THE IMPORTANCE OF ACCOUNTING ON ORGANIZATION’S EFFECTIVENESS
Historical development of book-keeping and accounting could be traced to 1494 when new method of recording transaction started, and with it a lot of transformation followed. This new system of book-keeping was developed by an Italian Monk Luca Paeido.
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Many scholars disciples of this educationist monk have traced and recorded the historical development of this innovation from their various historical and physiological background Okafor (1995:2). And from the onwards further innovations have been introduced into the accounting system. As a result a new dimension had been made or added to the book-keeping and accounting system in the needed requirement for periodic financial statement needed to know the result of business investment by the enter pernicious and the general public Okafor (1993:3).
At the all levels of government, emphasis is economics growth nearly all resources, energy and society attention have been divided towards the training and development of government accountant who stand as the catalyst development of private or commercial accounting in any economic. That is why in Nigeria, exports have been made in training government accounting officers in such institution. Such as the Administrative Staff College of Nigeria (ASCON) University of Lagos and treasury schools were established. More so, there are other private bodies like Institute of Chartered Accountant of Nigeria (ICAN) and the National Accountant of Nigeria (NAW) being professional bodies that regulates the practices and qualification in Accountancy Professional in Nigeria. It is pertinent to note here that government accounting and public, socio-economic units is as old as accounting for private or commercial organization more so, private qualified practitioner had dust, in early part of this decade introduced the subject of government accounting into their examination curricular. And in pursuance of better accountabity at all levels, efforts should be made to cultivate fully the necessity for adequate accounting records to be kept by government has and other commercial organization. Government has created area as for conventional training of accounting officers that may wish or desire to work in the civil services, hence Oshian (1992:123) states ”The death of text and adequate reference works in the area of government accounting does not help matters and this need to be improved urgently.
- NATURE OF GOVERNMENT ACCOUNTING:
According in a general sense may be regarded a process in which transaction and event in an operating entity are recorded for the purpose of accumulating and providing financial information sectional to the good conduct of the activities of such an entity Oshisani (1992:122).
Accounting has also been defined variously as a service activity, a descriptive and analytical discipline and an Information System. Nwobodo Okafor (1995:1) As a service activity, it provided interested parties with both qualitative and quantitative financial information that help them to take decisions on the development and use of resources on business and non business entity in an economy. And as a descriptive and analytical discipline, it identifies mass of event and transaction of an entity by providing measurement classification of data, summaries these data, to relatively small, highly significant and inter-related items, that when properly assembled and reported describes the financial conditions and result of operation of such an entity.
Consequently, as an information system it collects and communicates economics information about business and non business organization to a wider variety of persons and organization whose action and decisions are related to the activity being communicated.
With regards to Government, Accounting System may be depend as a system of analyzing the financial transaction of the government into heads and sub head recovering of financial transaction in the cash and not book, classifying, summarizing, reporting and interpreting the financial statement of the government.
JETOS (1992) further more, it is necessary to state here the purpose of government accounting which is to demonstrate the details of government transactions and their conformity with established rules, to give evidence of accountability for the steward ship of the government resources and to provide useful information for the good control and efficient management and control of government operations.
From the above analysis, one can easily conclude that government accounting system is quite different from other forms of accounting such as national income accounting, commercial or private sector accounting making use of the accounting tools and skills of technical book-keeping. However, ever through there are basic differences regarding the concept and approach in their accounting procedure they share the same principles and practice. Further more, government accounting system operates on cash bases as opposed to the accrual basis used in the commercial accounting system.
2.2 PROCEDURE FOR GOVERNMENT ACCOUNTING
Government accounting system is the same and follow the same procedure in every government department ministry, prostates, cooperation and all government owned business, and this is done in accordance with laid down rules and regulation as contained in the financial regulation (FR).
The supreme legal instrument or documentary authority is the constitution of Federal Republic of Nigeria which set out the general finance work and control of public accounting. Some of these financial matters are regulated by law promulgated by most government in power from time to time when the need arises.
These laws include:-
- The Federal (Control and management) Act 1958, which governs the management and operation of all public funds and regulates the according format used in preparation of government account.
- The audit act of 1958, which spells out the duties and power of the auditor general.
- The annual appropriation act or decrees which us the legislative act for incurring liabilities for specified purpose.
The financial regulation stands as the regulation and guide unprincipled On accounting method, which constrains a number of method and has uniformity in the recording and application of financial transactions in any government establishment which also aid in achieving efficiency and accountability of public found.
Not with standing that, at times the interpretation of these rules makes the achievement authors, especially Oshiani, remarked (1992:5) have that the civil service being a complex and large organization requires set standing in order to ensure uniformity and conformity to establishment financial regulation.
The direct implication and unintended consequences is that, more often than not accounting officer responsible for effecting, operating or interpreting the provision of the financial regulation (FR) encounter problem of conflict when interpreting some provision of this rule and these officer are often accused of an inhuman approach to their work for the government accounting system to achieve its objective, adequate attention must be paid to areas of staff development and constant review of those accounting rules as contained in the financial regulation. Give this condition; the out come is certainly going to be increased productivity in the system or organization.
More so, the application of these rules and regulation should be back with accounting instrument such as treasury and finance circulars and instrument such as treasury and finance circular and circular letters which are meant and used for amending the existing provision of the (FR) Federal Regulation by way of introducing new policies and guidelines.
