studies by other researcher in similar areas.
1.7 Scope of the Study
The scope of this study covers budgetary control and the corporate performance of
some selected Public companies such as. The researcher makes the use of their
annual report from year 2001 to 2011.
1.8 Definition OF Terms
1. Budgetary Control: is any plan by comparing actual result against targeted plans
to identify variances upon which corrective measure could be taken.
2. Budget: is a financial plan that set goals and allocates resources for the coming
period.
3. Budgeting: is the establishment of specific targets of performances and is
followed by executing plans to achieve such desired goals and from time to time
comparing actual with the targets of goals
4. Budgeting System: Budgetary system comprises of two components which are
budget planning and budgetary control.
5. Budget Manual: A budget manual describe in writing the objectives and
procedures of the budget program.
6. Budgetary: A budgetary matter or policy is concerned with the amount of money
that is available to a country or organization, and how it is to be spent.
7. Control: Public sectordevice or mechanism installed or instituted to guide or
regulate the activities or operation of an apparatus, machine, person, or system.
8. Corporate Planning: Is a comprehensive and systematize process of strategic
long-term planning incorporating the resources and capability of an organization
taking the environment into consideration.
9. Controlling: The basic management function of (1) establishing benchmarks or
standards, (2) comparing actual performance against them, and (3) taking corrective
action.
10. Performance: Performance is performing arts, generally comprises an event in
which a performer or group of performers behave in a particular way for another
group of people, the audience. Choral music and ballet are examples. Usually the
performers participate in rehearsals beforehand. Afterwards audience members often
applaud.
11. Activity Base Budgeting: It involves planning and controlling along the lines of
values adding activities and proceeds.
1.9 Organization of the Study
The research project covered five chapters. Chapter 1 was about the introduction
of the study, the statement of the research problem, research objectives and
research questions of the study and the scope of the study. Chapters 2 dealt with
the literature review and provide information on the areas of study Chapter 3
showed how the research work was designed. It further indicates the method of
sampling of questionnaire, data collection & analysis of data. Chapter 4 was
devoted to research findings of the field of study. Chapter 5 presented the
summary of findings and conclusions to the study.

AN EXAMINATION OF IMPACT OF DEPOSIT MONEY BANK CREDIT ON AGRICULTURAL SECTOR PERFORMANCE IN NIGERIA

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PROJECT TOPIC AND MATERIAL ON AN EXAMINATION OF IMPACT OF DEPOSIT MONEY BANK CREDIT ON AGRICULTURAL SECTOR PERFORMANCE IN NIGERIA

The Project File Details                                                                                                       

  • Name: AN EXAMINATION OF IMPACT OF DEPOSIT MONEY BANK CREDIT ON AGRICULTURAL SECTOR PERFORMANCE IN NIGERIA
  • Type: PDF and MS Word (DOC)
  • Size: [666 KB]
  • Length: [65] Pages
  • With Reference and Questionnaire
  • Amount: 3000 naira

ABSTRACT

The study attempted to examine the impact of deposit money bank credit or loans on agricultural sector performance in Nigeria between1982 -2016. The study examined the effect of deposit money bank credits on crop production in Nigeria, to find out the impact of deposit money bank credits on livestock production in Nigeria, to ascertain the extent to which deposit money bank credits has affected the overall agricultural sector in Nigeria. This research adopted the econometric method of ordinary least square (OLS) techniques of multiple regressions as the main analytic tool. This study obtained data from secondary sources mainly the Central Bank of Nigeria (CBN) statistical bulletin, National Bureau of statistics (NBS) the CBN’s annual reports and financial statement. From our findings the result revealed positive and insignificant impact of interest rate on agricultural output. The result also established a positive and significant relationship between bank loan advances and livestock, production. The general conclusion is that a deposit money bank credit is paramount in promoting agricultural sector.

TABLE OF CONTENTS

Title page………………………………………………….i
Certification……………………………………………….ii
Dedication…………………………………………………iii
Acknowledgement…………………………………………iv
Abstract…………………………………………………….v
Table of content……………………………………………vi

CHAPTER ONE INTRODUCTION…………………….1
Background of study……………………………………1
Statement of problem……………………………………3
Objective of study………………………………………4
Significant of the study…………………………………5
Research hypothesis…………………………………….5
Scope of the study………………………………………6
Organization of the study……………………………….6

CHAPTER TWO:
Theoretical literature…………………………………………….7
The concept of bank credit…………………………………………9
Bank credit and the Nigeria economy…………………………..10
Agricultural credit and finance………………………………….11
Types of agricultural credit programes in Nigeria………………14
The agriculture credit guarantee scheme fund…………………..19
Bank sector credit and agricultural output………………………25
Empirical literature………………………………………………28

CHAPTER THREE
3.1 Research design……………………………………………………40
3.2 Method of data collection………………………………………….40
3.3 Technique of data analysis…………………………………………40
3.4 Models specifications………………………………………………41

CHAPTER FOUR
4.0 Presentation and analysis of research findings…………………….44
4.1 Analysis of unit root and co-integration results of model 1…………44
4.2 Evaluation based on economic criteria………………………………46
4.3 Evaluation based on statistical criteria……………………………….47
4.4 Evaluation based on econometric criteria…………………………………..48

CHAPTER FIVE
5.0 Summary, policy recommendation and conclusion………………….61
5.1 Summary……………………………………………………………..61
5.2 Policy recommendation…………………………………………….62
5.3 Conclusion…………………………………………………………..63
References………………………………………………………………..6

CHAPTER ONE

INTRODUCTION
1.1 Background to the Study
Finance is the wheel on which every production activity anchors. The activities of the financial institution especially the banks, determine the economic progress and or retardation of a given nation. The banks are noted for playing the role of financial intermediation, which involves channeling funds from the surplus unit to the deficit unit of economy, thus transferring bank deposits into loans or credits.
The role of deposit money bank loans in economic growth and development can be recognized in the sense that various economic units use to meet their operational needs. For example, in the agricultural sector firm’s bank loans to purchase machinery and equipment buying seeds, fertilizers, erect various kinds of farm buildings (Adeniyi, 2006).
While highlighting the role of deposit money bank loans, Ademu (2006) explained that credit can be used to prevent an economic activity from total collapse in the event of natural disaster, such as flood, drought, disease, or fire. The banking sector is at the centre of making these credits available by mobilizing surplus funds from servers who have no immediate need of such fund and thus channel it in form of loans to investors who have brilliant ideas on how to create additional wealth in the economy but lack the necessary capital to execute their ideas.
According to the CBN (2007), credit or loans to the core private sector by the deposit money banks grew by 98.7%. Outstanding credit to agriculture, solid minerals, export, and manufacturing in 2007 stood at 3.1%, 10.2%, 1.4% and 10.1% respectively. Credit flows to the core private sector in 2007 amounted to N2, 289.2 billion. Adekanye (1986) noted that in making credit available to the productive sectors such as agriculture, manufacturing, real estate or housing etc, banks render a great deal of service as production will be increased, capital investment expended and higher standard of living realized.
Agricultural credit access has important role it plays in the context of agricultural and rural development in Nigeria. Rahji and Adeoti (2010) noted that some 70% of the population lives in the rural areas with their main source of livelihood being agriculture. Therefore, credit constants to farm household impose high cost on the society in the areas pf rural unemployment, poverty, and distortion s of production activities. Swinnen and Gow (1999) pointed out that access to agricultural credit has been severally constrained the productivity of agriculture in the developing countries. This is because of the imperfect and costly information problems encountered in the financial markets.
Tawose (2012) observed that the rapid growth of industrial production has increased the demand for bank credit on the part of industrial firms. He noted that financial institutions such as bank of agriculture and merchant banks have increasingly been proving finances for industries, some of which are manage by rapidly growing number of indigenous entrepreneurs.
Indeed, under the credit guideline being prescribed by the CBN, the banks have been encouraged to reallocate credit or loans and re-channel it to the productive sector, thereby boosting their level of productivity and performance as well as increase the growth and development of the domestic economy. It is against this background that this study examines the impact of bank of agriculture loans on agricultural sector performance in Nigeria from the period of 1982 to 2016.
1.2 Statement of the Problem
As pointed out earlier, loans or credit facilities of bank of agriculture are the life blood of any given economy. This is because credits available to the productive sector like agriculture go a long way stimulating growth and boost the domestic economy. Where bank loans or credits are insufficient to cater for the needs of this sector, the domestic economy that is private sector led is doomed to failure.
In Nigeria, it will be recalled that bank of agriculture credit guidelines of the government through its agency, Central Bank of Nigeria (CBN), the productive sector especially agriculture have suffered lack of access to credits for production purposes. For example, Yunus (2011) observed that lack of access to bank credit on the part of the poor was the key constraints on their economic progress. Rahji and Adeoti (2010) also asserted that banks perceive agricultural credit as risky and seek to channel credit to less risky sectors. The bank credit constraints to farmers and other investors impose such problems as reduction in the level of output, reduction in national income, level of unemployment, poverty, income inequality etc.
Following these eminent problems associated with poor or inadequate deposit money bank loans or credit access to agricultural sector, this study seeks to address such questions as: what factors are responsible for credit access to the agricultural sector of the economy? What impact has it on the various economic problems of unemployment, poverty, low level of national income, lower output, and inequality? What are the responses to these problems in Nigeria?
1.3 Objective of the Study
The main objective of this study is to examine the impact of bank of agriculture credits on the agricultural sector performance in Nigeria. Specifically, this study seeks to achieve the following objectives:
To examine the effect of bank of agriculture credits on crop production in Nigeria;
To find out the impact of bank of agriculture credits on livestock production in Nigeria; and
To discover the extent to which bank of agriculture credits has affected the overall agricultural sector in Nigeria.

1.4 Significance of the Study
Available literature revealed that the level of productivity is a direct function of capital and most of the loan to the productive sectors of the economy comes from the banks. There are insufficient studies carried out the deposit money bank loans on the agricultural sector of the development nations including Nigeria. The need to carry out this study becomes imperative as it bridges this apparent gap in the literature.
The finding of this study is of great importance to the industrialists, farmers, government and other researchers as it will establish the relationship existing between bank of agriculture loans and the agricultural sector performance in the country.
Finally, the study adds and contributes to the existing body of knowledge in economic literature.
1.5 Research Hypotheses
This study intends to test the following hypotheses:
HO1: There is no significant relationship between bank of agriculture loans and crop production in Nigeria
HO2: There is no significant relationship between bank of agriculture loans and livestock production in Nigeria
HO3: there is no significant relationship between bank of agriculture loans and overall agricultural sector production in Nigeria

1.6 Scope of the Study
This study seeks to examine the impact of deposit money bank loans on the agricultural sector of the economy. Also, the study covers how the deposit money bank loans or credits to the productive sector affect the overall performance of the Nigerian economy. The study spans between the periods of 1982 to 2016.
1.7 Organization of the Study
Organization is the structural pattern of the study. This is organized in five chapters. Chapter one considered the introduction which covers background of the study, statement of the problem, objectives of the study, significance, hypotheses and scope of study.
In chapter two, we considered the review of related literature on the issues of deposit money bank loans or credit and agricultural sector performance. Also, theoretical and empirical literatures were presented here.
Chapter three presented the method of study, which involves the research design, data required and sources, method of data collection, and technique of data analysis as well as models specifications.
Chapter four considered the presentation of data and analysis as well as the discussion of findings. Chapter five focused on the summary, conclusion and recommendations.

AN ASSESSMENT OF INTERNAL AUDIT OPERATION IN A GOVERNMENT PRASTATAL: A CASESTUDY OF PIPELINES AND PRODUCT MARKETING COMPANY (PPMC)

Download the complete Accounting project topic and material (chapter 1-5) titled AN ASSESSMENT OF INTERNAL AUDIT OPERATION IN A GOVERNMENT PRASTATAL: A CASE STUDY OF PIPELINES AND PRODUCT MARKETING COMPANY (PPMC) here on iProjectTopics. See below for the abstract, table of contents, list of figures, list of tables, list of appendices, list of abbreviations and chapter one. Click the DOWNLOAD FULL WORK BUTTON BELOW CHAPTER ONE  to get the complete project work instantly.

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PROJECT TOPIC AND MATERIAL ON AN ASSESSMENT OF INTERNAL AUDIT OPERATION IN A GOVERNMENT PRASTATAL: A CASE STUDY OF PIPELINES AND PRODUCT MARKETING COMPANY (PPMC)

The Project File Details                                                                                                       

  • Name:AN ASSESSMENT OF INTERNAL AUDIT OPERATION IN A GOVERNMENT PRASTATAL: A CASESTUDY OF PIPELINES AND PRODUCT MARKETING COMPANY (PPMC)
  • Type: PDF and MS Word (DOC)
  • Size: [666 KB]
  • Length: [65] Pages
  • With Reference and Questionnaire
  • Amount: 3000 naira

ABSTRACT

The main objective of the study was to assess the Internal Audit mechanisms put in place by the management of Pipelines and Product Marketing Company, determine its efficiency and effectiveness of also to ascertain degree of autonomy of the corporation’s Internal Audit Department. Data were gathered through questionnaires administered to the staff in Finance & Account Department and Internal Audit Department PPMC. Chi- square and Statistical tool were used to analyse the data. Findings from the study indicated that PPMC has effective internal control system, which have enhanced the company’s level of performance. The study also showed internal audit can effectively detect fraud and financial irregularities in PPMC. The study recommends that PPMC should recruit more competent personnel as auditors, institute audit committee and resource their internal audit departments. The study reveals that no organisation can operate effectively and efficiently without an Internal Audit Department alongside with a good internal control system. The study thus concludes that internal audit department must exhibit a high degree of autonomy in order to achieve operational efficiency.

