THE IMPACT OF PROPER ACCOUNTING PROCEDURES IN SMALL SCALE BUSINESS ENTERPRISES
(A CASE STUDY OF HOTEL CORDIAL LIMITED ENUGU)
The research study focused its content on the impact dried from running proper accounting of a small-scale enterprise. On doing this, the study stressed its emphasis on the examination of different, accounting terms like adequate means of financing small scale enterprises, concept and convention and its legal requirements towards their achievements in the above fact. The role of questionnaire, which was used in collecting data through primary and secondary sources will not also be taken for granted.
However the idea of this will help one to assess different definitions or opinions form different authors about small scale enterprises. Conclusively, in considering the above facts and some of the contents in this study, one can easily judge out the great impact contributed by small-scale enterprises in Nigeria economy when proper accounting procedures are maintained.
TABLE OF CONTENTS
1.1 Background of the study
1.2 Statement of the problem
1.3 Objective of the study
1.4 Significance of the study
1.6 The scope of the study
1.7 The limitation of the study
Review of related literature
2.1 Adequate financing
2.2 Accounting principles
2.3 Financial statement
2.4 The concepts
2.5 Legal Requirements
DESIGN OF RESEARCH AND METHODOLOGY
3.3 sample size
3.5 Sources of data
3.6 Data collection
3.7 Description of questionnaire
3.8 Constraints on data collection
3.9 Procedure for data analysis
Test of hypothesis
SUMMARY OF FINDINGS CONCLUSION AND RECEOMMENDATIONS
5.1 Summary of findings
1.1 BACKGROUND OF THE STUDY
The reason of selecting this study to numerous others is because of the contribution of small-scale enterprises towards the economic development of the third world countries e.g Nigeria, India, Korea, Taiwan etc.
However, small scale enterprises being catalyst for economic development needs adequate accounting procedures to create an impact, since financial problem had been described as an obstacle to progress by some Chief executives. In fact, the idea of proper accounting procedures in small-scale business had created an impact on their economic development. It is now possible for one to lender the stewardship account of the office he is holding, to the owner. The aim of this study therefore is to show the impact created in small-scale enterprises by keeping the proper book of accounts. This study will disclose all aspects of accounting principles, its concept and convention and legal requirement as concerned accounting procedures in small-scale enterprises.
Moreover, the nature and size of an enterprise plays an important role in adequate accounting system of an small scale business and it is on this ground that “the aid of companies decree of 1997 mapped out the basic requirement about it records and books of account”. The impact of proper accounting procedures in small-scale business was easy and simple to understand, it had introduce the idea of auditing and hesitation, cost accounting, financial accounting, management accounting, and so on. And the proper role of all these branches of accounting contributes to economic development and progress of small-scale enterprises.
Through accounting as a profession is the same in all sort of business set up, but different authors at different times had given different definition to it. Accounting to J.S. ETUK-UDO, he said that it is the act of recording business transaction in such a way that, the financial position of the business can readily ascertain in any point in time. On my own side, I will define accounting in the study as the scientific method of recording all the financial transaction of a business in a systematic manner so that
(i) It can show a true and fair view of the business transaction at any particular time.
(ii) Information can easily be ascertained from it at any particular time.
Secondary, many authors and researcher had given different definitions to small-scale business some define it in terms of the small size of the firm, some in terms of employee. However, when one looks into many firms or enterprises today, both small and big ones, she can easily convinces herself that what is big in one enterprises can be small in the other and as the result of that, the definition idea give above are consider inadequate to define small-scale enterprises is the one given by united industrial development organization. (UNIDO).
This simple states that a small-scale enterprises is enterprises that must posses at least two of the following points.
(a) It must be owned and managed by the same individuals.
(b) It must have its own small quote in large size market.
(c) It must be financed by the owner and the policy decision should emanate from the entrepreneurs.
(d) The employees and owners should emerge from the localized sole of the business. The owner should participate highly in the running of the day to day affairs of the business.
