THE ROLE
OF ACCOUNTING IN NATIONAL DEVELOPMENT A FOCUS
ON A DEVELOPING ECONOMY SUCH AS NIGERIA
CHAPTER ONE
1.1 Background of
the study.
The basic
economic problem that confronts an under developed or a developing country and especially the new independent
ones is how to attain within a relatively short period, a notable increase in
the rate of economic growth which is envisaged will bring it to the level of
perpetual real income comparable to those of more admired economics of the
world. In order to attain this oval, the country would have to ;
1.provide those
basic government services especially in education, public health and transport.
These services will serve as fertile soil to advancing the nation’s economy.
2. Stimulate a
higher rate of capital formation in
production facilities either in government or private sectors. The first
accomplishment requires transportation on needed factors or resources to the
governmental ;sector of the economy for the production of those services or
facilities required by the entire populace.. The second accomplishment required
transfer of resources to capital formation either strictly in the private
sector or through the governmental sector.
These resources may come from
a. outside the
control
b. present use for
consumption
c. present use in
production of capital of or types regarded as not contributing to economit
growth.
d. Idle or
partially idle resources primarily manpower. The above four sources off varying
opportunity growth and it actually does it only by transfer existing resources
to the appropriate quarter and profitable application of these to production
attains within that relatively short period a level of standard of living
comparable to those of other more
advanced countries of the world.
Accounting come
in as the tool that measures the profitability/viability a project with an
economic system.
Glanlier (1976)
defines accounting as the systematic collection, summarization, and analysis
and reporting of data in a form suitable and under stable to prospective users.
Generally, it
involves some other related discipline as budgetary control taxation, cost and
management accounting, financial management, auditing and quantitative
techniques.
Since development project entails
projection into the future, it is essential that public officers ;and employees
in the private sector appreciat the need a transaction and necessary statistics
as to enable the proper ;evaluation of past. Records with what obtains
presently in order to reasonably project into the future. Some of the practical ways in which
accounting can be and is known to have been used not only for a decision making
but also importantly to achieve desired results include.
1. Ecnomic planning
2. Capitalformation
3. Accountability
4. Taxation
5. Accounting for
social purposes.
Accounting records provide information that
may be used within the business and which may be relied on by businessmen while
making investment decision. The problem
with most potential investors in the development nations is they are mostly
illiterates and therefore required the services of any accountant and financial
analyst to help access possible areas of investment. Budget implementation is
another vital area where accounting knowledge is essential.
Most budgets are stated in accounting formula
and their implementation will require that knowledge that will enable officials
read the budget as it affects their
sector and even reflect on how other sectoral outlay may affect them. It is due to the perennial lags in our civil
service that the researcher decided to carry out an investigation into what are
likely lags in the wheel program or growth of the civil service and thereby the
nation. The private sector employees are
also caught in this lapses but however,
there seems to be more commitment on their part due to obvious reasons of
ownership and direct supervision by entrepreneurs. The proper functioning of financial system of
a company determines to a good extent the viability of her economic
structure. That is why the researcher
decided to show sets of accounts viz (profit and loss acco9unt and value added statement) from unpetrol Nigeria
PLC Annual Report and Account 1999. This
financial statements help users of such statements ascertain the viability of
the company and it is prepared by chartered Accountant.
1.2
Purpose of the
study
The purpose of this project is aimed at
identifying.
-The role of an accountant in planning
–
The role of an accountant in government accounting.
–
– The role of an accountant in controlling public
expenditure.
–
– The duties of an accountant in management and
control of public concerns.
1.3
Significance of
the study
The study which is an attempt to
diagnose the accounting system in a
developing economy is of immense importance to;
Future Researchers/The Researcher;]
This will serve as a secondary data to future researchers who intends to
carry on research on accounting role in
Nation Development. It will also help
students in the school of financial studies in having an in-depth knowledge of
control accounting.
It
will enable the researcher know more about the role of an accountant in
government accounting and where there are lapsed or breakdown in management and
control of public concerns, appropriate suggestions are made to the management.
1.4 Statement of the
problem. The problem of this research as contained in the introduction is whether
the accountant has major role to play in national development.
1.5 Hypothesis
formulation . For the purpose of direction and
charity of issues raised in this study, the hypothesis formulated are;
a. Accountant has a major role to play in
national development
b. Accountant has
no major role to play in national development.
1.6 Scope and
Limitations of the study. This project will cover some vital aspect of an
accountant’s role in government accounting and control of public expenditure
analysis and interpretations of financial statements, budgetary control,
management and control of public concerns in developing economy. It will also show a company’s financial
statement prepared by an accountant. In
carrying out this research, some obvious limiting factors are encountered.
There are reviewed below.
-Time fact; The time available to carry out
this research and compling of its report is rather very short. Infoact, one has to attend lectures as well
as face the research work thereby, the attention required for this work had to
be impaired.
–
Attitude of the people; The uncooperative attitude
of the people interviewed was very demoralizing.
–
-Most of the people were unwilling to give out
necessary answers for effective completion of this work because of fear of victimization.
1.7 Definition of
terms. Accounting ; American accounting association committee define accounting
as ‘ The process of identifying, measuring and communicating economic
information to permit informed judgment and decision by users of the information.
PRIVATE COMPNAY; J. C. Odike in managerial
economics for Nigerian Polytechnics II(2200) is a limited liability company
owned by the minimum of 2 shareholders and previously a maximum of 50 persons
but now in Nigeria, a maximum of 100.
Iabilities of shareholders are limited to
just their shares in the company (paid up and unpaid) if the business goes
bankrupt.
BUDGET; A budget according to chartered
institute of accountants is ‘ a plan quantified in monetary term, prepared and
approved prior to a defined period of time, usually showing planned inform to
be generated and or expenditure to be incurred during that period and the
capital to be employed to attain a given objective’
INTERNAL CONTROL; According to Horngren
(1982) INTERNAL control is the set of accounting and administrative controls
and practices that helps ensure that approved and appropriate decisions are
made in an organization.
PUBLIC COMPANY J. C. ODIKE in managerial
economics for Nigerian polytechnics II (200) is a limited liability corporate
body with previous minimum of shareholders but now in Nigeria a minimum of 2
since the 1990 companies and Allied matters Decree (CAMD) there is no minimum
of shareholders.
BUDGETARY CONTROL; According to Haper (1974) budgetary control can defined as the
establishment of budget relating the responsibilities of executives to the
requirements of a policy, and continuous comparison of actual with budgeted.