THE ROLE OF ACCOUNTING IN THE CONTROL OF PUBLIC

EXPENDITURES IN NIGERIA (A STUDY OF CENTRAL BANK OF

NIGERIA ENUGU STATE).

BY

KANU ESTHER AMAKA

ACC /2008/490

DEPARTMENT OF ACCOUNTANCY
FACULTY OF MANAGEMENT AND SOCIAL SCIENCE CARITAS
UNIVERSITY, AMORJI-NIKE, ENUGU.

AUGUST 2012
 TITLE PAGE

THE ROLE OF ACCOUNTING IN THE CONTROL OF PUBLIC

EXPENDITURE IN NIGERIA (A STUDY OF CENTRAL BANK OF
NIGERIA ENUGU STATE).

BY

KANU ESTHER AMAKA

ACC/2008/490

A RESEARCH PROJECT SUBMITTED TO THE DEPARTMENT OF

ACCOUNTANCY,
FACULTY OF MANAGEMENT AND SOCIAL SCIENCES,
CARITAS UNIVERSITY, AMORJI-NIKE, ENUGU STATE.
IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE
AWARD OF BACHELOR OF SCIENCE (B.Sc) DEGREE IN
ACCOUNTANCY.

AUGUST 2012.
 CERTIFICATION

This is to certify that in partial fulfillment of the course requirement

for the award of Bachelor of Science in Accounting by Kanu Esther A.

Reg. no ACC/2008/490, Caritas University, Amorji-Nike, Enugu. This

research work title “The Role of Accounting in the control of Public

Expenditure in Nigeria (a study of Central Bank of Nigeria plc)” has been

accepted and approved.

________________ _________________

Mr. James Ugwu Dr. Frank Ovute

(Project supervisor) (Head of Department)

Date:…………………….. Date………………………

__________________

External supervisor

Date…………………
 DEDICATION

This research work is dedicated to God Almighty, to my beloved parents:

Mr. and Mrs. N.C.E Kanu and my sibling whose physical assistance made

it possible for me to complete this program.

 ACKNOWLEGEMENT

It is necessary to give honor to whom it is due. I give thanks to

God Almighty who in his infinite mercies saw me through thick and thin
in pursuit of this degree.
My appreciation goes to my supervisor Mr. James Ugwu for his
constructive criticism, advice and contributions at every state of this
project and my success too. My thanks go to my lecturers who has
contributed in one way or the other to my success; Dr Frank Ovute
(H.O.D), Mr. Nsoke, Mr. Chinedu Enekwe, Mr. Desmond, for their under-
standing and support. My profound gratitude to my parents Mr. & Mrs.
N.C.E. Kanu, whose immense financial support advice and most of all
prayers, brought me to the level I am today which cannot be quantified
monetarily. I also appreciate my siblings; Felix, Stephen, Hope and Faith
Kanu. Even though time and space constraints would not permit me to
list the names of all whose efforts and contribution in one way or the
other have played prominent role in the completion of this work.
I am highly indebted to my colleagues and friends; Ukamaka,
Toyin, Jahid and Tosin whose sharing of ideas played a maturational role
towards my academic pursuit. Big thanks to all my consummate,
roommates and school friends who contributed immensely this project.
 ABSTRACT

This research examines the role of accounting in the control of public

expenditures in Nigeria, a case study of control bank of Nigeria, Enugu
State. The researcher adopted descriptive survey design. The
population of the study is the combination of internal audit department
staff and accounting department staff making it a total of 41. The
research used both primary and secondary source of data. In view of
this, three research questions were formulated to generate expected
answers. Literal works were reviewed for proper understanding and
guidance. Questionnaires, personal interview and observation were
used for collect of primary data. Secondary source of data were collect
from text books, periodical, articles and journals. Tables and simple
percentage were used for data analysis, hypothesis were tested using
chi-square statistics. Based on the findings, the researcher found out
that few of the staff were not following due accounting principles
thereby causing inadequate and improper pursuit of the accounting
records Omission of certain book-keeping records, improper audit. The
staff and management of central bank of Nigeria has now adopted
accounting standard, and the balance of power on NASC, financial
analyst government agencies and others. Finally the researcher
proffered among other use of accounting principle and standard in the
company.
 TABLE OF CONTENTS

Title page i

Approval page ii

Dedication iii

Acknowledgement IV

Proposal VI

Table of content vii

CHAPTER ONE

INTRODUCTION

1.1 Background of the study 1

1.2 Statement of problem 5

1.3 Purpose of study 5

1.4 Significance of the study 6

1.5 Research questions 7

1.6 Research hypothesis 7

1.7 Scope and limitation of the study 8

1.8 Definitions of terms 9

References 10
CHAPTER TWO

2.1 Review of related literature 11

2.2 Historical development of CBN

(A public company) 14

2.2.1 Ownership and control of CBN 17

2.2.2 Organization 19

2.3 Nature of accounting principles 23

2.4 Types of accounting principles 24

2.4.1 Factors affecting accounting principles 29

2.5 Budgeting and budgetary control 30

2.6 Standard costing of a tool of control 32

2.7 Role of accounting in public expenditure 37

2.8 Summary 38

References 39

CHAPTER THREE

3.1 Research methodology 40

3.2 Research design 40

3.3 Determination of sample size 40

3.4 Area of study 41

3.5 Population of study 41

3.6 Sample of study 41

3.7 Method of investigation 42

3.8 Method of data analysis 42

3.8.1sources of primary data 42

3.8.2 Source of secondary data 43

3.9 Development of research instrument 43

CHAPTER FOUR

4.1 Introductions 44

4.2 Presentations of data 44

4.3 Test of hypothesis and interpretation of result 54

4.3.1 Testing the first hypothesis 55

CHAPTER FIVE

5.1 Summary of findings 60

5.2 Conclusion 61

5.3 Recommendation 62

5.4 Recommendation for further 63

Appendix 1 64

Questionnaire 65

Bibliography 68
 CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

In most developing countries including Nigerian government

participation in economic activity is usually significant. One of the ways

through which government has intervened in Nigerian economy is

through the establishment of public enterprises and statutory bodies

operating service of an economic or social character on behalf of the

government.

Since the colonial era, especially after independence 1960,

Nigerian public enterprises have witnessed a steady growth unit

recently. Its Olisa (1988-133) pet it. Beginning as a trickle in the period

between this era of the second world war and Nigeria risen to flood

level since independence the establishment of public enterprise in

Nigeria are many add to available rational capital for the support of

development and welfare programme, making to be controlled by a

few individual, it possible for important profitable enterprise to be

controlled by a few individual or group organization certain critical

activities national survival and economic stability and providing

employment opportunities (Ademolukun 1983). However, after a long

period of growing starts intervention in the Nigeria economy through

public enterprises, the 1980’s onwards had witnessed a reversed which

has sometimes been dramatic in public opinion therefore public policy.

This has been brought by the persistent losses which state

enterprises that trivet been running over fears. Consequently, there

has been a willingness to look at alternative policy strategies for the

achievement of economic development. At the forefront of these

strategies is the minimization privatization of public enterprises.

In Nigeria, public enterprises are engaged in a while spectrum of

economic activities including agriculture, mining, construction,

manufacturing, commerce and services. The classification of public

enterprises in Nigeria has been made according to varieties of criteria

by different authorities. The public service review commission

(1975:101) classified public sector int.

Public utilities

Regulatory of service body

Financial institutions

Commercial and industrial enterprises

Being a mixed economy, individuals also own and operate private

enterprises. A firm classified as private enterprises when it is founded

and managed by an individual and or a group of individual. These firms

are expected to be registered in the local government within which

they operate.