In Nigeria small-scale business is officially defined as comprise which its assets will not exceed seven hundred and fifty thousand Naira (N750,000) but land exclusive and should employ workers not less than fifty (50) persons. The company must be owned by Nigerians wholly.
Conclusively, the impact of proper accounting procedures in small-scale enterprises are aimed mainly on the following key points.
(a) How revenue are generated and properly accounted for in small-scale enterprises using Hotel cordial as a case study.
(b) Analyzing how budgeted expenses are being made and properly accounted for in their books.
(c) Interpreting other accounting entries or book of accounting kept in small-scale enterprises and showing the roles of accounting principles, concepts and conventions, and its legal requirements as an impact of proper accounting procedures.
1.2 STATEMENT OF THE PROBLEM
Inefficiency in proper accounting procedure is always one of the reasons why small-scale enterprises use to fail. These set-backs besetting proper accounting procedures in small-scale enterprises using Hotel cordial limited as an example are as follows:
(1) Employing of Non-qualified or un-experienced accounts staff as their accountant.
(2) The second point is lack of good number of accounting staff to tackle their accounting work.
(3) The third problem is that their organizational chart is not well aspect out as concerns flow of authority between their accountant, accounts manager and other department line managers.
This situation can easily lead to conflict between them, thereby inconveniencing accounting work.
4 The fourth problem is accounting for small-scale enterprises is that there is always problem of insufficient finance from their owners and other leading agencies.
5 The fifth problem is management problem example; there is always delegation of duty to accountants without authority.
6 The sixth and the last is that their internal control system is weak and this is as the result of not keeping the financial books up-to-data and not carrying out their daily auditing properly.
This study therefore will examine the above problem and will recommend an immediate solution to it.
1.3 OBJECTIVE OF THE STUDY
As regards the numerous problem tested above, the target or objective of this study will be as follows:
1. To show the impact or the essence of keeping the proper books of account in small-scale enterprises up-to-data.
2 To show that the same accounting concepts and convention are caries both in small and large scale enterprises.
3 To advice and encourage people about advantages associated to the use of good number of accounting staff and well qualified accountant who can tackle account work in small-scale business.
4 To show that one of the reasons why small-scale enterprises at time fails is because of inefficiency in accounting procedures are a result of weakness in the internal control system.
Lastly, I believe that when the above four points are taken care of that there will exist a great impact make as a result of that there will exist a great impact made as a result of proper accounting procedure in small-scale enterprises.
1.4 SIGNIFICANCE OF THE SUTDY
This study due to its vest and meaningful contents will be very important to all sectors of economy in the country. The government, individuals, employees, and owners of small-scale enterprises will benefit from the contents of this study. The above fact is based on the reason that there is no economic organization you will belong to that proper accounting procedures won’t create an impact, since all of them will be consulting this research.
Infact, that business haven’t be going-in certain business, set-up, by individuals, like sole trading, partnership, limited liability companies etc. Is based on the accounting legal requirements its concepts and convention and as the result doesn’t keep the proper books of accounts. However, the contents of this study when consulted will help them in knowing more about accounting legal requirements its concepts and convention so that an impact should actually be created through proper accounting procedure.
The outcome of any research work is based mainly on the formular mapped out for the hypothesis.
Considering the problems identify and objectives stated for this research any hypothesis should aim towards solving the problem at hand. As regards the above statements, I will set the following hypothesis for any workings.
First Hypothesis: Outcome of proper accounting does not guarantee a true and fair view of financial position of small scale enterprise.
Second Hypothesis: Proper accounting in small-scale enterprises is not carried under accounting legal requirements.
Third Hypothesis: Proper accounting procedures is not important in small-scale enterprises.
1.6 THE SCOPE OF THE STUDY
The idea of my research work is for this study to cover the whole country (Nigeria) but as regards the cost and time aspect of the whole exercise, the sample system was used to cover any part of the country that was not visited.
Areas were mapped out and selected on geographical basis to represent others, the areas involved are Enugu state, Kano state, Ogun state, Edo state and Imo state. The assumption is that facts got from those areas represents the entire population opinions of the whole country (Nigeria).
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