TABLE OF CONTENTS
Table of content
Development of CBU (A Public company)
and limitations of the study
development of Accounting in Nigeria
nature of accounting principles
of accounting principles
affecting accounting principles
and budgetary control
costing as a tool for control
of data analysis
of research instrument
of data & Analysis
In most developing countries
including Nigeria, government participation in economic activity is usually
significant. One of the ways through
which government has intervened in Nigerian economy is through the
establishment of public enterprises and statutory bodies operating services of
an economic or social character on behalf of the government.
Since the colonial era,
especially after independence in 1960, Nigerian public enterprises have
witnessed a steady growth unit recently.
Its Olisa (1988:133) pet it. Beginning as a trickle in the period
between this era of the second world war and Nigeria attainment of independence
the creation of public corporations had risen to flood level since independence
and his maintained a steady growth. The
rational behind the establishment of public enterprises in Nigeria are many. Some of the reason include: generating revenue, they would add to available
rational capital for the support of development and welfare programme, making
to be controlled by a few individual, it
possible for important profitable enterprises to be controlled by a few
individual or group, organization certain critical activities national survival
and economic stability and providing employment opportunities (Ademolukun
1983). However, after a long period of
growing, starts intervention in the Nigerian economy through public enterprises,
the and of 1980’s onwards had witnessed a reversed which has sometimes been
dramatic in public opinion and therefore public policy.
This has been brought by the
persistent losses which state enterprises that have been running over fears.
Consequently, there has been a willingness to look at alternative policy
strategies for the achievement of economic development. At the forefront of these strategies is the
minimization privatization of public enterprises.
In Nigeria, public enterprises are engaged in a while spectrum
of economic activities including agriculture, mining, construction,
manufacturing, commerce and services.
The classification of public enterprises in Nigeria, had been made
according to varieties of criteria by different authorities. The public service review commission (1975:101)
classified public sector int.
Regulatory of service body
Commercial ad industrial enterprises
Being a mixed economy, individuals
also own and operate private enterprises.
A firm classified as private enterprises when it is founded and managed
by an individual and Ora group of individual.
These firms are expected to be registered in the local government within
which they operate.
The rationale for the establishment
of private enterprises are numerous just like establishment of public
enterprises. T hey include amongst other.
Provision of employment opportunities.
Generating income for the owner
of the enterprises. Government interest
in profit growth of the enterprises which determine the tax liabilities of the
firms, improve the performance of the public sector through competition. Moreover, the general public is concerned
with the contribution which makes towards social upliftment which is exhibited
to the environment in which the business is loaded and its willingness to
contribute to the development of the environment.
The activities of the public
enterprises have been on the increase in resent times which necessitated the
introduction of the accounting practice to check and monitor the financial activities
of these enterprises. In this book,
titled principles of accounting, by Bimage (1985) accounting is defined as a
process by which data relating to the economic activities of an organization
are measured, recorded and communicated to interested parties for analysis and
The earliest method of accounting
records were kept in physical quantities.
These records came from the Eastern (early) civilization which involved
in the countries around the Mediterranean sea such as Mesopotamia, Egypt,
Crete, Italy etc. money was recorded as
soon as money took the place of barter as a medium of exchange and unit of
accounting practice has been closely related to the economic development of the
country. If the business organization
grows in size and complexity, management and outsiders became more clearly
differentiate from the outside groups which include owners of the firm (stock
holder) creditors, government employer and the general public.
The differentiation necessitated the
need to have accounting department in the enterprises to give accurate
financial of the management and to satisfy the outside demands or the general
public who are already interested on whether the enterprises in growing or not.
The role of accounting in public
enterprises in Nigeria is primarily to ensure accurate accountability in these
sector and present the time and fair financial position of the
enterprises. The role is of utmost
importance in any organization. An
organization can only grow or profit when the resources are well managed and
effective observed over expenditure.
These resource can only be well managed if accounting department of the
organization give an accurate financial information to know how ,much the enterprises
having. It is only when this is done
that the firm allocate its resources and knows what is to be done.
The role of accounting seems to be
more pronounced in the public enterprises.
In recent time there are cases of misappropriation of funds in the
public enterprises and improper accountability.
These factors have led to a lot of public enterprises going into
oblivon. If the government has reorganized the role of accounting, all these
febles should not have arisen. No
enterprises can move forward without having a well organized financial
departments to give accurate financial; information about the firm.
This is because if improper
accounting records are not minimized or where possible eradicated these is
bound to be cases of public enterprises failure. Consequently, staff of such enterprises will
forced out of their job. This will
result to economic and social; activities in the society.
