IMPROPER ACCOUNTING SYSTEM CONTRIBUTES TO NON-PERFORMANCE OF GOVERNMENT OWNED COMPANIES

ABSTRACT

Government owned establishments in which hotel business is one, are no longer booming in the nationís competitive economy due to improper accounting system existing therein; as a result of non-challant attitude of its staff.Accounting which is the foundation of every business has been of age in the society.† This project work has three chapters:Chapter one is the introduction which gives hints on accounting standards and means of achieving management objectives.† Chapter two is the review of related literature which suggested alternative accounting and recording system which was carefully integrated to form the basis of comparison with that of Hotel Presidential Ltd.† It highlighted some interesting differences and similarities in the accounting and recording system of Hotel Presidential Ltd.† Chapter three, the researcher made recommendations and conclusion accordingly.

TABLE OF CONTENT

CHAPTER ONE

1.0              Introduction

1.1†††††† Research Objective

1.2†††††† Significance of study

1.3†††††† Limitation of study

1.4              Definition of terms

CHAPTER TWO:† LITERATURE REVIEW

2.0              Introduction

2.1†††††† Accounting and control in companies industry

2.2†††††† Fundamental practical application

2.3†††††† Accounting records and uses

2.4†††††† Financial department of a company

2.5†††††† Determination of profit in company industry

2.6†††††† Food and Beverage control

2.7              Accounting forecast and income

CHAPTER THREE:

3.0†††††† Summary of findings

3.1†††††† Discussion of findings

3.2†††††† Conclusion

3.3†††††† Recommendation

††††††††††† Bibliography

CHAPTER ONE

1.0              NTRODUCTION:

In recent years, some government owned establishments have failed to achieve the objectives which they were meant to achieve.

This trend has extended to government owned companies and has reflected in their fast becoming a burden instead of relief to the government.

Government as well as private establishment require proper accounting and control system as it gives information upon which future decisions can be made and/or analysis of loss in various department erased.

ACCOUNTING RECORDS:

The basic intention of record keeping is to provide an internal clerical control over the day-to-day operations of a business that will ensure the proper custodianship of oneís goods and property entrusted to the case of another.

There are two technical devices used in recording this process, they or journal and ledgers.

ACCOUNTING AND FINANCIAL CONTROL:

This consists of all accounting financial and monetary control techniques and systems built into the accounting system to promote and encourage the attainment of management objectives generally, accounting and financial records consist of:

1.                  Budgeting control

2.                  Security of assets

3.                  Legitimacy of income expenditure

4.                  Accounting controls

MANAGEMENT CONTROL:

This consists of non-accounting and non-financial systems and methods which are built into the accounting system to promote the attainment of the four major goals of the accounting system as earlier mentioned.† But however there are several basic control areas which should be evidenced, and these include:

(a)                Objectives

(b)               Procedures

(c)                Management information

(d)               Supervision

(e)                Review of the operational effectiveness and efficiency.

SYSTEM:

A system is a set of elements in which there exists relationships that can be described by formal statement.

Even system can† be sub divided into sub-systems and can also be combined with other systems to form a ledger system.

All systems are composed of the same basic element:† inputs, process and output (IPO).† In connection with transaction which pass through a system, there will usually be the following stages:

(i)                 Identification of the input as being appropriate to the system

(ii)               Processing of the data/item

(iii)             Output

There should be adequate authorization and control over each of the above elements.

1.1†††††† RESEARCH OBJECTIVES:

A good/proper accounting system is essentially indispensable to every organization that has portfolio of assets and bulky transactions to handle.† It is with due cognizance of this indispensable nature of proper accounting system to organizations mostly hotel industry that the researchers have assigned the research to:

(i)†††††††† Examine the nature of the accounting system sampled establishment.

(ii)††††††† Evaluate the effectiveness of the accounting system operating.

(iii)†††††† Ascertain the implications of the existing accounting system.

(iv)†††††† Determine factors that promote or constrain the operation of the accounting system in the sampled establishment and

(v)††††††† Make recommendations.

1.2              SIGNIFICANCE OF STUDY:

This research work is being undertaken in the hope that students, researchers and interested members of the public will be later exposed to the following:

(i)                 The various accounting systems;

(ii)               The cause of breakdown in the accounting system

(iii)             The effect of an efficient or inefficient accounting system on the development of the hotel industry.

(iv)             Appropriate methods of rectifying an effective accounting system and proper application of effective accounting system.

1.3              DEFINITION OF TERMS:

AUDIT:

Audit is the systematic and scientific examination and verification of the account records, vouchers and other legal records and documents of a private or public business organization.

ACCRUAL CONCEPTS:

Cost and revenue are recognized when they are incurred or earned not necessarily when the money is paid or received.† As long as revenue and cost can be identified in the profit and loss account of the period to which they relate, then they can be matched with one another.† To accrue means to accumulate overtime.

ASSETS:

The various items of wealth investors in a business enterprise are known as assets of that enterprise.† Assets are of many types and forms, they may consist of tangible or intangible wealth, in fact, an asset may be anything which has our exchange value and can be measured in terms of money.† It merely indicated the nature and amounts of certain forms of wealth.

ACCOUNTING STANDARDS:

Professional accounting bodies would like to determine standards which regulates the practice of the accounting which consists of particular reporting standards.† The standard which are generally accepted accounting policies are:

According to international accounting standards (IAS).

(a)                Prudence

(b)               Substance overform

(c)                Materiality

Whereas according to SAS they include:

(a)                Prudence

(b)               Substance overform

(c)                Materiality

(d)               Fairness

(e)                Objectivity

HISTORICAL COST CONCEPT:

Historical cost concept holds that cost is the appropriate basis for initial accounting recognition f all asset acquisition, services rendered and received, expenses incurred and it also holds that subsequent to acquisition cost, values are rationed throughout the accounting process.

FINANCIAL STATEMENTS:

These include:

(a)                Statement of accounting policy;

(b)               Balance sheet;

(c)                Profit and loss account or income statements;

(d)               Notes on the accounts;

(e)                Statement of source and application of funds;

(f)                Value added statement.

Hotel: A Hotel could be a building or an estate where meals and lodging facilities as well as recreational facilities are provided for paying visitors.

Types of Hotels: From the above definition, a hotel includes houses, cafes, motels, Inns, Taverns etc.

A)                Guest House

B)                Residential Hotels

C)                Resort Hotels

D)                Motels.

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