THE NEED FOR EFFECTIVE BUDGETING AS A TOOL FOR PLANNING IN BANKING INDUSTRY

THE NEED FOR EFFECTIVE BUDGETING AS A TOOL FOR PLANNING IN BANKING INDUSTRY

CHAPTER ONE

1.0     INTRODUCTION

A substantial advance has been made in the act and science of managing group efforts in industry, government and other endeavours. The complexity of modern management problems has led to the development of those management tools, techniques and procedures which are commonly and collectively referred to as scientific management. If business is not operated under some sorts of plans, it is merely an incoherent unit without any sense of direction and certainly it cannot be referred to as an organization.

Planning is inherent in the very nature of modern business conditions. Banks and other organizational activities must be well planned so that the firm may operate effectively and efficiently utilize all resources economically to achieve the desired result.

One of the most important approaches that has been developed for facilitating performance of the management process of the bank is comprehensive effective planning and control (management budgeting).

The concepts and techniques of the need for effective planning can be said to be a means by which complex organization can be guided so as to make or produce intended results. One of the objectives of budgeting is to secure economic stabilization in order to achieve desired goals.

Another objective of budgeting is to see how the organization accomplishes its set objectives and this can be inform of what organization does and what it achieves.

Budgeting also tries to allocate and secure adjustment in resources availability this is achieved with the aim of placing some of the laudable programme on priority list prompt alienation.

Planning on the other hand is of course decisions making since it involves selecting among alternative planning is referred to as future circumstances and requirement, deciding objectives, making short and long term plans, determining policies to be followed and also standard to be set.

Planning is based upon a clearly define objectives and it considered factors in the environment which will help or hinder organization goals, planning provides a tools so that performance can be evaluate with established standard, it should be precise, practicable and simple operate and understand. Planning should also be flexible to ensure that circumstances necessitate changes without disrupting the plan. However, budgeting drawn up a financial plan which contain certain financial proposals, these financial proposals

1.1     BACKGROUND OF THE STUDY

One of the most important approaches has been developed for facilitating performance of the management process of the bank is comprehensive effective planning.

The need for effective budgeting as a tool for planning in the banking industry in Nigeria involved use of budgeting to plan, planning is significant in the functional areas of management, which are brought into focus, creating a mutual enrichment of performance that is a vital focuses on the usefulness of planning to aid the management on how profit can be realized. Also, the planning function of the budget is very central to the realization of budget objective.

Planning involves the determination of objectives. This aimed at studying the meaning and importance of budgeting in banks, the problem face by this bank and also how budgeting procedure in planning can be used in bringing possible solution to their problems. As a result, a budget reflects the status of an organization.

1.2     STATEMENT OF PROBLEMS

The bank still finds it difficult to administer their operation effectively to the public because of the fluctuating effect of some factor ranging from economic political socio-cultural and religion factors.

1. Are there prospect of these bank?
2. Have you experienced any problem as regards budgeting yet?
3. What benefit are derivable from the service of the bank?

Other related problems are unqualified staff employed at the influence of top management (directors) and non-repayment of credit facilities at the specific date proposed.

1.3     OBJECTIVES OF THE STUDY

The main objective of this study is to ascertain THE NEED FOR EFFECTIVE BUDGETING AS A TOOL FOR PLANNING IN BANKING INDUSTRY. The specific objective of the study includes:

1. To find out some problems facing the authority in the process of budgeting.
2. To determine the area of price rating of authority in planning process and policies in achieving the goal of the organization through budgeting.
3. To examine how budgeting influence specifically relating the plans to actual performance of UBA Plc. through budgeting can do planning and this.
4. To offer useful suggestions on the basis of finding and how best to improve the budgeting system through planning process.

1.4     SIGNIFICANCE OF THE STUDY

This researcher work is relevant in the following ways:

1. It will point the importance of budgeting and how UBA Plc uses it to achieve its organizational aims and objectives.
2. It is envisage that this project will provide an insight to the problem which is associated with the bank with respect to the topic and proper solutions.
3. It could serve as a “think tank” for other business owners, particularly for the fact that will involves a big and successful business like UBA.
4. It is also significance in the area of academics, as it could be used for future reference where it is relevant.

1.5     SCOPE OF THE STUDY

This research work covers the activities of UBA Garki Branch. AU information in respect of this study is based on the branch. The study covers the need for effective budgeting as a tool for planning in banking industry in Nigeria.

Therefore, with the Abuja branch located where researcher is based, it ensures the cost of transportation for the collection of data and necessary information from the other branch.

1.6     DEFINITION OF TERMS

It is essential to make know every bit of term used there in, therefore some terms must be explained in detail to avoid misconception and misinterpretations since there are different people’s interpretation.

The following terms are to be considered:

1. Budgeting: Is a carefully worked out financial plan, a co-ordinating tool as well as a control technique based on forecasts and the best possible estimate that can be made at the date when budgets are prepared.
2. Planning: This involves taking a view of an organization how to make it forward through the use of resources and strategies to ensure customer satisfaction.
3. Management: The act of running and controlling a business organization to achieve its objectives and identify potential problem area for detailed investigation and corrective measure or actions.
4. Organization: Is a group of people who form a business together in order to achieve a particular aim to ensure effective cost control and put an effective organizational structure.
5. Credit: Money at owner disposal in an account it could be a sale on trust without money at the time of sale.
6. Overdraft: This is allow customers to draw cheque in excess of his current account balance.
7. Current Account: Customer deposit that is with drawable by cheque.
8. Advance: These are monies lent by a bank general in firm of an overdraft on a current account holder by means of loan.
9. Loan Capital: Loan capital is normally represented by fixed interest security.
10. Loan: Lending money to borrowers.

THE EFFECT OF LIQUIDITY MANAGEMENT ON THE PROFITABILITY OF COMMERCIAL BANKS IN NIGERIA

THE EFFECT OF LIQUIDITY MANAGEMENT ON THE PROFITABILITY OF COMMERCIAL BANKS IN NIGERIA

(A case study of selected banks in Nigeria)

ABSTRACT

This work investigated the effect of liquidity on the profitability of bank in Nigeria. The work is necessitated by the need to find solution to liquidity management problems in Nigerian banking industry. Three banks were randomly selected to represent the entire banking industry in Nigeria. The proxies for liquidity management include cash and short term fund, bank balances and treasury bills and certificates, while profit after tax was the proxy for profitability. Elliot Rothenberg Stock (ERS) stationary test model was used to test the run association of the variables under study while regression analysis was used to test the hypothesis. The result of this study has shown that liquidity management is indeed a crucial problem in the Nigerian banking industry. The study therefore recommends that banks should engage competent and qualified personnel in order to ensure that right decision are adopted especially with the optimal level of liquidity and still maximize profit.

CHAPTER ONE

INTRODUCTION

1.1   Background of the Study

In every system, there are major components that are very important for the survival of the system. This is also applicable to the financial system. The financial institution have contributed immensely to the  growth of the entire financial system, as they offer an efficient institutional method through which resources can be mobilized and directed from less productive uses to more productive uses.

In performing these financial role, the financial institutions has proved to be an effective link between savers and borrowers, among the financial institutions that have partake in these important financial role are the commercial banks. The functions of the commercial banks have become the strong base for the two major functions of the commercial banks namely deposit mobilization and credit extension. Commercial banks have become a very important institution in the financial system as it helps in facilitating the movement of financial assets that are less desirable to the more desirable public who needed the financial assets. In view of this role and activities commercial banks play in the society, the commercial bank is selected as the main focus of this study.

An adequate financial intermediation requires the attention and focus of the bank management to the profitability and liquidity, which are the two conflicting objectives of the commercial banks. These objectives are parallel in the sense that an attempt for a bank to achieve higher profitability will gradually destroy its liquidity and solvency position and vice versa. Practically, profitability and liquidity are effective indicator of the corporate wealth and performance of not only commercial bank but to all profit oriented venture. These performance indicators are very important to the shareholders and depositors who are major publics of a bank. As the shareholders expect the bank to increase lending in order to give them maximum return in money invested while the depositor expect the bank to keep much idle cash in order to meet their demand. With profitability objective conflicting with that of liquidity, and with the interest of the shareholders conflicting with that of the depositors, there is the need for reconcile and harmonize these conflicting positions through effective liquidity management so as to ensure the survival and growth of the commercial banks.