The rational for the establishment of private enterprises are

numerous just like establishment of public enterprises. They

include amongst others; provision of employment opportunities

generating income for the owner of the enterprises government

interest in profit growth of the enterprises which performance of

the public sector through competition. Moreover, the general

public is concerned with contribution which makes towards social

enlistment which is exhibit to the environment in which the

business is loaded and its willingness to contribute to the

development of the environment.

The activities of the public enterprises have been on the increase

in recent times which necessitated the introduction of the accounting

practice to check and monitor the financial activities of these

enterprises. In this book, titled principles of accounting, by Bimage

(1985) Accounting is defined as a process by which data relating to the

economic activities of an organization are measured recorded and

communicated to interested parties for analysis and interpretation. The

earliest methods of accounting records were kept in physical

quantities. These records came from the Eastern (early) civilization

which involved in the countries around the Mediterranean Sea such as

Mesopotamia, Egypt, Crete, Italy etc. Money was recorded as soon as

money took the place of barter as a medium of exchange and unit of

accounting practice has been closely related to the economic

development of the country. If the business organizations grows in size

and complexity management and outsiders groups which include

owners of the firm (stock holder) creditor, government, employer and

the general public.

The differentiation necessitated the need to have accounting

department in the enterprises to give accurate financial of the

management and to satisfy the outside demands or the general public

who are already interest on whether the enterprises in growing or not.

The role of accounting in public enterprises in Nigeria is primarily to

ensure accurate accountability in these sectors and present the time

and fair financial position of the enterprises. The role is of utmost

importance in any organization. An organization can only grow or profit

when the resources can only be well managed if accounting

department of the organization give accurate financial information to

know how much the enterprises having. It only when this is done that

the firm allocate its resources and knows what is to be done. The role

of accounting seems to be more pounced in the public enterprises. In

 recent times, there are cases of mis appropriation of funds in the

public enterprises and improper accountability. These factors have led

to a lot of public enterprises go into Obiwon, if the government has

reorganization the role of accounting, all these feeble should not have

risen. No enterprises can more forward without having a well organized

financial department to give accurate financial, information about the

firm. This is because if improper accounting records are not minimized

or where possible eradicated these is bound to be cases of public

enterprises failure. Consequently, staff of such enterprises will force

out of their job. This will result to economic and social activities in the

society.

1.2 STATEMENT OF PROBLEM

Obviously, every privates and public entries in Nigeria has their

accounting department and there are increase cases of financial

mismanagement in virtually all the public and private organization in

Nigeria. The problem of this study lies on how the manages of these

enterprises are able to recognizes the role of accounting in their

enterprises so that these cases of improper accountability will be

minimized or if possible its total eradication in our society.

1.3 PURPOSE OF STUDY

 This study aims at investigating the role of accounting in the control of

public enterprises in Nigeria. The purpose of this study include among

others:

 To determine the extent to which accounting records has

controlled the effect of expenditures in public enterprises.

 To find out factor that affects the accounting department

preventing them from carryout their function as expected.

 To determine government policies which promote accountability in

public enterprises in Nigeria.

1.4 SIGNIFICANCE OF THE STUDY

In this study, the researchers have set out to examine the role of

accounting in the public sector in this country. Nigeria with the aid of

highlighting the inherent problem encountered in the account

department of most organizations. It is expected that this work will be

of interest to the owners of business enterprises, the government,

students and the general public.

To shareholders, owners of enterprise, interested persons and

the government, this study is expected to en kindle their interest the

more and they will take note of various recommendations mentioned

here and help steer the management team towards forming a study

organizations to present an accurate financial information of their firm.

 This study will also help to serve as literature to individual or corporate

bodies into want to carry on further research on the role of accounting

in the public sector in Nigeria.

1.5 RESEARCH QUESTIONS

1. What extent does accounting records has control in affecting the

expenditure of public enterprise?

2. What are the factors that affect accounting department of most

organization which makes them not to function effectively as

expected?

3. What are these governments polices which promote accountability in

Nigeria public enterprises?

1.6 RESEARCH HYPOTHESES

This research hypothesis is to know the findings or result of this

research;

1. H0 - Good accounting records budgeting has no control effect on

expenditure of public enterprises.

H1- Good accounting records budgeting has control effect on

expenditure of public enterprises.

2. H0- Corruption do not affects the quality of service rendered by

accountants in public enterprises.

 H1- Corruption affects the quality of service rendered by accountants in

public enterprises.

3. H0- Government accounting policies do not aid in promoting

accountability in Nigeria public Enterprise

H1- Government accounting policies aid in promoting accountability in

Nigeria Public Enterprises.

1.6 SCOPE AND LIMITATION OF THE STUDY

Scope of the study shows extent of coverage done in the study.

The research topic suggests a study on the role of accounting in the

public enterprises in Nigeria. The focus of the study is on Central Bank

of Nigeria (CBN) Enugu State. I take this to be a fair representative of

Nigerian Public Enterprise that is either avoidable or hard to come by.

There are factors as constraints that normally follow this research

work, some of them are;

1. TIME: This which was a major problem was adequately not managed

by the researcher. There is not enough time for the research to get the

project time, get it approved and within a short time we will be talking

about our exams assignment and quiz.

2. LACK OF MATERALS: The un co-operative of most people working in

the library other offices where the research needed to get materials

posed great problem to the research. Some of the staff do not feel safe
 letting have access to some materials while other will change you more

than double the cost of Photostat before one can get what he wants.

3. FINANCE: Before now our project use to be a joint project of a group

of four-ten people but now it has to be on individual student. So

finance hinder the projects in one way or the other. Esther by

transportation to where to get the materials or where to obtain the

necessary information.

1.8 DEFINITION OF TERMS

MANAGEMENT: Its function, it is centered on the running and

controlling of the organization, the way the directors perform their

function to attain a successful operation.

ACCOUNTING: In this context, an accountants records, classify and

summaries all public expenditure in the Central Bank of Nigeria in a

significant manner and in terms of monetary events and transaction

which are in part at least financial character and to interpreter the

result thereof.

FINANCIAL STATEMENT: An accountant makes an accounting

report issued by a business to describe its financial affairs and results

of the operations.
REFERENCES

Ademolekun K.O. (1983), The Nigeria financial system, London:

Macmillian Publisher.

Image E.U.(1985), Principals of Accounting, Enugu: Fourth Dimension

Publisher.

Olisa, E.C. (1988), Public Enterprises and Privatization in Nigeria,

Nigeria: Longman publisher.

Ostisumi K.O.(1984), Financial Management in Nigeria Public sector,

London: Pitman Publisher.

Osumbor, O.A.(1991), An overview of Private Enterprises in Nigeria,

Business time.

Willy N.Ugwuyi, (1997), The Nigeria Financial System (A systematic

approach).
 CHAPTER TWO

2.1 REVIEW OF RELATED LITERATURE

Over the years, the Nigerian public sector has increased greatly in

important and this necessitated to many people waiting on the role of

accounting in this sector. Dule, E.1965 in his book titles Management

Theory and practice, describes the roles of accounting in the public and

private sector as the factor which to plan, organize direct and control

their financial resources and represent the organization to the third

parties.