TABLE OF CONTENTS

Title Page………………………………………………………………………………………………….i
Certification……………………………………………………………………………………ii
Dedication……………………………………………………………………………………….iii
Acknowledgement…………………………………………………………………………iv
List of Figures……………………………………………………………………………………………v
Table of Contents………………………………………………………………………………………..vi
List of Tables…………………………………………………………………………………………….vii
List of Abbreviation……………………………………………………………………………………..ix
Abstract……………………………………………………………………………………………………xi
CHAPTER ONE : INTRODUCTIION
1.1 Background Information …………………………………………………………………………………………………… 1
1.1.1 Background of the case study – Pipelines and Product Marketing Company (PPMC) ………………….. 2
1.2 Statement of Research Problem ………………………………………………………………………………………………. 3
1.3 Objective of the Study……………………………………………………………………………………………………………. 3
1.5. Research Hypotheses ……………………………………………………………………………………………………………. 4
1.6 Significance of the Study ……………………………………………………………………………………………………….. 4
1.7 Scope and Limitations of the Study …………………………………………………………………………………………. 5
1.8 Organisation of the Study ………………………………………………………………………………………………………. 5
CHAPTER TWO:LITERATURE REVIEW
2.1 Introduction ………………………………………………………………………………………………………………………….. 8
2.1.1 Conceptual Clarifications …………………………………………………………………………………………………….. 8
2.1.1.1 Definition of Auditing ………………………………………………………………………………………………………. 8
2.1.1.3 Objectives of Audit ………………………………………………………………………………………………………….. 9
2.1.2 Evolution of Internal Audit ………………………………………………………………………………………………….. 9
2.1.2.1 Definition and Scope of Internal Audit ……………………………………………………………………………… 10
2.1.2.2 Role of Internal Audit …………………………………………………………………………………………………….. 11
2.1.2.3 Objectives of Internal Audit …………………………………………………………………………………………… 12
2.1.2.4 Significance of Internal Audit ………………………………………………………………………………………….. 12
2.1.2.5 Assessment of the Internal Audit functions ……………………………………………………………………….. 13
2.1.2.6 Procedure of Internal Audit ……………………………………………………………………………………………… 14
vi
2.1.2.7 Reporting and Monitoring ……………………………………………………………………………………………….. 15
2.1.2.8 Guidance for Internal Auditors ………………………………………………………………………………………… 16
2.1.2.9 Internal audit versus external audit …………………………………………………………………………………… 17
2.1.2.9.1 Relationship between Internal and External Auditors……………………………………………………….. 17
2.1.2.9.2 Similarities and differences between internal audit and external audit ………………………………. 18
2.1.2.9.3 The main differences between internal and external audit functions …………………………………… 18
2.1.2.10 Types of internal audits …………………………………………………………………………………………………. 19
2.1.2.10.1 Financial Audit ………………………………………………………………………………………………………….. 19
2.1.2.10.2 Management Audit …………………………………………………………………………………………………….. 20
2.1.2.10.3 Compliance Audit ……………………………………………………………………………………………………… 20
2.1.2.10.4 Social Audit………………………………………………………………………………………………………………. 20
2.1.2.10.5 Investigation Audit …………………………………………………………………………………………………….. 20
2.1.2.10.6 System Audit …………………………………………………………………………………………………………….. 21
2.1.3 Operational Audit ……………………………………………………………………………………………………………… 21
2.1.4 Internal Control ………………………………………………………………………………………………………………… 22
2.1.4.1 Objectives of Internal Control Systems …………………………………………………………………………….. 23
2.1.4.2 Limitations of Internal Control System ……………………………………………………………………………. 24
2.1.5 Internal Check ………………………………………………………………………………………………………………….. 24
2.1.5.1 Internal Check vs. Internal Audit ……………………………………………………………………………………… 25
2.1.6 Internal auditing and Fraud ………………………………………………………………………………………………… 26
2.1.7 Fraud ………………………………………………………………………………………………………………………………. 26
2.1.7.1 Types of Fraud ………………………………………………………………………………………………………………. 26
2.1.7.2 Cause of Fraud ………………………………………………………………………………………………………………. 27
2.1.7.3 Roles for Fraud Prevention and Detection …………………………………………………………………………. 28
2.1.7.4 How to Detect and Prevent Fraud and Irregularities ……………………………………………………………. 29
2.1.8 Causes of ineffective internal auditing in Public sector ………………………………………………………….. 30
2.2 Theoretical Review ……………………………………………………………………………………………………………… 31
2.2.1 Agency theory ………………………………………………………………………………………………………………….. 31
2.2.2 Contingency Theory ………………………………………………………………………………………………………….. 31
2.2.3 Lending Credibility Theory ……………………………………………………………………………………………….. 33
2.3 Review of empirical findings ………………………………………………………………………………………………… 34
2.6 Summary of Empirical Review of Literature …………………………………………………………………………… 38
vii
CHAPTER THREE:METHODOLOGY
3.0 Introduction …………………………………………………………………………………………………………………………. 45
3.1 Research Design ………………………………………………………………………………………………………………….. 45
3.2 Research Population …………………………………………………………………………………………………………….. 45
3.3 Sample and Sampling Techniques …………………………………………………………………………………………. 45
3.4 Research Instrument …………………………………………………………………………………………………………….. 46
3.5 Validation and Reliability of Research Instrument …………………………………………………………………… 46
3.6 Data Collection Techniques ………………………………………………………………………………………………….. 46
3.7 Data Analysis Techniques …………………………………………………………………………………………………….. 46
3.7.1 Chi- Square Statistical Tool ……………………………………………………………………………………………….. 47
CHAPTER FOUR:PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA
4.0 Introduction ………………………………………………………………………………………………………………………… 48
4.1. Data Analysis and Presentation …………………………………………………………………………………………….. 48
4.1.1 Analysis of Demographic Characteristics of Respondents ……………………………………………………… 48
4.2.2 Test of Hypothesis Two …………………………………………………………………………………………………….. 64
4.2.3 Test of Hypothesis Three …………………………………………………………………………………………………… 66
4.3 Description of research instrument used. ………………………………………………………………………………… 67
4.4 Summary of Data Analysis and the Result Achieved ……………………………………………………………….. 67
CHAPTER FIVE:SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS
5.1 Summary of Major Findings …………………………………………………………………………………………………. 69
5.2 Conclusion …………………………………………………………………………………………………………………………. 70
5.3 Recommendations ……………………………………………………………………………………………………………….. 70
5.4 Suggestion for Further Studies ………………………………………………………………………………………………. 71
REFERENCES …………………………………………………………………………………………………………………… 72
APPENDIX ………………………………………………………………………………………………………………………… 74
viii
LIST OF TABLE
Table 1: Age distribution of respondent ………………………………………. Error! Bookmark not defined.
Table 2:Gender distribution of respondents ………………………………….. Error! Bookmark not defined.
Table 3: Marital Status ………………………………………………………………. Error! Bookmark not defined.
Table 4 : Educational Qualification …………………………………………….. Error! Bookmark not defined.
Table 5: Professional Qualification …………………………………………….. Error! Bookmark not defined.
Table 6:Work experience …………………………………………………………… Error! Bookmark not defined.
Table 7:Management Cadre ……………………………………………………….. Error! Bookmark not defined.
Table 8:There exist Internal Audit Department in the company ……… Error! Bookmark not defined.
Table 10: There is strict adherence to internal control procedures in the organisation ……………. Error! Bookmark not defined.
Table 11:The Internal Audit Department prepare audit report that is adequate in evaluating the internal control policies ……………………………………………………………. Error! Bookmark not defined.
Table 12: Internal Audit has helped to improve the company’s performance levelError! Bookmark not defined.
Table 13: There exist internal control policies that must be adhered to by responsible officers .. Error! Bookmark not defined.
Table14: All staff member are aware of the internal control policies of the company ……………. Error! Bookmark not defined.
Table 15: The internal Control policies are used as a safeguard for performance measurement . Error! Bookmark not defined.
Table 16:The Internal Audit Department reviews the internal control mechanism regularly …… Error! Bookmark not defined.
Table 17: The Internal Audit Department reviews the company’s internal control procedure periodically ……………………………………………………………………………… Error! Bookmark not defined.
Table18: The queries and recommendations of the Internal Audit Department are often implemented……………………………………………………………………………………………….. Error! Bookmark not defined.
Table 19:There has been incidence of fraud and funds misappropriation in the company ……… Error! Bookmark not defined.
Table 20: Incidence of fraud have been detected by the Internal Audit Department ……………… Error! Bookmark not defined.
Table 21: The Internal Audit Department has a functional Audit timetable for effective performance of its duties ………………………………………………………………………………. Error! Bookmark not defined.
Table 22: The Internal Audit Department is independent of Finance and Accounts Department Error! Bookmark not defined.
ix
Table 23:Internal Auditor performs an independent examination of the company’s financial records……………………………………………………………………………………………….. Error! Bookmark not defined.
Table 24: The Audit manager reports directly to the top managementError! Bookmark not defined.
Table 25:The Company’s Auditor have adequate skills and experience to provide internal check for the company’sasset…………………………………………………………………………………………Error! Bookmark not defined.
LIST OF ABBREVIATIONS
NNPC: Nigerian National Petroleum Corporation
PPMC: Pipelines and Products marketing company
IIA: Institute if Internal Auditors
IA: Internal Audit
ICAEW: Institute of Chartered Accountant of England and Wales
CIMA: Chartered Institute of Management Accounting
COSO: Committee of Sponsoring Organisations
APB: Auditing Practices Board
ISA: International Standards on Auditing

CHAPTER ONE

1.1 Background Information
Risk is inherent in every business decisions and in the business process established to assist in the achievement of organisation objectives. Changes in the way organisations carry out their normal activities resulting from expansion of the business, can place extra-ordinary quality on the organisation’s control mechanism and become major source of risk. That is why establishing and implementing effective risk and control elements of the overall corporate governance framework is essential to all organisations. ICAEW, (2004).
Internal audit is established by management as an independent appraisal function to review the internal control system as a service to the organisation. The primary role of internal audit is to help the Board and Executive Management to protect the assets, reputation and sustainability of the organisation. It does this by assessing whether all significant risks are identified and appropriately reported by management and the risk function to the Board of Directors: assessing whether they are adequately controlled; and by challenging Executive Management to improve the effectiveness of governance, risk management and internal control. Internal audit department is responsible for evaluating the adequacy and effectiveness of system of risk management and internal controls operated within the company. Its responsibilities are defined and monitored by the Audit committee, on behalf of the Board. Internal auditors are employees of the organisation; they are guided by principles such as independence, objectivity, integrity, confidentially and competency to their functions. The role of internal auditors is receiving recognition rapidly. This is evident in the establishment of Institute of Internal Auditors (IIA) in countries like U.S and U.K. as noted by Nagy and Cenker. (2002).
2
Internal auditors are seen as part of top management team involved in the creation of organisational wealth and values through effectiveness of risk management, control and governance processes.
This study therefore seeks to carry out an assessment of internal audit operation in Pipelines and Product Marketing Company (PPMC), a subsidiary of NNPC. Government parastatals like NNPC (Nigerian National petroleum Corporation) would use operational audit to carry out an inquiry into the business processes of the corporation. Operational audit is a systematic review of effectiveness, efficiency and economy of operation.
1.1.1 Background of the case study – Pipelines and Product Marketing Company (PPMC)
Pipelines and Product Marketing Company (PPMC) is responsible for transporting crude oil to local refineries established by Nigerian National Petroleum Corporation (NNPC). The company also markets other petroleum products to industries, automobiles, and domestic cooking; refined petroleum products in domestic markets, as well as exports primarily in the ECOWAS sub-region; and products, such as fuel oils, base oil solvents, waxes bitumen, and sulphur. It operates a network of pipelines and depots. The company was founded in 1988 and is based in Abuja, Nigeria. -PPMC is a subsidiary of NNPC. PPMC was set up with the objective of providing excellent customer services by transporting crude oil to functioning refineries and moving white petroleum products to the existing and future markets efficiently and at low cost through a safe and well maintained network of pipelines and depots. It is also part of the objectives of the company to profitably and efficiently market refined petroleum products in the domestic as well as export markets especially in the ECOWAS sub-region while providing marine services and maintaining uninterrupted movement of refined petroleum products from the local refineries. The Vision of PPMC is to be the dominant supplier of all refined petroleum products to the existing domestic and growing export markets within the West African sub-region. Its mission is thus to ensure security of supply of petroleum products to the domestic market at low operating costs,
3
marketing special products competitively in the domestic and international markets, providing excellent customer service by effectively, and efficiently transporting crude oil to the refineries.
1.2 Statement of Research Problem
PPMC was established to transport crude oil to NNPC local refineries and to markets other petroleum products to industries, automobiles and domestic cooking, as well as exports primarily in ECOWAS sub-region. It is often adjudged that officers of government parastatals entrusted with the management of both material and human resources of their establishment are not brought under thorough control. The ultimate consequence of this is that much of the resources allocated to the parastatals are indiscriminately mismanaged. In most parastatals, there is little or no resistance to the temptation of colliding with other workers to embezzle allocated fund to the detriment of the government and society as a whole.
Again, there is the problem of non-utilization or in some cases under-utilization of allocated resources, which pose great risk associated with the misuse of organisation funds and resources. Do internal audit department exist in the company? What is the degree of autonomy of internal audit operations? Do the management really understand the guidelines and standards of internal audit in PPMC? These are some of the questions that prompted the researcher to evaluate the internal audit mechanism in PPMC.
1.3 Objective of the Study
The primary objective of the study is to assess the internal audit operations of Pipeline Product and Marketing Company (PPMC) – a subsidiary of Nigerian National Petroleum Corporation (NNPC).
The specific objectives of the study are to:
i. Assess the Internal Audit mechanisms put in place by the management of PPMC
ii. Determine the efficiency and effectiveness of Internal Audit mechanism in PPMC
iii. Ascertain degree of autonomy of the corporation’s Internal Audit Department.
4
1.4 Research Questions
The following research questions are put forth in the study in order to achieve the above stated research objectives;
i. What are the Internal Audit Procedures in PPMC?
ii. How efficient and effective are the Internal Audit in PPMC?
iii. To what degree is the autonomy of Internal Audit Department in PPMC?
1.5. Research Hypotheses
Hypothesis One
H0: PPMC does not have a good Internal Audit Procedure
H1: PPMC have a good Internal Audit Procedure
Hypothesis Two
H0: The Internal Audit in PPMC is not effective and efficient
H1: The Internal Audit in PPMC is effective and efficient
Hypothesis Three
H0: Internal Audit in PPMC does not have a satisfactory degree of autonomy
H1: Internal Audit in PPMC has a satisfactory degree of autonomy
1.6 Significance of the Study
The study adds to the existing knowledge of internal audit system and the role that internal auditors’ plays in ensuring effectiveness of system of risk management and internal control operated within an organisation. It will serve as good source of reference to organisations for instituting and ensuring effective internal audit. Also, this would enable the corporation to derive optimum result from its employees by improving upon its internal control system. Similar
5
corporations will equally benefit to discover that internal auditors do not exist only to detect fraud but also to advice management on effective governance, risk and controls.
1.7 Scope and Limitations of the Study
This research seeks to perform an assessment of internal audit in government parastatals, with specific focus on PPMC a subsidiary of NNPC. The period of the study is 2015. Structured questionnaires were administered to staff members of PPMC at the branch operational office in Delta State, Nigeria. Time was a major constraint of the study. Availability of respondents to respond quickly to the questionnaire also posed constraint to the study.
1.8 Organisation of the Study
This study is divided into five chapters.
Chapter One: This chapter gives an overview of the study. It highlights the statement of the problem, objectives of the study, significance of the study, research questions, research hypotheses and scope and limitations of the study.
Chapter two focuses on the literature reviewed related to internal audit, its components and importance. Theoretical framework and empirical review of related studies are also addressed in this chapter.
Chapter three discusses the methodology used in the study. This includes research designs, population and sample size, research instrument, and data collection on internal audit evaluation of PPMC.
Chapter four analysed the data collected from administered questionnaires.
Chapter five presents the summary of findings, conclusions and recommendations for adoption by PPMC in order to achieve its business goals.
6
1.9 Definition of Terms
i. Auditing: Auditing is defined as an independent examination of the books and account of an organisation by a duly appointed person to enable that person give an opinion as to whether the account show a true and fair view and comply with relevant statutory guidelines or lay down rules and regulations.
ii. Auditor: An auditor is an accountant who conducts an audit to verify the accuracy of the financial records and accounting practices of a business or government. An auditor is also an officer whose duty is to examine the accounts of officer who received and disbursed public moneys by lawful authority.
iii. Internal Audit: This refers to independent, objective assurance and consulting activity designed to add value and improve an organisation’s operations. It helps an organisation accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.
iv. Internal Auditor: This is an employee of a company charged with providing independent and objective evaluations of the company’s financial and operational business activities, including its corporate governance.
v. Internal Control: Internal control is the whole system of control, financial and otherwise, established by management in order to carry on with the business in an orderly manner, ensure adherence to management policies, safeguard its asset and secure as far as possible the completeness, accuracy and reliability of books and other record.
vi. Internal Check: Internal check is the aggregate of the check and balance imposed on the day to day transactions in an organisation where by the work of one person is verified independently by or is complementary to the work of one another.
7
vii. Fraud: This is defined as a criminal deception in an act of acquiring other people’s money kept in one’s possession deceitfully.
viii. Government Parastatals: They are companies owned and controlled by government for business purpose in order to make profit.