1.2   Statement of Problem

Through these financial roles, the commercial banks use the idle funds borrowed from the lenders by investing such funds in other classes of financial assets investment. These business activities of the bank is not done without problem facing it, since these deposit which have been invested by the banks for profit maximization can be demanded for at any time. When the bank is not able to meet their financial obligations, the public begins to lose confidence and these will cause lot of competition to the financial sector. With the high increase of competition in the banking industry, every commercial bank should strive to operate on profit and at the same time meet the financial demand of its depositors by maintaining adequate liquidity. The problem then becomes how to select the optimum point at which commercial bank can maintain its assets in order to optimize these two objectives. These problems become more difficult as a large number of banks are basically engaged with profit maximization and tend to neglect the importance of liquidity management and these can lead to technical and legal insolvency.

This research work will also see to other problems such as the effect of excess liquidity and the problem of estimating the proportion of the deposits that can be demanded for at any specific time, selection of factors that will affect or influence the bank liquidity level and finally problem of satisfying the two major publics of the commercial bank simultaneously. With these solutions will be prescribe and recommendations will be made where necessary.

1.3   Objectives of the Study

The main objective of this study is to examine the effect of liquidity management on the profitability of commercial banks in Nigeria.

1. To examine the effect of bank cash asset on profitability.
2. To examine the effect of bank balance on profitability.
3. To examine the effect of Treasury bill and certificate on profitability.

1.4   Research Questions

The following research questions are given consideration in this work:

1. Does bank asset have any significant effect on profitability?
2. How can bank balance have effect on profitability?
3. What will be the effect of Treasury bill and certificate on profitability?

1.5   Statement of Hypothesis

From the statement of problem, objective of study and research questions of the study, the following hypotheses are formulated:

H_OI:  There is no significant relationship between bank cash asset on profitability.

H_O2:  There is a significant relationship between bank cash asset on profitability.

H_O3:  There is no significant relationship between Treasury bill and certificate on profitability.

1.6   Significance of the Study

For the fact that commercial banks operate on liquidity and profitability motives in the mind to satisfy their major publics, the shareholder and depositor, the need arise for them to bring into agreement these two public concurrently. With this, the commercial bank need effective and efficient liquidity management approaches and principles that will help them realize these motives. The result gotten from this study will reveal the level of attachment of the commercial banks to the monetary policies (Liquidity ratios) established by the government and these will help the government to set appropriate liquidity ratios and cash ratios that will not be harmful to the operation and survival of the commercial banks. It will also help banks operations and credit policy guideline which affect profitability level and finally minimize the effect of liquidity and help in providing effective liquidity formulations.    

1.7   Scope of Study

This study examines the effect of liquidity management on commercial bank profitability. The variables used are liquidity management which was the proxies is bank cash asset, bank balance and treasury bill and certificates. Profitability which is the second variables was proxied by profit after tax.

1.8   Definition of Term

1. Liquidity: Ability with which asset can be easily converted into cash. It also determines a firm ability to meet its short-term obligation.
2. Liquidity management: The planning and control necessary to ensure that organization maintain liquid assets so as to meet its obligations to customers.
3. Profitability: Profit is the ultimate measure of overall performance that is the excess of income over cost.
4. Commercial bank: The business of receiving money from outside sources as deposits, irrespective of payment of interest and granting of money loan and acceptance of credit or purchase and sales of securities for the account of others or incurring of obligations to acquire claims in respect of loans prior to maturity.

AN ASSESSMENT OF TAX POLICY AND ADMINISTRATION OF LOCAL GOVERNMENT ON THE GOVERNMENT COUNCIL

AN ASSESSMENT OF TAX POLICY AND ADMINISTRATION OF LOCAL GOVERNMENT ON THE GOVERNMENT COUNCIL

ABSTRACT

Tax is a compulsory levy on income, value of goods and services of individuals, partnership and companies derived from the government, that is, federal, state and local government. Taxation is therefore a compulsory levy imposed on individual organization called by tax authority or public authority with proper jurisdiction in order to defray public expenditure. Tax policy is a plan of action, statements of aims and ideas in relationship to charges made on income or certain types of goods. Taxation as it relates to local government is simply charges made by the local government on income or certain types of goods to help pay for running of the local government. Tax assessment is the ascertaining of actual number of tax payers in a particular area. The first policy in tax assessment is to enlighten those villagers whose tax is expected to be collected from them. They will know when the local staff will come for assessment and they wait for such exercise. After enlightenment, the proper assessment takes place and finally, becomes the actual collection of tax. Through the assessment, the tax is collected according to the number of assessment. The public responds favorable to government policies when it feels the political system protects their interest and encourages them to aspire un-hindered in their chosen careers in the same breadth, taxpayers will be much more forthcoming in discharging their tax obligations if they feel the state is for them than when they feel oppressed or derived of their fundamental rights. The population of government is a factor in relinquishing private resources to the state in the form of taxes. Citizens want to be satisfied that when paid their taxes will be honestly committed to finding the common weal, an assurance that only a good government can give. There is no tax collection without assessment. Therefore, tax assessment is the major key to tax collection, and one of the major sources of revenue to the local government.

CHAPTER ONE

INTRODUCTION

1.1   BACKGROUND OF THE STUDY

In this present time, it is obvious that the governments raises and spend funds to finance her activities and to provide practical mechanism of positive central control over the economy. Government expenditure is mainly directed towards the satisfaction of collective wants, that is, those wants which are common to all members of the society rather than to the particular ends of individuals. These collective wants included provision of law and order, administration of justice and defense of the country.

Therefore, for the government to meet this wants, there must be an enforcement of fiscal policy which is concerned with the provision of government revenue through taxation.

Tax as the name implies is a compulsory payment imposed on the citizens and companies by the government modern to attain her national goal and objectives.

According to A.K. AGYUEI, he states that tax is the transfer of resources from the private to the public sector, in other to accomplish some of the nation’s economy and social goals.

Therefore, taxation is the system whereby individual and companies are assessed and the final collection of funds for and used as a variable instrument for shaping and directing a nations social political effectiveness of the various types of taxes introduced.

However, for the purpose of the study, the researcher is more concerned with the main reason on how the government generates her own revenue from companies, individual and corporate bodies. One of the act regulating the taxation practice relating to companies income tax Acts 1979(CITA 1979)this Act is contained in chapter 60 law of federation of Nigeria (LFN 1990).it is a consolidation of the provision of the formal principal Act. The companies’ income tax Acts 1916 and the various amendments were top in other to ascertain the extent, to which such profits were incurred in Nigeria, derived from Nigeria, received in Nigeria or brought into Nigeria. The companies’ income tax Act (CITA, CAP6O, and LFN 1990) classified companies into two broad categories namely:

1. Nigeria companies

2. Foreign companies

Companies classified as Nigeria companies for the purpose of Nigeria taxation are those companies incorporated under the companies allied matters decree(CAMD 1990) Or any enactment replaced by that decree. Any profit made by such companies shall deemed to have either incurred in Nigeria, been derived from Nigeria, received in Nigeria, and brought into Nigeria, such profit thereafter be subject to Nigeria companies income tax irrespective of where they have actually arisen. By constitutional arrangement, the taxation of companies in Nigeria is vested In the federal tax authority thus irrespective of where a company may be located in Nigeria. it is under federal tax jurisdiction.

Companies classified as foreign companies for the purpose of Nigeria taxation are those company corporation (other than corporation sole) established by or under any law. in force in any territory or country outside Nigeria, any profit made such companies shall be to have incurred, been derived from, or arisen from outside Nigeria to the extent that they are not attributed to the activities within Nigeria.

Tax is payable for each year of assessment of the profits of any company at the rate of 30%.these include profit incurred, been derived from, brought into or received from a trade business or investment. Also, companies paying dividends to its shareholder are first obliged to pay tax on its profits at the companies’ tax rate.

Generally, in Nigeria company dividends or other company distribution whether or not of a capital nature made by a Nigeria company is liable to tax source of 1O%.However, dividends paid from the bonus of share of scrip share to individual shareholder are not subject to tax, were also a company is a shareholder in another company, then such dividends are excluded from the profit of the company br the purpose of computation of tax.

1.2   STATEMENT OF PROBLEM

Taxation has been a major tool thought which governments generate her revenue for the sole aim of allocation. Such generated revenue on the various facilities needed for the standard of living for her citizens and presently this service is an immense importance in improving the Nigeria economy. Company income tax cannot be overlooked because it serves as one of the major source of revenue to the government and to the federation account. Company income tax helps the federal government to generate revenue, create employment and also to help the government to know the companies that are registered and the ones that are not registered. There had been so many companies in Nigeria and the income generated from these companies as company income tax has not been able to meet some of the required facilities to better the Life0 of tax payers and these has create a big problem and many are wondering if the income tax has not been utilized judiciously.

