THE ROLE OF ACCOUNTANT IN A CORPORATE FINANCIAL ORGANISATION CASE STUDY OF FIRST BANK OF NIGERIA (OWERRI BRANCH) ACCOUNTING DEPARTMENT.
CHAPTER ONE
INTRODUCTION
1.1.
BACKGROUND
TO THE STUDY
Corporate
Financial organizations are setup with the principal objective of creating
wealth for their shareholders. Corporate Financial organizations are
increasingly becoming more complex (and in many cases global) thereby
engendering the need for complete, transparent, reliable and accurate
information that can be accessed quickly. This is particularly germane as the
gulf between ownership and management has grown wider in line with global best
practices and most large business organizations are owned by a broad and
disparate set of shareholders.
Businesses in much of the 18th and 19th
centuries according for Fowokan (1997) were small, with restricted
owner-manager teams as capital was produced by a tightly-knit family of
investors, and management was carried out solely by owners. In such a setting,
there was no external pressure to increase the quantity and quality of
corporate reports.
However, as businesses grew, widely
dispersed number of small time owners pooled resources for investment, and
delegated management to a professional crop of experts. The need to report to
the owners became a necessity and an indispensable requirement for remaining in
business. Such reports are usually rendered by book-keepers. However at the
onset of the 20th century’, according to Onukagha (1993) a number of
interrelated factors sped forth rapid development in corporate reporting, as a
result of which the business community accepted, the need for some basic and
common accounting and reporting standards. Hence, the emergence of Accountant.
Accountant occupies a very unique position
in any Corporate
Financial organization as, he is
always referred to as the life-wire of his establishment. Accounting as a
profession has come of age and current developments demand of Accountant to go
an extra mile before he could be adjudged as an achiever. However, since the
Accountant does not operate in a vacuum, he has several forces to contend with
if only he is to succeed in this environment that is saddled with political and
economic manipulations, moreso, several developments within the profession
coupled with the ever- changing environment in which the Accountant operates
has brought to light that, there is more to it than that. This is because there
are lots of refinements and sophistication which the Accountant has to contend
with in the daily performance of his
duties.
According
to Susan Davis (2015), an
accountant is a person who performs financial functions related to the
collection, accuracy, recording, analysis and presentation of a business,
organization or company's financial operations. The accountant usually has a
variety of administrative roles within a company's operations. In a smaller
business, an accountant's role may consist of primarily financial data
collection, entry and report generation. Middle to larger sized companies may
utilize an accountant as an adviser and financial interpreter, who may present
the company's financial data to people within and outside of the business.
Generally, the accountant can also deal with third parties, such as vendors,
customers and financial institutions.
Out of all the known professionals, the
Accountant seems the most mobile as he is unavoidable in almost all the facets
of human endeavours. While most of the other professionals are restricted to
their areas of operations such that, the Medical Doctor is found in the
hospital, the Lawyer in the Chamber or Court, and the Engineer in the factory
or workshop. In the case of the Accountant, he is everywhere and hence we have,
hospital Accountant, factory/workshop Accountant, Accountant in government
service, industry, academia and of course consultancy and professional
services. It is no gainsaying that, what blood is to the body is what money is
to business and by inference what the Accountant (the custodian of money) is to
his organisation and indeed, the Nation.
While it is widely believed that the accountant in any
corporate financial institution can serve many roles, from overseeing the
preparation of all financial documents related to the company to implementing
financial strategies created by management or making investment decisions for
the organisation. As a chief accountant in the accounting department, you may
sit on the upper management team to play an integral part in developing
long-term goals. In a larger business, you might also supervise a team of
financial professionals.
Indeed,
the modern business environment has changed drastically in a short time.
Business technology has advanced business functions and operations to levels
not previously believed possible. The role of accounting and business is
perhaps one of the most reliable functions in any business organisations.
While
a few basic procedures or methods have changed, the purpose of accounting
remains the same. Business owners often use accounting to measure the financial
performance of their companies and make business decisions. (Vitez2015).
For the enhancement of the performance of
his duties according to Edet (2001), Accountant has to undertake the
followings: record keeping (book keeping); cost accumulation for decision making
(performance evaluation, control, predictions and crises management); auditing
and investigation: tax management and other management advisory services such
as: liquidation, acquisition and mergers, privatization and commercialization.
In conducting or performing those duties, the profession is governed by rules
of conduct which include: independence; prudence; consistency and objectivity.
As a result of this, this study intends to
explore more on the artificial and natural roles of Accountant in a corporate
financial organisation.
1.2.
STATEMENT OF PROBLEM
Recently,
there has been growing concern about ethical and integrity issues in the
accounting & auditing profession in public and private on questionable
acts. As such, this era has been branded by series of corporate failures,
ethical negligence, auditing and accounting scandals both in developed
economies and developing economies. Despite the use of various laws and best policies, it is hard
to state that corporate financial organizations such as the banking industry in
developing countries are inadequate and ineffective. There have been instances
where financial institutions in such countries becoming subject to criticisms
due to their mismanagement, negligence, and lack of proper accountability and
transparency in the way by which such organization report their financial
statement.
Ethical
codes for professional accountants globally compels professional accountants,
regardless of the roles that they perform, to uphold values of integrity,
objectivity, professional competence and due care, confidentiality and
professional behavior. However, competing pressures can put professional
accountants in challenging and often times difficult situations. These
conflicts revolve around ethics, commercial pressures and the burden of
regulation. Situations may occur where professional accountants in corporate
financial organization are expected to help the organization achieve certain
financial outcomes. In some of these cases, the required action may risk
compromising compliance with accounting and financial reporting rules.
Professional accountants in businesses encounter tension in these situations.
As an example, accountants in organizations may face pressures to account for
inventories at higher values or select alternative accounting methods which are
more financially favorable to the company. However, these actions may be
contrary to what are allowable in the accounting standards or to what the
professional accountant may feel comfortable with.