CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

In most developing countries including Nigerian 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 service of an economic or social character on behalf of the

government.

Since the colonial era especially after independence 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 risen to flood

level since independence the establishment of public enterprise in

Nigeria are many 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 enterprise 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 Nigeria economy through

public enterprises the 1980’s onwards had witnessed a reversed which

has sometimes been dramatic in public opinion therefore public policy.

This has been brought by the persistent losses which state

enterprises that trivet 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 has been made according to varieties of criteria

by different authorities. The public service review commission

(1975:101) classified public sector int.

Public utilities

Regulatory of service body

Financial institutions

Commercial and 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 or a group of individual. These firms

are expected to be registered in the local government within which

they operate.

The rational for the establishment of private enterprises are

numerous just like establishment of public enterprises. They

include amongst others; provision of employment opportunities

generating income for the owner of the enterprises government

interest in profit growth of the enterprises which performance of

the public sector through competition. Moreover the general

public is concerned with contribution which makes towards social

enlistment which is exhibit 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 recent 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 interpretation. The

earliest methods 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 organizations grows in size

and complexity management and outsiders groups which include

owners of the firm (stock holder) creditor 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 interest 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 sectors 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 can only be well managed if accounting

department of the organization give accurate financial information to

know how much the enterprises having. It 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 pounced in the public enterprises. In

recent times there are cases of mis appropriation of funds in the

public enterprises and improper accountability. These factors have led

to a lot of public enterprises go into Obiwon if the government has

reorganization the role of accounting all these feeble should not have

risen. No enterprises can more forward without having a well organized

financial department 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 force

out of their job. This will result to economic and social activities in the

society.

1.2 STATEMENT OF PROBLEM

Obviously every privates and public entries in Nigeria has their

accounting department and there are increase cases of financial

mismanagement in virtually all the public and private organization in

Nigeria. The problem of this study lies on how the manages of these

enterprises are able to recognizes 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.

1.3 PURPOSE OF STUDY

This study aims at investigating the role of accounting in the control of

public enterprises in Nigeria. The purpose of this study include among

others:

 To determine the extent to which accounting records has

controlled the effect of expenditures in public enterprises.

 To find out factor that affects the accounting department

preventing them from carryout their function as expected.

 To determine government policies which promote accountability in

public enterprises in Nigeria.

1.4 SIGNIFICANCE OF THE STUDY

In this study the researchers have set out to examine the role of

accounting in the public sector in this country. Nigeria with the aid of

highlighting the inherent problem encountered in the account

department 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 shareholders owners of enterprise interested persons and

the government this study is expected to en kindle their interest the

more and they will take note of various recommendations mentioned

here and help steer the management team towards forming a study

organizations to present an accurate financial information of their firm.

This study will also help to serve as literature to individual or corporate

bodies into want to carry on further research on the role of accounting

in the public sector in Nigeria.

1.5 RESEARCH QUESTIONS

1. What extent does accounting records has control in affecting the

expenditure of public enterprise?

2. What are the factors that affect accounting department of most

organization which makes them not to function effectively as

expected?

3. What are these governments polices which promote accountability in

Nigeria public enterprises?

1.6 RESEARCH HYPOTHESES

This research hypothesis is to know the findings or result of this

research;

1. H

0

- Good accounting records budgeting has no control effect on

expenditure of public enterprises.

H

1

- Good accounting records budgeting has control effect on

expenditure of public enterprises.

2. H

0

- Corruption do not affects the quality of service rendered by

accountants in public enterprises.

H

1

- Corruption affects the quality of service rendered by accountants in

public enterprises.

3. H

0

- Government accounting policies do not aid in promoting

accountability in Nigeria public Enterprise

H

1

- Government accounting policies aid in promoting accountability in

Nigeria Public Enterprises.

1.6 SCOPE AND LIMITATION OF THE STUDY

Scope of the study shows extent of coverage done in the study.

The research topic suggests 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) Enugu State. I take this to be a fair representative of

Nigerian Public Enterprise that is either avoidable or hard to come by.

There are factors as constraints that normally follow this research

work some of them are;

1. TIME: This which was a major problem was adequately not managed

by the researcher. There is not enough time for the research to get the

project time get it approved and within a short time we will be talking

about our exams assignment and quiz.

2. LACK OF MATERALS: The un co-operative of most people working in

the library other offices where the research needed to get materials

posed great problem to the research. 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. Esther by

transportation to where to get the materials or where to obtain the

necessary information.

1.8 DEFINITION OF TERMS

MANAGEMENT: Its function it is centered on the running and

controlling of the organization the way the directors perform their

function to attain a successful operation.

ACCOUNTING: In this context an accountants records classify and

summaries all public expenditure in the Central Bank of Nigeria in a

significant manner and in terms of monetary events and transaction

which are in part at least financial character and to interpreter the

result thereof.

FINANCIAL STATEMENT: An accountant makes an accounting

report issued by a business to describe its financial affairs and results

of the operations.

REFERENCES

Ademolekun K.O. (1983) The Nigeria financial system London:

Macmillian Publisher.

Image E.U.(1985) Principals of Accounting Enugu: Fourth Dimension

Publisher.

Olisa E.C. (1988) Public Enterprises and Privatization in Nigeria

Nigeria: Longman publisher.

Ostisumi K.O.(1984) Financial Management in Nigeria Public sector

London: Pitman Publisher.

Osumbor O.A.(1991) An overview of Private Enterprises in Nigeria

Business time.

Willy N.Ugwuyi (1997) The Nigeria Financial System (A systematic

approach).