1.3   OBJECT WES OF THE STUDY

Despite emotion of tax payer on why the government should take part of the legitimate earnings of persons, certain reasons can be advanced to justify government in position of tax in any country. Some of these reasons are stated as follows:

I. REVENUE GENERATION: Provision of service and infrastructure facilities entails huge expenditure. Most of the services and facilities are public goods which cannot be adequately financed by individuals. Revenue realized from taxes, are used to cover such public expenditure such as school, roads, water supply etc.

2. ECONOMIC STABILIZATION: When a country is facing some economic problems like inflation and poor economy used to bring about a change in case to inflation, high rate of taxes will be charged to reduce the disposable income in the hand of the consumer which in turn reduce the demand of goods and services and which in a long run bring about low prices. Taxes can also be used to sustain economy growth when a country is experiencing a depression, in this case, taxes will be lowered to increase disposable income in the hand of consumers and thereby increasing the demand for goods and services the multiple increases of income, output and employment.

3. REGULATNG OF ECONOMIC ACTIVITIES: Government can use taxes in regulating micro economic activities like consumption and production patterns. When the government intends to discourage the consumption of certain goods and services tax, for such goods and services will be increased and reduced when consumption is to be encouraged, imposition of impact duties. This applies when there is need to encourage or discourage production patterns.

4. RE-DISTRIBUTION OF INCOME: Government levy progressive tax to reduce disparities or difference in the standard of living between the rich and the poor.

1.4   RESEARCH QUESTION

i. What are some of the tax and factors that are militating against the collection of company income tax?

ii. What measure has been put in place to ensure that all the companies understand the system of tax and the importance?

iii. What important role has the company income tax played on the federation revenue funds?

1.5   SIGNIFICANCE OF STUDY

This research work will be useful to the government in planning her fiscal policy as regards improving the Nigeria economy. This reason is that much emphasis will be placed on the companies income tax of which in the past generation over 30% of the government revenue instead they concentrated solely on petroleum (oil sector)ineffective in centrally disposable income and inflation, thus, the research work is to urge the government in paying more attentions on company income tax, also government should use the excess income from the oil sector and allocate such sector like agriculture, industries to mention, but a fence of the Nigeria economy so as to strengthen government tax policy.

1.6   SCOPE OF THE STUDY

Though there are other agencies which the government use in collecting tax, this research work is only restricted to the revenue mobilization, fiscal allocation commission Abuja for easy access to data kept by them and also with the help of seminar 4paper presented at the chartered institution of taxation. Other reasons are the time factor and financial constraints which also hindered this research work in acquiring more data from other sources.

1.7   DEFINITION OF TERMS

TAX: A tax is a compulsory levy imposed by the government or public authority on the income, profit or wealth of an individual, community, corporate body etc. for public purpose.

TAXATION: Taxation can be defined as the processor system of raising an income through the levying types of taxes. The extent to which taxation can be used as veritable instrument shaping and directing nation socio-political economic financial activities various types of taxes.

COMPANY: The court defined company as a justice person having no physical existence of its own but recognized by law as performing its functions through agents and servants who do exist physically. Company can broadly be classified into the following types in accordance with their mode of formation.

ASSESSMENT OF INCOME: This is the amount of income after charging expenses and outgoing against the gross income from each source in the year immediately preceding the year of assessment.

VALUE ADDED TAX: Value added tax is a tax payable on the supply of services they purchase. (input VAT is charged VAT on goods and services they supply output VAT),input VAT relates the goods and services purchased or imported directly for resale and goods which from the stock in trade used for the manufacturer production of any new product on which the output tax is charged.

WITHHOLDING TAX: Tax is an advance tax on income deducted at source, in some cases; it is the final tax most especially when it is paid to nonresident recipient. The tax payable to the relevant tax authority.

COMPANY INCOME TAX: Tax is payable on each year of assessment profit of any company at a specific rate. Company income tax is assessed on all the profits of any company that is incurring in, derived from, brought into or received in Nigeria in respect of any trade or business for whatever period of time such trade or business may have been carried on.

THE ROLE OF INFORMATION AND COMMUNICATION TECHNOLOGY (ICT) IN FRAUD DETECTION IN NIGERIAN BANKS

THE ROLE OF INFORMATION AND COMMUNICATION TECHNOLOGY (ICT) IN FRAUD DETECTION IN NIGERIAN BANKS

(A CASE STUDY OF FIRST BANK OF NIGERIA ENUGU)

ABSTRACT

This research work aims at determining the role of information and communication technology in detecting fraud in the Nigerian banking system. The banking institution which has integrity and trust as its hallmark has been exposed to various forms of fraud and various means employed in defrauding banks. Fraud derails the society’s integrity and value among the committee of nations and in effect, affects the level of trust. The banking sector has been the cornerstone of economic and financial mainstay of any nation, hence the need for study of the role and the effectiveness of information and communication technology in fraud detection in the banking industry. First Bank of Nigeria Pie, Enugu metropolis was used as a case study. The research work treated the causes of fraud in Nigerian banks, forms of bank frauds, Effects and consequences of fraud in first bank of Nigeria plc, the information and communication technology and fraud detection in banks and Fraud control measures in banks. The methodology adopted in this study is the survey research design there were interactions with bank staff of various cadres with structured questionnaire to know their own opinion. 400 questionnaires were administered of which 320 were duly completed and returned. Some of the findings from the research work reveal that lack of staff motivation has an effect on the incidence of fraud in Nigerian banks. It also reveals that the introduction of ICT into the banking industry has reduced the incidence of fraud in Nigerian banks. Further findings reveal that the Nigerian banking laws are not adequate for fraud control in banks. Based on the findings of this study, recommendations made are the adoption of computer aids as tool for fraud prevention and control; banks should employ highly sophisticated security gadgets in their banks, like surveillance TV systems, on —the-spot photographing of customers etc. Proper reviewing of laws relating to fraud should be encouraged and stern penalties that commensurate with any offence committed should be embarked on.

CHAPTER ONE

1.1     BACKGROUND OF STUDY

Today’s business environment is very dynamic and undergoes rapid changes as a result of technological innovation, increased awareness and demands from customers. Business organisations, especially the banking industry of the 21st century operates in a complex and competitive environment characterized by these changing conditions and highly unpredictable economic climate. Information and Communication Technology(ICT) is at the centre of this global change curve. Laudon and Laudon, (1991) contend that managers cannot ignore Information Systems because they play a critical role in contemporary organization as it regards fraud detection in Nigerian banks.

Fraud is a global phenomenon,it is not unique in any sector of the economy or peculiar to Nigeria. The level of fraud in the present day Nigeria has assumed an epidemic dimension. It has eaten deep into every aspect of our life to the extent that a three year old child talks about yahoo mail or 419, newly discovered sobriquet for advanced free fraud that is hunting us as a nation. Nigeria, with all of its natural and human resources, tethers on the brink of destruction because of fraud. Much of what we do is “cutting leaves” instead of dealing with the root problem. Generally, fraud takes its root from the human heart. It is an axiom that the heart is deceitful above all things and is desperately wicked.

Fraud is the number one enemy of the business world, no company is immune to it and it is in all works of life, it is becoming predominant in the banking industry, as banks are now persistent targets of frauds. Nwankwo (1991)said that there is no where fraud is more serious than in banking. It is the biggest cause of bank failure. The fear is now rife that the increasing wave of fraud in the financial institutions in recent years, if not arrested might pose certain threats to stability and the survival of individual financial institution and the performance of the industry as a whole and no area of the economy is immune from fraudsters and even the banking system. Fraud if not checked might cause run on in the banking sector.

Fraud together with its sister white-collar crimes which came into being later in the 19th and 20th century interalia corruption, money laundering, tax evasion,externalization of foreign currency to itemize just a few have stood as potent weapons capable of hemorrhaging the entire world economies particularly the banking sector because of its high risk factor.Since fraud is carried out over a period of time, a minor one at the initial stage snowballs into a sizeable one over a period of time. However, the incidence of fraud has become a nightmare to the bankers who are particularly concerned,not only because it is on the increase, but also it acquires sophistication and tries outwitting every new technology. In the past years, cases of frauds in banks have been on the increase with each year recording staggering figures, even though most of the reported cases are essentially different types of fraud, An example is defrauding a bank using a genuine account of an employee who is the defrauder.Another one is through the use of fictitious account; also, fraud is carried out with the aid of an employee’s friend. Similarly this unholy act is sometimes done usingan account of a third party that depends on an employee-insider to perpetrate the act.

