Improving the Effectiveness of Accounting Systems in Production Industries in Nigeria

Improving the Effectiveness of Accounting Systems in Production Industries in Nigeria

This chapter presents the review of related literature on the nature of production industries accounting systems and control.

Modern accounting is widely recognized as basic component of business management. Accounting evaluating business activities. This is perhaps the most mangers and business student to familiarize them with the accounting discipline. Both profit seeking and non profit seeking organization maintain extensively accounting records. The reason for maintaining this accounting record may be that law requires it.

In Nigeria production industries maintain a very high accounting system to enable them run the activities of the organization which is mainly geared towards profit making.

To order the Complete Project Material, Pay thr Sum of N3,000 to:

BANK NAME: FIRST BANK PLC

ACCOUNT NAME:  CHIBUZOR TOCHI ONYEMENAM

ACCOUNT NUMBER: 3066880122

Then send the Project Topic, Your Email Address and Full Name to 07033378184.

 

Finally this chapter also co-ordinate different views expressed and established to accomplish the objective of the study

DEFINITIONAL FRAMEWORK OF AN ACCOUNTING SYSTEM

Accounting is simply an information system necessitated by the great complexity of modern business. According to Bach (190) mangers are informed of the financial process of planning control. Also according to istaran and Averg (1969) defined according to as the processing observing recording storing summarizing and reporting the net impact of the effect that result from certain kinds of decision

Wedgenback (1980:2) in his own contribution said :Accounting involves the process of recording classifying reporting and interpreting the financial data of an organization

. once accounting system has been designed and installed recording and classify of data may become somewhat routine and repetitive. Accountants direct most of them to the reporting and interpretation of the meaning implication of the data.

On the other had the word system is widely used and connotes variety of concepts all geared towards the same meaning. Deferent authors have defined system in the ways it best appeal to them.

According to Banish (1951:3) a system is means by which manger of organization perform their duties co- operatively towards attainment of goal and objective of the enterprise. This is a fact because in any business organization none in particular being organizational set up there are always mangers to man various department. These mangers must work hand in had thereby culting across their department rotes instead of working in isolation which will never be in the best interest of the organization. The definition went ahead to say that a system provides means of translating managerial policies into action. However to the author, it is unifying factor personal material machines and activities towards accomplishment of enterprise objective.

Debbek (1975) also defined a system as a hole body with component part that need co ordination for the effective working of the entire system. In his opinion any default in any of the component parts must adversely affect the entire system.

Accounting system therefore has been defined in various ways. Accounting to Horngren Charles T. (1982:908) Accounting system is defined as a set of records procedures and requirement that routinely deal with events effecting financial performance and position of the entity. It is concerned with the non accounting event which he categories into four, namely cash disbursement cash receipt, purchase of good and services, production selling and administrative expenses. Top him accounting system feed management with information for routine decision making. Feiting Paul E., Istra Dorald, F and Mottice Hommer, J (1996: 43) state that the broadest definition of accounting system includes with the activities required to provide management with the needed information for use in conducting the affaire of the organization in reporting to the owners.

Black et al (1961: 16) in their own opinion said that accounting is an orderly and effectively scheme for providing accurate financial information control. Black et al identifies the ingredients of accounting system as:

  1. ledger, which shows the result of transactions as summarized according to each asserts or equities.
  2. The financial reports, which reports on how the enterprise fared for that period
  3. Journals, in which the effects of transactions on asset and equity are analyzed in term of debit and credit.
  4. Basic bushiness document or forms such as cheques or sales of tridets which serve either to get thing   done or report what has been done.
  5. The procedures for preparing these records and reports.

Welseh (1980) et al defined accounting as an information processing system designed to capture and measure the economic essence of events that affects on that entity to decision makers. Thus it is a systematic process of providing information about wealth and the effect of economic events.

Tricker (1976:140) in his own view stated that accounting system may be broken down into four (4) broad class viz:

  1. Financial Accounting
  2. Cost Accounting
  3. Management Accounting
  4. Control Accounting

FINANCIAL ACCOUNTING

Financial Accounting aims at recording of all income and expenditure distinguishing between revenue and capital, there by permitting a measurement of profit that can be recorded with the increase or decrease in act worth as shown in the balance sheet. The intelligent presentation and classification of financial accounting, the provision of comparative figures, percentages and notes enable the financial accountant to make his statement more informative and useful to all its users.

