ENHANCING FINANCIAL ACCOUNTABILITY IN THE PRIVATE SECTORS
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1.1 BACKGROUND OF STUDY
The subject, financial accountability is vital to any organization, be it profit oriented or non profit oriented. Lack of financial accountability result to embezzlement, fraud and misplacement of funds. The regular nature of the Nigeria economy has made any topic in accountability, financial or other wise, worth discussing. Nigeria has had her fair share of financial impropriety both in the public and private sectors, this is not unconnected with her political set up, the history of the evolution of her financial institution and of course the level of the country development.
Its due to the problem mentioned above which is associated with lack of financial accountability in any organization that has motivated the researcher to choose the topic enhancing financial accountability in the private sector of Nigeria economy through a system of control. Internal control system comprises the plan of organization and all co ordinate method and measure adopted with in business to safeguard its asset, check accuracy and reliability of its accounting data, promotes operational efficiency and enlarge adherence to prescribed managerial policies.
The research will focus on finding if the reference company has installed this control system and if so, how effective it is as to enhance early detection of mistake deliberate misappropriation and detection of severally check collusion, fraud or embezzlement of funds through proper authorization, reliability of financial record, safeguarding of assets and hence, maintenance of financial accountability. However, the ability of any business organization to enhance its financial accountability depends mostly on the type and effectiveness of its internal control system should be designed in such a way that it is effective as to benefit primarily the organization.
1.2 STATEMENT OF STUDY
Every policy formulated in boardrooms would have been a success if any were being carried out there too. But adherence to planned policies by employee is the problem of many a management companies. Management is the act of getting things done through other. The owners of every lousiness expect a reasonable return on their investment, irrespective of who executes the policies the problem of policy execution is further compound by the evolution of larger organization personal supervision of employee by individual manager seems an attempted at impossibility with larger span of control.
Therefore, the need for an internal control system is such an indispensable tool in the hands of management if it wishes to obtain adequate and useful information, protect company asset and control successive operation which land to accountability but despite the established necessity for installing and internal control system, if has been discovered that most business do not maintain any internal control system because they assume that it is expensive to operate many managers do not see the need for installing an internal control system to prevent big losses at every little additional cost. That many control procedure whose effectiveness depend on segregation of duties are being circumvented by the collusion of the employee is yet another problem. The degree of compliance with the control procedure are often left to deteriorate due to negligence of duty carelessness, mistake and even personal factors.
These factors are problem to the firms and eventually undermine the effectiveness and efficiency of internal control system if not taken care of. These problem question abound:
How adequately are subordinate adhering to the internal control measure?
What measure should management adopt to test observance of internal control procedure?
Should the internal auditing be an adequate means of checking circumvention of internal control measure?
Should management rely on internal auditing to appraise the efficiency and adherence to internal control?
Should the effective of internal control be relied on for adequate financial accountability?
These question prompt the need for a research study of the kind embarked upon here, and they are further addressed in subservient chapters of the project.
1.3 OBJECTIVE OF THE STUDY
A research into the internal control system of any organization is a research into its efficiency, profitability apparatus, viability prospect and of course accountability of the entire organization. It is the purpose of this study therefore to have a close look at the sort of internal existing in Godm steel industry (NIG) limited if there is any, then to know how effective this has assisted in attaining financial accountability. The important area to be looked into is as follow:
1. To ascertain whether there is adequate division or segregation of duties of various level of management in the organization.
2. To ascertain or know the step taken when efficiency is detected in the internal control system and know the effect on accountability.
3. To know whether there is a system of adequate authorization and recording to provide reasonable accounting control over assets liabilities, revenue and expenses
4. To undertake a critical appraisal at the system generally and to suggest solution where the system is seen ineffective and
5. To suggest a way of enhancing early detection of mistakes, deliberate misappropriations checks collection, fraud or embezzlement of funds.
1.4 SIGNIFICANCE OF STUDY
Financial accountability through different effective control has been much discussed in the recent day in Nigeria every programme and policy of any organization has accountability as one of the things that is to be achieved due to lack of internal control system most people that were entrusted with public funds on many occasion embezzled them without being held accountable for the sum.
Many establishment loose fabulous amount due to fraudulent acts of some of their employee these have led to the folding up of some private and public enterprises. To save this ugly situation investigation and correction are to be made as regards those things that cause ineffective internal control is lack of accountability increased losses and eventually reduction in the firms level of profitability. Controls are there for devised and in this research, the importance of effective internal control system is emphases to enhance financial accountability in the private section of the Nigerian economy using Godm steel industry (nig).
It is believed by the researcher that effective internal control system will enhance financial accountability .this is because effective internal control system which envious proper authorization that help management in planning segregation of duties which lead to early detection of mistakes and deliberate misrepresentation, adherence in the laid down policies at the company which lead to effectiveness, regular check and suspend which make for proper accountability and adequate corrective measure will go a long way toward renting some notorious activities. Such nefarious activities as fraud, misappropriation, embezzlement and other social ill being for retracted by some of the workers in the private and even in the public sector of our economy.
Moreover, companies with affective internal control system will benefit from it as that will make for financial accountability. Effective internal control system most often is believe to enable the companies with it, to achieve their objective and it will be for the overall good of any company.
1.5 SCOPE AND LIMITATION OF THE STUDY
Internal control is made up of administrative internal control and (financial) control. The former refers tot eh decision making process leading to management hand hesitation of transaction which is aimed at achieving the company objective it is also the basis of establishing accounting or financial control this is because the administrative control sees to the employment of the right people an make some that they do their normal work assigned to them. The later (financial ) work assigned to them. The later financial internal control) so concerned with the safeguarding of assets and there reliability of financial records to ensure that transaction are executed with management specification. the scope: the are the survey covered include practically all company activities especially those that can be reduced to financial terms the scope of the research is the accountability as the topic suggest. These area will include purchase of raw material, hiring and firing or person. Production and sales payment, and collection of debts etc. Thought internal control is a brand concept the control measure will be the only one to be computed for analytical purpose. Respondent to the study will be spread overall the department and even beyond the company.
However, a certain sampling procedure, as will seen later, is adopted to achieve a certain level of reliability of the date God this is to say that the research will be mostly concerned with those who can provided financial instruction or information. The financial records will be studied. to know the effectiveness of internal control system in Godm steel industry (nig) limited limitation: conducting researchers in third world countries e.g. Nigeria, could be any thing but easy. The problem associated with research generally as always compounded by the complete lack of data or its inadequacy. This however, has been attributed to the non availability of a computer system in these countries. Other limitations are as follow:
– As the collection of vital information which are needed to improve the quality of research the person concerned with realizing the information was later got but after much time waste and persuasion. As the time factor is another limitation. The time wasting attitude inherent in most establishment constituted a problem. The researcher on every occasion had filled some forms and went before seeing any of the top management for any form of formation.
– The prevalent property situation in the country has prevented the researcher from making frequent visits to the company as many times as are necessary
– Respondent show uninterested attitude when they discovered their is no financial renewed which might accrue to them in the whole exercise some keep the questionnaire for so long while other never return them