Fraud is a universal phenomenon which has been in existence for so long. Its magnitude cannot the security team designed to prevent it. Its management has become a central point in banking like the management of risk because of the above facts. Fraud and its management have been the precipitating factor in the distress of banks, and as much as various measures have been taken to minimize the incidence of fraud, it still rises by the day because fraudsters always device tactical ways of committing fraud. This has become a point of great attention in the banking sector as well as every organization in Nigeria.

Technology is invented by man to manipulate his social and physical environments. The sociology of science and technology made us to understand that, technology came with both manifest and latent intents. The manipulation of computer and other information and communication technology (ICT) to detect fraud in banks gives more insight into the manifest function of technological revolution. When computer was invented, the intention of its inventors is to hasten data processing with effortless ease. That it has been doing efficiently by giving timely and accurate information. The ability of computer to control manipulations,frauds, and forgeries continue to give the banking system the urge to upgrade their information communication technology (ICT) department. If not for the introduction of information communication technology system in Nigeria, fraud could have defeated the Nigeria banking industry. In this view, despite the introduction of the first banking ordinance in 1952 and central bank act in 1958including acts and ordinance with the amendments over the years to control and regulate the activities of the banks, fraud rather increased in size and thetechniques gained more sophistication.

The introductions of modern banking methods like automatic electronic gadgets;communication systems and computers; fraud has a watchdog to check its excesses. Due to forgery in cheques, bankers are extremely carefully when clearing them, and most times the forged cheques look authentic and the owner will have to confirm the signature on the cheque as his own. It is against this backdrop that this study seeks to evaluate the role of information and communication technology in Nigerian banks with special reference to First Bank of Nigeria plc.

1.2     STATEMENT OF THE PROBLEM

The enormity of bank frauds in Nigeria can be inferred from its value,volume and actual loss. A good number of banks’ frauds never get reported to the appropriate authorities, rather they are suppressed partly because of the personalities involved or because of concern over the negative image effect that disclosure may cause if information is leaked to the ban1cin’ public. The banks’ customers may lose confidence in the bank and this could cause a setback in the growth of the bank in particular.

Fraud leads to loss of money, which belong to either the bank or customers.Such losses may be absorbed by the profits for the affected trading period and this consequently reduces the amount of profit, which would have been available for distribution to shareholders. Losses from fraud which are absorbed to equity capital f the bank impairs the bank’s financial health and constraints its ability to extend loans and advances for profitable operations. In extreme cases rampant and large incidents of fraud could lead to a bank’s failure.

Fraud can increase the operating cost of a bank because of the added cost of installing the necessary machinery for its prevention, detection and protection of assets. Moreover, devoting valuable time to safeguarding its asset from fraudulent men distracts management. Overall, this unproductive diversion of resources always reduces outputs and low profits which in turn could retard the growth of the bank. It also leads to a diminishing effect on the asset quality of banks. This work therefore tends to look into how the Nigerian banks can use information and communication technology (ICT) to detect and minimize fraud.

1.3     OBJECTIVES OF THE STUDY

The main aim of this study is to find a practical means of detecting the incidences of fraud in Nigeria banks with the aid of information and communication technology. While specific objectives are:

1. To investigate whether the introduction of information and communication technology into the banking industry reduced the incidence of fraud.
2. To ascertain if lack of motivation contributes to incidence of fraud in FBN in particular.

1.3     RESEARCH QUESTIONS

1. How has the introduction of ICT into the banking industry reduced the incidence of fraud?
2. Has the introduction of information technology into the banking system reduced fraud in First bank?

1.5     HYPOTHESIS OF THE STUDY

1. Ho: the introduction of ICT into the banking industry reduced the incidence of fraud in Nigerian banks
2. Ho: the introduction of ICT into the banking industry reduce the incidence of fraud in First bank in particular

1.6     SCOPE OF THE STUDY

The research covers the First bank of Nigeria plc within the Enugu metropolis. The information used for the analysis covers the five years period between 2014 and 2018.In order to attain the objectives of this research, the scope of the study is defined to involve all relevant aspect of fraud in First bank operations. Information is obtained on the number of fraud cases perpetrated in First bank and their frequency, the effect it has on the bank, the persons involved,and causes of fraud and the level of effectiveness of the information and communication technology employed.

1.7     LIMITATIONS OF THE STUDY

The main limitations of the study are the uncooperative attitude of some staff of the bank taken into study, inadequacy of time and financial constraints.Some of those approached for information declined and refused to cooperate. This affected the volume of information available for the study. Again, limited time allocated for this research work did not provide room for accuracy and reliability of results.

1.8     SIGNIFICANCE OF THE STUDY

This study can be of importance to the banking industry at large, particularly the first bank of Nigeria because it will expose the fraud perpetuators which will be of interest to the management. It is also prepared for those who may be interested or willing in carrying out further investigation on fraud detection with special reference to first bank of Nigeria. It will throw more light on ways by which fraud can be detected and minimized with the aid of ICT the study will serve as a body of knowledge to be referred to by researchers.

1.9     DEFINITION OF TERMS

Bank: Section 41 of Nigerian banking act of 1969 defined a bank as an institution that carries on banking business and includes a commercial bank an acceptance house, discount house, financial institution and merchant bank.

Banking: the section defined banking as the business of receiving money from outside source as deposits perspective of the payment of interest or the granting of bills and cheques or the purchase and sale of securities for account of other or the incurring of the obligation to acquire claims in respect of loan prior to their maturity.

FRAUD: The act of depriving a person dishonestly of something which is his or of something to which he is or would or might be entitled, but for the perpetration of fraud.

BANK: Refers to a person or company carrying on the business of receiving money and collection of drafts from customers subject to their obligation of honouring cheques drawn upon them from time to time by the customers to the extent of the amount available in their current account.

ALL COST ARE MANAGEMENT ACCOUNTING DISCUSS

ALL COST ARE MANAGEMENT ACCOUNTING DISCUSS

CHAPTER ONE: INTRODUCTION

1. Background to the study

Management accounting collects data from cost accounting and financial accounting. Thereafter, it analyzes and interprets the data to prepare reports and provide necessary information to the management.On the other hand, cost books are prepared in cost accounting system from data as received from financial accounting at the end of each accounting period.In management accounting or managerial accounting, managers use the provisions of accounting information in order to better inform themselves before they decide matters within their organizations, which aids their management and performance of control functions.

One simple definition of management accounting is the provision of financial and non-financial decision-making information to managers.According to the Institute of Management Accountants (IMA): “Management accounting is a profession that involves partnering in management decision making, devising planning and performance management systems, and providing expertise in financial reporting and control to assist management in the formulation and implementation of an organization’s strategy”. Management accountants (also called managerial accountants) look at the events that happen in and around a business while considering the needs of the business. From this, data and estimates emerge. Cost accounting is the process of translating these estimates and data into knowledge that will ultimately be used to guide decision-making.

The Chartered Institute of Management Accountants (CIMA), the largest management accounting institute with over 100,000 members describes “Management accounting as analysing information to advise business strategy and drive sustainable business success”.

Cost accounting is an input into management accounting. Cost accounting focuses on understanding and optimizing costs in a complex business environment. Management accounting focuses on the bigger picture of using data to make planning and strategy decisions for the company. Cost accounting tracks and analyzes costs, including material, labor, overhead and time, for every activity performed in producing and delivering goods and services. This information can be used to improve efficiencies and reduce overall cost.

The objective of management accounting is to collecting data to prepare budgets for organizations. The purpose of management accounting system is to properly use the management accounts to achieve the organizational objective. The management control system is very broad term it not only controls the management accounting system but also control the personal and groups issues.

Management accounting control system highly influences the business environment. The role of management accounting control system providing the information to accountant and control managers for planning, controlling and measuring the performance in the organizations. The important changes in the environment are highly influences by management accounting control system. Without effective management accounting control system no organization can be flourishing.

1. Statement of the Problem

In recent years, the cost of products in Nigeria has been very expensive beyond the reach of common Nigerians. This cost challenges has made many products manufactured in the country unpatronized by the consumers, and as a result of that expires in the hands of the sellers. Management accountants are assigned with managing cost elements of products among other responsibilities. He aligns cost with efficiency; provide required information for cost minimization so that profit could be maximized.  In making a sound decision the management needs some valuable and accurate information from the accountant. The accountant is at the services of the management by providing the management with the necessary information which they need for decision making. In recent times, it was observed that cases of mismanagement, fraud and irregularities prevail in the organization.