COST ACCOUNTING SYSTEM: The cost accounting concerned with cost finding (from measurement and estimates) cost analysis cost recording and reporting in the various cost centers and units and also profit centers. It s objective is profit but accounting as a service activity is a change against profit.

MANAGEMENT ACCOUNTING SYSTEM: Management accounting on the other hand can be regard ass the presentation of accounting information in such away as to assist the management in the creation of policy and in the day to day operation of an undertaking.

Apparently it is primarily concerned with obtaining the highest possible degree of overall accounting system. In selecting accounting system the central theme is examination of a series of decision problem and their associated information problem. From the above definitions it can be said that accounting system is the entire flow of communication to provide for its information need. It can be seen that every enterprise or organization needs accounti9ng system for its survival.

CONCEPTUAL DESIGN OF AN ACCOUNTING SYSTEM

The same basic accounting principles are applicable to all types of organization each entity fashion its individual accounting systems to suit its purpose of business entity. Accounting system is defined as:

The combination of accounting records and procedures designed for an entity. This system include accounting forms, records instruct manual flow charts programs and reports to fit the particular needs of the business. Designing on accounting system and putting it into operation are thus specialized phases of accounting.

Eight step in accounting sequences was identified as:

  1. Selecting a chart of accounts
  2. Analyzing and journalizing the transactions
  • The journal entries are recorded and posted
  1. A trial balanced is prepared.
  2. Schedule of accounts receivable and accounts payable are prepared.
  3. The financial statements including income statement of owner equity and balance sheet are prepared. Revenue expenses and owner drawing accounts are closed
  • Finally a post closing trial balance is prepared.

For accounting to maintain it functions as recording of business transactions and providing information to users, transaction have to be properly recorded, classified and summarized in such a way as to give the user the required information, hence accounting system also is defined as, the way in which management is given the information for use in conducting the affaires of the business and in reporting to owners, creditors, suppliers etc. Accounting system must provide the information needed management in information and in conducting the affairs of the business detailed procedure used by management to control operation (internal control) must be shown. Accounting must be cost effective. The value of reports must be at least equal to the cost of producing them.

Accounting system must be tailored to the organizational structure of each business. The objectives and purposes for which funds have been received and used authorized for expenditure must be well specified in any effective accounting system.

Accounting system must specify budgeting system and release to budget classification.

Accounting system must be kept in such a way as to ensure easy access by external auditors and furnish at a glance the information necessary for effective audit.

—This article is not complete———–This article is not complete————
This article was extracted from a Project Research Work/Material Topic

IMPROVING THE EFFECTIVENESS OF ACCOUNTING SYSTEMS IN PRODUCTION INDUSTRIES IN NIGERIA

A CASE STUDY OF PATERSON ZECHONIS INDUSTRIES PLC ABA.

To purchase complete Project Material, Pay the sum of N3, 000 to our bank accounts below:

BANK NAME: GUARANTY TRUST BANK (GTB)

ACCOUNT NAME: CHIBUZOR TOCHI ONYEMENAM

ACCOUNT NUMBER: 0044056891

OR

BANK NAME: FIRST BANK PLC

ACCOUNT NAME: CHIBUZOR TOCHI ONYEMENAM

ACCOUNT NUMBER: 3066880122

After paying the sum of N3, 000 into any of our bank accounts, send the below details to our Phone: 07033378184

  1. Your Depositors Name
  2. Teller Number
  3. Amount Paid
  4. Project Topic
  5. Your Email Address

Send the above details to: 07033378184 or on/before 24hours of payment. We will send your complete project materials to your email 30 Mins after payment.

Articlesng.com will only provide papers as a reference for your research. The papers ordered and produced should be used as a guide or framework for your own paper. It is the aim of Articlesng.com to only provide guidance by which the paper should be pursued. We are neither encouraging any form of plagiarism nor are we advocating the use of the papers produced herein for cheating.

Speak Your Mind

*