AN ASSESSMENT OF COST PERFORMANCE AND ACCOUNTABILITY IN PRIVATIZED PUBLIC ENTERPRISES IN NIGERIA. A STUDY OF OANDO (UNIPETROL) PLC IN ENUGU STATE

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  • Name: AN ASSESSMENT OF COST PERFORMANCE AND ACCOUNTABILITY IN PRIVATIZED PUBLIC ENTERPRISES IN NIGERIA. A STUDY OF OANDO (UNIPETROL) PLC IN ENUGU STATE
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ABSTRACT

Despite an impressive level of privatization activity across Africa and the upsurge in search of the operating performance of privatized firms in both develop and developing economies, our empirical knowledge of the privatization program in Africa is limited. The purpose of this study is to appraise the post privatization cost and operating performance as well as accountability of some privatized public enterprises in Nigeria. A survey research design was adopted for the study, sixty five internal audit and thirty five accounting. Totally one hundred was randomly sampled and stratified among the staff of Oando plc Enugu state. Three research questions and hypothesis tested at 0.05 percent level of significance guided the study. Frequencies, percentages, mean and standard deviation were employed to answer the research questions while Z-test statistics were used to test the hypothesis. It was found that privatization of unipetrol has led to efficient and improved cost performance, and proper accountability to share holders. We conclude and recommend among others that effective cost performance and proper accountability to share holders is very necessary in privatized public enterprises and that government should prive the entire necessary enabling environment for the privatized company to carry out their activities without unnecessarily increasing their cost.

TABLE OF CONTENTS

Title page 1
Approval page 2
Certification 3
Dedication 5
Acknowledgement 6
Table of content 7
Abstract 11
CHAPTER ONE
1.0 Introduction 12
1.1 Background of the Study 12
1.2 Statement of problem 16
1.3 Research questions 17 1.4 Objective of the study 18
1.5 Statement of hypothesis 18
8

1.6 Significance of the study 19 1.7 Scope of the study 20 1.8 Limitation of the study 20 1.9 Definition of key terms 21

CHAPTER TWO
2.0 Introduction 24
2.1 Literature review 24 2.2 The nature and concept of public enterprises 24 2.3 Performance of public enterprises in Nigeria 28 2.4 Problems of public enterprises in Nigeria 35 2.5 Public enterprises privatization in Nigeria 41 2.6 Concept of privatization 52
2.7 Types of privatization 55
REFERENCES 57
CHAPTER THREE
3.0 Introduction 59
3.1 Research Questions 59
3.2 Source of Data 60
9

3.2.1 Primary source of data 60
3.2.2 Secondary source of data 60
3.3 Area of Study 61
3.4 Population of the study 61
3.4.1 Sampling design and technique 61
3.5 Instrument of data collection 63
3.6 Reliability of the test Instrument 63
3.7 Validity of the research instrument 63
3.8 Method of data Analysis 64
CHAPTER FOUR
4.0 Analysis of data and testing of hypothesis 66
4.1 Data presentation and analysis 66
4.2 Test of hypothesis 73
4.3 Tabulating the result 84
10

CHAPTER FIVE
5.0 Summary, Conclusion and Recommendation 86
5.1 Summary 86
5.2 Conclusion 87
5.3 Recommendation 88
BIBLIOGRAPHY 90
APPENDIX I 93
APPENDIX II

 

CHAPTER ONE

INTRODUCTION
1.1 Background of the Study
Privatization of state-owned enterprises has become an important
phenomenon in both developed and developing countries. Over the last
decade, state-owned enterprises (SOEs) have been privatized at an
increasing rate, particularly in developing countries (DCs). Privatization has
become an important phenomenon in both developed and developing
countries. Over the past decade, privatization attempts have been
occurring at an increasing rate, especially in developing countries. The
compound annual average growth rate was around 10% between 1990 and
2000, with global privatization revenues jumping from $25 billion in 1990 to
$200 billion in 2000. The number of countries that have implemented
privatization policies has exceeded 110, not to mention that privatization
has touched almost every aspect of economic activity (Shadeh, 2002).
Privatization of state-owned enterprises (SOEs) has become a key
component of the structural reform process and globalization strategy in
13

many economies. Several developing and transition economies have
embarked on extensive privatization programmes in the last one and a half
decades or so, as a means of fostering economic growth, attaining
macroeconomic stability, and reducing public sector borrowing
requirements arising from corruption, subsidies and subventions to
unprofitable SOEs. By the end of 1996, all but five countries in Africa had
divested some public enterprises within the framework of macroeconomic
reform and liberalization (White and Bhatia, 1998). In line with the trend
worldwide, the spate of empirical works on privatization has also increased,
albeit with a microeconomic orientation that emphasizes efficiency gains
(La Porta and López-de-Silanes, (1997); Boubakri and Cosset, (2001);
Dewenter and Malatesta, (2001) D’Souza and Megginson, (2007). Yet,
despite the upsurge in research, our empirical knowledge of the
privatization programme in Africa is limited. Aside from theoretical
predictions, not much is known about the process and outcome of
privatization exercises in Africa in spite of the impressive level of activism in
its implementation.
14

Current research is yet to provide useful insights into the peculiar
circumstances of Africa, such as the presence of embryonic financial
markets and weak regulatory institution efforts. Most objective observers
agree, however, that the high expectations of the 1980s about the “magical
power” of privatization bailing Africa out of its quagmire remain unrealized
(Adam et al., (1992); World Bank,(1995); Ariyo and Jerome, (1999); Jerome,
(2005).
As in most developing countries, Nigeria until recently witnessed the
growing involvement of the state in economic activities. The expansion of
SOEs into diverse economic activities was viewed as an important strategy
for fostering rapid economic growth and development. This view was
reinforced by massive foreign exchange earnings from crude oil, which
fuelled unbridled Federal Government of Nigeria (FGN) investment in public
enterprises. Unfortunately, most of the enterprises were poorly conceived
and economically inefficient. They accumulated huge financial losses and
absorbed a disproportionate share of domestic credit. By l985, they had
become an unsustainable burden on the budget. With the adoption of the
structural adjustment programme (SAP) in 1986, privatization of public
15

enterprises came to the forefront as a major component of Nigeria’s
economic reform process at the behest of the World Bank and other
international organizations.
Consequently, a Technical Committee on Privatization and
Commercialization (TCPC) was set up in 1988 to oversee the programme. In
the course of its operations, the TCPC privatized 55 enterprises. Sufficient
time has elapsed since the start of reforms to allow an initial assessment of
the extent to which privatization has realized its intended economic and
financial benefits, especially with the commencement of the second phase
of the programme. This is particularly important in view of the lessons of
experience revealing interesting features that may alter earlier notions as
to the most appropriate way to implement privatization programmes
(Nellis, 1999). Concerns about globalization, in some transition economies
(notably the former Soviet Union and Czech Republic) and disappointment
with infrastructure privatization in developing countries are spawning new
critiques of privatization (Shirley and Walsh, 2000). Among the pertinent
issues to be addressed are: What is the extent and pattern of cost
performance and accountability of privatized firm? What have been the
16

results of these performance? Has privatization improved the cost and
accountability of firm? Finally, what policy lessons are to be learned from
the privatization experience so far? These are the issues that come into
focus in the study.

1.2 Statement of Problem
The issue of cost performance and accountability of privatized public
enterprise have been a serious subject of the debate and different interest
group that is the “stakeholders”. The post privatization effect this
enterprise have been the subject of public scrutiny and criticism by the
public and others alike. Majority are of the view that their performance is
not different from the way it was when they were under public enterprise.
In response to this in recent national assembly committee, that was set
up to look into this enterprise partially supported public concern on their
performance. It is against these background that this research is carried
out to determine or find out if these view are true as the research is
intended to look at this research is intended to look at this privatized firms
cost performance and accountability.
17

Public enterprise before their recent privatization where perceived to be
bedeviled by numerous challenges ranging from political interference,
inefficiency in the management of resources, conflict of objectives,
overdependence on subvention for survival etc. these over the years have
been the main source of criticism of public enterprises and the reason why
they are poorly managed . is this issue the same after the privatization o
these enterprises? This study is intended to establish it.
1.3 Research question:
Based on the problem statement and the objective of the study
stated above the study will answer the following questions;
i) Has privatization improved the cost performance and
accountability of this firm as anticipated?
ii) To what extent are privatized firms accountable to shareholders
and other relevant stake holders?
iii) To what level has there been effective checks and balances in
privatized enterprises in Nigeria.

18

1.4 Objectives of the Study.
The overriding objective of this study is to evaluate the second wave of
the Nigerian privatization programme spanning 2008-2012. The specific
objectives are as follows:
(i) To examine whether privatization has improved the cost
performance and accountability of privatized firm.
(ii) To assess the extent to which privatized firms are accountable to
shareholders and other relevant stakeholders.
(iii) To determine if there are effective checks and balances in
privatized enterprises in Nigeria.
1.5 Statement of Hypothesis
Ho: Privatization has not led to efficient and improved cost
Performance.
Hi: Privatization has led to efficient and improved cost
Performance.
19

Ho: There have been no effective accountability to share holders and other
relevant stake holders.
HI: There have been effective accountability to shareholders and other
relevant stakeholders.
Ho: privatization has not led to effective checks and balances in privatized
enterprises in Nigeria.
Hi: privatization has led to effective checks and balances in privatized
enterprises in Nigeria.
1.6 Significance of the study
Giving the substantial number of enterprises that are yet to be
privatized, the study would provide insights into the desirability, feasibility
and sustainability of future reforms. It is envisaged that the policy
recommendations from the study would assist the National Council on
Privatization in correcting the pitfalls embedded in the previous endeavor.
20

The study will assist students and fellow researchers generate
information on cost performance and accountability of firm particularly if it
is relevant to their studies.
In the overall, it is envisaged that the outcome of the study will assist
international, multilateral and donor agencies to identify the felt needs,
thereby facilitating the design of demand-driven policies and programmes
to ensure the success of privatization in Nigeria in particular and sub
Saharan Africa in general.