1. Research Questions

 In attempt to achieve the objective of this study, the research seeks to find answer to the following research question:

1. Are all cost management accounting?
2. What is the difference between cost accounting and management accounting?

1. Objectives of the study

The aim of this research is ascertain whether all costs are management accounting. The specific objectives of this study are;

1. To determine whether all cost are management accounting.
2. To identify the difference between cost accounting and management accounting.

1. Statement of Hypotheses

The following are the hypothesis which this research tries to test:

H0: All cost are management accounting

H1: All cost are not management accounting

1. Significance of the study

The management accounting makes the necessary information available to the management. The significance of this study is to bring to the notice of the management the exemplary role of the management accounting and the technique used to provide information and also how these would affect the operations and the attainment of the organizational goal if these information provided are not recommended for use by the management. And with such knowledge and information put to use, management would be able to plan and control the organization such that the cost of operating the business will be at a minimum while profit will be maximized.

Finally, this work will be of immense help to students, researchers and scholars as it will open a new area of study for further research and also form a basis for view of related literature.

1. Scope of the study

The scope of this research is on the examination of cost and management accounting with the sole aim of determining whether all cost accounting are management accounting.

1. Limitations of the study

In the process of carrying out this research work, the most nagging problem facing the study is how to obtain reference materials. The time to carry out the research is short and insufficient, since it is done alongside with some other courses to contend with so as to present a good result.

1. Definition of Terms

Accountant: An accountant is a practitioner of accountancy or accounting (referred as an accounting in the united states), which is the measurement, disclosure or provision of assurance about financial information that helps managers, investors, tax authorities and others make decisions about allocating resources.

Management Accountant: are those key officers that provide business data and analysis to managers within organizations to assist in decision making and control.

Profit maximization: A process that companies undergo to determine the best output and price levels in order to maximize its return. The company will usually adjust influential factors such as production costs, price of goods and output level as a way of reaching its profit goal.

Performance; General accomplishment of a given task measured against present standards of accuracy, completeness, cost and speed.

Management: This is defined as the process of dealing with or controlling things or people. It is the responsibility for control of a company or similar organization.

Information: this means data that is accurate and timely, specific and organized for a purpose, presented within a context that gives it meaning and relevance, and can lead to an increase in understanding and decrease in uncertainty. Information is valuable because it can affect a decision or an outcome. For e.g.,if a manager is told, his companys’ net profit decreased in the past month, he may use this information as a reason to cut financial spending for the next month.

Decision making: The thought process of selecting a logical choice from the available option. It is done to achieve a specific objective or solve a specific problem

BENEFIT OF GOOD ACCOUNTING SYSTEM IN ORGANIZATION

BENEFIT OF GOOD ACCOUNTING SYSTEM IN ORGANIZATION

CHAPTER ONE: INTRODUCTION

1. Backgroundto the study

 One of the most effective benefits ofaccounting system is decision making. Decision making has being described as apurposeful choosing from a number of alternative causes of action. Theaccounting information or system provides managers with the necessaryinformation they need. In this case, it is the accountants that provide theinformation with which the management uses for its decision making. Managementscan only come up with a good decision if they are able to get correctaccounting information from the accountant. In a situation where the accountantdoes not provide correct information: this is bond to affect the decisionmaking of the management adversely.

Thequestion now is, how business executive know the company is embarking on afavorable decision or unfavorable one. The answer to this question is based onthe management and the accounting system. According to Ray (1996), most top level business executiveshave background in accounting and finance than in any other field. The essenceof using accounting information is to enable managers make wise decision. It isalso used (accounting information) to set up system of internal control toincrease efficiency and prevent fraud in companies.

Accounting system aids in profit making, budgeting and costcontrol. In an organization, it is the duty of the management accountant to seethat the organization keeps good records and prepare proper financialregulations. Management accountants also need to keep up with the latestdevelopment in the use of computers and in the computer system design. Accountantsprovide many special reports for management, decision making. This functionrequires the gathering of both historical and projected data. (Carr etal 1994;woutersan and Verdaasdonk 2002).

Green wood and Hinings (1996) there is evidence which revealthe influence of accounting information in decision making process. itemphasize the important of a holistic context and which led to the integrationof other institutional influence and multiple logics. It is in this contextthat the research wishes to evaluate the effectiveness and uses of accountinginformation for decision making in public sector. In summary, accountinginformation is primarily concerned with data gathering from internal andexternal sources analyzing, processing, interpreting and communicating theresult (information) for use within the organization so that management canmake more effective plan, decisions and control operations.

1. Statementof the Problem

Thecentral concern of management is decision. In making a sound decision themanagement needs some valuable and accurate information from the accountant.The accountantis at the services of the management by providing the management with thenecessary information which they need for decision making. In recent times, itwas observed that cases of mismanagement, fraud and irregularities prevail inthe organization. Several problems accounts for the need for accurateaccounting information among such problems are malfunctioning and wrong decision making by managersin the management of risks arising from the portfolios, high occurrence offactors that may result to high incidence of losses instead of expected profitswhere proper accounting information on portfolio management is not on hand, inabilityof managers to strike a balance between risk and investment, the negativeeffects which is seen on the low profits derived from the portfolios. It isagainst this background that this study tries to examine the impact oaccounting information in Nigeria public sector.

1. ResearchQuestions

The purposeof the study is to highlight the benefit of accounting system in anorganization. This therefore propels the following research question for thisstudy:

1. Howdoes accounting system help in fraud control, mismanagement and irregularities?
2. Howuseful and effective is accounting systems to decision making in organizations?
3. Whatare the benefits of accounting system in an organization?

1. Objectivesof the study

Thisresearch is aimed at examining the benefit of accounting system in organization.

Thespecific objectives of this study are;

1.  To identify how accounting system help infraud controls, mismanagement and irregularities.
2. To determine how useful and effective accounting system todecision making in an organization.
3. To examine the benefits of accounting system in anorganization.

1. Statementof Hypotheses

The following are the hypothesis which this researchtries to test:

Ho: Accounting system does notcontrol fraud, mismanagement and irregularities.

H1: Accounting system controls fraud,mismanagement and irregularities.

Ho: Accounting system is noteffective in decision making in public sector organizations.

H1: Accounting system is effective indecision making in public sector organizations.

1. Significanceof the study

Accountinginformation is very important in the life of any business. It is based on thisinformation that the management will be able to make wise decisions. Theaccountants present the accounting information in such a way as to assistmanagement in policy and decision making in the day to day operations of the organization.

Based onthe information produced, the management will have the benefits on using it toplan and control their current and future operations. Based on it also theywill come up with their management decision and information of long term plans.The information also will help the management report historical information tooutsiders

This work will also be of much help to the government in findingout measures to apply in order to curb or reduce the high incidence of lossesand risks in an organization in other to increase the national income andoutput of the economy.

Finally, this work will be of immensehelp to students, researchers and scholars as it will open a new area of studyfor further research and also form a basis for view of related literature.

1. Scopeof the study

This research work will specifically focus attention on the benefitof accounting system in an organization.

1. Limitationsof the study

Timefactor: This wasone of the major problems I encountered in the course of the study since thedata collected was partly by personal interviews and persons to be interviewedhad limited time to attend to me. Also the researcher has to allocate part ofher time to class room work one and other activities.

Finance: Another factor thatlimited the scope of the study was the financial cost which consisted mostly oftravelling expenses, cost of materials to be used for the study, cost ofinputting the information collected into the computer, cost of diskette, costof printing the hard copies and binding of the report. This consisted tolimitation of my study.

1. Definitionof Terms

Decisionmaking: This isa process of choosing specific cause of action from among many possiblealternatives. Determine ways and means for accomplishing the line of actiondecided upon is also a part of the decision making process.

Accounting: This means the act ofrecording, classifying and summarizing in a significant manner and in terms of money,transaction and events which are in part at least of a financial character andinterpreting the result thereof.

Information: Data that has been processed toproduce meaning relating to a field.

Accounting information: Those processed information relatingto accounting.

Management: This is a group in a businesswho have overall responsibility for achieving the company’s goals

Planning: The use ofinformation supplied by accountants in making decision by which managementformulate objectives for future business of the firm

Control and Coordination: A process of ensuring that thecause of actions is maintained and that the desire aims are achieved. This isdone through the use of budgets and actual data.

