THE ACCOUNTING AND INTERNAL CONTROL SYSTEM IN NIGERIA
TABLE OF CONTENT
1.1 STATEMENT OF THE PROBLEM
1.2 OBJECTIVE OF THE STUDY
1.3 SIGNIFICANCE OF THE STUDY
1.4 SCOPE AND LIMITATION OF THE STUDY
1.5 RESEARCH METHODOLOGY
1.6 PLAN OF THE STUDY
1.7 DEFINITION OF TERM
2.1 REVIEWS OF ACCOUNTING POLICIES
2.2 INTERNAL CONTROL SYSTEM REVIEW
2.3 INTERNAL AUDITOR AND THE WATCH DOG ROLE
2.4 ESSENTIAL ELEMENTS OF INTERNAL CONTROL ORGANIZATION PLAN
3.0 RESEARCH METHODOLOGY
3.1 POPULATION OF THE STUDY
3.2 SAMPLING OF METHOD
3.3 SOURCE OF DATA AND COLLECTIONS TECHNIQUES.
3.4 METHOD OF DATA ANALYSIS
3.5 PROBLEM OF THE STUDY
4.1 DATA ANALYSIS
4.2 INTERPRETATION OF DATA
4.3 INTERPRETATION OF THE FINDING
The established of universities constitution part of the infrastructure of the country within which development and the role of accounting is this whole system of control, financial and otherwise established by the organization in an orderly and efficient manner, ensure adherence to management policies, safeguard the asses and secure as for possible the completeness and accuracy of records.
In order to allow for better administration in the universities, the executive arm of the education administration is divided in appropriate and each is change with specific duties. They are required to render an account of their stewardship on how the assets and obligations of the students, staff and government have been safeguarded.
The question that readily came to mind is, how far has this stewardship role been performed? Case of embezzlement and misappropriation of public funds are rampart these days. Fraud have taken many forms in this country within the education institution in areas as, financial fraud which include embezzlement of case pure by cashiers ratification or wrongful manipulation of account materials and commercial fraud in state of government properties. Personal fraud include the existence of ghost workers forging of certification and use of workers and university’s time for private jobs while on payroll of two or more determents. Drawing wage cheque for a greater amount than actual wage. Buttering factious names of relating to the name of previous employees on the payroll.
Outright Burglary, breaking in and stealing of materials and universities promises.
It should be noted these fraud device have a lot of effect on the operation efficiency of the universities and the fraud could have been prevented if there is effective and accurate accounting role and procedure.
In view of the light role of fraud in the Nigeria public sector, it becomes necessary to develop satisfactory and efficient system of internal controls of safeguard public money and other asset. This could be reinforced by drastic law and regulation against frauds which the formal president of Nigeria, chief Olusegun Obasanjo had stated there is fraud where there is a poor accounting role system. A good system of accountability on internal control system will ensure that every transaction correctly recorded, and that the responsibilities or duties are adequately segregate, so that the some person do not receive money, make entries, and make payment.
Lack of inadequacy of internal control methods result in the mismanagement of the economy, lack of public accountability, insensitivity of the political leadership and general determination of the standard of living hence there is need for positive action for fraudulent accounting.
1.1 STATEMENT OF THE PROBLEM.
It would appear that inadequate accountability has been one of the problems of the Nigeria society since independence. It is arguable that hot public officer holder have not proved to be quiet successful in accounting effectively of year stewardship.
The inadequate accountability and stewardship of public officers and politicians did sustain and aggravate economic problem which directly increase unemployment, austerities, inflation scarcities of fuel. Local and imported goods falling of standard of living which generally in going for fairly used material which is popularly known as “Tokunbo”.
1.2 OBJECTIVE OF THE STUDY.
The role of accounting system which is regarded as the central or most important part of every educational establishment, therefore its efficient organization means that the education establishment is carrying out its objective effectively with specific regards to laid down rules and regulations.
Control is essential in management function that deals with the measurement or correction of o f the performance of subordinate with a view of achieving the organization object with maximum efficiency and at minimum cost.
Therefore, the objective of the study is to study the role of function of accounting, principles in existence of university of Ilorin and see how effective these accounting dements are. In other words evaluation will be made as to whether the system of accounting in operation of the university of Ilorin is sound and reliable.
The competent honest, dedicate and imaginative staff with clear line of authority and responsibility can almost perform at a high level and general reliable vouchers even than there are few other control to support them. The existence of an effective system of accounting will require and adequate separation of duties If the records kept are to be relied upon.