HISTORICAL DEVELOPMENT OF CBN (A PUBLIC COMPANY)
The formation of CBN started
gradually in the early 1950’s but gathered momentum by the middle and towards
the decade. Precisely CBN was
established in 1958. Among the factors
that led to the formation for an apese financial institution in the early “50s”
were the dissatisfaction and short coming to the west African currently
board. The WACB established in 1912 was
playing the role for an apese monetary institution in the British West Africa
especially in areas of the country.
The issue of West Africa Currency
exchanging this with the existing currencies, investment of reserve mainly in
London and the repatriation of existing currencies. However, because of the
anomalies and short coming of the WACB especially as if could not perform the
monetary management, Nigeria nationalist continued to amount pressure on the
colonial administration for the establishment of a central Bank that should
have all pioneers of a central bank, and not just a glorified currency exchange
In 1952 at the floor of federal house of Assembly (First sitting)
Lagos-Chief Anthony Enahoro Summoned up courage and mored a private member
motion calling for the establishment of central Bank for the purpose of rapid
economic development in all its phases.
However, as result of the composition
of he house then and lack of awareness of the importance of central bank on the
part of some Nigeria members the bill failed.
Even though the motion was not successful, it stirred the hornet
comb. It gingered the colonial office in
London Administration appointed Mr. Fisher, a Senior staff of Bank of England,
to inquire into the desirability and practicability of establishing a Central
Bank of Nigeria as an instrument for promoting the economic development of the
Fishers in his report as an agents of
colonialism and on orthodox bank stated that central Bank cannot be established
in a financial environment where all factors that make a central Bank perform
are not existent.
In the same year, while fisher was
submitting his report to another independent term of financial expects were in
Nigeria from world Bank (international Bank for reconstruction and development)
with a mission like that of fisher at examining the desirability and
practicability of establishing a central bank of Nigeria.
The world Bank mission were more
objective in their report and less inclined to perpetual economic
dependence. They really agreed with the
recommendation of fisher on the instability of the financial environment as a
result of weak money and market instruments but they were quick to add, that
the continued political and economic advancement of Nigeria is bound to lead to
the establishment of a central bank. To
postponed the day when functions of currency issue and the management of
foreign assets are performed in Nigeria will also postponed the day when trained
Nigeria will be able to perform these functions responsible by themselves.
In 1957, even though Nigeria had not
totally got her indigence, but she gained the antonomy of self internal
rule. The nationalists did not wash time
in commissioning another financial expert from Bank of England J.B Loyness to
advise then as:
establishment of a federal institution to perform appropriate central banking
introduction of Nigerian currency and the administration of such as currency so
as to presence in external value and its acceptability within the country.
relationship of the federal institution to the federal and regional government,
to government institutions, to the commercial Bank and to the public and
role of such an institution in the development of a local
money and capital market. The report of JB Loyness led to establishment
of the central Bank of Nigeria (CBN) by the Central bank of Nigeria ordinance
of 17th March, 1959, The bank officially commenced business on 1st
OWNERSHIP AND CONTROL OF CBN
The 1959 Central bank ordinance of
Nigeria established the CBN with an authorized capital of $1.5 million (123m)
which was fully paid up by the federal government of Nigeria. The Bank was 100 percent a public company,
and there was no provision in the ordinance of 1958 establishing the bank and
subsequent amendments there of required the bank to maintain a general reserve
fund from profit arising from its operation the rate of the reserve and was
dictated by the prevailing economic condition at that point in time.
Furthermore., the 1958 central Bank
ordinance provided that the Bank should
transfer one eight (1/8) of the net profit made every year to the fund (general
reserve) until the fund is equal to the paid up capital (the proceed should be
used to pay the federal government for the amount contributed) and therefore
only 1/16 of the profit for each year was to be transferred to the fund. Meanwhile the balance of the profit would be
appropriated in the following manner.
50% of the balance to be applied for
retirement of any outstanding obligation of the federal Government to the Bank
in respect of cost of printing, mining shipment of the initial of the Bank
notes and coins.
remaining 50 percent as to be paid to the president appoints the governor of
the CBN (on the advice of the senate 1979 constitution and 1995 draft
constitution). Infact CBN is directly
under the federal ministry of finance i.e. the governor who in turn reports to
the president. This war amended by the
military in 1997.
In 1997, with the presidentialization
of key ministries in Nigeria, the CBN has been sent the presidency, and the
governor who is solely appoint by the military president reports directly to
him (the president). The board of
Director of the bank under this system is equally appointed by the president.
