The Effect Of Value Added Tax On Price Stability In Nigerian Economy

  • : Ms Word, Ms Word Format
  • : 71 Pages
  • : ₦3000
  • : 1-5 Chapters
  •  
  • Click to DOWNLOAD Materials

This Research Work is on

The Effect Of Value Added Tax On Price Stability In Nigerian Economy

CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
In most developing countries including Nigeria government participation in economic activity is usually significant. One of the ways through which government has intervened in Nigerian economy is through the establishment of public enterprises and statutory bodies. In Nigeria, public enterprises are engaged in a wide spectrum of economic activities including agriculture, mining, construction, manufacturing, commerce and services. The classification of public enterprises in Nigeria has been made according to varieties of criteria by different authorities. The public service review commission (1975:101) classified public sector into Public utilities, Regulatory body and financial institutions. The rational for the establishment of public enterprises are numerous just like establishment of private enterprises. They include amongst others; provision of employment opportunities, generating income for the owner of the enterprises etc. The activities of the public enterprises have been on the increase in recent times which necessitated the introduction of the accounting practice to check and monitor the financial activities of these enterprises. In his book, titled principles of accounting, by Bimage (1985) Accounting is defined as a process by which data relating to the economic activities of an organization are measured recorded and communicated to interested parties for analysis and interpretation. The earliest methods of accounting records were kept in physical quantities. These records came from the Eastern (early) civilization which involved in the countries around the Mediterranean Sea such as Mesopotamia, Egypt, Crete, Italy etc. Money was recorded as soon as money took the place of barter as a medium of exchange and unit of accounts, accounting practice has been closely related to the economic development of the country. This study looks at the role of accounting in the control of the expenditures of government particularly at the local government level. The Nigerian government practices a three tier governmental system. The most important of these tier is supposed to be the local government been the closest to the common man hence the need to take a critical evaluation and review of the activities of the local government and her expenditure profile with a view to providing possible ways by which its spending derives maximum benefit for the good of all. The role of accounting in the public sector and particularly in local governments is primarily to ensure accountability in the sector and present the true and fair financial position of the entity. An organization can only grow or profit when its resources are well managed. In recent times, there have been cases of misappropriation of funds in the public enterprises and lack of accountability. This scenario is even worse at the local government level as the only thing they do is to share money at the end of the month once the fund allocated from the federal purse arrives. No organization can move forward without having an organized accounting department to give accurate financial information about her financial activities. This is because if proper records of transactions are not kept, management is then incapacitated as regards planning and control as well as decision making. Proper accounting records and practice therefore is sine qua non to the success of public enterprises and particularly local government administration. This study looks at the role of accounting in the control of the expenditures of government particularly at the local government level. One of the veritable tools for the control of expenditure in all organization and most often than not by the three tiers of government is the budget. The institute of cost and management accountant (ICMA) defined budget as a financial or quantitative statement prepared and approved prior to defined period of time of the policy to be pursued during the period for the purpose of attaining a given objective. It may include income, expenditure and the employment capital. Therefore in order to achieve these objectives or goals, the organization must economize resources and discover the means of achieving these goals. Budget as a financial plan sets out anticipated revenues and estimated expenditures over a certain period of time. The various kinds of budget have long been in use since their inception in the 1920 and every serious organization has made them the central part of their planning and control system. Their ability to coordinate the allocation of resources through internal communication while at the same time serving as a means of expenditure authorization and evaluation base has made them the most important tool that is at managers’ disposal today. It is exactly the importance that has contributed to its longevity and caused them to remain relatively unchanged since the first days of their existence.

1.2 STATEMENT OF PROBLEM
Obviously, every privates and public entity in Nigeria has their accounting department and there are increased cases of financial mismanagement in virtually all the public and private organization in Nigeria. The problem of this study lies on how the managers of these enterprises are able to recognize the role of accounting in their enterprises so that these cases of lack of accountability will be minimized or if possible its total eradication in our society. The specific problems of local government as it relates to its activities and expenditure control are as follows
· The budget and budgetary systems in the local government are faced with serious challenges.
· The expenditure profile of public entities and particularly local governments in Nigeria are witnessing unjustifiable increments.
· The conducts of personnel at the local government level aids the possibility of fraudulent practices.
· Lack of budget in planning and control has resulted in the indiscriminate use of fund meant for more viable activities.

1.3 OBJECTIVES OF THE STUDY
The purpose of this study include among others:
To determine the extent to which accounting records has controlled expenditures in public enterprises and specifically in Ankpa local government.
To find out the factors that is responsible for the unjustifiable and consistent increase in the expenditures of public entities.
To determine government policies and practices which promote accountability and transparency in public enterprises in Nigeria and Finally, the study also aims to examine the role that budgeting and budgetary techniques plays in the budgeting process of public enterprises

1.4 RESEARCH QUESTIONS
· To what extent has accounting records helped in controlling the expenditure of public enterprise?
· What are the factors that affect accounting department of most organization which makes them not to function effectively as expected?
· What are the governments polices which promote accountability in Nigeria public enterprises?
· In what ways can budget and budgetary techniques help the local government in ensuring probity, accountability and transparency? These and some other questions have been effectively answered in this research work.