Cost Decision: This is the application of and cost of principles, methodsand techniques in the ascertainment of cost and analysis of savings and orexcess as compared with the previous experiences or with standard.

Organization: In organization the managers decide how best to puttogether the organizations human and other resources in other to carry outestablishment.

General Accounting: This is the overall records keeping preparation of financialstatements and reports and control at all business activities.

ASSESSMENT OF THE EFFECTIVENESS OF ACCOUNTING INFORMATION AS A TOOL FOR MANAGEMENT DECISION

ASSESSMENT OF THE EFFECTIVENESS OF ACCOUNTING INFORMATION AS A TOOL FOR MANAGEMENT DECISION

(A CASE STUDY OF DANGOTE CEMENT COMPANY, OBAJANA)

ABSTRACT

This research work, “Assessment of the Effectiveness of Accounting Information as a Tool for Management Decision (A case study of Dangote Cement Company, Obajana) with the specific objectives to identify the frequency of using accounting information in decision making in Dangote Cement Company, Obajana; to assess the effectiveness of accounting information in long-term strategic decisions in Dangote Cement Company, to identify the problems in generating accounting information in manufacturing organization and to recommend suggestions to overcome the identified problems. The methods of data collection were primary and secondary data method. The data collected were analyzed by use of simple percentages while chi-square was used to test the hypothesis formulated for validity. Findings show that accounting information is an indispensible tool in the management of  organization and that accounting information has improved effectively the basic roles of cost minimization, proper allocation of scarce resources and improvement of production, the quality of accounting information is relevant to an organization performance, finally the research shows that accounting information is an effective tool for management decision making.  Based on the findings, the researcher concludes that the accountant should put more efforts especially when computing the financial statement since accounts fraud result from ignorant of proper accounting procedures. Since the financial statement are sources of document of accounting information, efforts should be made in generating more relevant, timely, effective and accurate accounting information necessary for management decision making to enhance organization performance and profitability.

CHAPTER ONE: INTRODUCTION

1. Background to the study

Accounting information is a part and parcel of today’s life which is necessary to understand the accurate financial situation of the organization and used as the basis of making any decisions. Since strategic decisions have long-term effect on the business and therefore it is important to analyze accounting information for making strategic decisions. Accounting information helps managers understanding their tasks more clearly and reducing uncertainty before making their decisions (Chong, 1996). Accounting is sometimes referred to as a means to an end, with the ending being the decision that is helped by the availability of accounting information (Arneld and Hope, 1990). Accounting systems can aid in decision making providing information relevant to the decision and to the decision maker (Gray, 1996).

Effective and efficient accounting information plays a central role in management decision making (Tunji, 2012). Accounting information is one type of information recognized as a ‘learning machine’ that can help to evaluate how objectives might be achieved by quantifying the financial impact of each alternative available to the decision (Burchell et al., 1980).

Accounting and financial information are among the most important information widely used in the managerial decisions (Royaee, 2012). Within contemporary economic conditions, a successful manager needs a lot of reliable accounting information in order to be able to make quality business decisions (Miko, 1998). Economical information especially financial and accounting ones are the information which always managers use in short term and strategic decisions and they may have most application among different variables effective in decision-making and in all types of decisions (Royaee, 2012).

Strategic decisions, when the decision maker aims for long periods of time, allocates all or part of the company’s core assets to achieve that goal; such decisions are usually adopted at top management (Eugenia1 and Tiberiu, 2013). Strategic decisions are among the most distinctive decisions in an organization and these are used for determining the goals and direction for long-term company development. Basically top management is involved in these sorts of decisions.

They decide on company policy, long-term and annual business plans and the organizational structure, i.e. anything that is linked to the future of the company. A wrong strategic decision have far-reaching, negative effects on the company, which in turn places a lot of responsibility on the shoulders of the strategic decision maker (Sikavica, et al.1994).

Accounting Information will be useful when information provided by them is used effectively in decision making process by users (Christiansen 1994). Otley (1980) argues that accounting information are important parts of fabric of organisational life & need to be evaluated in their wider managerial, organisational & environmental information not only depends on the purpose of such system but also depends on contingency factors of each organisation.

1. Statement of the problem

Information is indispensable for decision making in any business organization. The problem however lies in the quality and validity of the information, that is, if it is timely, adequate, and clear. The major purpose of the use of accounting information is to minimize risk, failure and uncertainties and also stay ahead of competitors. Notwithstanding the immense benefit of use of accounting information, it is generally acknowledged that most unqualified accountants generate inaccurate information and so result in failure of organizations to achieve desired goal. These problems largely contribute to the failure of the use of accounting information in business with the result that inaccurate decisions are made to the detriment of the organization. It is only through accounting information that managers and external users get a picture of the organization as a total entity. Managers who fail to realise this do not appreciate an accountant’s analysis in respect of financial accounting information generated. This may lead to poor decision being taken and it may affect the profitability & performance of the organisation. Some organisation due to low financial layout causes the effect & importance on decision to be taken not to be noticed or gained by the organisation. The researchers in this study will seek to assess the effectiveness of accounting information as a tool for management decision.

1. Research Questions

The following research questions will guide the researcher towards achieving the objectives of the study:

1. What is the frequency of using accounting information in decision making in Dangote Cement Company, Obajana?
2. How effective is accounting information in long-term strategic decisions in Dangote Cement Company?
3. What are the problems associated in generating accounting information in manufacturing organization?
4. What are the possible solutions to overcome the identified problems?

1. Objectives of the study

The main objective of the study is assess the effectiveness of accounting information as a tool for management decision (A Case Study Of Dangote Cement Company, Obajana)

The specific objectives of the study are:

1. To identify the frequency of using accounting information in decision making in Dangote Cement Company, Obajana.
2. To assess the effectiveness of accounting information in long-term strategic decisions in Dangote Cement Company
3. To identify the problems in generating accounting information in manufacturing organization
4. To recommend suggestions to overcome the identified problems.
   1. Statement of Hypotheses

The following hypothesis serves as a guide to study:

H0: Accounting Information is not an effective tool for management decision making

H1: Accounting Information is not an effective tool for management decision making

1. Significance of the study

Accounting information is very important in the life of any business. It is based on this information that the management will be able to make wise decisions. The accountants present the accounting information in such a way as to assist management in policy and decision making in the day to day operations of the company. The study is very significant because it:

Highlighting the importance of accounting information systems in the Nigeria manufacturing organization and their role in developing administrative efficiency, thus improving organizational performance and profitability.

The result of this study will benefit users of accounting information (internal and external users) and improve their abilities in decision making process, as well as any other groups interested in these organization through using efficient accounting information systems, and provide recommendations that increasing the contribution level for different users to secure achieved precious information to take suitable decisions, through the use of information Accounting systems.

This work will also be of much help to the government in finding out measures to apply in order to curb or reduce the high incidence of losses and risks in the government own agencies and parastals in other to increase the national income and output of the economy.

Finally, this work will be of immense help to students, researchers and scholars as it will open a new area of study for further research and also form a basis for view of related literature.

1. Scope of the study

This research work will specifically focus attention on the assessment of the effectiveness of accounting information as a tool for management decision. The study will be limited to Dangote Cement Company Obajana.

1. Limitations of the study

Research of this nature cannot be complete without a experiencing limitations and problems, in the course of this study the researcher experience the following limitations. However, concerted effort is made reduce its effect on the outcome of the study:

Time factor: This was one of the major problems I encountered in the course of the study since the data collected was partly by personal interviews and persons to be interviewed had limited time to attend to me. Also the researcher has to allocate part of her time to class room work one and other activities.

Finance: Another factor that limited the scope of the study was the financial cost which consisted mostly of travelling expenses, cost of materials to be used for the study, cost of inputting the information collected into the computer, cost of diskette, cost of printing the hard copies and binding of the report.

Uncooperative attitude of the Respondents: The respondents were reluctant and fill insecure in the providing necessary information with respect to the research, however the research make necessary arrangement to convince them that the study is solely for academic purpose and that their contribution will be held confidential. 

1. Definition of Terms

Accounting: This means the act of recording, classifying and summarizing in a significant manner and in terms of money, transaction and events which are in part at least of a financial character and interpreting the result thereof.

Information: Data that has been processed to produce meaning relating to a field.

Accounting information: Those processed information relating to accounting.

