Full Project-A COMPARATIVE ANALYSIS OF THE APPLICATION OF ACCOUNTING PRINCIPLES IN PRIVATE AND PUBLIC SECTORS - AZ Research Consult (MBA MSc Dissertation/thesis Project Writer) Nigeria

WhatsApp or SMS: 07087083227
Click here to Get The Complete Research Project Chapter 1-5

Full Project-A COMPARATIVE ANALYSIS OF THE APPLICATION OF ACCOUNTING PRINCIPLES IN PRIVATE AND PUBLIC SECTORS

Click here to Get this Complete Project Chapter 1-5

CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Almost every economy today, practices what is called mixed economic system which is composed of two sectors: the public and private sectors. According to (Okeke, 1996:11), the public sector refers to the governmental sector of the economy while the private refers to the sector that is made up of private business enterprises and households. The public sector can be seen also as a sector that consists of the federal, state and local government in which the state owns all the resources and uses these resources for appropriate economic activities so as to enhance the welfare of the citizens while the private sector can be seen as that part of the economy that is in private hands which could be private individuals or corporate individuals. It is very important to note that, in the public sector all factors of production, which is land, labor, capital and entrepreneurship, are fully owned by the government. Nigeria is a mixed economy, which means that private and public sectors exist side by side. These two broad sectors have dierences among them which include that: In the public sector, participation in economy is totally for the provision of service while the private is goal oriented in nature. The public sectors’ sources of income includes taxes, rates, royalties, e.t.cwhereas in the private sector, the source of income is through contributions of members, borrowing, as well as the sale of goods and services. Accounting basis for the public sector is cash commitment bases where as accrual base is the accounting basis in the private sector. Public sector is usually multi-entity while the private sector is single entity. Accountability in the public sector is to the public but in the private sector, it is done to the shareholders. Pre and post payment audit are experienced in the public sector while only the post payment audit are done in the private sector.
Depreciation is not allowed in the public sector except in some parastatals while depreciation in the private sector is based on useful life of the assets. The legal basis in the public sector is the constitution but the company Acts (like CAMA 90) is the legal basis for private sectors. In these sectors, several forms of business organizations exist. The Companies Allied Matters Acts of 1968 and the recent companies and Allied Matters Acts of 1990 provide the guidelines for the establishment of these organizations, and they also provide the procedures that have to be followed before the organization can be incorporated and even aer incorporation. (Ejiofor, 1991:7) describes two basic forms of business organizations in Nigeria; they are the incorporated and unincorporated. The unincorporated does not require and a legal procedure to be fulfilled before the organization is set up, whereas the incorporated organizations/companies otherwise known as registered companies require legal procedure before it can be incorporated. There are methods of classifying companies incorporated under the companies Act. One of such refers to status, which is whether a company is privately or publicly owned while the other relates to the possible liabilities of the members that is, if it is limited by shares, limited by guarantees or unlimited. Before primarily on theAccounting Standard Board, under the sponsorship of the Federal Government and various accounting organizations. These principles are influenced by business practices, customs, ideas and beliefs of those who prepare and make of financial statements. In recent years, the federal government of Nigeria with the aim of harmonizing accounting practices promulgated the companies and Allied Matters Acts 1990. This Act was expected to help organization within the country. A number of company Acts and indigenization Decree have previously been published but the companies and Allied Matters Act encompasses all other previously existing Acts and Decrees. Reporting procedure of business organization is expected to conform to the statement of accounting practice published by the Nigeria Accounting Standard Board.
Nwoke, (1993:14) states that the Companies and Allied Matters Act section 335 subsections 4 prescribes that ‘financial statements of any company shall comply with the accounting standard laid down in the statement of accounting standard from time to time by the board’. The Nigerian Accounting Standard Board is the only accounting standard making body in Nigeria. With the enactment of the Companies and Allied Matters Act (No 1) of 1990, the board is now a parastatal under the Federal Minister of commerce. The board had various members from dierent bodies and had published about twenty-one accounting standards, which is SASI-SAS 21. According to Umeaka, (2003:72), the Nigerian Accounting Standard Board was established in 1982 and has the following representatives as members:
– Institute of Chartered Accountants of Nigeria
– Association of National Accountants of Nigeria
– Nigerian Accounting Teachers Association
– Chartered Institute of Bankers
– Federal Ministry of Commerce and Tourism
– Federal Board of Inland Revenue
– Central Bank of Nigeria
– Nigerian Association of Chamber of Commerce, Industry, Mine and Agriculture
– Nigerian Deposit Insurance Corporation.
1.2 HISTORY OF THE CASE STUDY