1.5 RESEARCH HYPOTHESES
According to Abdulwahab (2000) The Research Hypotheses set out the basic issues relating to the data to be gathered in the course of carrying out the research. They serve as a theoretical conceptualization of what and how the researcher anticipated in terms of his research outcomes. They assist him to test and verify his ideas on the basis of which he makes very concrete and dependable conclusions and generalization. They also help him to sharpen his focus on the research problem with a view to determining the direction to find the solution. These research hypotheses are to know the findings or result of this research;
HO1-There is no significant impact of efficient and effective record keeping on the public expenditure control of organizations in Nigeria.
H11 -There is a significant impact of efficient and effective record keeping on the public expenditure control of organizations in Nigeria.
H02-There is no significant impact of efficient and effective public expenditure control on the financial performance of organisations.
H12-There is a significant impact of efficient and effective public expenditure control on the financial performance of organisations.

1.6 SIGNIFICANCE OF THE STUDY
In this study, the researcher examines the role of accounting in the public sector in Nigeria with the aid of highlighting the inherent problem encountered in the account department of most organizations and particularly at the local government level. It is expected that this work will be of interest to the owners of business enterprises, the government, students and the general public. To shareholders, owners of small and medium scale enterprise, interested persons and the government, this study is expected to enkindle their interest the more to take note of various recommendations mentioned here and help steer the management team towards forming a formidable accounting department to present accurate, reliable and dependable financial information to their firm. In conclusion, this study expects to fill the knowledge gap of local government employees and top management on current budgeting practices such as zero based budget, planning programming budgeting system, flexible budget and incremental budget with a view to enhancing efficiency and effectiveness of resource allocation at the local governments.

1.7 SCOPE OF THE STUDY
Scope of the study shows extent of coverage in the study. The research topic suggests a study on the role of accounting in the control of public expenditures of government Nigeria with particular reference to Dekina local government. The focus of the study is on Dekina local government area of Kogi State. It is pertinent to state that this study exhaustively examines the accounting practices as obtained from evidence gathered from the questionnaire and interview conducted in the case study area. The work covers accounting practices in local government areas as opposed to privately owned businesses.

1.8 LIMITATIONS OF THE STUDY
There are constraints that normally follow every research work, a constraint is that which limits the general application of a research work and this is what is referred to as limitations. Some of them are;
1. TIME: This was a major problem as the researcher needed to combine the riddles of lecture while at the same time conduct the research work; this was not a good experience to manage in any way. Time was not enough for the research to be properly and meticulously carried out. The researcher will recommend that project allocations should be done and project topics approved at the end of the preceding session of the final year session. Overall the fit achieved within the short time frame is well commended.
2. INADEQUATE MATERIALS: The data available for the research work was inadequate as the staff of the local government refused to provide sensitive materials which they consider in their view might implicate the local government authority. The researcher also suffered from the lack of journals and periodicals in areas of the selected topic.
3. FINANCE: finance hindered the projects in one way or the other. The personnel of the local government did not help the situation as they expected some kind of monetary facilitation by the researcher before they could give adequate attention.
4. Finally, this study was also limited by the inadequacy in the number of local governments studied. The work was limited to Dekina local government which is acclaimed the largest local government in West Africa. The peculiarities of Dekina local government may not even be the same with a close local government like Ankpa not to talk of other local government within the federal republic. Users are advised to take into considerations attributes that are peculiar to their local government before adapting or adopting the recommendations thereof. The assumptions of budget and budgetary techniques may not also reflect real life happenings.

1.9 OPERATIONAL DEFINITION OF TERMS
MANAGEMENT: This refers to persons, groups, departments and sections that are in charge of planning, controlling, coordinating, and directing organizational resources in the most efficient and effective manner.
ACCOUNTANT: In this context, an accountant records, classify and summarizes all public expenditure in the local government in a manner and in terms of monetary events and transaction which are in part at least financial character and interpret the result thereof. An accountant prepares accounting reports which are vetted by an independent auditor and presented to management.
LOCAL GOVERNMENT: This is the third tiers of government in Nigeria with original responsibilities of providing primary education, establishment and maintenance of cemeteries and homes for destitute, in charge of naming of streets, responsible for the registration of birth and deaths.
GOVERNMENT: This is an institution responsible for the provision of amenities, defend the country against external aggression and protect the lives and property of the citizens and manage the resources of the country for the general good of all.
ACCOUNTING: In this context, an accountants records, classify and summaries all public expenditure in the Central Bank of Nigeria in a significant manner and in terms of monetary events and transaction which are in part at least financial and to interpret the result thereof.
FINANCIAL STATEMENT: An accountant makes an accounting report issued by a business to describe its financial affairs and results of the operations. A good example of financial statement will be the following: Statement of comprehensive income, statement of financial position, statement of cash flow, statement of changes in equity.
EFFICIENCY: The extent to which time and other resources are well used for the intended purpose. Efficiency means doing the right things. Channeling organizational resources to ventures so as to provide maximum benefit for the good of all
EXPENDITURE: It means disbursement, expense, payment, cost, charge and outlay. This is the aggregate of government spending in other to meet her responsibility as well as guaranty a good life for its citizenry.
PUBLIC: This refers to an entity funded by government or its agencies for the general good of all. It could also mean things or phenomenon related to the masses or the common man.
PUBLIC ENTITY: This refers to organizations that are established by government with the aim to provide basic amenities, essential services, or the protection of national interest. This study takes CBN to be one of such entities for a fact that it is a statutory body by which the government implements its monetary and sometimes fiscal policies.

 

 

Get the Complete Project

 

FOR MORE RESEARCH PROJECT TOPICS AND MATERIALS, CLICK HERE

Sharing is caring!

Leave a Reply