1.7 Scope of the study
The scope of the study has been narrowed in order to look at the impact of
cost performance and accountability in the petroleum industry, particularly
in UNIPETROL (now called OANDO plc after privatization). The study will
cover a period of five(5) years ranging from (2008-2012).

1.8 Limitation of study
Like many other research study, this research is confronted with the
following limitations:
21

1. Finance – The cost of running any research project is quite expensive. It
ranges from producing questionnaires to be distributed to respondents, the
cost of transporting to the areas where information concerning the project
is to be obtained etc, and this research is not an exception.
2. Time- The time required to complete a research project is often limited
judging from the information required to complete a comprehensive
research work. This research is also affected by time.
3. Problem of confidentiality- The challenge of getting respondents to fill
the necessary research questionnaires is tasking despite the confidence
giving to keep all information obtained from them in utmost confidence.
1.9 Definition of key Terms.
A. Accountability: It is rendering stewardship. It is also the act of being
able to
Shoulder responsibilities and carry the correlative burden of
performance.
In other words it means answerability, blameworthiness, liability and
the
22

Expectation of account-giving.
B. Asset sale: is the transfer of ownership of government assets,
commercial-type enterprises, or functions to the private sector. In
general, the government has no role in the financial support,
management, or oversight of a sold asset. However, if the asset is
sold to a company in an industry with monopolistic characteristics,
the government may regulate certain aspects of the business, such as
utility rates.
C. Competition: occurs when two or more parties independently
attempt to secure the business of a customer by offering the most
favorable terms or highest quality service or product. Competition in
relation to government activities is usually categorized in three ways:
(1) public versus private, in which private-sector to conduct public
business; (2) public versus public, in which public-sector
organizations compete among themselves to conduct public-sector
business; and (3) private versus private, in which private-sector
organizations compete among themselves to conduct public-sector
business.
23

D. Cost: this is the sacrifice rendered for benefit derived. It is seen in
terms of opportunity cost that is the one associated with alternative
forgone.
E. Divestiture: involves the sale of government-owned assets. After
divestiture, the government generally has no role in the financial
support, management, regulation, or oversight of the divested
activity
F. Privatization: privatization implies permanent transfer of control, as
a consequence of transfer of ownership of right, from the public to
the private sector. This definition is perhaps the most common usage
of the term.
G. Public enterprise: any corporation or parastatal established by or any
enactment in which the government of the federation or it agencies
has ownership or equity interest.
H. Public sector: that portion of an economy whose activities (economic
or non economic) are under the control and direction of the state.

AN APPRAISAL OF AN EFFECTIVE TAX SYSTEM (ASSESSMENT AND COLLECTION) IN A GROWING ECONOMY

Download the complete Accounting project topic and material (chapter 1-5) titled AN APPRAISAL OF AN EFFECTIVE TAX SYSTEM (ASSESSMENT AND COLLECTION) IN A GROWING ECONOMY here on iProjectTopics. See below for the abstract, table of contents, list of figures, list of tables, list of appendices, list of abbreviations and chapter one. Click the DOWNLOAD FULL WORK BUTTON BELOW CHAPTER ONE  to get the complete project work instantly.

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PROJECT TOPIC AND MATERIAL ON AN APPRAISAL OF AN EFFECTIVE TAX SYSTEM (ASSESSMENT AND COLLECTION) IN A GROWING ECONOMY

The Project File Details                                                                                                       

  • Name: AN APPRAISAL OF AN EFFECTIVE TAX SYSTEM (ASSESSMENT AND COLLECTION) IN A GROWING ECONOMY
  • Type: PDF and MS Word (DOC)
  • Size: [666 KB]
  • Length: [65] Pages
  • With Reference and Questionnaire
  • Amount: 3000 naira

TABLE OF CONTENTS

Title Page
Certification i
Dedication ii
Acknowledgement iii
Table of Content iv
Chapter One
1.1 Introduction
1.2 Background of the Study
1.3 Statement of Problem
1.4 Objective of the Study
1.5 Significance of the Study
1.6 Research Questions
1.7 Hypothesis Formulation
1.8 Scope and Limitation of the Study
1.9 Definition of Terms Used
Chapter Two
2.0 Literature Review
2.1 Concept of Taxation
2.2 Principles or Attributes of a Good, Efficient Tax System
2.3 Reason for Imposition of Tax by Government
2.4 Administration of Income Tax-Return Assessment
of and Recovery of Tax
2.5.1 Individuals-Returns
2.5.2 Companies-Returns
2.5.3 Time Limit For Filing Tax Returns, Audited Account
2.5.4 Penalty for Non-Compliance
2.5.5 Incentive Bonus for Aerly Filing of Tax
2.5.6 Other Returns
2.6 Assessment Procedures
2.6.1 Self–Assessment
2.6.2 Tax Authority and Returns Examination
2.6.3 Best- Of- Judgement Assessment
2.6.4 Back Duty Assessment
2.6.5 Additional Assessment
2.6.6 Service of Notice of Assessment
2.6.7 Objection to Assessment
2.6.8 Can A Taxpayer Appeal?
2.6.9 Final and Conclusive Assessment
2.7 Collection Procedure
2.7.1 Provisional Tax
2.7.2 Time Limit for Paying Tax
2.7.3 Currency of Payment of Tax
2.7.4 Penalty for Late Payment of Tax
2.8 Enforcement Procedure
2.9 How Database Management System Can
Help Tax Administration (Collection)
2.10 Structure of Tax Administration
2.11 Factors That Enhance Efficiency of Tax Administration
2.12 Multiple Tax
2.12.1 Nature of Multiple Tax
2.12.2 Types of Multiple Tax
2.12.3 Methods of Collection of Multiple Tax
2.12.4 Federal Government’s Solution To Problem of
Multiplicity of Tax
2.12.5 Assessment and Collection by the three tiers of Government
2.12.5 Assessment and Collection of Tax by the Federal Government
2.12.6 Taxes to be Collected by the Federal Government
2.12.7 Assessment and Collection of Tax by the State Government
2.12.8 Taxes and Levies to be Collected by the State Government
2.12.9 Assessment and Collection of Tax by the Local Government
2.12.10 Taxes and Levies to be Collected by the Local
Government
Chapter Three
3.0 Research Methodology and Design
3.1 Sources of Data
3.2 Research Approach
3.3 Research Design
3.4 Identification of Population and Sample Data
3.5 Instruments of the Study
3.6 Hypothesis
3.7 Questionnaires
3.8 Questionnaire Design And Assumption
3.9 Reasons for Using Questionnaire
Chapter Four
4.0 Analysis Interpretation of Data
4.1 Summary of Data Collected
4.2 Testing And Interpretation of Hypothesis
Chapter Five
5.0 Summary, Findings, Conclusion And
Recom
5.1 Findings of the Study
5.2 Conclusion
5.3Recommendation
References
Questionnaire (Specimen)

CHAPTER ONE

INTRODUCTION
1.1 BACKGROUND TO THE STUDY

A society comprises of the ruling authority and the ruled subjects. As a social
contract them the ruler is expected to perform same roles, be it administrative,
social, economic, political, cultural or religious in return. The ruled subjects
that enjoy the benefits from those roles performance are to give something for
keeping working this could be in cash or kind.
In light or the above, every constituted human society. Primitive or modern,
needs fund this necessitates tax and taxation. Historical reviews of man and
society review that tax exists as major source of revenue for government.
More so all the religions in the world today encourage such payment.The
Nigerian tax system is a set of rules and regulations and the organs
of tax administration that interact with each other to generate
revenue for government. It is indisputable that in development
countries tax has not had the desired effect on various aspects of
the economy/economic level. Also, effective tax assessment and
collection have not reached an appreciable level in developing
countries. This may either be due to the inadequate methods
adopted or precisely as a result of inadequate, technical know-how
on the rent of tax boards/authority.Taxation is a dynamic subject,
which grows with the constant change in the economic
environment in which it operates, hence the need to underscore the
importance of an effective tax system in a developing economy.
Thus, it has been stated that the importance of an effective tax
system lies primarily in its ability to raise capital formation for the
public sector, for development and growth of the economy and also
in assisting in the regulation of the consumption pattern resulting
in economic stabilization and effective re-distribution of income.
Today, taxes have roles to play especially in the economic and social
policy of any government.
Indeed, tax is a major source of revenue to the government at
various levels to provide different infrastructure. Government has
so many ways of raising funds or revenue for the purpose of
meeting its expenditure; one of the direct ways is “TAXATION”. As
with most source of revenue, taxation plays an important role in
the budgetary policy of a country and government ensures the
The Nigerian tax system is a set of rules and regulations and the organs of tax
administration that interact with each other to generate revenue for
government. It is indisputable that in development countries tax has not had
the desired effect on various aspects of the economy/economic level. Also,
effective tax assessment and collection have not reached an appreciable level
in developing countries. This may either be due to the inadequate methods
adopted or precisely as a result of inadequate, technical know-how on the rent
of tax boards/authority.
Taxation is a dynamic subject, which grows with the constant change in the
economic environment in which it operates, hence the need to underscore the
importance of an effective tax system in a developing economy. Thus, it has
been stated that the importance of an effective tax system lies primarily in its
ability to raise capital formation for the public sector, for development and
growth of the economy and also in assisting in the regulation of the
consumption pattern resulting in economic stabilization and effective redistribution
of income. Today, taxes have roles to play especially in the
economic and social policy of any government.
Indeed, tax is a major source of revenue to the government at various levels to
provide different infrastructure. Government has so many ways of raising
funds or revenue for the purpose of meeting its expenditure; one of the direct
ways is “TAXATION”. As with most source of revenue, taxation plays an
important role in the budgetary policy of a country and government ensures
the workability of reliable tax collection and assessment machinery at its
disposal. However, the problem of tax assessment and collection is universal
but developing countries are more plagued than their developed counterparts
as a result of non-compliance, ignorance, illiteracy, poverty and inefficient
collection machinery. The problem of tax assessment and collection is grossly
affected and undermined by high rate of tax avoidance and evasion.
I will therefore want to use this research work to highlight the importance of
an effective and well-structured tax system in enhancing economic growth and
development in the Nigerian economic sectors as a whole. Invariably,
adequate funding and provision of basic infrastructures are necessary tools for
a developing economy and this is directly related to adequate sources of
revenue for Nigerian economy, if the dream is to be achieved.

1.2 BACKGROUND OF THE STUDY
Taxation has been with us from time immemorial when organized living
started. Prior to the advent of Colonial rule, there has been a particular system
of direct taxation except for the fact that the system varied from one part of
what is presently called Nigeria to the other.
According to Lawal (2004), the payment of tax either was in kind or cash,
first to the local head and later on to a form of an organized government. This
has been known as a direct tax and it has been with us and developed over the
years. The development of tax is in three (3) stages namely.
 The pre-Colonial period
 The Colonial period
 Past – Colonial period
At these stages, various tax acts were promulgated which includes:
 Personal Income Tax Act
 Capital Transfer Income Tax Act
 Capital Gain Tax Act
 Company Income Tax Act.
In Nigeria, a number of principles have been developed on taxation over the
years. Some of the principles are:
 Principle of Certainty
 Principle of Neutrality
 Principle of Equity
 Principle of Administrative Efficiency
 Principle of Flexibility
 Principle of Convenience.

1.3. STATEMENT OF PROBLEMS
In the course of carrying out this research project, the problem of the study
“An Appraisal of an Effective Tax system in a Growing Economy” is
as follows:
(i) That there is no effective tax assessment and collection system
in Nigeria,
(ii) What are the effects of composition of these taxes and their
contribution to the total revenue of Nigeria?
(iii) That the procedures or processes adopted in assessing and
administering taxes are weak, obsolete and outdated.
(iv) What are the requirements in sustaining a good tax system?

1.4. OBJECTIVES OF THE STUDY
The main purposes of this research study are:
(i) To find out the effectiveness and efficiency of a tax system in a
growing economy,
(ii) To analyze the effects of an effective Tax assessment and collection
system/procedures on the economy,
(iii) To access the composition of these taxes and their contribution to the
total revenue of Nigeria.
(iv) The study will also lend to review the contents of professional
pronouncements as contained in various accounting standards and legal
requirements for taxation in Nigeria and assessing the extent to which
these are applied by the tax authority in terms of default.
(v) To identify the basic requirement in sustaining an effective tax system.
(vi) To ascertain the fundamental causes of inefficient tax system.
(vii) Attempt will be made to highlight the problems in a developing
economy.
(viii) To contribute an unbiased opinion which can benefit the government in
their policy making?

1.5. SIGNIFICANCE OF THE STUDY
In the course of carrying out this study, the followings were critically
evaluated as the significance of the study;
(i) It will help to establish the importance of an
effective tax system in a growing economy
(ii) It will assist to buttress an effective tax system.
It will help to explain the concept of effective tax system. It will be useful in
the understanding of various problems inherent in the assessment and
collection process/procedures.
(iii) It will ensure that information provided from an
effective tax system will be beneficial to the growth and development of the
economy.
(iv) It will give analytical features and attributes of
an effective or a reliable tax system.

1.6. RESEARCH QUESTIONS
The followingare the questions pose in the course of this study.
(a) Why is there laxity in tax collection and assessment in Nigeria?
(b) What are the effects of non-efficient or ineffective tax assessment and
collection in Nigeria?
(c) Which areas need improvement to enhance efficiency and effectiveness in tax
system?
(d) Will an efficient or reliable tax collection system enhance economic growth?
(e) Which areas are yet untaxed?
(f) How can the new policy or suggested development be introduced to
government?
(g) How can a reliable or effective tax system affect developing economy?
(h) Who bears the final burden of tax imposed by government?