He further stated that a reflection reveals that each of these

approach contains a significant financial dimension for instance,

important financially strategies can be used to measure whether

resources are being effective utilized and co-ordinate in order to

express organization plans and control activities to the third parties. In

addition to this sheared 1974 shares, the views that accounting plays

an important and inevitable role of recording and management funds

in any public organization in most suitable manner, using this funds as

profitably as possible. Planning future operations and controlling

financial accounting, cost accounting, in different direction. In short, it

can be said that sheared views is as follow up of Dule’s 1965 idea on

the role of accounting in any organization Kolade, O. and Peter M.Dean

1987 in third book, Financial Management in the Nigeria Public Sector

looked at the role on the number of staff employed by these sector to

facilitated the work of accounting in an organization. They said that the

role of accounting in the public sector have become so important that

the number of people employed to carry out these accounting function

in an organization are very few compared to their work perform.

However, they maintained that public sector to recruit, train and

develop accounting, sector with disproportional large number of the

experience and unqualified accounting staff. At the same time, the

small numbers of qualified experienced accountants remaining the

service have been neglected. The financial function has been

concerned with the routine task of controlling, authorization, rewording

and reporting the lack of total view of the role of the financial function

almost exclusively with middle-level managers and the lack of good

financial managers. Within top level management have predictable

result in our public enterprises future.

The effects of this defect are:

 Management information system of which accounting is is a part,

have been neglected: Accounting has been more convened with

 the compliance and regulators than with serving management or

other user needs.

 Methods of evaluating investment and performance have been

inadequate with the result that management have been deprived

at useful information and utilization of information has been poor.

 Policies have been evolved without proper consideration of their

financial effects and implications.

 Accountability and control have been inadequate because of lack

of innovation in financial sphere:

Okafor on his own view classified role of accounting in the public

enterprises into four categories:

 The owners of the business are primary state holders. The

financial information obtain from the accounting department

determines how much the owner of the enterprises will earn.

 It is also from this information that the enterprise determines

how many people the enterprises will employ and how much

each person will earn.

 Creditor supply funds or service to the business. Their states

to enable it meet its contractual payments obligations to the

creditors. It is from this financial department that determines

 how much the organization earns as their profit and finally

how they will take their payment to their creditors.

 The government is interested in profit performance which

determines the tax liability of the business. It is from the

accounting departments that the financial positions of the

firm are known and this enable the firm to know whether

they are making profit or not. The government then tax the

enterprises if they are making profit.

2.2 HISTORICAL DEVELOPMENT OF CBN

(A PUBLIC COMPANY)

The formation of CBN started gradually in early 1950’s but gathered

momentum by the middle and towards the decade. Precisely CBN was

established in 1958. Among the factors that led to the formation for an

apese financial institution in the early 50’s were the dissatisfaction and

short coming to the West African Currently Board. The WACB

established in 1912 was playing the role for an apese monetary

institution in the British West Africa especially in areas of the country.

The issued Of West African Currency exchanging this with the existing

currencies, investment of reserve mainly in London and the repatriation

of existing currencies. However, because of the anomalies and short

coming of the WACB especially as if could not perform the monetary

management, Nigeria nationalists continued to amount pressure on the

colonial administration for the establishment of a central bank that

should have all pioneers of a central bank, and not just a glorified

currency exchange house.

In 1952 at the floor of federal house of assembly (first sitting) Lagos-

Chief Anthony Enaton summoned courage and moved a private

member motion calling for the establishment of Central Bank for the

purpose of rapid economic development in all its phases.

However, as a result of the compaction of the house then and look of

awareness of the importance of Central Bank on the part of some

Nigeria members the bill failed. Even through the motion was not

successful, It stirred the hornet comb. It gingered the colonial office in

London Administration appointed Mr. Fisher, a senior staff of Bank of

England, to inquire into the desirability and practicability of establishing

a Central Bank on the part of some Nigeria members the bill failed.

Even though the motion was not successful, it stirred the hornet comb.

It gingered the colonial office in London Administration appointed Mr.

Fisher, a senior staff of Bank of England to inquire into the desirability

and practicability of establishing a central Bank of Nigeria as an

instrument for promoting the economic development of the country.

Fishers in his report as an agent of colonialism and on orthodox bank

stated that central Bank cannot be established in a financial

environment where all factors that make a central Bank perform are

not existent.

In the same years, while fisher was submitting his report to another

independent term of financial expects were in Nigeria from World Bank

(international bank for reconstruction and development) with a mission

like that of fisher at examining the desirability and practicability of

establishment a Central Bank of Nigeria.

The World Bank mission were more objective in their report and less

inclined to perpetual economic dependence they really agreed with the

recommendation of Fisher on the instability of the financial

environment as a result of weak money and market instruments but

they were quick to add, that the continued political and economic

advancement of Nigeria is bound to lead to the establishment of a

Central Bank. To postpone the day when functions of currency issued

and the management of foreign assets are performed in Nigeria will

also postponed the day when trained Nigeria will be able to perform

these functions responsible by themselves.

In 1957, even though Nigeria had not totally got her indigene, but she

gained the autonomy of self internal rule. The nationalists did not wash
 time in commissioning another financial export from Bank of England

J.B. Loyness to advise then as:

 The establishment of a federal institution performs appropriate

central banking functions.

 The introduction of Nigerian currency and the administration of

such as currency so as to presence in external value and its

acceptability within the country.

 The relationship of the federal institution to the federal and

regional government, to government institutions, to the

commercial bank and to the public.

 The role of such an institution in the development of a local money

and capital market. The report of J.B. Loyness led to establishment

of the Central Bank of Nigeria (C B N) by the Central Bank of

Nigeria ordinance of 17th March, 1959, the bank officially

commenced business on 1st July, 1959.

2.2.1 OWNERSHIP AND CONTROL OF C B N

The 1959 Central Bank ordinance of Nigeria established the C B N with an

authorized capital of 1.5 million (123m) which was fully paid up by the

Federal Government of Nigeria. The Bank was 100% a public

company, and there was no provision in the ordinance of 1958

establishing the bank and subsequent amendments there of required

the bank to maintain a general reserve fund from profit arising from its

operation the rate of the reserve and was dictated by the prevailing

economic condition at that point in time.

Furthermore, the 1958 Central Bank ordinance provided that the bank

should transfer one eight (1/8) of the net profit made every year to the

fund (general reserve) until the fund is equal to the paid up capital

(the proceed should be used to pay the federal government for the

amount contributed) and therefore only 1/6 of the profit for each year

was to be transferred to the fund. Meanwhile the balance of the profit

would be appropriated in the following manner;

 50% of the balance to be applied for retirement of any

outstanding obligation of the federal government to the bank in

respect of cost of printing, mining shipment of the initials of the

bank notes and coins.

 the remaining 50% as to be paid to the president appoints the

governor of the CBN con the advice of the senate 1979 constitute

and the1995 draft constitution). Infect CBN is directly under the

federal ministry of finance ie the governor who in turn report to

the president. This war amended by the military in 1997.

In 1997, with the presidentialization of key ministry in Nigeria, the CBN

has been sent the presidency and the governor who is solely appointed
by the military president reports directly to him (the president). The

board of director of the bank under this system is equally appointed by

the president.

In 1999, when democracy returned back to the state, country

(Nigeria). The president appointed the Governor of the CBN, but the

Governor report to the ministry of finance. The CBN Governor Mr.

Soludu, economist by profession. The Ministry of Finance is Mrs Ngozi

Okonjo Iwuani, doctor by profession.

2.2.2 ORGANISATION

The central bank of Nigeria took after the British pattern (the mother

of all central banks) in many respects especially in organization and

management.Infact, the first governor of the Bank in British Mr. Fan

was seconded from bank of England.