Management: This is a group in a business who have overall responsibility for achieving the company’s goals

Decision making: This is a process of choosing specific cause of action from among many possible alternatives. Determine ways and means for accomplishing the line of action decided upon is also a part of the decision making process.

Profit centre: This is a segment of a business that is responsible for both its revenue end expenses, providing information for such an entity.

Planning: The use of information supplied by accountants in making decision by which management formulate objectives for future business of the firm

Control and Coordination: A process of ensuring that the cause of actions is maintained and that the desire aims are achieved. This is done through the use of budgets and actual data.

Cost Decision: This is the application of and cost of principles, methods and techniques in the ascertainment of cost and analysis of savings and or excess as compared with the previous experiences or with standard.

Organization: In organization the managers decide how best to put together the organizations human and other resources in other to carry out establishment.

Cost Accounting: This refers to the determination and control of cost.

General Accounting: This is the overall records keeping preparation of financial statements and reports and control at all business activities.

ASSESSING ECONOMY GROWTH IN DEVELOPING COUNTRIES, ROLE OF TAX COLLECTOR

ASSESSING ECONOMY GROWTH IN DEVELOPING COUNTRIES, ROLE OF TAX COLLECTOR

CHAPTER ONE

INTRODUCTION

1.1       Background To The Study

Tax is a financial issue and its payment is a civil duty. It is the imposition of a financial burden for the government on individual firm and companies. In general based, the word tax means any contribution imposed by the government upon individual and companies for the use of government to provide facilities or services as rendered by the state. It is not a voluntary payment or donation but an enforced contribution made on the pronouncement or directive of legislative authorities.

The subject of taxation has received considerable intellectual and theoretical attention in the literature. Taxation is one of the most volatile subjects in governance both in the developing and developed nations. Tax refers to a compulsory levy by a public authority for which nothing is received directly in return (James and Nobes, 2015). According to Nightingale (2011), tax is a compulsory contribution, imposed by government, and while taxpayers may receive nothing identifiable in return for their contribution, they nevertheless have the benefit of living in a relatively educated, healthy and safe society. She further explained that taxation is part of the price to be paid for an organized society and identified six reasons for taxation as provision of public goods, redistribution of income and wealth, promotion of social and economic welfare, economic stability and harmonization and regulation.

According to Chaudhry and Munir (2010), tax as a source of government revenue consists of direct and indirect tax.  Direct tax is a form of tax that is levied on the income of individuals both civil servants and self-employed persons. OECD (2013) popularly called it Personal Income Tax (PIT),the burden of PIT is borne by the person on whom it is imposed. The concept of direct tax is not restricted to individual’s income in the form of pay As You Earn (P.A.Y.E) alone. It extends to profits of corporate bodies whose burden cannot be shifted. On the other hand, indirect tax is a type of tax that is levied on goods and services. Unlike direct tax, the burden of indirect tax can be shifted as in the case value added tax, import duties, among others.

Government needs a great deal of revenue in order to perform its duties effectively. Without adequate fund, development and improvement in human welfare will be hampered. The primary motive of taxation in all countries of the world is to generate funds to sustain economic growth and development. According to Osho, Ogumnyankin and Fadekinto (2020) taxation is the primary sources of government revenue. They opined that, it is an instrument for moving resources from the private hands to the public in order to achieve some of the country’s economic and social goals.

Despite the importance of PIT revenue, generation as key to economic development there has been a lot of tax evasion which is a major problem plaguing many emerging economies across the globe and Nigeria’s  situation seems peculiar when viewed against the scale of corrupt practices prevalent in the country.

Despites the importance of taxation to economy growth in a developing nation, many still evade tax in one way other other. Lekan and Kajola (2016), said that tax evasion is a deliberate practice of not disclosing full taxable income so as to pay less tax. This behavior is seen as a criminal act of disobeying the provision of tax laws. They also pointed out methods by which people evade tax to include failing to furnish correct return, statement or information or keep records required, making false return by a way of omitting or understating income liable to tax, presenting large amount of expenses in other to reduce taxable income and deliberating tax payment.

That is why Salawu (2015) further stressed that tax evasion is a crime that impedes government fiscal policy. This means that tax evasion makes government effort at regulating the economy ineffective.

Tax collectors either as an individual staff of the government or as a government agency plays a significant role in ensuring that the right income accrue from tax to the government is rightfully paid. Therefore, the need for this study to access economy growth in developing countries with the view of ascertaining the roles of tax collector.

1.2       Statement Of The Problem

It has been noted that tax system in developing countries has come to play a significant role, as a major source of revenue to the federal government  by way of imposing tax on tax payers and it is for them to pay up the tax.  The act of evading and avoiding tax by most registered companies and  some individuals has however affected the revenue base of the  government especially in providing essential services in the society. People naturally prefer to reduce their tax liabilities by deliberately overstating  their expenses and make false entries and fictions in their books of  account. Thus, their act however, causes tremendous reduction in the  revenue accruable to the government which eventually shrinks revenue to  the treasure of government. The inability of tax collectors or revenue board to collect substantial amount of money from tax is as a result of evasion and avoidance of tax. This research work access economic growth in developing countries with the view of examining the role of tax collectors.

1.3       Objective Of The Study

The general objective of this study is access economic growth in developing countries: role of tax collectors with particular references to Nigeria economy.

The specific objectives of this study are as follow

1. To analyze the state of economic growth in Nigeria
2. To evaluate the contribution of tax to the economic growth of Nigeria
3. To assess the role of tax collectors in increase tax revenue in Nigeria
4. To identify the factors or problems militating against the tax assessment and collection in Nigeria.

1.4       Research Questions

1. What is the state of economic growth in Nigeria?
2. What is the contribution of tax to the economic growth of Nigeria?
3. What is the role of tax collectors in increase tax revenue in Nigeria?
4. What are the factors or problems militating against the tax assessment and collection by tax collectors in Nigeria?

1.5       Statement of hypothesis

H0: Tax revenue did not play significant role in the economic growth of developing countries.

H1: Tax revenue plays significant role in the economic growth of developing countries.

1.6       Significance of the study

This research work would be relevant to various tax authorities; the Federal Board of Inland Revenue, Local Government revenue committee as well as their tax officials who are responsible to collect tax on individual or corporate bodies. It gives them insight on how to improve the tax administration.

The research would also help the professional bodies like the chartered institute of taxation of Nigeria and the institute of chartered accountants of Nigeria as well as their members to see the areas of deficiency in the collections and call for improvement in tax revenue.

This research would also be relevant to the future researchers and the dents of accounting, economic, business administration and other social and management sciences as well as the legislations which will also benefit immensely from this research because it will form basis of tax policy formation, implementation and administration.

1.8       Scope and Limitation of the Study

Since no single research can validly cover all areas of the topic the researcher tends that thrust of this project will be limited the scope of the study to Nigeria Economy.

Limitation of the Study

It is not unusual for research to encounter some difficulties in course at their research and these may include.

1. Finance: This is always a major limitation in a study of this nature, since the individual may not have enough money to carryout all the necessary research.
2. Lack Of Data: There are areas where data is available but which the researcher cannot lay hands on because the relevant information is sometimes termed confidential and unavailable to outsiders.
3. Lack Of Co-Operation:- By some of the respondents whom he administered certain copies of his questionnaire and vocal interview.
4. Delay in giving back its him some of the copies of the questionnaires for some of the respondents.

1.9       Operational Definition Of Terms

Taxation: This is a Compulsory levy imposed by the government to defray the cost of government and communal services.

Gross Domestic Product: This is the market value of all officially recognized final goods and services produced or the primary indicators used to gauge the health of a countries economy.

Development: This is the sustained concerted actions of policymakers to promote taxation and economic health of a specified area.Growth: This is the increase in the amount of tax paid by the tax payers over time or it is the conventionally measure in percentage rate of increase in real GDP calculated in real terms.

