IMPROVEMENT OF ACCOUNTING SYSTEM IN GOVERNMENT OWN COMPANY

CHAPTER ONE
INTRODUCTION
1.1            BACKGROUND OF THE STUDY
Following reports of irregularities and malpractices in the government owned companies, then the state governor, chief, Jim Nwobodo appointed a panel of inquire to investigate the management finances and organization of the company.  This was in September 1980.          
The panel discovered in the course of its investigations that the management like store ledger payment vouchers, cash books and accounting ledgers.  After a through investigations of the financial operation the panel found:-
a.   That the company board started operation with out the necessary preparation that would enable it function well both as a service and profit making concern.
b.   That at the early stage of the company operation, only memorandum records of the financial transactions were kept.  
The company board did not maintain proper books of accounts and the accounting system.  A very recent testimony to this assertion is the controversial case of NNPC(The Nigerian national petroleum corporation).  The missing #2.8 billion this was around 1979 and even recently more of such testimonies still exists.Testimonies at the House of Representatives special committee investigating the missing money revealed a gross deficiency in the accuracy of the accounting system.  The presidency then under the civilian administration set up a judicial commission of inquiry into the affairs of the NNPC.This country will be saved a lot of waste in the midst of poverty if our government corporation and parastatals are more efficiently managed.  It is in the light of this project is being carried out determine the accuracy as well as the adequacy of accounting system of one of the government owned companies in Enugu state with a view to ascertain how efficiently it has been contributing towards the improvement of the efficiency of the management of the company.
1.2            PURPOSE OF THE STUDY
The purpose of this project is to study the accounting system of government owned companies to see is proper books of accounts and kept as required by the S.122 (1)(b)(c) and 2 of schedule, table of the companies and Allied matters Decree 1968, and to see how effectively the system helps the management of the company to improved its efficiency by supplying it with relevant information in proper form and timely enough to be useful in the fulfillment of its management function.
(a)    All sums of money received and spent by the company and the matter in respect of which the receipt and expenditure take place.
(b)    All sales and purchase of goods by the company.
(c)    The assets and liabilities of the company in subsection (2) of the same section it says “proper book shall not be demanded to give a true and fair view of the state of the company’s affairs and to explain its transactions.
1.3            SIGNIFICANCE OF THE STUDY
The study is focused on the improvement of accounting system in government owned companies.  This work therefore, would be significant and beneficial to the following ways.
A.   The study is a scientific enquiry geared towards the improvement of accounting system in government companies.  Therefore, it will be of interest to the management of government companies, especially the accountants, members of the Board of Directors etc.
B.    The research findings would contribute extensively to the existing pool of knowledge in the areas of accounting system in Nigeria.  The academic and the general seekers in knowledge would gain from the pool of knowledge in many ways.
C.    The study is an academic effort directed towards the laying of solid foundations for more research in the areas of human endeavor, therefore, this work will be a great help to the future researchers reference.
D.    The improvement in the accounting system in the government owned companies promotes the up-comings latent accounting deficiency companies.
E.    Finally, research work is an academic task designed for the award of Bachelor Degree in Accountancy to the researcher by the Madonna University collage, Okija, an affiliate of Esut.
1.4            SCOPE AND LIMITATION OF THE STUDY
The research study is limited towards improved accounting system in government owned companies.  However, the researcher hopes to cover all possible regarding government owned companies.As more concern is being expressed over the failure rate of government owned companies, thus becomes necessary.  This study was conducted on selected companies within the limit of problem or difficulties which government owned companies in this case it is necessary to determine the extent to which accounting records or control is recognized for the success of the government owned companies.Policy by careful and scientific analysis of accounting records he can bring to light significant facts which will enable errors in management and policy to be rectified and reform & economics to be introduced.  He must be competent to device and consolidate the accounting records of branches and subsidiaries, install and direct costing system and generally to advise and give effect to their policy and all matters affecting the business in its financial and accounting aspects.