1.7. HYPOTHESIS FORMULATION
Hypothesis can simply be defined as a basis for drawing conclusion. It is equally
meant for determining whether a process is working properly or not. It ensures that
the researcher is certain that the correct conclusion is reached based on the research
work.
Hypothesis will therefore be formulated based on the findings in the course of this
research and when tested, it will confirm the extent at which an effective tax system
has had an impact on the growing economy.
Null Hypothesis (Ho)
Alternative Hypothesis (H1)
NULL HYPOTHESIS (Ho)
This is the hypothesis that represents the conclusion we draw, if the processes were
operating properly and it is questionable. It is against this backdrop that hypotheses
are tested. The hypotheses to be tested are as follows:
Hypothesis 1
H0: There is a significant relationship between an effective tax system and growth
in a developing economy like that of Nigeria.
H1: There is no significant relationship between an effective tax system and
growth in a developing economy like that of Nigeria’s.
Hypothesis 2
H0: There is an effective and reliable tax system in Nigeria.
H1: There is no effective and reliable tax system in Nigeria.
Hypothesis 3
H0: Returns on/from tax are used to develop Nigerian economy.
H1: Returns on/from tax are not used to develop Nigerian economy.

1.8 SCOPE AND LIMITATION OF THE STUDY
The areas that fall within the sample frame are the Federal Board of Inland Revenue
(FBIR), the Joint Tax Board (JTB) and the office of the Minister of Finance. Tax
payers also fall within the sample frame. However, since the above office covers all
the tax officers in Nigeria, then it means that all taxpayers are also involved for
effective control, reliability and consistency.

LIMITATIONS
(i) Old Methods of recording data that affect assessment and collection
tax.
(ii) Inability to have access to some records in the tax office of the Federal
Inland Revenue Services.
(iii) Lack of qualified personnel in the various tax offices.
(iv) Lack of up-to-date information in revenue mobilization derived and
project execution.

1.9. DEFINITION OF TERMS USED
– Taxation: A compulsory payment/levy made by each eligible citizen
towards the expenditures of the State.
– COMPULSORY LEVY: This means that all the citizens of the country
are legally bound to pay the taxes imposed on them by the State.
– REVENUE: The amount of money raised by the government from
various forces.
– DIRECT TAXES: These are taxes levied
– On the income of individuals and business firm and which is actually
paid by the person on whom/which it is legally imposed.
– EXCISE DUTY: Tax levied on locally manufactured goods/products.
– PROGRESSIVE TAX: This form of tax is graduated as it applies
higher rate of tax as the income increases.
– REGRESSIVE TAX: This is a form of tax under which the tax payable
decreases as the tax payer’s income increases.
– PROPORTIONAL TAX: This form of tax assesses a tax payer to tax
at a flat rate on his total assessable income.
– WITHOLDING TAX: This is the deduction of tax at source from
payment made to a taxable person for the supply of goods and services.
– TAX AVOIDANCE: This is an endeavor on the part of the tax payment
to reduce his tax liabilities by taking advantages of the specific provisions of
the law.
– TAX EVASION: This arises when a taxpayer willfully fails to report a
source of income or seek to reduce his tax liability by understanding a source
of income to the tax authority.
– INFANT INDUSTRIES: These are the newly formed or established
industries.
– CAPITAL ALLOWANCE: It is an allowance or amount granted to a
business which has incurred qualifying capital expenditure during the year of
assessment for the purpose of the business.
– TRANSITIONAL PROVISION: As a result of the change in mode of
computation of capita allowance from reducing balance to straight line method,
a transitional provision was in place.
– VALUE ADDED TAX (VAT): This can be described as tax on
spending. It is borne by the final consumer.
– EXPORT DUTY: These are taxes imposed on goods exported into the
other Countries.
– IMPORT DUTY: These are taxes imposed or levied on goods
imported into the Country.
– CAPITAL GAIN TAX: This can be described as tax on gain accruing
on disposal of assets situated within or outside Nigeria.
– TRANSFER OF VALUE: This represents any disposition by which the value
of person’s estate is reduced.
1.10 Historical Background Of The Case Study
Ogun state internal revenue service is a state revenue agency that derives its
from personal existence from Personal Income Tax Act of the federation 2004,
which stipulates the establishment of the board of internal revenue by all the
states of the federation.
The Ogun state Edict of 1996 established the board to carry out the functions
of assessing, collecting and accounting for taxes, levies and fees with the
additional responsibility to tax policy formation for the state.
In April2004, the governor of the state (Ogun) gave the Board the authority to
implement the said edict of 1996 in its term of organizational structure and
improve revenue generation.
Its aims are:
 Efficient service delivery
 Good public image
 Accountability and transparency
 Best tax practice
 Effective tax payer education/public enlightenment
 Friendly tax environment for voluntary tax compliance
 Adequate checks and balance to block all revenue leakages

AN ANALYSIS ON THE PERSISTENT DEPRECIATION OF THE NAIRA IN THE FOREIGN EXCHANGE MARKETS CAUSES, EFFECTS AND SOLUTIONS.

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TABLE OF CONTENTS

CHAPTER ONE

INTRODUCTION

  • Background of study
  • Statement of problem
  • Purpose of study
  • Research questions
  • Statement of hypothesis
  • Significant of the study
  • Scope and limitation of the study
  • Definition of terms.

CHAPTER TWO

REVIEW OF RELATED LITERATURE.

2.1 Nominal and real exchange rates.

2.2 The foreign exchange market in Nigeria since 1986.

2.3 Causes of the persistent depreciation of the naira.

2.4 Effects of the depreciation of the naira on the economy.

2.5 Measures to strengthen the value of the naira.

CHAPTER THREE

RESEARCH DESIGN AND METHODOLOGY

3.1 Area of study

3.2 Instruments of data collection

3.3 Validation of instrument

3.4 Method of data analysis

CHAPTER FOUR

DATA PRESENTATION AND ANALYSIS

CHAPTER FIVE.

FINDINGS, CONCLUSION AND RECOMMENDATION

5.1 Summary of findings

5.2 Conclusion

5.3 Recommendations

BIBLIOGRAPHY

APPENDIX.

 

CHAPTER ONE

INTRODUCTION

  • BACKGROUND OF THE STUDY

Foreign exchange is the means of payment for international transactions and it is made up of convertible currencies that are generally acceptable for the settlement of international trade and other external obugations.

The foreign exchange market is an arrangement or medium of interaction between the sellers and buyers of foreign exchange in a bid to negotiate a mutually acceptable price for the settlement of international transactions (ile 1999: 325)

Afolabi (1999) defined exchange rate as the price of one currency in terms of the other. In other words, it is the rate at which one currency will exchange for another.

In the pre-babangida administration years the Nigeria currency was above the dollar and on par with the pound. However the naira has depreciated in value to a great extent since 1986 with the introduction of the structural adjustment programme (SAP) , under the babangida administration since the introduction of SAP in 1986, exchange management has been at the core of macroeconomic policy. The overriding objective has been to have a realistic and stable exchange rate consistence with the internal rate of naira and to reduce the economy’s dependence on the external sector.

Prior to 1986, one official foreign exchange market existed in Nigeria and exchange rates were officially fixed by the CBN. Then in the September 1986, the foreign exchange market was divided into two : the first-tier foreign market and the second – tier foreign exchange market (STEM). The major aspect of the SFEM was that the prices of foreign currencies as against the naira was determined through competitive bidding with the prices settling at points. Where the available supply of the currencies are cleared the bidding was in terms of one currency. The us dollar, against the naira and the rates for other currencies were correspondingly determined after the determination of the dollar rate.(essien 1990 : 129).

With the establishment of SFEM the rate of naira depreciation by the central bank gathered momentum. With the view of merging the first and second tier markets within the shortest possible time, which was about one year. In July 1987, the first and second tier foreign exchange market were merged and called the foreign exchange market (FEM). On march 20 1987 the central bank introduced the Dutch auction system which was intended to inject more caution in the bidding sessions since dealers who bid above the marginal rate would be made to buy at that rate the Dutch auction system was expected to control the sharp depreciation of the naira.

In 1994 a natural merger of the official market and the parallel market occurred. The  parallel market gradually marginalized the official market. The foreign exchange market was liberalized in 1995 with the introduction of the autonomous foreign exchange market (AFEM) for privately sourced fund at market determined exchange rates(CBN Annual Report 2001).

In 1995, the foreign exchange market was split into three tiers. The administratively fixed through the manipulation of the market mechanism, and the parallel market. Still, there was greater depreciation of the naira. There was also an introduction of dual exchange rate regime in 1995 which was a mixture of both the fixed  and the market determined rate. The dual exchange rate regime was restricted in 1997 with the official selling rate fixed at #21.9960 to us$1for selected priority government transactions. The stability of the nominal exchange rate achieved in 1995 and 1996 at the AFEM was generally sustained in 1997.

The exchange rate of the naira depreciated in all segments of the foreign exchange market prior to the introduction of IFEM(Inter-Bank Foreign Exchange Market). Which commenced operation on October 25,1999. the exchange rate depreciated to #97.42 toUS$1.00 and depreciated on the average by 6.5 percent to #101 to US$!>)) in 2000. there was a phenomenal depreciation in early April 2001 with the naira sinking to #113.2263 to US$1.00 as against the official rate. This fall in value continued as the naira sank again to #126.38883 to US$1.00 in December 2002,and #136.5000 to US$1.00 in December 2003 then to #132.85 in December 2004.the CBN was successful in keeping to its target on growth of broad money M2 in 2004. from 2002 – 2005. The naira has performed 15 times better than in both 2000 and 2001.

  • STATEMENT OF PROBLEM.

A review of the Nigeria economy shows a decline in the value of the naira in the years under study (1986 to date). This has brought about a series of problems, which include inflation, unemployment, balance of payment problems and increase in the level of poverty. Some of the measures adopted by the government to help reduce the incessant depreciation of the naira include the introduction of IFEM in 199, the AFEM and the re-introduction of the Dutch Auction System(DAS) in 2002. in spite of these measures, the value of naira has continued to cascade downwards.

It is these set of problems encountered as a result of this depreciation that has motivated this research which apart from determining the causes and economic effects of the depreciation, is also aimed at proffering solutions to it

  • PURPOSE OF THE STUDY

The study has the following objectives:

  1. To determine the effect of the depreciation of the naira on Nigeria’s economic growth level and on the industrial sector.
  2. To find out the factors that cause the persistent depreciation of the naira.
  3. To investigate the various avenues through which it can be alleviated
  4. To make recommendations based on the findings.
    • RESEARCH QUESTION.

To guide this study the following questions were formulated.

  1. To what extent does the depreciation of the naira have effect on the Nigeria’s economic growth level.
  2. To what extent have the depreciation of the naira affected the industrial sector.
  3. What is the extent to which relevant economic factors have caused the persistent depreciation of the naira.
  4. To what extent can these factors be alleviated?
    • STATEMENT OF HYPOTHENSIS.

The following hypothesis have been formulated to guide the study:

HYPOTHESIS

Ho: The depreciation of the naira has no significant effect on Nigeria’s economic growth level.

Hi: the depreciation of the naira has a significant effect on Nigeria’s growth level.

HYPOTHESIS II

Ho: The depreciation of naira has no significant effect on the performance of the industrial sector.

Hi: The deprecation of the naira has a significant effect on the performance of the industrial sector.

1.6 SIGNIFICANT OF THE STUDY.

This research work will be of immense benefit to the following groups of people:

  1. Policy makers of the various governmental organisms.

Nigeria who formulate and issue the regulatory economic guidelines.

  1. Industrialists who engage in import and export of both rate materials and finished goods.
  2. Students and researchers who may desire to research further on the topic or related topics in future.
  3. The general public who directly or indirectly affected by the depreciation of the naira.

1.7SCOPE AND LIMITATION OF THE STUDY.

This study centers on the cause and effects of the persistent depreciation of the Naira in the foreign exchange market and the solutions to it. The years under study are 1986 to date. The analysis will be limited to the effect of the naira / dollar exchange rate on the cross Domestic product at current factor cost, which will be used as proxy for economic growth and on the industrial sector.

Some products were encountered in then course of the study. Firstly, the researcher could not benefit substantially from previous works because enough research work has not been carried out in the area of study. Secondly, the officials of the establishments from where must of the data was soured did not offer their full co-operation. As such they could not be easily obtained. There were also financial constraints such as high  cost of text books and transport cost.

1.7 DEFINITION OF TERMS.

  1. Autonomous foreign Exchange market (AFEM): this is a market where banks are allowed to source their foreign exchange and sale and used at market determined rates.
  2. cu rrent factor cost: this is used to measure the rate of cross Domestic product (GDP)
  3. Dual exchange rate: This situation exists where two exchange rates are in existence in an economy.
  4. Dutch Auction System (DAS) This is a method of determining the exchange rate through auction.
  5. First – Tier Foreign Exchange Market This was the market where government and its agencies buy foreign currency a foreign currency at officially determined rate of exchange.
  6. Inter-Bank foreign Exchange market(IFEM): This was conceived to deepen the foreign  exchange market through active participation of other players e.g bank, oil companies, non- bank financial institutions. It is the market where banks can sale foreign exchange to one another and to other users at their own rates
  7. Para.lopee market: This is also known as blank market’. It is the unofficial market where foreign currencies are bought and sold.
  8. Second-tier foreign exchange market (SFEM): This was the market where non-governmental bodies buy and sale foreign exchange at a market determined exchange rate.

1.1 RESEACH QUESTION

To guide this study the following questions where for malted.

  1. To what extent does the depreciation of he Naira have effect on the Niger as economic growth level..
  2. To what extent have the depreciation of the Naira affected the industrial sector.
  3. What is the extent to which relevant economic factors have caused the persistent depreciation of the Nira.
  4. To what extent can these factors be alleviated.