AN ASSESSMENT OF INTERNAL AUDITORS ROLE IN FEDERAL MINISTRIES

AN ASSESSMENT OF INTERNAL AUDITORS ROLE IN FEDERAL MINISTRIES

(A CASE STUDY OF FEDERAL MINISTRY OF TRANSPORT ABUJA)

ABSTRACT

This research work assesses internal auditors role in Federal Ministries Transport, the main objective of this research work is to determine the extent of effectiveness of fraud detection and control mechanism, to examine the procedures in fraud detection and control in government organizations. In undertaking this research work, both primary and secondary data were used. The primary data were obtained through the use of questionnaires: the secondary data were obtained from the review of related literatures.  Questionnaires were administered and Ninety nine were duly completed and returned. Anova method was used for analysis of the questionnaires, it was found out from study that there is presence of effective and adequate internal control system in operation to curtail the future occurrence of fraud in Federal Ministry of Transport Abuja. And that without doubt, this fraud detection and control mechanisms are effective and also it was noted that fraud could be detected through normal audit. In the light of the above findings, the researcher recommends among others that staff should be made to rotate their job from time to time to eliminate any possible exploitation caused by long stay on a particular job to commit fraud. The researcher also recommended that the welfare of the staff in the Federal Ministries should be given priority as this will go a long way to reducing the rate of fraudulent activities in public offices. The researcher further stated that, thorough supervision should be carried out during and after a task is executed that is to say the activities of junior staff should be properly checked by another senior staff that has more years of experience in the field. Finally, Staff Welfare: since average remuneration has been identified as one of the reasons responsible for persistent cases of fraud, it is recommended that the audit staff in particular and the other staff in general, should adequately be remunerated. This will bring contentment to the staff and hence reduces the temptation to get involve in fraudulent activities in the Federal Ministries. All other benefits should equally be improved and paid as at when due.

CHAPTER ONE: INTRODUCTION

1. Background to the study

Auditing is the examination of accounting records with a view to ascertaining their accuracy and compliance with relevant statutory provisions, accounting standards, professional pronouncements, and the organisational policies.

The Chartered Institute of Public Finance and Accountancy (CIPFA), as cited by Johnson (1996:47), defined internal audit as “an independent appraisal function within an organisation for the review of activities as a service to all levels of management. It is a control which measures, evaluates and reports upon the effectiveness of internal control, financial and otherwise, as a contribution to the efficient use of resources within an organisation.”

According to Gupta (1999), internal audit is an independent appraisal function established within an organization to examine and evaluate its activities as a service to the organization.

Jocelyn (2003:67) traces the definition of internal auditing given by the Institute of Internal Auditors as “an independent appraisal function established within an organisation to examine and evaluate its activities as a service to the organisation.” The objective of internal auditing is to assist members of the organisation in the effective discharge of their responsibilities.

Internal auditing is an independent appraisal function established within an organization to examine and evaluate its activities as a service to the organization. The objective of internal auditing is to help members of the organization in the effective discharge of their responsibilities. In view of this, internal audit furnishes them with analysis, appraisal, recommendations, counsel and information concerning the activities reviewed (Institute of Internal Auditors, 1991).

According to Institute of Internal Auditors (1991), the scope of internal auditor is defined as “The examination and evaluation of the adequacy and effectives of the organization’s system of internal control and the quality of performance in carrying out assigned responsibilities”.

Danbatta (2004) concludes that a properly conducted internal audit is expected to reveal errors, strengths or weaknesses of internal control system of the organization. Base on his conclusion, there is significant positive relationship between internal audit and internal control.

Vos (1997) said that objective of internal auditor is to evaluate effectiveness of financial and operating control, confirm compliance with company policies, procedure, protect assets verify the accuracy and consistency of organization’s external and internal reports. Stoner (1994) was of the opinion or view that the objective of internal audit is to evaluate several of the organization’s reports for accuracy and usefulness and also recommending improvement of the control system.

Tracey (1994) is of the view that it is the responsibility of the internal auditor to review how well the accounting system works and also evaluate the effectiveness and efficiency of many operations in the organization. A lot of public sector has been operating without internal auditor. This can be attributed to the fact that few people outside the accounting profession realize the importance of the internal auditor. Emphasis was laid on discharging accountability for the use of owners fund through the internal auditor report. Some public sector management adduces the argument that internal auditors, being employees in public sector do not have the liberty to exercise the unbiased and independent attitude so necessary to an auditor.

1. Statement of the Problem

In spite of various pronouncements on internal audit in the Nigerian Public Sector, the general opinion according to literature is that most of the public enterprises have failed to deliver on the purposes for which they were established. Many people accuse managers of public enterprises in Nigeria of ineffectiveness and inefficiency in terms of resource control. They argue that poor application of internal audit principles and procedures leads to blatant diversion of scarce resources with its attendant consequences on the traditional accountability of government to the public. However, mention must be made that the ineffective implementation of internal audit procedures in the Nigerian public sector is not only attributable to unavailability of adequate legislations. It also hinges on whether there are adequate punishments for violations of internal audit procedures and whether the punishments are justly and effectively applied whenever need be. With these looming cases against the performance of internal audit procedures the researcher considered it a matter of urgency to have an in-depth assessment of internal auditors role in Federal ministries with particular interest in Federal Ministry of Transport Abuja.

1. Research Questions

To achieve the objectives of the study the following research questions are answered:

1. To what extent is the effectiveness of fraud detection and control mechanism used by internal auditors in Federal Ministries?
2. Are there procedures used in fraud detection and control in government organisation?
3. Do internal auditors report irregularities to the management?

1. Objectives of the Study

The main objective of this study is to assess the internal auditors role in Federal Ministries.

The following are the specific objectives:

1. To determine the extent of effectiveness of fraud detection and control mechanism in Federal Ministries by internal auditors
2. To examine the procedures in fraud detection and control in government Organizations.
3. To evaluate whether internal auditors report irregularities to management.

1. Statement of Hypotheses

H₀₁: Fraud detection and control mechanism used by internal auditors is not effective in the Federal Ministries.

H_A2: Fraud detection and control mechanism used by internal auditors is effective in Federal Ministries.

H₀₂: Internal auditors do not have procedures to use in fraud detection and control.

H_A2: Internal auditors have procedures to use in fraud detection and control.

1. Significance of the study

This study brings to light the role of internal auditor in fraud detection and control in Federal Ministries which is been limited to Federal Ministry of Transport Abuja as a case study.

Therefore this research study will be of great benefit to ministries, government parastatals, and corporation in order to know the weakness of internal control system of the organization that give room for the fraud and also to determine the existence of the fraud in the organisation.

It will also be of importance to those in academic and researchers in accounting and audit field to have more knowledge on the role of internal auditor, in fraud detection and control.

The above mentioned benefits will improve extensively if they use report Submitted by the internal auditor to management for corrective measures and also all the recommendations will be put into consideration.

1. Scope of the study

The researcher embarks on an assessment of internal auditor’s role Federal Ministries in Nigeria as a whole. But the resources and duration of the time and cost did not give enough room to cover the entire Ministries in Nigeria at large. For this reason, the researcher took Federal Ministry of Transport as a case study. The period under consideration and review was year 2016.

1. Limitations of the study

This research is limited to the role of internal auditor in fraud detection and control in Federal Ministry of Transport Abuja; this is because the researcher will not be able to cover all the ministries and government parastatals within the limited time.  The researcher also finds it difficulties in gathering data from the research population as they considered such information as confidential.

1. Definition of Terms

Auditor: An auditor is an independent person who is appointed to investigate the organisation, its records and financial statement prepared for them, and thus form and opinion on the accounting and correctness of the financial statement.

Errors: This refers to an unlimited mistake or act committed by employee in the financial statement and accounting records, whether of the mathematical or clerical nature, whether in application of the accounting principles or due to oversight or misinterpretation of relevant facts

Fraud: This is an intentional act by one or more individuals among management those charged with governance, employees, or third parties, involving the use of deception to obtain an unjust or illegal advantage.

Fraudulent practice: This is an intentional violation of internal control system in an organisation for the acquisition of unjust benefits either in monetary terms or in kind by a fraudster in the Federal Ministry of Transport Abuja Nigeria Misrepresentation: this refers to the reporting of wrong facts in financial statement for the use of the management and other regulatory bodies.

Irregularities: This refers to intentional distortion of financial statements and accounting records for whatever purpose and misappropriation of assets whether or not accompanied by distortion of financial statement and accounting records.

Misappropriation: This could be seen as taking somebody’s money or property for yourself especially when they have trusted you to take care of it.

Finance: the management of large amounts of money, especially by governments or large companies.

Financial Statements: Financial statements present the results of operations and the financial position of the company. Four statements are commonly prepared by publicly-traded companies: balance sheet, income statement, cash flow statement and statement of changes in equity.

Parastatal: A company, agency, or intergovernmental organisation, that possesses political clout and is separate from the government, but whose activities serve the state, either directly or indirectly.

Fiction: Is a deliberately fabricated account of something. It can also be a literary work based on imagination rather than on fact, like a novel or short story. The Latin word fictus means “to form,” which seems like a good source for the English word fiction, since fiction is formed in the imagination.