In 1999, when democracy returned Back
to the state/country (Nigeria). The
president appointed the Governor of the CBN, but the Governor report to the
ministry of finance. The CBN governor
Mr. Solud Economist by profession. The
ministry of finance is Mrs. Ngozi Okonjo
Iwuani, Doctor by profession.
The central Bank of Nigeria took
after the British pattern (the Mother of all central Banks) in many respects
especially in organization and management.
Infact, the first governor of the bank in British Mr. Fanton, was
seconded from the bank of England.
The apex policy making body of the
Bank is the Board of Directors. At the incept, the enabling law establishing
the bank shall comprise seven members the governor (who is the chairman), the
Deputy governor and five part time Directors.
The ordinance went further to stipulate that it was the responsibility
of the governor general to appoint the governor and the deputy governor of the
bank while the appointment of the part – time director was responsibility of
the prime minister.
To cope with defects of the economic
development couple with the
recommendations of the international finance experte the CBNs Board was
re-organized for more efficiency. In order
to be able to face the challenge of the time, the membership of the Board was
enlarged to thirteen, the Governor, the Deputy Governor, three executive
Directors and eight part-time Directors, (The central Bank of Nigeria Decree No
24) of 1991 went further to enlarge the Board by increasing the member to
eleven made up of a Governor, five Deputy Governors and five Directors, while
the Decrease (1991) assigns the responsibilities of policy and general
administration of he affairs and business of the Bank to the Board, the fire
major department see figure 1.1 below. The decree also stipulate that the
governor and the Deputy Governor should be appointed by the president in the
first instance for a term of five years and each should be eligible for re-appointment
for another not exceeding 5 years.
Some of he activities of the bank as
we shall see are decentralized while others are not, while the ministry and
policy formulations are done at the Bank lead office in Lagos (now Abuja), the
banking operations of the Bank is decentralized. To facilitate the efficient execution of the
bank functions over the Nigeria’s vast territory, some central banking activity
are decentralized and operate through four zones. Bauchi, Enugu, Ibadan and kano. In addition to the zonal centres, there is a
branch network whereby each state capital in the federation has a CBN Branch.
However, in the newly-created states
currency centers are set up by CBN, pending the time full-fledged branch as
could be established the respective heads of each zone, branch controller and
the currency officer respectively. As at the end of 1992, the CBN had in
operation four zonal officer, 15 branches and 6 currency centres. As at May 1993, the CBN had 19777 members of
the staff comparising 23, executives of whom 22 were departmental director 2581
senior and 6965 Junior staff
THE 1958 CENTRAL Bank ordinance
placed the bank CBN under the federal ministry of finance and Development so
that the Board of Directors reported to the Minister who in turn reported to the head of state. However, in 1988, as part of the military
re-organizations in the country aimed placed under the presidency. This arrangement is still stating under this
arrangement CBN is independent of the Federal Ministry of finance and report
directly to the president. This
nites has been reserve again in
1997. CBN Government now reported to the
federal ministry of finance
HISTORICAL BACKGROUND OF GOLDEN
GUINEA BREWERIES (AS A PRIVATE COMPANY)
Golden Guinea Breweries limited was
conceived by the Okpara Government of the former Eastern region in July
1961. The Brewery was computed in
September, 1963 and under the name of independence Breweries produced the first
bottle of Golden Guinea larger the same year.
At this stage, the brewery capacity was 50,000bl per annum-a small
brewery. After a few years of some Ups
and downs, the brewery looked ready to take off and a second product eagle
stout was introduced and proved popular in the stout market.
But unfortunaately, the civil war was shut down the growing hopes and
eventually, shut down the brewery itself.
After the war, there was shortage of
money and materials. Then the East
central Government could only minter as an initial Brewery reconstruction fund,
the sum of $50(100) But they were also to help with a subsequent interest-free
loan of N160,000, the first bank of Nigeria then offered an over draft
facility, the federal ministry government followed with a loan of $500,000. In
1971, with the name of company completely change to Golden Guinea Brewery
limited, Golden Guinea larger and Eagle stout reappeared on the market.
In August 1974, the first major
expression project took place and triple production from 50,000bl to
150,000bl. After consultation with the
authorities, the expansion was eventually sited away from Umuhia to help market
coverage. Golden Guinea was to be
produced in Onitsha. The brewery went up
on schedule then fate intervened again.
In March 1976, the state was divided into two Imo and Anambra states,
and the new brewery stood on the other side of the division. It become premier Brewery and golden Guinea’s
expansionist hope were dashed.