The apex policy making body of the Bank is the Board of Directors. At

the incept, the enabling law establishing the bank shall comprise seven

members the governor and five part time directors. The ordinance

went further to stipulated that it was the responsibly of the governor

general to appoint the governor and the deputy governor of the bank

while the appointment of the part-time director was responsibility of

the prime minister.

To cope with defects of the economic development couple with the

recommendations of the international finance export the CBN’S Board

was re-organized for more efficiency. In order to be able to face the

challenge of the time, the membership of the board was enlarged to

thirteen, the governor, the deputy governor, three executive directors

and eight port-time directors. (The Central Bank of Nigeria Decree No

24) of 1991 went further to enlarge the Board by increasing the

member to eleven made up of a governor, five deputy governors and

five directors, while the decrease (1991) assigns the responsibilities of

policy and general administration of the affairs and business of the

bank to the board, the five major department, see figure 1.1 below.

The decree also stipulate that the governor and the deputy governor

should be appointed by the president in the first instance for a term of

five years and each should be eligible for re-appointment for another

not ascending five years.

Some of the activities of the bank as we shall see are decentralized

while others are not, while the ministry and policy formulations are

done at the Bank lead office in Lagos (now Abuja), the banking

operations of the bank is decentralized. To facilitate the efficient

execution of the bank functions over the Nigeria’s vast territory, some

central banking activity are decentralized and operate through four

Zone; Bauchi, Enugu, Ibadan and Kano. In addition to the Zonal

centers, there is a branch network whereby each state capital in the

federation has a CBN branch.

However, in the newly-created states currency centers are set-up by

CBN, pending the time full-fledged branch is could be established the

respective heads of each zone, branch controller and the currency

officer respectively. As at the end of 1992, the CBN had in operation

four zonal officers, 15 branches and 6 currency centre. As at may

1993, the CBN had 19,777 members of staff companying 23, exculsive

of whom 22 were departmental directory 2581 senior and 6965 junior

staff.

The 1958 Central Bank ordinance placed the bank CBN under the

Federal Ministry of Finance and development so that the board of

directors reported to the minister who in turn reported to the head of

state. However, in 1988, as part of the military re-organization in the

country aimed placed under the presidency. This arrangement is still

stating under this arrangement CBN is Independent of the Federal

Ministry of finance and report directly to the president. This nit has

been reserve again in 1997. CBN government now reported to the

Federal Ministry of Financial

 FIGURE 1.1

ORGANIZATION CHART OF THE CBN SOURCE CBN BRIEFS:

JUNE 1996

Board of director

Governor

Deputy Deputy Deputy Deputy Deputy

Governor Governor Governor Governor Governor
General Domestic Domestic Domestic Internation
Administra Monetary Manageme operation al
tion Banking nt Operation
services

5 Directors 4 Directors 3 Directors 3 Directors 4 Directors

1)Administra 1) Agric. 1) Finance 1)Banking Foreign opera

te Finance acct Operation trade and
3)Special 2) Banking 2) 2)Branch exchange
duties super computes, operation int.econo..
2)Building & 3) Bank Service 3)currency relation
Eng. examination 3) security operation Debt mgt
Services 4) Research service
4) medical
service
5) personnel

Director 2.3Director
NATURE of OF ACCOUNTING
Deputy PRINCIPLES
Director of Director of
of office of the director of organizatio secretarial
internal governor legal unit n and department
method
Accounting principle is the guidelines, law or riles accepted by the

accounting profession to service as guide to accounting practice.

Accounting principle includes the accounting and reporting assumption,

standards and practices that a company must use when preparing

external financial statement. One objective of accounting principles is

to reduce the difference and inconsistencies in accounting practices,

there improving the comparability and credibility of financial report.

The term General Accepted Accounting Principles are procedures

that guide and regulate accepted accounting practice at a certain

period of time. It is the collective opinion of time. It is the collective

opinion of what the professionals consider good accounting practice

and procedure.

GAAP are recommended by the authoritative bodies of each country.

The term does not imply a rule of law which the can be not deviations

or exception? The application of accounting principles in each country

requires the accounting the accounting in each country requires the

professional judgment for an accountant and their principles are

applied primarily to material and significant items. Items which have

little or no importance on the financial statement can be dealt with on

the basis of their necessity or application. The Accounting Principles

Board (APB) state that “ Generally accepted accounting principle”. In

 corporate the consensus at a particular should be recorded in them

should be measured, what information should be disclosed and which

financial statement should be prepared.

2.2 TYPES OF ACCOUNTING PRINCIPLES

The term generally accepted accounting principle has long been used

in accounting profession and entries into the public domain. These

principle were not all written down in one day, they evolved over

several decades. These principles are supported and justify by

institutions legal authority and acceptability it present, there exist

certain accounting principles that all accountants recognizes applied in

practices.

They among others;

 BUSINESS ENTITY PRINCIPLES

Financial accounting distinguishes the business entity from the

individuals connected with or coming into contact in the business ,

including the owners and managers of business. Therefore, accounts

maintained for employ6ers, employees, customers and other parties

connected company as a separate legal entity from its members. The

shareholders, debenture holders, creditor seen as merely contributing

the financial resources entrusted as the directors of the company to

manage the company in the over all interest of the owners of the
business. The system of financial accounting is designed to report on

the stewardship of the direction.

This stewardship function would effectively Isolates values belonging

to the company from these belonging to the parties in order to enable

it ascertain the position of the business at a given time.

 THE OBJECTIVITY PRINCIPLES

This brings the idea of dependent judgment by the accountants is

expected to prepare accounts in such a way as to make room for other

accountants to verify the account. This then means that the same

conclusion should be reacted by different accountants working

independently and following the same measurement standards. In

most cases, however curtail costs provide the most objective data;

capable of being independently verified. This implies that as much as

possible that accounting records should be based on verified evidence.

According to the Nigeria statement of Accounting and practice

standards. The principle connotes independence of judgment on the

part of the accountant preparing the financial statements. An objective

requires support by verifiable evidence, in contrast to subjecting. Or

dependence on the various opinions of the accountants preparing the

financial statement.

 FAIRNESS
The principle holds that in preparation of the accounts and

presentation of the financial statement the accountant. Should serve all

the parties interested in the report fairly and equitably. Investor,

prospective, investors, creditors, management and government

agencies need accounting information to help them decision regarding

the allocation of their resources, and accountants should provide such

information without fawning any particular group. Auddors are

expected its test whether the account prepared by accountant show a

true and fair view of the operation of the business and once this

position is certified –by an independent accountant reliance can be

placed upon the accounts.

According to SASI, the principles is a extension of the objective

principle, in view of the fact that there are many users of accounting

information, all having different need, the fairness principles require

that accounting reports should be prepared net to favors any group or

segment of society”

In describing financial statement as presenting true and fair view of

business operations, such statements are taken as a whole. The idea is

that though some minor mistake may exist in the financial statement

over all picture of the statement present a satisfactory expression of

the operation for the period covered by the accounts. It cannot be

guaranteed that every item which appear in the balance sheet and

profit and loss account is accurate. It is possible, that any errors that

exist in the financial statement are not sufficient to mislead those

relying on the statements.

 MATERIALITY

According to SASI, this principle holds that only items of materials

values are recorded strict accounting treatment.

The analysis of accounting data can be costly while the inclusion of a

range of data in the accounting report may be confusing to the range

of data in the accounting report may be confusing to the render.

Hence, the significance of item in relation to other item in the account

should be considered. The relatives rather than absolute value of item

should be within. Items of insignificant values are usually group

together and reported under one heading for example general or

miscellaneous expenses.

