The Role of Accountants in the Privatization And Commercialization of Public Enterprises in the Nigerian Economy

THE ROLE OF ACCOUNTANTS IN THE PRIVATIZATION AND COMMERCIALIZATION OF PUBLIC ENTERPRISES IN THE NIGERIAN ECONOMY

THE OBJECTIVES OF NATIONAL COUNCIL OF PRIVATIZATION

The objective of National Council on Privatization includes.

  1. To restructure and rationalize the public sector in order to determine unproductive investment in the sectors.
  2. To alert the enterprises on the privatization and commercialization towards a new horizon of performance improvement viability and over all efficiency.
  3. It helps in approving the policies on privatization and commercialization.
  4. To determine the political, economic and social objective of privatization and commercialization of public enterprises.
  5. To approve guideline and criteria for valuation of public enterprises for privatization and choice of strategies investor.
  6. Approve public enterprise to be privatization and commercialization.
  7. Determine whether the shares of a listed public enterprise should be by public or private issue of otherwise and advice the government of the federation accordingly.
  8. To determine the time and when public enterprises to be privatized.
  9. To approve the prices for share.
  10. To review from time to time the social economic effects of the programme of privatization and commercialization and decide on appropriate remedies.
  11. To approve the appointment of privatization advise and connection and their remuneration.
  12. Appointment and when necessary, committee comprising persons from private and public sectors with requisite financial competence to advice on the privatization or commercialization of specific public enterprise.
  13. To approve the budget of the council.
  14. To approve the budget of the bureau.
  15. To supervise the activities of the bureau

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Issues directions on the implementation of this privatization and commercialization programme.

  1. Receive and consider for approval, the account of the bureau.
  2. Submit to the state commander in chief of the armed forces in each year a report on the activities of the council on the bureau.
  3. Receive regular and periodic report from the bureau on program, implementation and give appropriate directions and perform other function as may from time to time be necessary to achieve its objective.

The membership of national council on privatization consists of the  following:-

  1. The vice President as he chairman.
  2. The minister of finance as the vice chairman.
  3. The attorney general of the federation and the minister justice
  4. The minister of industry
  5. The secretary to the government of the
  6. The governor of the central bank of Nigeria.
  7. The adviser to the president on economic affairs.
  8. The director general of public enterprises.

Four other members to be appointed by the president. The steps of privatization are divided into three phrases.

PHASE I

  1. Organize for privatization.
  2. Assess political situation.
  3. Create political situation
  4. Develop strategies and guidelines

PHASE II Selection target

  1. Policy review
  2. Organization evaluation.
  3. Business evaluation

PHASE III Privatization transfer

  1. Estimate value.
  2. Issue condition and solution for transfer
  3. Evaluate and select successful bidder
  4. Negotiate and execute transfer
  5. Evaluation regulate and oversight mechanism.
  6. Monitoring performance.
  • THE IMPACT OF PRIVATIZATION AND COMMERCIALIZATION ON THE ACCOUNTANTS

As we have into 21st century, the nation is obviously faced with numerous challenges especially investments of parastatals. The government has been laying more emphasizes going through the past events government deduced that the absence of good reporting system is most of the companies problems in their organization. It will not be a hyperbole for one to say that behind every successful enterprises, there is always a qualified and disciplined accountant.

Accountants translate the numerous events that occur on the statements are basis on the health for the organization rests upon and prescripts made to save the companies. The current privatization exercise involve exchange of millions of naira, therefore, the investing public expects these organization to inform them about the health position of their organization. In this article, “privatization and commercialization”  what role for the account 1989/90 elicitation B.K Amanherene opined that the Accountants therefore have the following roles to play.

