ABSTRACT: The purpose of the is to see how the accounting system of government owned companies meets the statutory requirement that such books of accounts must be kept as will give a true and fair view of state of affairs of a business, and to explain its transaction. Secondly, it is to see how far the system aids improving the efficiency of the management of the company. The various books of account were examined and the manner of recording transaction right from their points of origination was studied.
Findings generally showed that the system was adequate for a company of its size for the purpose of maintaining proper books for managerial information and control is very under developed in the company.
The effect of this cannot be accurately quantified. Nevertheless, it cannot fail to be significant.
It is recommended that there should be an urgent investigations into the causes of the increase in the costs of sales and services. Effort should made to control the increase matched by appropriate increase in the revenue from sales and services.
The effective practice of this will involve instatement of Budgetary control system which will enable actual performance to be compared with the budgets periodically and deviations from the budgets analyzed as to causes and effects.
TABLE OF CONTENTS
CHAPTER ONE
1.1 Background of the study
2.1 Background of accounting in government owned companies
2.2 Meaning of accounting government owned companies
2.3 Subsidiary books & Nominal accounts
Bibliography
CHAPTER ONE
INTRODUCATION
Following reports of irregularities and malpractices in the government owned companies, then the state governor, chief, Jim Nwobodo appointed a panel of inquire to investigate the management finances and organization of the company. This was in September 1980.
The panel discovered in the course of its investigations that the management like store ledger payment vouchers, cash books and accounting ledgers. After a through investigations of the financial operation the panel found:-
Testimonies at the House of Representatives special committee investigating the missing money revealed a gross deficiency in the accuracy of the accounting system. The presidency then under the civilian administration set up a judicial commission of inquiry into the affairs of the NNPC.
This country will be saved a lot of waste in the midst of poverty if our government corporation and parastatals are more efficiently managed. It is in the light of this project is being carried out determine the accuracy as well as the adequacy of accounting system of one of the government owned companies in Enugu state with a view to ascertain how efficiently it has been contributing towards the improvement of the efficiency of the management of the company.
The purpose of this project is to study the accounting system of government owned companies to see is proper books of accounts and kept as required by the S.122 (1)(b)(c) and 2 of schedule, table of the companies and Allied matters Decree 1968, and to see how effectively the system helps the management of the company to improved its efficiency by supplying it with relevant information in proper form and timely enough to be useful in the fulfillment of its management function.
The study is focused on the improvement of accounting system in government owned companies. This work therefore, would be significant and beneficial to the following ways.
The research study is limited towards improved accounting system in government owned companies. However, the researcher hopes to cover all possible regarding government owned companies.
As more concern is being expressed over the failure rate of government owned companies, thus becomes necessary. This study was conducted on selected companies within the limit of problem or difficulties which government owned companies in this case it is necessary to determine the extent to which accounting records or control is recognized for the success of the government owned companies.
Policy by careful and scientific analysis of accounting records he can bring to light significant facts which will enable errors in management and policy to be rectified and reform & economics to be introduced. He must be competent to device and consolidate the accounting records of branches and subsidiaries, install and direct costing system and generally to advise and give effect to their policy and all matters affecting the business in its financial and accounting aspects.
In summary what they are saying is that it is the duty of accountant to design a system that will produce accounting information acquired and to extract the information, analysis it and translate it to the language which is easily comprehensible to those who are likely to us it. The information provided by the system must be those that will meet the specific information needs of the business and its management.
Yagore Goldschmidt says that the use of the information should dictate the type of data provided by the accounting system. It is not possible for one accounting system to serve all purposes. Rather, the accounting system has to be failure to the purpose at hand.
J. Batty insists that the system should collect and record accounting information in the manner most suitable for assisting management in its work.
Anthony and Reece (1975) described the best accounting system as that one which achieve the following objectives.
Warner (1972) suggest that the setting up of the accounting system can be divided into two main parts, firs, the development of technique which yield accurate information no what the company is actually doing and second the presentation of that in a form which is comprehensible to management. Accountant are encouraged to give meaning to a purely factual analysis which is the result of their recording methods, it is their responsibility to see that information reaches management in a form that provides the basis for decision. The raw data itself is insufficient. This is saying that an accounting system must be able to provide information that will aid management in performing its planning and controlling functions, as well as reporting the events that actually occurred in the business. It is not enough to provide one and live the other.
G.A Lee (1973) says that the ultimate concern of every truly artienlated accounting system is with money value created by exchanges of economic goods and services, or their equivalents in current money, between the entity and other entities and manifesting themselves in shorter and longer runs as cash flows into or out of the entity. Value personality distinct from persons comprising it the company may due or be send in its own name in an action at law, and neither the death nor bunkmate of any of its members nor any personal of the membership affects its independent existence. In advance countries like UK over 600,000 companies are in existence and they are a popular form of business ownership because with certain rare exceptions, the members are limited in their liability for the debts contracted by the company. This principle of limited liability company has attracted investors who are willing to become part owners of a business under such conditions, and has made possible the formation of companies with very large capitals to carry on large scale business. At the other extreme, many sale trading and partnership concerns have been converted into companies to take advantages of the limitations of the liability. A few companies have been incorporated by special act of parliament, as were in British Railways, or by Royal charter, like the Hudson Bad Company. Most were incorporated under the companies Acts. Since government owned companies are known as Unit Companies in other countries, especially in America where it originates, Kamerschen (1984) maintained that in the Hotel system, the activities of a hotel is confined to a single office, through they are allowed to have branches with strictly limited area. In words of R. Kent, under the unit Hotel system, however, the hotel operations are carried through a net work of branches. Under this system of hotel, the hotel ling office shall operate within a limited area almost with 20 branches, the size of the hotel shall be quite small compared to the branch hotel ling organization. This unit hotel ling system is entirely America in character towards the information “money trust”.
In Unit hotel ling system, many merits derivl from it, it include efficient management, less possibility of economic concentration, accountability, stewardship. Moreover there are some demerits namely, limited financial resources, effected by economic fluctuations.
In summary, the accounting system of any company ought to keep proper books of account are kept as required by section 122(1)(b)(c) &(2) of schedule 1 table A of the companies Decree 19,68, amended 1990.
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