Golden Guinea Breweries did not give
up. The following year, initiatives were
again developed for a new expansion
project. Meanwhile in December, 1978,
the company voluntarily went public
becoming, with characteristic pace-setting the first indigenous brewery to be
quoted in the stock market indeed, no other public quoted company of any sort
has a Nigerian ownership approaching that of GGB & a full 90%. Furthermore, the breweries own staff were
encourages to become shareholders, thereby increasing participation and
responsibility in the overall activities of the company.
On 28th November, 1981,
the 600,00bi expansion project was officially commissioned by his excellency
the governor of Imo state, chief Samuel Onunaka Mbakwe with the latest brewing
technology, two separate bottling a brand new fully equipped and expertly
staffed quality control department substantial new malt storage silos,
capacious Largering talks, new fresh water boreholes and water treatment
plants: Golden Guinea can be called truly modern. Over
350,000 bottles of “liquid’ come off the bottling lines everyday.
Presently, three brands are produced,
namely Golden Guinea, Eagle stout, and Bergedof. Also a major investment in Agriculture has
been planned whereby the company is expected to be self sufficient in adjuncts,
making use of local raw materials like sorgum, maize and rice. One of such farm is at Aduchi, Lafia district
of Nassarawa state.
It account department is organized
under three section product and cost.
Cost/management accounting techniques in use include budget and
budgetary control system, standard and sited along costing. Golden Guinea Breweries is sited along Aba
road in Africa Ukwu Umuahia. It is
opposite the timber market and beside Aloma specialist Hospital
STATEMENT OF PROBLEM
Obviously, every private and public
enterprises in Nigeria has their accounting department. And there are increasing cases of financial
mismanagement in virtually all the public and private organization in
Nigeria. The problem of this study lies
on how the managers of these enterprises are able to recognize the role of
accounting in their enterprises so that these cases of improper accountability
will be minimized or if possible its total eradication in our society
PURPOSE OF STUDY
This study include to investigate the
role of accounting in the control of
public enterprises in Nigeria. The
purpose of this study include among other others.
determine the extent to which accounting is generally affects the economic
activities of the public section in Nigeria
examine how managers adequately and efficiently apply the role of accounting in
disseminate certain factors that affects the accounting departments of most
organizations which makes them not to function as expected
determine government policies which aid to promote accounting in all public
enterprises in Nigeria.
what extent do accounting records generally affect the economic activities of
Do managers adequately and efficiently apply
the role of accounting in their organization?
are the factors that have negative effect on accounting departments of most
organizations which make them not to function effectively as expected?
are those government policies which aid to promote accounting in Nigerian
SIGNIFICANCE OF THE STUDY
In this study, the researchers have
set out to examine the role of accounting in the public sectors in this
country. Nigeria with the aid of
highlighting the inherent problem encountered in the account departments of
most organizations. It is expected that
this work will be of interest to the owners of business enterprises, the
government, students and the general public.
To shareholder, owners of
enterprises, interested persons and the governments, this study is expected to
enkindle their interest the more and they will
take note of various recommendations mentioned here and help steer the management
team towards forming a sundry organizations to present an accurate financial
information on their firm. This study
will also help to serve as literature to individual or corporate bodies who
want to carry on further research on the role of accounting in the public
sectors in Nigeria.
SCOPE AND LIMITATION OF THE STUDY
of the study shows extent of coverage done in the study. The research topic suggest a study on the
role of accounting in the public enterprises in Nigeria. The focus of the study is on central bank of
Nigeria (CBN). I take this to be a fair
representative of Nigerian public enterprises that is either avoidable or hand
to come by
There are factors as constraints that
are normally follows this research work, some of them are
which was a major problem was adequate not
managed by the researcher. There was not enough time for the researcher
to get the project topic, get it approved and within a short time we will be
talking about our exams assignment and quiz.
LACK OF MATERIALS: the unco-operative of most
people working in the library and
other offices where the researcher needed to get materials posed great problem
to the researcher. Some of the staff do not feel safe letting have
access to some materials while other will change you more than double the cost
of Photostat before one can get what he wants.
3. FINANCE: Before now our project use to be a joint
project of a group of four-ten people but now it has to be on individual
student. So finance hinder the projects
in one way or the other. Either by transportation to where to get the materials
or where to obtain the necessary information.
DEFINITIONS OF TERMS
MANAGEMENT: Its function centre on decision for
planning and guiding the operation that is going on in the enterprises.
ACCOUNTING: accounting is the act of recording,
classifying and summarizing in a significant manner and in terms of money,
events and transactions which are in part at least financial character and
interpreting the result thereof.
FINANCIAL STATEMENT: These are accounting reports issued
by a business to described its financial
affairs and resuslts of the operations.
The financial statements are the end product of the general financial