  1. Draw up the accounts of the enterprises.
  2. The need to maximize the amount of working capital available to the parastatals finance operation.
  3. Perform the study of cash management planning based on accurate and reliable, cash flow for lasting.
  4. To minimize the risk of fraud or error to invest any surplus cash at a maximum rate of return.
  5. Offer advice on where and where not the company needs reconstructing.
  6. Audit the account of the companies so as to give credence to the state of affairs in the organization.
  7. Provide technical advice as to the best way of implementing the policy.
  8. Developing of a reporting system which not only provide necessary management information but as also capable of safeguarding the asset to the company.
  • Forecasts and analysis are based on the information suited to the purpose, state, assumption and decree of certainty and provide relevant Quantitative and Qualitative information for the decision to be made.
  • Vigilant about any inconsistencies or conflicts in the aims and ideas of the management or any external factors relevant to the organisation entity are brought to the management’s alternative in a manner likely to inform future discussions.
  • Information are recommendation relevant to decision making provided together with the criterion of the analysis.
  • Advise on dividend polices and location matter
  • Providing data to determine economic pricing of the projects or services of the companies
  • Advice government on adequate ration needed in the various companies to be commercialized of or privatization
  • To provide financial back up services to the organisation and to provide information to external decision – makers.
  • To provide timely report in order to meet stock exchange requirements.
  • The management is encouraged to thin through and make explicit their current position and to identify any influencing factors.
  • To provide the enterprise trends and development which may have relevance to the time for it to be used.
  • Probing and reflecting techniques are to be provided to assist the management in their evaluation and determination of strategy.

Another important role the accountant plays the tax management.

“Pantene states that” the account may be limited to deal with variety of tax problem: the service  rendered by the accountant include determination of available income, frequently the accountant is consulted with respect to income tax implication of prospective transaction.

In his contribution state said that “where the account is also the tax consultant of his audit chief the tax will be more efficient and cost effective. The accountant need not start from the search again having already gained understanding of the operations of the firm. Hence, will be able to make comprehensive report and avoid as much as possible. It will also be cheaper forth enterprise since necessary dislocation will be avoided. As we all know, tax avoidance is illegal but tax planning is legal. The accountant may advice the management on the parastatals to buy in money inform of denture as get loan instead of buying it as a personal money. This is because latest on loan and debenture is tax free not taxable. The accountants is also investigation the potentials of the forms, how to had this resource and seek for possible leakage and how to control them and equally control the revenue generated.

They prepare and process the accounting information in the companies annual financial statement. The accountant on auditor should explain the possibility of raising capital on the stock exchange to finance the new or respective the company’s management. In the same vein, Daniel A. Nyako in his article. “Beyond the traditional roles of the Accountants” published in Nigeria equally supported this view.

  • PROBLEM OF THE NIGERIAN ACCOUNTANT.

Considering all these roles of an accountants, a number of problems have been identified,

In the public services the problem of qualified accountant is not just apron remuneration alone the private sector offers salaries that is attractive and negotiable but the major problem is that them recommendation, alone, opinion, report are hardly respected according to Mr M.R. Sani Chartered accountant in the public sector.

In some government ministries and parastatal. It is a common sight to see social scientists and indeed other related discipline performing the duty of accountant.  When this happens, the best option for the accountant is to resign and seek his fortune elsewhere and possible to an organize private sector where he holds a high esteem.  Low remuneration is another problem of accountants recently discovered.  Although, this affects every employee in an organization but it affects the accountants most because he is the brain behind the success of the organization in the area of financial management.

In conclusion, it should be noted that the accountant is always the corner stone of which any well established firm that is functioning at the rate expected and for the growth of any nation or the society at large.

 

  • THE ACCOUNTANT AND THE PUBLIC IN GENERAL:

The Accountant has a lot of roles to play in the public sector but it is regrettably unpleasant that their information advice etc are most often neglected.  I must confess that sometimes every medical data, not because of anything but because opinion on medical lines are always adhered to without any complain or negligence.

Unfortunately, Client going through the report of a chartered accountant who is an auditor called him (the auditor) into his office and told him point blank that he is not a position to teach him how to run his business and that he has been running it the way, he has been running for decades not and the client also said that if indeed he auditor was a financial guard, as being purported by the society why was he not a millionaire, such is the type of insult and embarrassment accountants usually receive from misinformed people and such cannot be done to an expert as specialist in the medical line.  It has been observed that qualified auditors and accountants by virtue of training and the chief financial adviser are the people to be consulted at such sensitive issues.  Nigerian economy is currently sick and passing through a lot of challenges and it is only the attention of qualified accountant that can be effective heading to the nation.

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