The various case studies used for the purpose of this research work are: – Power Holding Company of Nigeria The Power Holding Company of Nigeria (abbreviated PHC or PHCN), formally the National Electric Power Authority (Abbreviated NEPA) is an organization governing the use of electricity in Nigeria. The company runs a football team NEPA Lagos. In the early 1960s, the Niger Dam Authorities (NDA) and Electricity Corporation amalgamated to form the Electricity Corporation of Nigeria (ECN). Then immediately aer the Nigerian Civil War, the management of ECN changed its nomenclature of NEPA. What is currently the Power Holding Company of Nigeria was formally known as National Electric Power Authority. For several years despite consistent perceived cash investment by the Federal Government, power outages have been the standard for the Nigerian populace and are now seen as normal by the citizens of the country since its privatization The government has divided the current PHCN distribution sector into separate companies or entities that will be called Local Electric Distribution Companies or Local Distribution Companies (LCD) among the regions. The sample consists of procedure enrolled in payment of bills by way of banks. The Power Holding Company of Nigeria, PHCN has made settling customers’ monthly electricity bills easier, hence the introduction of the bank revenue collection system to complement the operations of the cash oices in PHCN premises. Customers are no longer expected to travel for outside their immediate neighbourhood to settle PHCN bills. Just as stated above, Nigeria Electrical Power Authority since its privatization now answers Power Holding Company of Nigeria. – Intercontinental Bank Plc Intercontinental Bank Plc is one of Africa’s strongest financial institutions with a robust brand equity that resonates with a reputation for excellent customer service, superior financial performance and a track record of high returns on investment since inception 20 years ago. From a capital share of N12 million in 1989, intercontinental bank’s shareholders’ fund is now over N200 billion. Total assets plus contingents is N1.7 trillion as at February 2008, while total Deposit Liabilities stood at N1.08 trillion. Intercontinental Bank is driven by an inexorable quest for leadership in global financial passion for excellence in customer service delivery. They are professional innovative and resilient. This bank is in business to help customers, clients, employees and shareholders build and preserve wealth. Their vision to be on all continents is driven by a bold global expansion plan that kicked o with the first offshore subsidiary: Intercontinental Bank Ghana Limited, which commenced operations in 2006 with five branches and head office in Accra. There is also the London subsidiary: Intercontinental Bank UK which is up and running. More subsidiaries will open soon. Intercontinental Bank is in technical partnership with BNP paribus, one of the ten largest banks in the world in the management of Nigeria’s foreign reserves. Mission and Vision Statement: Mission To help the stakeholders build and preserve wealth Values
– Trust in God
– Integrity
– Helpfulness
– Excellence
– Resilience
– Fairness
– Central Bank of Nigeria The period 1892-1952, there was an enquiry by the then colonial administration to investigate banking practices in Nigeria. The G.D Paton Report which emanated from the enquiry was the basis for the first banking ordinance of 1952. The ordinance was designed to ensure orderly commercial banking and to prevent the establishment of unviable banks. Dra legislation for the establishment of Central Bank of Nigeria was presented to the House of Representative in March, 1958. The Act was fully implemented on 1 July, 1959 when the Central Bank of Nigeria came into full operations. Since its inception, the Central Bank of Nigeria has taken responsibility in the supervision of other banks and nurturing the money and capital markets. In addition, the CBN introduced treasury bills in 1960, treasury certificate in 1968.
1.3 STATEMENT OF THE PROBLEM
There are a number of problems which have hindered the performance of the public and private sectors and by so doing, affect the sectors in achieving their respective objectives. These following problems necessitated this research work. – Poor performance of the sector due to its dependent on the public sector for some specific services. – Inadequate professional staff in the field of accounting and finance in both sectors. – Inability of these sectors that is, private and public sectors to improve on their internal revenue generation. – Inadequate review of their operational policies and programmes
. – Lost of sight in long and short-run economic development perfects.
– Ignorance of the strategies to apply in improving their revenue generation.
– The lamentable state of facilities in the public and private sectors.
– The problem of misappropriation and embezzlement of fund among staff as a result of non accountability of workers.
– Neglect on the application of accounting principles while preparing financial statements.
1.4 OBJECTIVE OF THE STUDY
– To establish those areas in which the private sectors depend on the public sector.
– To determine the extent to which lack of accounting staff affects the economic activities of business organizations in both sectors
– To determine those governmental policies which help in promoting or constraining the application of accounting principles
– To examine whether or not there is an improvement in the inland revenue generation of organization in both private and public sectors due to the application of accounting principles
– To educate the private and public sectors on the strategies to apply to improve in their revenue generation
– To investigate into the causes of bad conditions of the facilities in the public and private sectors.
1.5 RESEARCH QUESTION
For a comparative study of this research work, the following questions were asked:
– What factors are to be considered before adopting a principle or standard?