Those who have custody asset should not be made responsible for maintaining accounting records of such assets as combination both functions increase the risks of man-detection of such frauds
Having ascertained the existence of these characteristic of internal controls, compliance test will be carried out to ensure that accounting procedures are applied as prescribed, while the objective will be to make recommendation and suggestions.
1.3 SIGNIFICANCE OF THE STUDY.
The significance of the study is mainly concern with the appraisal of control, compliance, verification, recording and reporting of economic transaction appraisal of performance and recommendations for operation improvement of the whole system of controls, financial, otherwise establishment by educational administrations is order to carry on the universities affairs in orderly efficient manner.
The significance is also premised on the benefits to be derived from the study. The study is set out also to find out when there are frauds and why internal controls system are to be sound and strong and need for educational administration to employ the strategic technical and operation management of the institution on the accounting and internal control system.
In addition, it is strongly believed that the study contribute by away of opening a new insights and idea for further findings that may be embarked upon in the future for the purpose of partial fulfillment of the requirements for the award of Higher National Diploma.
1.4 SCOPE AND LIMITATION OF THE STUDY.
The study is not introduce complexities into the accounting and internal control system but to simplify the method by analyzing evaluating innovation for the purpose of yielding fruitful result through effective participation and utilization of scarce resource in the university social, cultural and moral institutions, promotion of scholarship and research.
Also among the objective of universities are to promote the national unity, self reliance, the evaluation of a just and egalitarian society, industrialization of improvement of the people. Correction of education in balance and developing faculties according to the economic pre-occupation of the area.
Furthermore, accounting is a means of recording and reporting the economic transactions of an entity. It is aimed at measuring economic entity with a view to providing information and has been called the business. Since it serve to record and communicate economic phenomenon in order to provide a basis for policy.
While accounting control has been defined as the method and procedures that are mainly concerned with the authorization of transactions, the safeguarding of assets and the accuracy of the financial records.
Finally management is the combination of human and material resources in the right proportion to active organization goals.
2.1 REVIEW OF ACCOUNTING POLICIES
The end product of finacial statement is based on convention derived from experience. These conventions originate from such concepts as entity, going concern, periodicity, realization, matching consistency and historical cost. The purpose of this statement is not to evolves a basis theory of accounting out identity some of these concepts which are generally accepted. These fundanmental accounting concepts are seldom disclosed because they are generally accepted as the understanding of the proportion presentation of financial statement. Disclosure is however necessary if these fundamental accounting concepts are not followed. The fundamental accounting concepts referred to above are described below:
Every economic unity, regardless of its legal from of existence, is treated as a separate entity (in accounting). From parties having proprietary or economic interest in it.
The assumption is that the business unity will operate in perceptivity, that is, the business is not expected to be liquidating in the foreseeable future. A business is considered a going concern if it is capable of earning a reasonable not income and there is on intention or threat from any some to curtail significantly its line of business in the foreseeable future.
Although the results of business unity cannot be determined with prediction unity its final liquidation or winding up, the business community and the users of financial statement require that the business be divided into accounting periods (usually one year) and that changes in position be measured over these periods.
The concepts establish the rule for the period recognition of revenue as soon as:
(A) It is capable of objective measurement, and
(B) The value of asset received or receivable in exchanges is reasonable certain. It is possible to recognize revenue at e variety of points, for instance, when goods are produced, when goods are delivered, or when the transaction is completed. Choice in most cases, an industrial normal, and depends on which of the point is the critical events. Only, when this event is passed, can revenue be legitimately recognized.
The concepts held that for any accounting period the earned revenue and all the incurred costs that generated revenue must be matched and reported from the period. If revenue is carried over from prior period or and expenses relating to that revenue are usually carried over or deferred as the case may be.
Usually, there is more than one way in which an item may be treat in the accounts, without violating accounting principle. The concept of consistency holds than when a company selects a method it should continue unless conditions warrant a change to use that method in subsequent periods so that a comparison of accounting figures over time is meaningful the concept endures that the accounting treatment of like items is consistency, taking over one accounting period with another.
The historical cost concept hold that cost is the appropriate basis from initial accounting recognition of all assets acquisitions service rendered or received expense incurred creditor and owner’s interests, and it also held that subsequent to acquisition, cost value retained throughout the accounting process..