Materiality is a relative term, so that what may be consider material in

smaller firm may be in material in large firms but generally, the

materiality of an item would have on ultimate user of the accounts. If

the omission of an item in the financial statement would mislead those

relying on them, such an items is considered material.

 PRUDENCE

They are many instance in the past when accounting statement were

prepared on the basis of speculation or optimizing rather than reality.

So that if revenues were expected on the future, they could be

recognized in the current year accounts. Accounts have learnt through

long and sometimes better experience to be cautions and this attitude

is expressed in the principle demands exercising great care in the

recognitions of profit while at all know losses are adequately prouder

for. This is however to a justification for the creation of secrete or

hidden reserves.

 DISCLOSURE

This principle is not started in the SAS, but it implies it. It stipulates

that the present financial statement should includes all material data

that informed the reader to arrive at appropriate conclusion accounting

statement should not be misleading and should be accompanied by

adequate notes to explain their contents. The fundamental accounting

contents are expected to the followed in the preparation for this needs

to be disclosed and reasons for it. The SAS, 8th schedule of the

companies Act, section 335, subsection (ii) (iii) of the companies and
 Allied Matter Decrees are concerned with the details and form of

financial rewards of companies.

2.4.1 FACTORS AFFECTING ACCOUNTING PRINCIPLES

The following condition has to exist before the rules of general

application for recording and reporting information about whether that

is accounting principles will be needed if possible.

 A recognized medium of exchange and a developed market for

goods so that values could be provided for incorporation in the

account.

 Business carried on a continuing basis where period reports

become necessary.

 Large scale enterprises where it difficult for any one of ultimately

acquainted reports and valuations embedded in such report are

more difficult to come by, hence the need for recognized

accounting role is greater.

 separation of ownership and management rule for accounting are

not essential when the manager is responsible only for himself.

 The existence of an undefined group of owners. The problem of

separation of management and ownership are reinforced when

ownership is divided up among many people and the right of

 ownership is freely transferable as in the case with public

companies listed in the stock exchange.

2.5 BUDGETING AND BUDGETARY CONTROL

In other to have an effective control expenditure in our organization. It

is advisable to adopt and consider the effect to budget and budgetary

control. In a simple term, a budgeting is a financial plan for activities

an objective set out. This is based merely fore cast, past experience,

expectation etc.

As defined by ICMA, A budget is a financial and or qualitative

statement prepared and approved prior to a defined period of time for

the purpose of attaining a give objective and employment of capital.

Budgetary control is a system of controlling lost which includes the

preparation of budgets co-ordinating the department and establishing

responsibilities complaining actual performance with that budgeted and

letting results to achieve maximum control. The essential fractures of a

budgetary control process include:

1. A financial plan to actives the objective or target

2. A monitoring process which measures the actual performance during

the period.
3. Comparison of actual performance with budgeted performance in order

to determine the extent to which they are in line with one another.

4. As corrective process designees to eliminate the divergence, if any

between budgeted any actual performance.

Type of bugets

Generally, we have two type of budgets:

 short term budget

 long-term budget

SHORT-TERM BUDGET: This is usually referred to as current or

operational budget. It relates to current or operational budget. It

relates to current condition and is normally prepared for a period not

exceeding one year. It is common to prepare short-term budget, for

one year is broad outline only and them to phase the one year budget

into quarterly, monthly, or even weekly plan in greater detail

depending on the nature of the business operations and also on other

environmental factors.

LONG-TERM BUDGET: This is the budget designed for long term

development of the business. A period of between three and five years

may be used depending on the nature of business and the

environment in which the business operates; such budget are in

 variably prepared in broad outline only and then expanded and

detailed as the implementation period in.

USES

Budgeting helps immensely to the achievement of expenditure control

in both public sector:

1. Authorization: it is used as an authority for the expenditure control for

instance, if five thousand naira

(N 5,000) is approved for the purchase of raw materials in any month,

the purchasing officer do not need any formal approval of this

expenditure in the budget and it expected that he must not expand

beyond.

2.6 STANDARD COSTING AS A TOOL FOR CONTROL

There is no double that standard costing plays an important role

in production cost/expenditure control.

This is clear when a survey of accounting and management literature is

taken. It is not contestable that the high cost of goods and services

produced in Nigeria are a sort or worry not only to the consumers but

also to the produces of the goods and service i.e firms.

Therefore for some of these firms, who are both on retaining many of

their customers, they are always seeking ways of minimizing their cost
of production so as to finally have product with low prices, when

compared with other product of the same quality, one of such way is

the use of standard costing which compares actual cost incurred with

pre-determined cost of production. This has the effect of keeping cost

work pre-determined limits thereby increasing efficiency in production.

ESTABLISHMENT OF STANDARD COST

The establishment of standard cost for the element of production is

along and difficult task in that all the factors affecting production to be

taken care of and their cost pre-determined as closely as possible.

Some of the factors are:

A. production specification: This implies that materials to be used in

the production of a particular production must be specified both as

to quality and quantity. The amount of wastage which are

expected to be incurred should be as certain as they yield from the

materials in some cases. As to the quality of the material to be

used. It must be decided whether conditions demand that it be

classifieds into:

i Unspecified

ii whatever can be obtained

 iii whatever the harvest

This classification must be done in such a way as to avoid

exceeding the quality and dimension of material require to be used

in production.

B. Purchasing: Adequate procedures should be established such

that raw materials are obtained under competitive tender at lower

prices. The quantities purchased should be enough so as to avoid

frequently purchasing purchased should be enough so as to avoid

frequent purchasing with the result that capital is always tied up.

The firm should also establish methods for maintaining adequate

record at commitment and others outstanding.

C. Receipt of Materials: This involves procedures which will sure that the

material derived by suppliers meet the specification required for

production, Assurance is however quarried by carrying through

inspection of the goods delivered by the supplier before the material

are taken into stores.

D. Issued of Materials: The firm should also establish method

procedures to take adequate account of material that is issued of

the stores.

E. Defining of Operations: The firm would have to determine the type

of operations to be performed, who will perform the operation and

 where they are to be performed. They would also determine the

square in which the operation is to be carried out and the timing

operation. This is done to guarantee efficient operation of

production activities.

F. Division of Factory into functions: This is matter of policy depending

on the organization concerned. This is decision has to be made on

how to group the different function of the organization. Usually

these groupings or divisions are termed. Cost centre each being a

work centre in which district operations are performed on the

product. Having taken care of all the above factors, the firm would

then decide on the type of standard it want to achieve an effective

control over expenditure. The following are the standards: (1)

Ideals standard (2) Expected standard

(3) Basic standard (4) Normal standard

i. Ideal standards: In this case, a target is set, which it achieved will

represent the highest level of the efficiently is the standard can be

attained under the most favorable condition possible. This therefore

presupposes the most efficient operating conditions and that the

firm’s plant adaptation perfects labor performance maximum of the

efficient material usage and absolute absence of operating hitches.

Machine break down are not expected to occur therefore to produce

 a particular particular product, an absolute minimum of direct

material at the lowest possible prince are assumed, so also the

direct labors in which cases of the time and rates allow no deviation,

no matter the extent from the very high standard of efficiency are

also taken into accounting when settle standard for overhead cost

as a result, an ideal standard is always better than the actual

performance.

ii expected standards: standards set on the basis of expected

standard could be of a great advantages so far as they are set

with the objective of obtaining the best result out of the available

facilities. Though the variance generated under to this condition

will show divergences. They are likely to reflect more accurate,

measurement of superior or normal performance this fact in itself

constitutes a recommendations. As a result, sub-unit managers

and superior or normal performance this facts in it constitutes a

recommendations. As a result, sub-unit managers and supervisors

are expected to come to grips with the target set and the resulting

variance represents a reduction in efficiency.