– How can accounting principles help the organization in decision making?
– To what extent can accounting principles help the organization in financial analysis?
– What is the relationship between the application of accounting principles in the public and private sectors?
– What are the reasons for poor performance in the application of these principles in both sectors?
1.6 RESEARCH HYPOTHESES
The null and alternative hypotheses with the symbols, H0 and H1 for the null and alternative hypotheses were used in this research hypothesis. The research hypotheses include the following:
A. (i) H0: There is no significant uniformity in the accounting principles generally used in the public and private sectors.
(ii) H1: There is a significant uniformity in the accounting principles generally used in the public and private sectors.
B. (i) H0: Strict adherence on the application of accounting principles has not helped the organization in decision making.
(ii) H1: strict adherence on the application of accounting principle has helped the organization in decision making.
C. (i) H0: Application of accounting principles has not helped the public and private sectors in long and short run economic development projects.
(ii)H1: Application of accounting principle has helped the public and private sectors in long and short run economic development projects.
1.7 SCOPE OF THE STUDY
This research study covers the application of accounting principles in the public and private sectors of the economy with reference to some selected organization in the both sectors. These organizations will help to provide the research findings with some necessary and vital information at which the findings and analysis will be considered. For the purpose of brevity, the companies and institutions used for this study are:
– Power Holding Company of Nigeria.
– Intercontinental Bank Plc representing the private sectors while:
– The Central Bank of Nigeria represents the public sector. During the course of this research finding, the various departments like the budget, planning, accounting, finance, etc will be consulted in order to get the required information. Some of their senior staff will also be interviewed personally.
1.8 LIMITATIONS OF THE STUDY In the course of carrying out this study, the following consultants could be encountered:
a) Time Constraint: Time here can be likened to the non availability of permission/ exeat to leave school for research and also there are times which your exeat expires.
b) Academic Programme: The project research and academic programmes in coincidence makes the research diicult.
c) LACK OF RESPONSE: Another major limitation to this research is non-chalant attitudes of some persons to the response of this questionnaire for some personal reasons e.g fear of what such answers might be used for
1.9 SIGNIFICANCE OF THE STUDY
As this study points towards understanding the application of accounting principles in the public and private sectors of the economy, the significance of this project include:
– To my selected case studies, this research work will uncover the demerits that accompanies the non-compliance of these accounting principles and its applications
– It will enhance the effectiveness in the work of other research who might be interested in carrying out similar/ related research
– To the state, with knowledge acquired in the cause of making this research make some corrections if called upon especially in government owned organizations.
– The state can also make reference to my work as a guide in the preparation of the annual budget, revenue and expenditure statements
– And to my school, they can also make reference to it in any area they find complicating both the students
– It will show the need for proper accountability in the public and private sectors.
– The various principles in accounting profession or practices will be comprehensively revealed in order to help preparers and users of financial statements.
1.10 DEFINITION OF TERMS
The terminologies of public and private sector accounting differ from used in everyday practice. In order to ensure easy understanding of this study, the following terms are clearly defined:
– Accounting Assumption: These are broad concept that underlines generally accepted accounting principles.
– Accounting Basis: This refers to the foundation upon which revenues and expenditures are accounted for. It include: accrual, cash and modified basis.
– Accounting Conventions: These are the various methods, tradition, procedures which guide accountants when they are preparing financial statements.
– Accounting Period: This refers to the fiscal year normally twelve months in which economic activities take place. It is the period at which financial statements are prepared.
– Accounting Principle: These are fundamental beliefs or general truth which does not change once it is established. It can be seen as the rule of action or conduct and as such, can be aptly applied to rules in accounting.
– Accounting Standards: These are principles by which financial activities of organization are guided. – Private Sector: This means those industries and organizations owned and managed by the private individuals and it includes the sole proprietorship, partnership, joint venture as well as private companies.
– Public Sector: This refers to those organizations established through legislation, decree or edicts owned and managed by the government. It can also be defined as the sector where all factors of production belong to the government.

Get the Complete Project

This is a premium project material and the complete research project plus questionnaires and references can be gotten at an affordable rate of N3,000 for Nigerian clients and $8 for International clients.

Click here to Get this Complete Project Chapter 1-5

You can also check other Research Project here:

1, Accounting Research Project