2.3 FINANCIAL CONTROL
Good organizational structure does not by useful produce good performance just as a good constitution does not guarantee great president or good laws in a moral society but a poor organizational structure makes good performance impossible no matter how good are the individual manager.
The same applies to institution arrangement just like the civil service administration where accountability is the watchword with regard to the financial regulation proper management and the control of accounting system for efficiency. And this can be achieved only through good internal control and proper management information. The purpose here is to minimize or eradicate waste, fraud dishonestly, embezzlement and misappropriation of public fund.
Financial control which is part of financial management has a dual posture by nature, first it has the control function which is part of the total function of system it performs and secondly, the control function which serves each phase of the system Oshisani (1992:35).
Financial control ensures that resources obtained economically and used efficiently and effectively in order to accomplish the desired goals. In every organization this financial accounting system is inspected by two institutions, the internal audit and the external audit.
External audit is the control system operating independently of an organization and focuses on accountability and good steward ship, and to achieve this, external audit and public account committee (PAC) are the tools employed. Auditing is concerned with the examination of accounting records of all government financial operation to ensure strict compliances with the statutes, rules and regulation.
Which stands to ensure that all monies approved and allocated to every service are judiciously used and applied for the purpose inherited other wise adequate explanation are sought?
Furthermore, public accounts committee is appointed by the legislative or the federal executive conceit and their function is the federation and also the services of the Auditor General on those accounts (PAC Decree of 1987 Decree 18).
On the other hand, internal audit implies the whole control system established by the organization management in performing its record, promote operational efficiency and encourage allowance to policies Oshisani (1992:31).
It is pertinent to state here that financial control is divided into four as follows:
- Control Technical
- Internal Check
- Supervision and Checking
- Resolution of Audit Queries
These segment resolve around the accounting system to ensure that all financial transaction and events are accurately recorded in the system.
2.4 CONTROL TECHNICAL
It the process by which control objectives one made possible. It also includes physical arrangement that provide coverage, which is always available when needed. These includes lock safe and alarm system other include proper documentation, recording and execution which takes place with due authority.
Internal check is concerned with the manner in which the entire operation of the accounting system are duties of individual staff in the system are organization so that fraud and other regulates are checked.
This is accomplished by the sub division of duties such that no one person can on his own begins and completes a process. The duties performed in the system are more or less complete a process. The duties performed in the system are more or less complementary and only by so doing can proper checks and balances be achieved.
Resolution of audit quarries concludes accounting control supervision; evaluate finding or recommendation to audit quarried and report. It determines the proper response reply and takes action that will correct the issue at stake when necessary.
- THE TREASURY CONTROL
The treasury is duty-bound to keep all necessary books of accounts, all records and all receipts and payment voucher of all Federal Ministries/Department under its control and also prepares the annual statement of account for the Accountant General of the Federation. All accounts kept by the federal ministries are rendered to the treasury for inclusion in its final account and it acts as a control and check measure to the accounting unit.
More so, the treasury, through its inspective division conduct regular inspection of all accounting activities of all Federal Ministries Department to ensure efficiency of accounts which has to conform with the appreciate regulation and procedures.
- REVENUE CONTROL
Financial regulation (FR) chapter 3 deals extensively with the general Procedure for collection of government revenue and this provision stated in the above chapter provides for adequate safeguard for indemnifying condition for collection revenue, monitoring the collection and ensuring accountability for such collection (FR 311). The financial regulation (311) mandated every revenue collector to submit his cash receipt book for examination to the sub-accounting officer to whom he pays the revenue collected at such. Fixed internal as the officer may prescribe.
- EXPENDITURE CONTROL
Public funds are not expected to be spent without following the laid Down rules and regulations. These rules are a guide against extravagant spending, embezzlement and fraud.
Fill payment are covered by appropriation authority and document accompanying the payment and valiabity of all claims must be made for the purpose intended. Also specific directions are given for keeping the departmental vote book (AVE BOOK) and responsibility for expenditure control and other authorizes for preparing payment vouchers. The financial regulation (FRSIO) specifically provided for two key officers to be account able for what they sign. These are the officers controlling the vote.
The sub-accounting office that is referred to have as the officer controlling the vote is equally enjoined to check the accuracy far as he is in a position to do so before payment (FR 519)
This provision states that before making any payment, a sub-accounting officer will satisfy himself so far as he is in a position to do so that:-
- The expenditure has been authorized by warrant and the voucher correctly classified in accordance with the estimates.
- The information furnished on the voucher is correct in all particulars, the certificate on the voucher completed where necessary and the voucher signed by the proper officer.
- All proper deflection from salaries or pension on account of contribution, repayment of allowance or other liabilities have been duly.
- DEPARTMENT CONTROL
This is another form of control that is very important in the financial
System and in this case grass root supervision is carried out to ensure that money voted for any department for any purpose is not over spent on any sub-head except the sub-head it is meant for and this is done by the maintenance of the system of accounting introduced by the treasury. Efforts
Being made for the proper collection of the revenue and its payment with the treasury. It is the function of the head of department to fix and control the responsibilities of the officer in charge of key result area and also closely monitors their performances.
- SUMMARY OF RELATED LITERATURE
From the above reviews, one can clearly understand how the term accounting came into existence and various opinions given by many authors and some school thought concerning the importance of accounting and various efforts made by the government and other private organization to ensure its effectiveness on an organization. Hence, we can say that accounting is the life wine of any organization.
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