1.5 STAETMENT OF HYPOTHSIS

Following hypothesis have been formulated to guide the study:

 HYYPOTHESIS 1

HO: The depreciation of the Naira has no significant  effect on Nigerians economic growth level

H1 The  depreciation of the naira has a significant effect on Nigeria’s growth level.

.HYPOTHESIS 11

Ho; The depreciation of the Naira has no significant effect on the performance of the industrial sector.

1.6 SIGNIFICANCE OF THE STUDY:

This research work will be of immense benefit to the following grou7ps of people;

  1. policy markets of the various governmental organs in sangria who formulate and issue the registry economic guidelines.

 

AN ANALYSIS OF CREDIT MANAGEMENT IN THE BANKING INDUSTRY (A CASE STUDY FIRST BANK OF NIGERIA PLC. ENUGU.)

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PROJECT TOPIC AND MATERIAL ON AN ANALYSIS OF CREDIT MANAGEMENT IN THE BANKING INDUSTRY (A CASE STUDY FIRST BANK OF NIGERIA PLC. ENUGU.)

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  • Length: [65] Pages
  • With Reference and Questionnaire
  • Amount: 3000 naira

ABSTRACT

Credit extension is an essential function of banks and bank management strive to satisfy the legitimate credit needs of the community it tends to serve. This study is aimed at analysing the credit management in the banking industry in Nigeria with particular reference to first Bank of Nigeria PLC. The importance of credit in the economic growth and development of a country cannot be overemphasized. Despite the important role played by credit in the economy, it is associated with a catalogue of risks. The Nigeria banking industry witnessed some failures prior to the consolidation era due to imprudent lending that finally led to bad debt and some ethical facts. The issue of non- performance of asset and declaring of ficticious project has become the order of the day in our banking system as a result of poor credit management leading to bank distress in the industry. Three hypotheses were formulated and tested through use of chi-square on questionnaires administered to various respondents. From the data collected and the tested hypothesis, results showed that: (i) Inadequate feasibility study affects loan repayment in the banking industry, (ii) The diversion of bank loan to unprofitable ventures affects loan repayment and (iii) The problem of poor attention given to distribution of loan has negative effect on banks performance. Amongst several recommendations were the following: (a) Banks should establish sound and competent credit management unit and recruit well motivated staffs (b) Banks should ensure that the chief executive avoid approval in principle in the credit management, and (c) Banks should have a monitoring and control unit or department to carry out a sort of post- modern exercise by way of controlling and monitoring credit facilities and also ensuring completeness of all conditions precedent to draw down.

TABLE OF CONTENTS

Title Page i
Approval Page ii
Certification iii
Dedication iv
Acknowledgement v
Abstract vi
Chapter One
1.0 Introduction 1
1.1 Background Of The Study 1
1.2 Statement Of The Problem 2
1:3 Objectives Of The Study 3
1.4 Research Questions 3
1.5 Statement Of Hypotheses 4
16. Scope Of The Study 4
1.7 Significance Of The Study 5
1.8 Definition Of Terms 6
Chapter Two

ix

Review Of Related Literature
2.0 Introduction 7
2.1 Theoretical Review 7
2.2 Emperical Reviews 51
CHAPTER THREE
Research Methodology 54
3.1 Introduction 54
3.2 Research Design 54
3.3 Sources And Techniques Of Data Collection 55
3.4 Descripti0n Of Population And Sample Procedure 55
3.5 Method Of Data Analysis 56
3:6 Determinations Of Critical Values 57
Chapter Four
Data Presentation, Analysis And Interpretation.
4.1 Introduction 60
4.2 Presentation Of Data 60
4.3 Analysis And Interpretation Of Data 60
Chapter Five
Summary, Conclusion And Recommendation
5.1) Introduction 64
5.2 Summary Of Findings 64
5.2 Conclusion 65
5.4 Recommendation 65
Questionnaire 72
Appendix 71

x

Bibliography

CHAPTER ONE

INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Credit management in our banking sector today has taken a different dimension from what it
used to be. The banking industry has adopted a lot of strategies in checking credit
management in order to stay in business. Thu the banking industry in Nigeria has lost large
amount of money as a result of the turning source of credit exposure and taken interest rate
position. Nigerian banks are being required in the market because of their competence to
provide transaction efficiency, market knowledge and funding capability. To perform these
roles, the banks act as the most important participants in their transaction process of which
they use their own balance sheet to make it easier and making sure that their associated risk is
absorbed.
Credit extension is essential function of banks and the bank management strive to satisfy the
legitimate credit needs of the community it tends to serve. This credit advances by banks as a
debtor to the depositor requires exercising prudence in handling the funds of depositors. The
Central Bank of Nigeria established a credit act in 1990 which empowered banks to render
returns to the credit risk management system in respect to its entire customers with aggregate
outstanding debit balance of one million naira and above (Ijaiya G.T and Abdulraheem A
(2000). This made Nigerian banks to universally embark on upgrading their control system
and risk management because this coincidental activity is recognized as the industry
physiological weakness to financial risk. The researcher, a New yolk-based, said that 40% of
Nigerian banks that made up exchange rate value in west Africa, has reduced the operating
lending as a result of bad debts which hit more than $10 billion in 2009 and this has led to a
tied-up questioning asset that is holding almost half of Nigerian banks. The central bank of

2

Nigeria fired eight chief executive officers and set aside $ 4.1 billion in order to bail out
almost 10 of the country‟s lenders. The reform which was introduced by Central Bank of
Nigeria (CBN) in 2010 has made Nigerian banks resume lending supporting assets
management companies and set up the requirement which will allow Nigerian banks make
full provision for bad debts that will boost the market.
The banks identify the existence of destructive debtors in the banking system whose method
involved responding to their debt obligations in some banks and tried to have contract of new
debts in other banks. Banks are trying to make the database of credit risk management system
more open for them to be more functional and recognized as to enable banks to enquire or
render statutory returns on borrowers. There are some banking practices which increase the
risks in the bank and cannot be easily changed. This result still leads to the question: what are
the possible ways that will help make Nigerian banks manage their credit risks?
Credit risk management helps credit expert to know when to accept a credit applicant as to
avoid destroying the banks reputation and making decision in order to explore unavoidable
credit risk which gives more profit. Controlling a risk results in encouraging rewards that
give internal audit more technical support service and customized training in banks or
financial institutions. This research is presented to outline, find, investigate and report
different state of techniques in risk management in the banking industry

1.2 STATEMENT OF THE PROBLEM
In the history of development of the Nigerian banking industry, it can be seen that most of the
failures experienced in the industry prior to the consolidation era were results of imprudent
lending that finally led to bad loans and some other unethical factors (Job, A.A Ogundepo A

3

and Olanirul (2008)). Also the problem of poor attention given to distribution of loans has its
effect on the bank‟s performance. Most of the people collected loan from the banks and
diverted the money to unprofitable ventures. Some bankers are not actually considering the
necessary criteria for disbursement of loans to the customer. This work therefore intends to
outline, explain these problems identify the causes and suggests lasting solutions to the
problems associated with credit management and consequently banks debts.

1:3 OBJECTIVES OF THE STUDY
The objectives of this study is as follows
1. To examine how feasibility study affect loan repayment in the banking industry.
2. To highlight the extent in which diversion of bank loans to unprofitable ventures
affect loan repayment.
3. To examine how distribution of loans affect banks performance if banks give proper
attention.

1.4 RESEARCH QUESTIONS
Bank lending is said to be effective if it successfully achieves the banker‟s obligation of
maximum liquidity to the depositors. The questions here are
1. To what extent does feasibility study affect loan repayment in the banking industry?
2. To what extent does diversion of bank loans to unprofitable venture affect loan
repayment?
3. Does distribution of loans have effect on banks performance if given proper
attention?

4

1.5 STATEMENT OF HYPOTHESES
A reputable credit management system enhances good control on lending and proper keeping
of credit account.
HYPOTHESES 1
Ho. Inadequate feasibility study does not affect loan repayment in banking industry.
Hi. Inadequate feasibility study affects loan repayment in banking industry.
HYPOTHESES 2
Ho. The diversion of bank loans to unprofitably ventures does not affect loan repayment.
Hi. The diversion of bank loans to unprofitably ventures affects loan repayment.
HYPOTHESES 3
Ho. The problem of poor attention given to distribution of loans does not have effect on
banks performance.
Hi. The problem of poor attention given to distribution of loans has effect on banks
performance.

16. SCOPE OF THE STUDY
This study is aimed at analysing the credit management in the banking industry in Nigeria
with a particular reference to First Bank of Nigeria plc. The study intends to analyse the
credit facilities in banking industry. It also reviews the various concepts procedures for
efficient and effective credit management. It examines the success and failure (if any) as well
as recommending corrective measure.

5

1.7 SIGNIFICANCE OF THE STUDY
This study will be useful to the executive and managers in the banking industry and other
financial institutions. This is because it provides guidance which will enhance effect and
efficient credit management aimed at attaining and boosting maximum profitability and
liquidity in their banks. The depositor (public) on the other hand will be more enlightened on
the need to be honest and fulfil the responsibilities in credit transaction with the banks so that
they can look up to improve service from the banks. Finally to the researcher, this is an eye
opener because as a potential manager it will guide one in future on how to manage credit
facilities.

1.8 DEFINATION OF TERMS
Below are the major terms used in the course of this research work.
1) BANKRUPTCY: A state where a person or firm is unable to meet their financial
obligations.
2) MANAGEMENT: management is the study of decision-makers from the
supervisor and line managers at lower levels to the Board of Directors.
3) LOANS AND ADVANCES: These are credit facilities granted by banks to their
customers. They could be short, medium or long term depending on the length of
period of repayment
4) OVERDRAFT: A credit facility (usually short term) granted by banks to current
account holders and it carries interest charges on daily basis
5) BANK: Section 61 of BOFIA 1991 Act defines a banking business as business of
receiving deposits on current account or other similar account paying or collecting
cheques drawn by or paid in by customers.
6) CUSTOMER: A person is a customer if he or she has account with the bank.

6

7) FINANCIAL RATIO: These are ratios usually expressed in mathematical terms
to test the financial obligations.
8) FINANACIAL STATEMENT: They are firm balance sheets, profit and loss
account and classified statement which show the financial state of affairs of the
firm.
9) GUARANTOR: A person or group of persons who stand for bank customers for
credit facilities.
10) COLLATERAL/ SECURITIES: is an asset presented by a customer to his bank to
secure a credit facility granted to him by the bank.

ACCOUNTING SYSTEM IN MICRO FINANCE BANKING (A CASE STUDY OF EVERGREEN MICRO FINANCE BANK NIGERIA, LTD, ENUGU)

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PROJECT TOPIC AND MATERIAL ON ACCOUNTING SYSTEM IN MICRO FINANCE BANKING (A CASE STUDY OF EVERGREEN MICRO FINANCE BANK NIGERIA, LTD, ENUGU)

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  • Name: ACCOUNTING SYSTEM IN MICRO FINANCE BANKING (A CASE STUDY OF EVERGREEN MICRO FINANCE BANK NIGERIA, LTD, ENUGU)
  • Type: PDF and MS Word (DOC)
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  • Length: [65] Pages
  • With Reference and Questionnaire
  • Amount: 3000 naira

ABSTRACT

Every organization including bank registered under the Nigerian company law having statutory responsibility of profit and loss account together with statement of assets and liabilities at the end of its accounting period, to its members shareholders the public and other uses including the government accounting system means the system of recording financial transaction in an organization. It could also be referred to as an internal control system in an organization depending on the nature of business undertaken by the organization monetary terms and this requires proper recording of receipts and payments of funds. It is worthy to note here that any default in the accounting system of an organization could lead to business failure. In addition banks with the nature of its services dealing with money are expected to maintain any up to date record of its transaction with or on behalf of its customers the objectives of providing accounting information for decision making cannot be achieved if there is no adequate accounting system in place. In the course of this research work the following problems will be considered.  The effects of inadequate accounting system in banking operation and more. In order to do further justices to the matter that will raise in this work primary and secondary sources of information will be used samples size of the study will be determines using this Bowles rules questionnaires will be designed in such a way to solicit information both this management and consumers as to confirm answers to the research as to question listed down in chapter one data presentation and a detailed analysis of data collected from this research work will be carried out. In summary of findings, recommendations and conclusion into five chapters.

 

 

TABLE OF CONTENTS

CHAPTER ONE

  • Introduction
    • Background of the study
    • Statement of problem
    • Objectives of the study
    • Research Questions
    • Significant of the study
    • Scope and Limitations of the Study

CHAPTER TWO

  • Review of Related Literature
    • Historical Background of the Evergreen Micro

Finance Bank Nigeria Limited

2.2  Meaning of Accounting System

2.3  Banking Operation in Evergreen Micro Finance

2.4  Uses of Accounting Information Providing

2.5   Balance Sheet Structure of Evergreen Micro

2.6  Benefits of Proper and Adequate Record Keeping

  • Effect of Inadequate Accounting System

 

CHAPTER THREE 

  • Research design and methodology

3.1  Sources of Data

3.2  Population of the study

3.3  Sample Size Determination Technology

3.4  Location of Data

3.5  Method of Investigation

3.6  Data Treatment Technique

3.7  Validity and Reliability of Research Instrument

Reference

CHAPTER FOUR

  • Data presentation and analysis.