Iii Basic standards: These are standards based on the ideal of suing

existing or past performance in the case future performance will

not be better than the past and are therefore established to be

 used over a long period of time without an adjustment to it. A

standard of the type is similar to the standard of measurement of

length; volume etc. that is to say, it serves as a fixed standard of

measurement for a long period of time and to this extent is

extremely useful.

Iv Normal standard: These are standard which are set lacing into

account the pre-determined cost of production for a business cycle

rather than for a fiscal year. In other words, they represents an

average figure, which hopes will smooth out fluctuations caused

by seasonal and cyclical change using this standard as a base for

setting standard cost will have for reacting implication since they

do not contribute much to incentives to the workers to perform

better and also for the fact that they are of a long range time

duration.

2.7 ROLE OF ACCOUNTING IN PUBLIC EXPENDITURE

This in other words can be referred to as financial management in the

public sector.

A very important development initiative (FMI) accounting. accounting

to him , the public expenditure survey, ministers decision thereon,

periodic policy reviews and the discipline of cash limits should suffice to
determine and control the tool of public spending and its allocation

between competition services. The rote accounting system and the

associated federal executive council and audit procures should guard

against spending without constitution authority and misappropriation of

public funds.

SUMMARY

The primary purposed standard cost is to keep unit variables as low as

possible under the given condition of themselves. Standard cost can

not by themselves achieve lower product cost. The aim is to achieved

when the workers in a particular organization used specific amount for

it s input. It is therefore necessary that special care be employed in

setting standard cost.

In setting standard cost, it is essential that the factory be so

organization that department are clearly designated and that lines of

authority are defined, after which a detailed study of the function

necessary for the manufacture of a single product would be

undertaken.

The organization should see that the responsibility of setting standard

is given to an individual or to a committee which might include the

production controller, the cost account among others since the

success of system officiate involved in setting standard cost

organization concerned.

REFERENCES

Dala, E. O. (1965), Management Control of Business Organization.

London: Mc. Crew Hill.

Ejiojor, N. O. (1989), Foundation of Business Administration.

Holiness Geofry, (1982), Interpreting Company Reports and Accounts,
2nd Edition : Wood head and Cambridge.

Howard, W.B. (1980), A complete Executive Encyclopedia of

accounting, Financial, Investment, Banking and Economics.

Mosiah, A. N. (1982), Internal Accounting 5th Edition

Nwoko Chinedum O. Historical Difference of Accounting studies in

Accounting Tests and Reading, Enugu: New age publisher.

Okafor F.O. (1980), Financing the Nigerian Public Sector in the

Nigerians Financial Infrastructal, London: Macmillam Publisher.

Oshisami, K.O. Financial Management in the Nigeria Public, Nigeria :

Macmillam publisher.

Samulsum R .T. (1981), A survey Basic Accounting 3rd edition, Nigeria.

Sheared, P. M. (1974), Financial control of Business, London:

Cambridge Publisher.

Stinner, R. M. (1982), “Accounting Principles Acadian view point 3rd

Edition, Nigeria: Briden Press Ltd.

William Phillip, (1981), Foundation Accounting Principles

U.S.A: Mc Craw Hill line.
 CHAPTER THREE

3.1 RESEARCH METHODOLOGY

This study is intended to obtain information that will enable the

researcher assess the accounting principles adopted by the Nigeria

Public Sector.

3.2 RESEARCH DESIGN

For the purpose of this study the researcher made use of certain

methods and designs. These involve the planning and implementation

of this plan in generating information, which would be used in

investigating the study, the role of accounting in the control of public

enterprises in Nigeria . The plan will include methods and source of

data collection and also determination of sample size.

3.3 DETERMINATION OF SAMPLE SIZE

This study by its nature did not permit the use of large sample size.

It consist of few responsible officials in the accounts and internal audit

departments of central bank of Nigeria Enugu branch. The internal

audit department has a population of 15 staff while the account

department has a population of 26 staff maki8ng a total population of

41 official. For our sample size, we would use the total number of

staffs because of the small number we have, there would be no need

for a formula to calculate the sample size

for the project work.

Therefore, the sample size of this research work is 41. this means

that the questionnaire prepared should be distributed to 41 officials

base on our findings of officials.

3.3 AERA OF STUDY

The research for this study will conduct his research on the

company below;

Central Bank of Nigeria (CBN) Enugu Branch Public Expenditure

Enterprise.
 These are the companies from which the researcher will be able to

obtain adequate information for the study.

3.4 POPULATION OF STUDY

The target population for this study is the staff in the accounting

department of the companies used, the staff in the accounting and

internal audit department of the central Bank of Nigeria plc (C B N)

Enugu Branch totally 41.

3.5 SAMPLE OF STUDY

Central Bank of Nigeria plc. Is used as the sample in the public

sector.

3.6 METHOD OF INVESTIGATION

Method of investigation consisted of questionnaire and interiors held

with senior officers of both accounting and internal audit department.

3.7 METHOD OF DATA ANALYSIS

The research would normally need to use various sources of data

for this study the various sources of data will help to see the impact of

accounting in the control of public enterprises. The researcher made

use of primary and secondary sources of data for the study and chi-

square formular of regression

3.8.1 SOURCES OF PRIMARY DATA

 The researcher made use of primary data collection through a field

survey of the staff of account and internal audit department also

conducted oral interviews with senior official of account and internal

department of C B N. I also went through the account books and audit

procedures in the accounts and internal audit disbursement of the

organization.

The oral interview, however was aimed to further obtain same

details which are not ascertainable thought the structured

questionnaires. Also data obtained through the questionnaire. The oral

interview is also aimed at getting the plan of the management.

3.8.2 SOURCE OF SECONDARY DATA

The research reacted on books and documents made available to

them by the heads of account and internal audit department. The

secondary data could be obtained from libraries, source nails,

newspapers and material relevant to the research.

3.9DEVELOPMENT OF RESEARCH INSTRUMENT

No questionnaire used as an instrument for data collection, rather

the research made use of primary and secondary data.

CHAPTER FOUR

PRESENTATION OF DATA AND TESTING OF HYPOTHESES.

4.1 INTRODUCTION

This chapter deals with the presentation and interpretation of data

obtained from responses to questionnaires administered to competent

staff of account department and internal audit department.

It also contains a summary of responses from interview questions and

the role of each question.

4.2 PRESENTATION OF DATA

SUMMARY OF RESULTS/FINDINGS

Question1: Good accounting I budgeting has no control effect on

expenditure of public enterprises in Nigeria?

No of response

Alternatives Internal Accts dept Total Percentage

audit

Yes 0 6 26 63

No 5 10 15 37
Total 15 26 41 100

In this questionnaire, the staffs disagree to the fact that good

accounting I budgeting has no control effect on expenditure of public

enterprises in Nigeria meaning good accounting I budgeting has control

and effect on expenditure of public enterprise in Nigeria. But not all the

staff agreed, 63% agreed and 37% disagreed.

Question 2: Do accounts give good interpretation of government policies

on expenditure control in central Bank of Nigeria?

No of response

Alternative Internal Account Total Percentage

audit dept

Yes 15 26 41 100

No - - - -

Total 15 26 41 100
 In this questionnaire, all the staffs agree that the accounts being

prepared give good interpretation of government policies on expenditure

control.

Question 3: Do you agree that poor accounting has been attributable to

poor capital expenditure as budgeted?

