The Role Accounting Records On The Performance Of Small Scale Industries In Nigeria

The Role Accounting Records On The Performance Of Small Scale Industries In Nigeria

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PROJECT TOPIC AND MATERIAL ON THE ROLE ACCOUNTING RECORDS ON THE PERFORMANCE OF SMALL SCALE INDUSTRIES IN NIGERIA

The Project File Details

  • Name: The Role Accounting Records On The Performance Of Small Scale Industries In Nigeria
  • Type: PDF and MS Word (DOC)
  • Size: [70 KB]
  • Length: [56] Pages

 

 

 

CHAPTER ONE

INTRODUCTION

1.1    Background of the study

The Nigeria business system, particularly the small scale industries has undergone a number of changes in recent years. Most small scale industrialists in Nigeria engage in purchase of raw material into finished goods that would be sold to the public either in small quantity or in bulk. In return they must ensure that they pay for manufactured goods sold for any services they render if their business is of that nature [Ajonbadi, 2002]. Moreover, the final result of farming, manufacturing, trading or rendering of commercial or professional services [transporting, banking, insurance, education, consultancy etc.] must be ascertainable over a period of time which must be profitable if enterprises are to continuous in operations.

All the transactions and contracts arising from these activities therefore, must be recorded in such a manner that their profitability can be ascertained. The records are kept in term of money which acts as a common measure for estimating the value of purchases, sales, and contract for services, taxes and rates. This act of recording the financial transaction is referred to as book-keeping. It is also known as an art of accurate record keeping of data relating to financial transaction in any organization. The actual systematic recording of daily transaction in the appropriate books is called book-keeping [Wikipedia, 2012].

However, the owner of a small business has no time for elaborate system of book-keeping. Yet it is essential for him to keep a clear and accurate account. Surprisingly, many small scale business success and it also solve the problems of_ making and policy implementation.

1.2     Statement of the Problem.

Small scale industries have limitation and problems, although, all business organizations irrespective of their objectives have philosophy of growth survival and addictiveness [LawaI, 2003]. The inability of a business to maintain this philosophy can be regarded as business failure. Hence, the following paragraphs elaborate on the problems of the study:

i.       Lacks of managerial technical know – how: Here, majority of small scale industries lack necessary managerial know-how for effective and efficient running of business.

ii.      Poor financial control poses another problem. Here, the inability to maintain proper accounting records and have effect on the survival of a business. In other words, many small scale business owners failed because of their inability to understand the accounting system completely. Without complete records of every part of the business, an owner cannot get a clear picture of exactly how the business is progressing.

iii.    More specifically, inadequate records or failure to keep records of business transactions constitute another major problem causing small business going into liquidation in Nigeria. For instance an owner of business who invests in his business and trade with it, realizing N10, 300 will think he made profit of N10, 300 without taking into consideration an expense incurred during the period. Ascertain of actual profit cannot be obtained without keeping proper records of all transaction during the period. Also, another notable problem arises in the interpretation of financial data in evaluating the performance which may be due to non-existence of accounting records.

iv.    Inability to attract qualified manpower is major problem facing small scale industries in Lagos state. Most small scale cannot afford to employ competent and skilled manpower due to the financial status and reputation. Hence, once competent and skilled manpower cannot be employed, the financial and proper accountability become problems. Even where small scale industries are fortunate to employ qualified manpower, the general working conditions are very poor.

1.3   Purpose of the Study

The primary purpose of this study is to examine the role of accounting record on the performance of small scale industries in Nigeria. Therefore, the following paragraphs consider the main purpose of the study and it is to:

i.       Provide the means of improving managerial skills for effective and efficient running of small scale business.

ii.      Provide means of maintaining proper accounting records and control that does not give room for fraudulent practices.

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iii.    Examine factors responsible for inadequate records or failure to keep records of small scale business transactions that leads to liquidation.

iv.    Determine proper skills involved in interpretation of financial data and evaluation of performance.

  1. Determine means with which employee’s satisfaction can be achieve through quality working conditions.

1.4             Research Questions

1.    What are the means of improving managerial skill for       effective and efficient running of small scale business?

2.    Would proper accounting records and control give room for fraudulent practices in small scale business?

3.  What factor is responsible for inadequate records of small scale business transactions?

4.    What skills should be used in the interpretation of financial data and evaluation of performance?

5.    Can employees’ satisfaction be achieved through quality working conditions?

1.5             Research Hypotheses.

  1. Ho: There is no significant relationship between    managerial skills and effective and efficient running of small scale business.

Hi: There is a significant relationship between managerial skills and effective and efficient running of small scale business.

  1. Ho: There is no significant relationship between proper accounting records and fraudulent practices of small scale industries.

Hi: There is a significant relationship between proper accounting records and fraudulent practices of small scale industries.

  1. iii.      Ho: There is no significant relationship between interpretation of financial data and evaluation of performance.

Hi: There is a significant relationship between interpretation of financial data and evaluation of performance.

iv.     Ho: There is no significance relationship between   inadequate records and liquidation of small scale industries.

Hi: There is a significance relationship between inadequate records and liquidation of small scale industries.

  1. Ho: There is no significant relationship between employees’ satisfaction and quality working conditions.

Hi: There is a significant relationship between employees’ satisfaction and quality working conditions.

1.6   Significance of the Study

The research work was taken up to show the significance of accounting record to aggregate performance of small scale industries in Nigeria. Apparently, all organizations, whether small, medium or large industry needs to pay attention to the role and importance of accounting record. Consequently, it is clear that the contribution and importance of this study cannot be over emphasized.

It is expected that the study will educate readers on the importance and role of accounting records on the importance in performance of small scale industries in particular and the economy, in general. The study will also offer advice to government, policy makers in formulating policies that affect small scale businesses, individuals, industrialists, academia and professionals amongst others. The study will also offer professional advice as regards subject matter.

The result from the study should contribute to performance of small business and Nigerian economy.

1.7    Scope and Limitation of the study

The scope of study would cover all aspect of small scale industries with particular emphasis on the practices of financial and accounting record. It will examine the quality of the managerial skills and interaction between individual and the business environment, taking cognizance of proper accounting technique. More so, apart from time, fund and availability of relevant materials, this study will present relevant limitations in chapter three.

1.8 Definition of Terms

Accounting Records: This refers to all of the documentation and books involved in the preparation of financial statements or records relevant to audits and financial reviews.

Small scale Industries: These are small businesses that mostly use power and small machines and employ a small nu mbers of workers.

Performance management: This referred to a strategic and integrated approach to increasing the effectiveness of organization by improving the performance of people who work in them and by developing the capabilities of teams and individual contribution.

Performance: This is described as employees’ ability to meet performance expectation is based on individual levels of capability, the degree of support provided by management, the processes, system and resources made available to them by the organization.

Management: This is defined as a multi-purpose organ that manages a business, manager and manages workers and work.

Accounting Concepts: Accounting concepts is fundamental or basic rules and regulations which must be observed in the preparation of financial statement of every business organization in order to attain objectivity fairness in the in the statement.

Accounting Conventions: These are the general norms and practices of the accounting profession which are expected to be complied with by accountants.

1.9    Summary

This chapter is systematically written to show introductory background to the study. This includes historical background of the study, Statement of the problem, purpose of the study, research questions, research hypotheses, scope and limitation of the study, definition of terms. This of course, will serve as basis with which the whole study relied.


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