4.1  Analysis of Response to Questionnaire

 

CHAPTER FIVE

  • Summary of findings, conclusion and Recommendation.
    • Summary of Findings
    • Conclusion
    • Recommendation

Bibliography

 

CHAPTER ONE

INTRODUCTION

1.1  BACKGROUND OF THE STUDY

Accountancy embraces the installation of book-keeping and accounting systems, the writing up of account and the preparations of every kind of financial statement from the simplest receipts and payments of small club to the published accounts of large public companies. It is one of the main work of the accountant in practice to provide client both large and small with necessary advice as to the most appropriate accounting system to in tall what will provide management with up-to date information.

According is always said to be the language of business. Every organization including bank registered under the Nigerian company law, having statutory responsibility f profit and loss account together with statement of the assets and liabilities at the end of its accounting period, to its members shareholders, the public and other users including the government. Accounting system means the system of recording financial transactions in an organization. It could also be referred  as an internal control system in an organization depending on the nature of business undertaken by the organization. This is because financial transactions are qualified in monetary terms and this requires proper recording of receipts and payment of funds. It is worthy to note here that any default in the accounting system of an organization could lead to business failure.

In addition, banks by virtue of nature of its services dealing with money are expected to maintain an-up-to-date record of its transactions with or on behalf of its customers.

However, in micro finance bank, this responsibility can be effectively discharged if there is an adequate system of account put in place for recording day to day transactions of the bank. Besides, accounting is not only concerned with recording of transactions but also with the use to which the records are put, their analysis and interpretations for use in making decisions not only for the management usefulness but also to the members and would be investors, government agencies etc.

Recent researchers have shown that one of the main causes of indigenous business failure in the country is due to the failure to maintain proper accounting records. Therefore, these purposes can only be achieved in the light of good design and application of sound accounting system. Thus, the scope of this research work is to make  appraisal of relevance and adequacy of accounting system in micro finance banking using “Evergreen micro finance bank Nigeria ltd as a cases study.

1.2  STATEMENT OF THE PROBLEM

Accounting being  a profession referred to as service activity and accounting  as often termed to be the language of business, therefore the importance  of accounting system in any organization cannot be overemphasized. The objectives of providing accounting information for decision making cannot be achieve if there is no adequate accounting system in place. In the course of this research work, the following problems will be considered:

  1. The effects of inadequate accounting system in banking operation.
  2. Unavailability of timely accounting data.

iii.    The falsification of account in the banking sector.

  1. Nonchalant attitude of the management towards the information provided by the accounting system.
  2. Poor decision-making
  3. Poor accounting record

vii.   Poor audit problem

1.3  OBJECTIVE OF THE STUDY

  1. To determine the impact of accounting system in micro finance banking.
  2. To determine whether the strategies used by micro finance bank in their accounting system have been very efficient and effective.

iii.    To evaluate the factors that will limit the efficacy of micro finance banks in their efficient application of accounting system in  their banking operations or activities.

  1. To assess the role9s) of accounting system in proving the activities of micro finance bank.
  2. To assess whether they have efficient and effective machinery to implement her planned programmes.
  3. To find out whether accounting system will provide timely accounting data for management decision making.

vii.   To find out whether it will facilitate banking activities.

viii.  To make recommendations on how to enhance the efficiency and effectiveness of accounting system in micro finance banking.

1.4  RESEARCH QUESTIONS

The following question forms the basis of the frame work for carrying out this research study.

  1. Do accounting system have any imp[act in micro finance banking?
  2. Do micro finance bank have efficient machinery to implement it planned programmes for efficient accounting system?
  • Do micro finance hanks make use of effective and efficient accounting system?

 

1.5  SIGNIFICANCE OF THE STUDY

As it is a known fact that accounting system plays very important role in the life of a business organization, it is termed the determinant factor which determines whether business would fail or survive depending on the  manner in which the particular organization records its financial transactions. Therefore, the significance of this project research work is to provide:

  1. Management with the importance of accounting information towards ensuring profitability and efficiency in business management.
  2. The relevance of accounting system in micro finance banking.

iii.    Evaluation of the role(s) played by management in ensuring adequate accounting system in banking operation

1.6  SCOPE AND LIMITATIONS OF THE STUDY

The study will be limited to Evergreen micro finance bank Nig. Ltd here in Enugu. The research cannot cover the entire population of the bank hence; a sample will be drawn from selected department in the bank.

The major factors limiting the extent of this research work are time available for the conduct of the research and inadequate financial resources and those encountered in the course of data collection.

  • DEFINITION OF TERMS
  1. Deferred tax: This is defined to include taxes due on income which is not taxable within 12 months of the current year as a result of differences between the tax profits and the reported profit.
  2. Deposits: This means all deposit liabilities of banks including other accounts and placements by other banks, current and time deposits.

iii.   Dividend: This is referred to the total dividend paid to either the ordinary shareholders or the preference shareholders.

  1. Earnings per share: This computed as profit after taxation less preference dividend by the number or ordinary and founders shares outstanding. To enhance comparability, all shares are assumed to have a per value of one Naira.
  2. General Reserves: This includes allover reserves like profit and loss balances exchange revaluation reserves and other reserves.
  3. Interest margin: This is the net of interest income received and paid.

vii.  Investment: This includes investment in all calls money, fixed deposit, negotiable certificates of deposits with other banks, bankers acceptances, quoted and unquoted investments.

viii. Loans and advances: All loans and advances given to customers, the advances net of provision is used.

  1. Lateral Acquisition: This is the investigating in other types of business apart from banking.
  2. Bills of Exchange: This simply means an unconditional order writing address by one person to another signed by the person giving it, requiring the person to whom it is addressed to pay on demand, or at a fixed or determinable future time, a sum certain in money to, or to the order of a specified person or to the bearer.
  3. Cheque: A Cheque may be defined as a bill of exchange drawn on a banker payable on demands.

xii.  Drawee: This is the bank on whom the cheque is drawn.

xiii. Payee: This is the beneficiary of an order cheque or the bearer of a cheque.

xiv. Open cheque: An open cheque is one that can be cashed over the canter.

  1. Cross cheque: A crossed cheque is one that cannot be cashed over the canter, it has to be paid into an account.

xvi. Profit after taxation: This is profit before taxation. Less taxation charged.

xvii. Capital Reserves: This includes all reserves that is no longer available for distribution as cash dividends like loan, stock redemption accounts, deposit for shares and appropriation for bonus issues.

xviii.      Contra Assets and liabilities: These are contingent liabilities arising in the normal cause of business. These commitments may be acceptances, guarantees and other such obligations on behalf of customers. The bank will normally have a corresponding contingent asset due from the customers.

xix. Fixed Asset: This includes asset purchased for lease to customer where they are classified as fixed assets.

  1. Share capital: This includes all issued share capital distinguishing between ordinary and preference shares.

xxi. Shareholders fund: this is the total of share capital statutory capital and general reserves.

xxii. Profit before taxation: This represents gross earnings, less all expenses, including loan, less provision but before taxation.

xxiii.      Net Asset per share: This is the total shareholders, fund, less preference shares, divided by the number of ordinary share

ACCOUNTING PROCEDURE ADOPTED IN GOVERNMENT MINISTRIES AND PARASTATAL

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PROJECT TOPIC AND MATERIAL ON ACCOUNTING PROCEDURE ADOPTED IN GOVERNMENT MINISTRIES AND PARASTATAL

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  • Name:ACCOUNTING PROCEDURE ADOPTED IN GOVERNMENT MINISTRIES AND PARASTATAL
  • Type: PDF and MS Word (DOC)
  • Size: [666 KB]
  • Length: [65] Pages
  • With Reference and Questionnaire
  • Amount: 3000 naira

CHAPTER ONE

1.0 INTRODUCTION
1.1 The Background of the Study

The economic development of a country is often planned and financed by
it’s government. Many countries in Africa have recently built ‘DAM’
(such as Aswan in Egypt and kanji dam in Nigeria.) to provide electric
power and essential services.
Economic development like these can only be financed by government.
And if government is to provide public services and to exercise control
over the economy, it needs great amount of money to pay for the
development project and to employ those people who work for it. In
Nigeria revenue generation can be categorised into two; namely, oil
revenue and non oil revenue. Oil revenues include royalties, petroleum
profite.t.c. while non oil revenues include indirect t taxes, import duties,
export duties e.t.c.
Each year, a government should produce a budget, which is a plan for
spending the revenue in its various departments and for different
development. This budget has to be approved by the National assembly
which consists of the people representing the interest of their electorates.
In Nigeria, the public sectors consist of three tiers of government whose
status and power are defined and guaranteed by the constitution. They are
Federal, State and Local governments. The federal, state and local
governments conduct their activities through two major forms of
organization; Ministries such as Ministry of finance, Health, education
and parastatals such as hospital management Board of Ogun state water
corporation etc.
Hence, government accounting may be viewed ‘as the system adopted by
the government establishment in rendering their account of stewardship
to the public and where necessary to the management’ since the aim of
government establishment is to make profit, referred to as ‘fund
accounting system’.

1.2 Statement of Problem
With the present economic condition in which the people focus attention on
the public sector for the provision of amenities, it has been observed that
various irregularities were going on in the public sector which is now an
open secret. Such irregularities and lack of amenities are those arising
through poor or inefficient management of government accounting and
which may result in losses. This may further lead to other irregularities as;
1. Irregularities not directed or immediately resulting in losses to the
government, but which infringe upon budgetary control and proper
financial management.
2. Irregularities including those resulting in losses to government due to
either fraud, negligence or incompetence.
Therefore, proper accounting system and its implementation and
compliance is necessary for the effectiveness of government functions
so that interested users of government account may make appropriate
decision relating to the economy of the country.
1.3 Significance and Relevance of the Study
As it is now a common that the major problem of government account is
the mismanagement of fund and inefficient management of public sector
accounts. Based on this, it is hoped that this project will examine the
procedure of keeping books of account and record.

1.4 Objective of Study
Having recognised the role played by the government of Nigeria in the
provision of amenities and such economic development projects, it may
be concluded that, for the economy of Nigeria to improve greatly, the
accounting system of government must be intact, improved, reviewed and
monitored for proper financial reporting.
The purpose of this is to conduct research on the procedure used by the
government in keeping their records and in preparing their financial
statement. It also aims at making a research on how the condition of the
procedure can be improved.

1.5 Scope of the study
Because of the wide scope of government accounting and that of the
accounting procedure adopted by the ministries and parastatals are similar
in nature, this research work is limited to Ogun state public service with
Ado-Odo/Ota Ogun state ministry of finance and economic planning.
The researcher decided to choose ministry of finance so that a wider
scope can be covered due to the fact it is the ministry that is in charge of
the financial role of the state.

1.6 Research Questions
In carrying out this research work through the research instrument, these
are some questions that needed to be asked to be able to form opinion of
the sample obtained for this research, some of these questions were
contained in questionnaire while some are used in the course of personal
interview;
1. Are there any regulation governing the accounting procedure in the
government ministries and parastatals in Ado-odo /ota local government?
2. Are they employing with these regulations?
3. Are there any qualified Accountant heading the treasury department in
Ado- odo/ota local government?
4. Arethe internal control system in the treasury department adequate or
strong enough to provide financial information?
1.7 Statement of Hypothesis
1. Are there any regulations governing the accounting procedures in the
government ministry and parastatals?
Ho: There are no regulations governing the accounting procedures in the
government ministry and parastatals.
Hi: There are regulations governing the accounting procedures in the
government ministry and parastatals.
2. Are they following these regulations?
Ho: They are not following these regulations.
Hi: They are following these regulations.
3. Are there any qualified accountants heading the treasury department in
Ado- Odo/Ota local government?
Ho: There are no qualified accountants heading the treasury department
in Ado- Odo/Ota local government.
Hi: There are qualified accountants heading the treasury department in
Ado- Odo/Ota local government.
4. Are the internal control systems in the treasury department adequate
or strong enough to provide financial information?
Ho: The internal control system in the treasury department adequate is
not strong enough to provide financial information.
Hi: The internal control system in the treasury department adequate is
strong enough to provide financial information.
Based on this, I hope this research project will examine regulations, the
role of the qualified accountant and to know whether the internal control
system in treasury department in Ado-Odo/Ota local government is
strong enough to detect manipulation on how the fund is mismanaged.

1.8 LIMITATION OF THE STUDY
The researcher decided to choose ministry of finance so that a wider
scope can be covered due to the fact it is the ministry that is in charge of
the financial role of the state.
It is hoped that this project will give broader knowledge on accounting
procedures in the ministries and parastatals.

1.9 DEFINITION OF TERMS
1. ACCOUNTING: This can be defined as the process of recording,
classifying, reporting and interpreting the financial data of an
organisation.
2. GOVERNMENT ACCOUNTING: this can be defined as the process
of recording, analysing, classifying, summarising, communicating, and
interpreting financial information about government in aggregate and in
details, reflecting all transactions involving receipt transfer and
disbursement of government fund and properties.
3. PROCEDURE: this is a sequence of clerical operations usually
involving several people in one or more departments established to ensure
uniform handling of recording transactions of the business.
6
4. MINISTRY: this is a government department led by a minister
(federal level) and commissioner (state level) to carry out specific
functions of government on any responsibilities allocated to it.
e.g.Ministry of finance and economic planning.
5. PARASTATALS: These are the corporation, authorities, boards,
council, and limited company in which government has full or majority
interest. Each parastatal is set up to provide essential services to public
e.g. water corporation, sport council.
6. FUNDS: this can be defined as a separate fiscal and accounting entity
in which resources are held, governed by special regulation, segregated
from other funds and established for specific purpose on which the
resources of the fund may be expended.
7. DEPOSIT: These are monies paid to government for safe keeping.
8. VOUCHERS: This is a documentary evidence used to discharge
obligation through disbursement (or payment) of money.
9. IMPREST: This is the money set aside for disbursement when
voucher cannot be immediately prepared or raised.
10. REVENUE: This is the total annual income that government of a
country is able to generate through taxes, fees, fines and proceed from
sales and for mineral resources or loan.
11. EXPENDITURE: This is the government spending in the execution
of its programme for the country.