No of response

Alternative Internal Account Total Percentage

audit dept

Yes 10 16 26 63

No 5 10 15 37

Total 15 26 41 100

In this questionnaire, 63% of the staff state that the poor

accounting system has been attributed to the poor capital expenditure

as budgeted.

Question 4: Are accounting reports or records taken into consideration

used in making policies for the company?

No of response

Alternative Internal Account Total Percentage

audit dept
Yes 15 26 41 100

No - - - -

Total 15 26 41 100

All accounting reports or records made by the internal audit

department are taken into consideration in making decisions and

policies in the company.

Question 5: Do the internal audit department in public enterprises

carryout heir control function satisfactory?

No of response

Alternatives Internal Acct dept Total Percentage

audit

Yes 15 20 35 85

No - 6 6 15

Total 15 26 41 100

In this questionnaire, you notice all the staff of the internal audit

department concord to the fact that they carry out their function in
 public enterprises and 20 staff of their account department agreed to

that but 6 staff of the account department disagree.

Question 6: Do accounting records generally affects the economic

activities of the organization to an extent?

No of response

Alternatives Internal Acct dept Total Percentage

audit

Yes 12 20 32 78

No 3 6 9 22

Total 15 26 41 100

In this questionnaire, it is cleat that every accounting records

affects all the aspect of the organization in the economic activities of

the organization.

Question 7: Do central Bank of Nigeria prepare and adhere to their

annual budget?
 No of response

Alternatives Internal Acct dept Total Percentage

audit

Yes 5 6 11 27

No 10 20 30 73

Total 15 26 41 100

The objective of this question is to know whether managers

prepare and adhere to their annual budget from the table; 11 staff

states that the managers adhere the every plan of their budget in the

bank, 30 staff states that they do not adhere to the budget plan in the

Central Bank of Nigeria, Enugu branch.

Question 8: Are the accounting records of CBN transparent?

No of response

Alternatives Internal Acct dept Total Percentage

audit

Yes 7 11 18 42

No 8 15 23 58

Total 15 26 41 100
 From the table above, we see that the accounting department and

internal audit department have different view on the accounting record

of the bank.

Question 9: Is there any from of fraud/embezzlement by accounting

officials?

No of response

Alternatives Internal Acct dept Total Percentage

audit

Yes 15 8 23 56

No - 18 18 43

Total 15 26 41 100

In the above table, we can see that fraud I embezzlement can also be

found in Central Bank Of Nigeria, but are kept away from the mass, only

faw staff that know that.

Question 10: Does the organization apply the general accounting

principles in the activities of the organization

No of response

Alternative Internal Account Total Percentage

audit dept

Agree 15 26 41 100
Disagree - - - -

Total 15 26 41 100

The staff of the both department states and agrees that the

organization apply the general accounting in accounting principles of

CAMA in the activities of the organization.

Question 11: Do government policies aid in promoting accounting in

Nigeria public Enterprises?

Alternative Internal Account Total Percentage

audit dept

Agree 14 20 34 83

Disagree 1 6 7 17

Total 15 26 41 100

Government policies are made to aid in the economy or economic

sector, government help to control accounting in Nigeria public

Enterprises, accounting to this table.83% of the staff agree to this

while 17% of the staff disagrees.

Question 12: Are feed back being received in the department

periodically?
 No of response

Alternative Internal Account Total Percentage

audit dept

Yes 10 16 26 63

No 5 10 15 37

Total 15 26 41 100

The objective of this question is to know if feedback are been received

periodically to each department, from the table, you would see that not

all the staff agree that there are feed back that means in so point in

time department do not give feedback to the managers of the various

department.

Question 13: do government policies on trial f corruption

embezzlement cases do have enough determent effect to other?

 No of response

Alternative Internal Account Total Percentage

audit dept

Yes 7 11 18 42

No 8 15 23 58

Total 15 26 41 100

From the table, you would see that government policies on trial of

corruption/embezzlement cases have enough determine effect on other

to an extent.

Question 14: do threats a d intimidation by some government official

on the accountants affect the quality of the records kept?

No of response

Alternative Internal Account Total Percentage

audit dept

Yes 7 11 18 42
No 8 15 23 58

Total 15 26 41 100

Due to the threats by personnel in the government, account find it

difficult and threatening to do their perfectly well.

Question 15: do account /internal audit department encounter any

problem in the discharge of their duties?

No of response

Alternative Internal Account Total Percentage

audit dept

Yes 10 10 20 49

No 5 16 21 51

Total 15 26 41 100

Some problems are encounter either by the government fellow staff,

other commercial banks or within the organization.

4.3 TEST OF HYPOTHESES AND INTERPRETATION OF

RESULTS.

In line with the problems already stated and the objectives set to

be achieved this study, three hypotheses are formulated:-

1. H0- Good accounting records/budgeting has no control

effect on expenditure of public enterprises.

 H1- Good accounting records/budgeting has no control effect

on expenditure of public enterprises.

2. H0-Corruption do not affect the quality of service rendered on

accountants in public enterprises.

H1- Corruption affect the quality of service rendered on

accountants in public enterprises.

3. H0- Government accounting policies do not aid in promoting

accountability in Nigeria Public Enterprises.

H1 - Government accounting policies aid in promoting

accountability in Nigeria Public Enterprises.

4.3.1 TESTING THE FIRST HYPOTHESIS

Having gathered all the necessary data, the statistic adopted for

the first hypothesis is the chi-square formula. Applying the formula

to the study , one will have:

Chi-square (x2) = ∑ (of –ef)2

Where :-Of = Observed frequency

ef = expected frequency

∑ = summation sign

X02 = Calculated chi-square

Expected frequency (ef) = 41÷ 2 = 20.5

Degree of freedom= Df
(column-1) (Row -1)

( C – 1) (R-1)

( 3 -1 ) ( 2 – 1)

(2) (2)

=2

TABLE 4.2.1

Good accounting/budgeting has no control effect on expenditure on

public enterprises in Nigeria?

Table of observed frequency.

No of response

Yes 10 16 26 63

No 5 10 15 37

Total 15 26 41 100

Source: field survey 2012

Table of expected frequency using chi-square methics

Responses/ Of Ef (of-ef) (of-ef)2 (of-ef)2

Alternates

Yes 26 20.5 5.5 30.25 1.47

No 15 20.5 -5.5- 30.25 1.47

Total 41 - - - 2.94

Decision rule:

Reject H0, if x02 cal ≥ xe2 critical value.

Accept H0, if x02 cal ≤xe2 critical value.

If xe2 = chi= square value from distribution table.

Df =N-1

DF = 2-1 =1

At the level of significance of 5% or 0.05 xe2 (0.05, 1) = 3.84.

Since xe2 = 3.84 and xo2 = 2.94.

Decision: since x02 calculated 2.94 is lesser than xe2 3.84, we accept H0

(null hypothesis) and reject Hi ( alternative hypothesis). We hence

conclude that good accounting records/budgeting has no control effect

on expenditure of public enterprises.

TABLE 4.2.8

Are the accounting records of CBN transparent?

No of response

Option/alternatives Internal Account Total Percentage

audit dept
Yes 7 11 18 42

Total 15 26 41 100

Source: field survey 2012.

Table of expected frequency using chi-square method

Responses Of Ef (of-ef) (of-ef)2 (of-ef)2

Alternatives ef

Yes 18 20.5 -2.5 6.25 0.30

No 23 20.5 2.5 6.25 0.30

Total 41 0.6

Decision rule:

Reject H0, If xo2 cal ≥ xe2 critical value.

Accept H0, If x o2 cal ≤ xe2 critical value.