ACCOUNTING INFORMATION SYSTEM AS A MEANS OF ENHANCING FINANCIAL MANAGEMENT OF TRANSPORT COMPANY (A CASE STUDY OF THE NIGERIAN RAILWAY CORPORATION ENUGU)

Download the complete Accounting project topic and material (chapter 1-5) titled ACCOUNTING INFORMATION SYSTEM AS A MEANS OF ENHANCING FINANCIAL MANAGEMENT OF TRANSPORT COMPANY (A CASE STUDY OF THE NIGERIAN RAILWAY CORPORATION ENUGU) here on iProjectTopics. See below for the abstract, table of contents, list of figures, list of tables, list of appendices, list of abbreviations and chapter one. Click the DOWNLOAD FULL WORK BUTTON BELOW CHAPTER ONE  to get the complete project work instantly.

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PROJECT TOPIC AND MATERIAL ON ACCOUNTING INFORMATION SYSTEM AS A MEANS OF ENHANCING FINANCIAL MANAGEMENT OF TRANSPORT COMPANY (A CASE STUDY OF THE NIGERIAN RAILWAY CORPORATION ENUGU)

The Project File Details                                                                                                       

  • Name: ACCOUNTING INFORMATION SYSTEM AS A MEANS OF ENHANCING FINANCIAL MANAGEMENT OF TRANSPORT COMPANY (A CASE STUDY OF THE NIGERIAN RAILWAY CORPORATION ENUGU)
  • Type: PDF and MS Word (DOC)
  • Size: [666 KB]
  • Length: [65] Pages
  • With Reference and Questionnaire
  • Amount: 3000 naira

ABSTRACT

Accounting information system in a transport organization has been a great problem to the third world countries in general, which Nigeria as a country has its own share. This research work, “Accounting information system in a transport organization, suggests ways of minimizing the effects of the problems of inefficient accounting information. It is believe that an improvement in this regards will enhance the performance of the corporation. To enable the researcher find solution to the problem of this study, some questions were raised in the form of hypotheses, which were developed comprising the null and alternative hypotheses. The methods of data collection were primary and secondary data method. The data collected were analyzed by use of simple percentages while chi-square was used to test the hypothesis formulated for validity. Findings show that accounting information is an indispensible tool in the management of Nigeria Railway Corporation and the activities of unqualified and incompetent accounting officers are responsible for the performance of the accounts departments in Nigeria Railway Corporation. Based on the findings, the researcher concludes that the accountant should put more efforts especially when computing the financial statement since accounts fraud result from ignorant of proper accounting procedures. Since the financial statement are sources of document of accounting information, efforts should be made in generating more relevant, timely, effective and accurate accounting information necessary for prevention or detection of fraud.

TABLE OF CONTENTS

Title page————————————————————————— i
Approval page———————————————————————- ii
Dedication ————————————————————————— iii
Acknowledgement —————————————————————– iv
Abstract —————————————————————————— v
Table of content——————————————————————— vi
CHAPTER ONE
1.0 Introduction—————————————————————– 1
1.1 Background of the study————————————————– 1
1.2 Statement of problem—————————————————– 4
1.3 Objective of the study—————————————————– 5
1.4 Research questions——————————————————– 6
1.5 Hypothesis of the study—————————————————- 7
1.6 Significance of the study————————————————— 8
1.7 Scope and limitation of the study—————————————- 8
1.8 Definition of terms———————————————————- 9
CHAPTER TWO: LITERATURE REVIEW
2.0 literature review———————————————————- 11
2.1 The concept of accounting information system———————– 16
2.2 The importance of accounting information—————————- 19
2.3 The users of accounting information———————————— 20
7

2.4 Criticism of accounting information system in Nigeria Railway Corporation Enugu———————————————————— 21
2.5 The output of an information and the users.—————————- 24
2.6 The outline of the information generation
process and source document———————————————- 28
2.7 Application of computer system———————————————33
2.8 Accounts department in the Nigeria Railway Corporation Enugu 36
2.9 Functions of the accounts department———————————— 38
2.10 Officers of the accounts department————————————— 38
2.11 Accounting officers and heads of department—————————-39
2.12 Disagreement between accounts officers and heads of department 39
2.13 Accounting system in Nigeria Railway Corporation——————– 40
2.14 Capital expenditure budgeting————————————————42
2.15 Expenditure checking section————————————————-46
Reference
CHAPTER THREE: RESEARCH DESIGN AND METHODOLOGY
3.1 Research design————————————————————— 55
3.2 Sources of data —————————————————————- 56
3.3 Research instrument———————————————————- 57
3.4 Reliability and Validity of research instrument————————- 58
3.5 Population ——————————————————————— 58
3.6 Sample size/ techniques—————————————————– 60
8

3.7 Administration of research instrument———————————– 63
3.8 Method of data analysis——————————————————- 64
3.9 Decision criterion for validity of hypothesis—————————— 65
CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS………… 68
4.1 Data presentation———————————————————– 71
4.2 Testing of hypothesis——————————————————- 87
CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.1 Summary of findings——————————————————— 96
5.2 Conclusion———————————————————————- 98
5.3 Recommendation————————————————————- 98
Bibliography————————————————————————- 100
Appendix —————————————————————————– 102

CHAPTER ONE

A CRITICAL ANALYSIS ON AUDIT COMMITTEE AND FINANCIAL REPORTING IN NIGERIA

Download the complete Accounting project topic and material (chapter 1-5) titled A CRITICAL ANALYSIS ON AUDIT COMMITTEE AND FINANCIAL REPORTING IN NIGERIA here on iProjectTopics. See below for the abstract, table of contents, list of figures, list of tables, list of appendices, list of abbreviations and chapter one. Click the DOWNLOAD FULL WORK BUTTON BELOW CHAPTER ONE  to get the complete project work instantly.

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PROJECT TOPIC AND MATERIAL ON A CRITICAL ANALYSIS ON AUDIT COMMITTEE AND FINANCIAL REPORTING IN NIGERIA

The Project File Details                                                                                                       

  • Name: A CRITICAL ANALYSIS ON AUDIT COMMITTEE AND FINANCIAL REPORTING IN NIGERIA
  • Type: PDF and MS Word (DOC)
  • Size: [666 KB]
  • Length: [65] Pages
  • With Reference and Questionnaire
  • Amount: 3000 naira

ABSTRACT

Out of the worries ignited by the incessant occurrence of organizations failure and liquidation in Nigeria, even with the presence of audit committees in these organizations, this project topic was born. A topic aimed at evaluating audit committee and financial reporting Nigeria. In carrying out this investigation, the likert-scale questionnaire was drawn to extract correct and direct data from respondents in some randomly selected firms. Data extracted were presented, analyzed and interpreted. Hypothesis were tested using chi-square with five percent (5%) level of significance, indicating ninety five percent (95%) assurance or confidence on the accuracy reliability and validity of the data collected and information gathered therefrom. After rigorous research and study, it was revealed that audit committees have contributed immensely to the financial reporting in Nigeria, though at some point they just exist without making any considerable impact in the financial reporting system in the firm they are established. It was recommended that it is not enough for companies to establish audit committees because the law, CAMD 1990, says so but that the company and its board of directors must show full commitment to accountability by providing a conducive environment in which their audit committees can discharge their responsibilities effectively and efficiently.

TABLE OF CONTENTS

Title Page………………………………………………………………………………………………………………..i
Certification………………………………………………………………………………………………….ii
Dedication…………………………………………………………………………………………………..iii
Acknowledgement…………………………………………………………………………………….iv
Abstract……………………………………………………………………………………………………..viii
CHAPTER ONE: INTRODUCTION
1.1 Introduction……………………………………………………………………1
1.2 Statement of Research Problem………………………………………………..2
1.3 Objectives of Study……………………………………………………………2
1.4 Research Hypothesis……………………………………………………….…..3
1.5 Scope of study……………………………………………………………….…4
1.6 Significance of the Study………………………………………………….……4
1.7 Limitations of the study……………………………………………………….….5
REFERENCES…………..…..…………………………………………………….6
CHAPTER TWO: LITERATURE REVIEW
2.1 Historical Background…………………………………………………………7
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2.2 Functions and Practices of Audit Committees in Nigeria………………………9
2.3 Composition of Audit Committees in Nigeria and the Ambiguity in the Provision of CAMD‟90(Now CAMA 2004)…………………………………………………………….10
2.4 Qualifications of Audit Committee Members………………………………….12
2.5 Quality of Audit Committees……………………………………………………14
2.6 Audit Effectiveness and its Relevance to Financial Reporting………………….15
2.7 Audit Committee Independence…………………………………………………18
2.8 Audit Committee Relationship with Management, Internal Auditor and External Auditors……………………………………………………………………………………..21
2.9 Audit Committees and the Independence of External Auditors…………….….22
2.10 Audit Committees and Financial Reporting: Audit committee Characteristics and Financial Reporting Quality…………………………………………………………………24
2.11 Corporate Reporting……………………………………………………………26
2.12 Forms and Contents of Financial Statements…………………………………..26
2.13 Types of Financial Statement…………………………………………………..27
REFERENCES…………………………………………………………………….28
CHAPTER THREE: RESEACRH METHODOLOGY
3.1 Introduction…………………………………………………………………….30
3.2 Research Design………………………………………………………………..30
3.3 Population of Study……………………………………………………………30
3.4 Sample and Sampling Technique………………………………………………30
vii | P a g e
3.5 Sources of Data………………………………………………………………..31
3.6 Instrument of Data Collection…………………………………………………32
3.7 Actual Field Work……………………………………………………………..32
3.8 Data collection Method………………………………………………………..32
3.9 Data Analysis Method…………………………………………………………32
3.10 Justification for the use of Chi-Square test……………………………………33
3.11 Decision Rule…………………………………………………………………33
REFERENCES……………………………………………………………………33
CHAPTER FOUR: DATA PRESENTATION, ANALYSIS AND INTERPRETATION.
4.1 Introduction……………………………………………………………………35
4.2 Data Presentation………………………………………………………………35
4.3 Data Analysis and Interpretation ………………………………………….…..35
4.4 Test of Hypothesis……………………………………………………………..48
REFERENCES……………………………………………………………………54
CHAPTER FIVE: FINDINGS, RECOMMENDATIONS AND CONCLUSION
5.1 Introduction…………………………………………………………………..55
5.2 Findings………………………………………………………………………55
5.3 Recommendation(s)…………………………………………………………..56
5.4 Conclusion……………………………………………………………………57
viii | P a g e
BIBLIOGRAPHY………………………………………………………………………59

CHAPTER ONE

1.1 INTRODUCTION
One mechanism that has been widely used in worldwide organizations to monitor the financial reporting process is the establishment of an audit committee comprising a majority of independent directors. The existence of an audit committee could improve the monitoring of financial reporting and internal control. This could be done by bridging the communication gap between the auditors and management and through strengthening the role of the internal auditors. Although audit committees have been in existence for decades, there are criticisms of the practices of audit committees and a large amount of research have been undertaken to identify an ideal audit committee that would act in the interest of shareholders (Abbott and Parker, 2000; Krishnan, 2005).
Audit committees serve as a bridge in the communication network between internal and external auditors and the board of directors, and their activities include review of nominated auditors, overall scope of the audit, results of the audit, internal financial controls and financial information for publication (FCCG, 1999). Indeed, the existence of an audit committee in a company would provide a critical oversight of the company‟s financial reporting and auditing processes (FCCG, 1999; Walker, 2004).
Audit committee could also enhance auditor independence. Knapp (1987) discovered that an audit committee is more likely to support the auditor rather than management in audit disputes and the level of support is consistent across members of the committee, regardless of whether the member is in a full-time or part-time position, such as managers, academicians and retired partners.
In addition, audit committees could play a role in selecting auditors, determining their remuneration and in the dismissal/retention of auditors. Goldman and Barlev (1974) pointed out that audit committees could observe the financial reporting process and provide recommendations in the selection of auditors, negotiation of fees and termination of external auditors, which would ultimately diminish management‟s power over the auditor. An audit committee is anticipated to ensure that a business organization has sufficient internal controls,
xi | P a g e
proper accounting policies, and independent external auditors that will prevent the incidence of fraud and promote high quality and timely financial statements.
1.2 STATEMENT OF RESEARCH PROBLEM
Audit committees are by reference to relevant Sections of CAMA 1990 expected to bridge the expectation gap in providing a means by which the opinion expressed by auditors on a firm‟s financial statement can be seen to be unbiased and independent. It is argued that the presence of Audit Committees is likely to lead to unnecessary rift between shareholders and directors as well as management and auditors. Also, were the managing director is a very influential member in the board and succeeds in hijacking authority from others, the audit committee would have no choice but to dance to his tune, given the composition of the audit committee of equal number of directors and representatives of the shareholders of the company subject to a maximum of six (6) members. This makes the appointment of the committee unnecessary.
In view of the above, the study intends to find answers to the following questions:
1. How relevant is the establishment of audit committee to the financial reporting of organisations in Nigeria?
2. Does the frequency of audit committee meetings in a given financial reporting year determine to a large extent, the effectiveness of that audit committee?
3. How effective are audit committee composition of equal number of directors and representative of shareholders?
1.3 OBJECTIVES OF THE STUDY
The basic objective of this study among others is to evaluate audit committees to financial reporting in contemporary Nigeria. More so, for the purpose of clarity, simplicity and avoidance of ambiguity, this study intends to;
xii | P a g e
1. Find out the relevant of the establishment of audit committee to the financial reporting of organisations in Nigeria.
2. Examine whether the frequency of audit committee meetings in a given financial reporting year determine to a large extent, the effectiven