If xe2 = chi-square value from distribution table

Df = N-1

Df 2 = 1 = 1

At the level f significance of 5% or 0.05

Xe2 ( 0. 05,1) = 3.84

Since xe2 = 3.84 and xo2 = 0.60

Decision: since x 02 calculated 0.60 is lesser than

xe2 3.84,we accept H0 ( null hypothesis) and reject HI ( alternative

hypothesis). We hence conclude that corruption do not affect the quality

of service rendered on accountants in public enterprises.

TABLE 4.2.11

Do government policies aid in promoting accounting in Nigeria Public

Enterprises?

No of response

Option Internal Accts dept Total Percentage

alternatives audit

Agree 14 20 34 83

Disagree 1 6 7 17

Total 15 26 41 100

Source: field survey 2012.

Table of expected frequency using chi-square method

Responses Of Ef (of-ef) (of-ef)2 (of-ef)2

alternative Ef

Agree 34 20.5 13.5 182.25 8.89

Disagree 7 20.5 -13.5 182.25 8.89

Total 41 17.78
Decision rule:

Reject H0, If xo2 cal ≥ xe2 critical value.

Accept H0, If x o2 cal ≤ xe2 critical value.

If xe2 = chi-square value from distribution table

Df = N-1

Df 2 = 1 = 1

At the level f significance of 5% or 0.05

Xe2 ( 0. 05,1) = 3.84

Since xe2 = 3.84 and xo2 = 17.78

Decision: since x 02 calculated 0.60 is greater than

xe2 3.84,we accept H0 ( null hypothesis) and reject HI ( alternative

hypothesis). We hence conclude that corruption do not affect the quality

of service rendered on accountants in public enterprises.

 CHAPTER FIVE

5.1 SUMMARY OF FINDINGS

The researcher made some notable findings in the central Bank of

Nigeria (CBN). These findings are whether the organization applies the

role of accounting in the control of public expenditure in Nigeria. And

also if the manages and other staff were following statement.

However, the data that is collected for this study have been

presented and analyzed in the previous chapter. The managers are

adequately and efficiently apply the role of accounting in their

organization which ensure accurate accountability in the

recordkeeping.

The role is of utmost important in any organization in which if

other company can imitate will enhance the organization and help

them in achieving their goals. Based on the observation there is

enough materials. Resources and funds to express organization plans

and control. It is also indicates that accounting plays on important and

inheritable role of recording and managing funds in the organization.

In the organization studies, several of the staff that has been

interviewed are using the accounting principles and also applied it in

the financial transaction of the organization. That is the reason why

the organization is functioning up till today and once they are using
 these principles it will enhance the standard of living both in the

organizations and in the Nigerian economy.

5.2 CONCLUSION

The role of accounting principles in the control of public expenditure in

Nigeria was the main aim of this project. Also student, were the effects

of certain economic factors and government policies on the role of

accounting principles in Nigeria is primarily to ensure observed that the

role of accounting principles in Nigeria is princely to ensure

accountability in this sector and present the true and fair financial

position of the enterprises.

At the end of project, it was discovered that the role accounting is

effective in the need for adequate application of the standard were

normal. It was suggested that projects, write-ups, these include in

conclusive should be carried out extensively on the point topic studied.

The validity of accounting principles rest on their simplicity, classify and

generality in current practices and in furnishing guidance for moral

conduct of practitioner of the profession. Finally, the role of accounting

by all organizations in the public sector would result in higher be

enhance. Therefore the practice should be better in amongst

parishioners of all levels of production.

5.3 RECOMMENDATION
The following recommendation have on the basis of findings of the

study, less emphasis should be placed on the needs and expectation of

management when preparing financial reports prepares should not be

biased in the perforators. Better awareness should be created amongst

the public practitioners of accounting profession on the need and

importance of adequate application of accounting standards. The NASB

should show some list of imagination and adequate research in its

standards and an attempt should be made to develop a system of

accounting standards reflection of local social economic be separation

from the control of practitioner, rather practitioners should be guided

in the practice by body of independently developed theory.

A high level working committee should be inaugurated to examine

constant breaches of accounting standard and the balance of power on

NASC should be titled to favour the process of account, the auditor and

the public interest equally and have detailed standard be published. All

organizations in both public and private sector of the economy should

be made to comply fully with the standard requirement the

presentation of reports on financial transaction and strict disciplinary

measure should be against those that will fail to comply. Efforts to

improve existing principles will have better channels of success if they

are made with full recognition of needs and special problems of

business activities, financial analyst government agencies and others,

who used the accounting information in their organization.

5.4 RECOMMENDATIONS FOR FURTHER STUDIES

Even though this study has added to existing literature on the

topic, the extent and coverage has been constrained by some factors,

as pointed out in chapter one. The researcher hereby recommend that

further studies on the role of accounting in the control of public

expenditure in Nigeria should be carried out the find out the areas of

weakness and how the role can be made more efficient and effective.

Further, a study should be carried out on the rides of accounting

standard broad in the improving the level of practice amongst

partitions of the role of the accounting principles.

 APPENDIX 1

Department of accountancy,

Caritas University,

Amorji-Nike,

P.M.B 01784,

Enugu State.

May 2012.

Dear respondent,

RESEARCH QUESTIONNAIRE

The researcher is a student of Caritas University Amorji-Nike,

Enugu, a final year student of the above named institution. She is

currently embarking on a research of “The role of accounting in the

control of public expenditure In Nigeria”. The research is purely for

academic purpose.

Kindly give your sincere responses to the questions and please, be

rest assured that your responses would be held confidential

Yours faithfully

Kanu Esther. A

QUESTIONNAIRES

Direction
Please tick (x) or mark [ ] as best appropriate to you against your

choice of answer or a brief comment for open spaces.

PERSONAL INFORMATION

1a what is your sex?

a) Male [ ]

b) Female [ ]

b in what department of the company are you serving?

a) Accounts department [ ]

b) Internal audit department [ ]

c. What is your position in the department?

a) Top manager [ ]

b) Middle Manager [ ]

c) Supervisor [ ]

2. Good accounting / budgeting has no control effect on expenditure

of public enterprises in Nigeria?

Yes [ ] No [ ]

3. Do accounts give good interpretation of government policies on

expenditure control in central Bank of Nigeria?

Yes [ ] No [ ]
4. Do you agree that poor accounting has been attributable to poor

capital expenditure as budgeted?

Yes [ ] No [ ]

5. Are accounting reports or records taken into consideration used

in making policies for the company?

Yes [ ] No [ ]

6. Do Accounts/ Internal audit department encounter any problem

in the discharge of their duties?

Yes [ ] No [ ]

7. Do the internal audit department in public enterprises carryout

their control function satisfactory?

Yes [ ] No [ ]

8. Do accounting records generally affects the economic activities of

the organization to an extent?

Yes [ ] No [ ]

9. Do Central Bank of Nigeria prepares and adheres to their

annual budget?

Yes [ ] No [ ]

10. Are the accounting records of the C B N transparent?

Yes [ ] No [ ]
11. Is there form of fraud / embezzlement by accounting

officials?

Yes [ ] No [ ]

12. Do Government Policies aid in promoting accounting

in Nigeria Public Enterprises?

Yes [ ] No [ ]

13. Are feedback being received in the department periodically?

Yes [ ] No [ ]

14. Do Government Policies on trail of corruption

embezzlement cases do have enough determent effect to

others?

Yes [ ] No [ ]

15. Do threats and intimidation by some government officials

on the accountants affect the quality of the records kept?

Yes [ ] No [ ]
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