BUSINESS FAILURE AND THEN ACCOUNTING PROFESSION IN NIGERIA
(A CASE STUDY OF SELECTED BUSINESS IN PORT-HARCOURT)
The Nigeria economy with the first half of the century experienced quite a lot business failure. Business failure can be defined as the inability of a particular business enterprise to continue to function as a ‘ going concern’’. This development has started generating anxiety by both international and local investors in arriving at investment decision. However, the task of identifying the root causes of corporate collapse is what this study seeks after. This study is carried out at ensuring a survival dosage of business in post- Harcourt through the use of accounting profession (auditing) to appraise operational performance.Some of the causes of business failure include mismanagement Bribery and corruption, and poor remuneration etc. the brain behind the failure of business in the political undertone in the management positions.Based on the findings in the study, the following conclusion were dawn, mismanagement, mode of appointment and selection of key officer, poor co-ordinates management device, government inference, and privatization and commercialization programme.Finally, it is recommended that business should appreciated the importance of audit as a tool evaluating performance, appointment of board of directors and top management officers should be based on skill, should also institute its commercialization and privatization programme in place etc.
TABLE OF CONTENT
1.1 OBJECTIVE OF THE STUDY
1.2 STATEMENT OF PROBLEM
1.3 STATE OF HYPOTHESIS
1.4 SIGNIFICANCE OF THE STUDY
1.5 SCOPE OF THE STUDY
1.6 LIMITATION OF THE STUDY
1.7 DEFINITION OF TERMS
REVIEW OF RELATED LITERATURE
2.2 THE GOING CONCERN OF BUSINESS
2.2.1 DEFINITION OF BUSINESS
2.2.2 FORMS OF BUSINESS
2.2.3 IMPORTANCE OF BUSINESS
2.2.4 WHEN A BUSINESS IS NOT GOING CONCERN
2.2.5 WHEN A BUSINESS MAY NOT BE A GIONG CONCERN
2.3 SYMTOPMS OF IMMINENT BUSINESS FAILURES
2.4 NATURE AND CAUSES OF BUSINESS FAILURES
2.5 THE DEVELOPMENT OF ACCOUNTIGN PROFESSION
2.5.1 DEFINITION OF AUDITING
2.5.2 TYPES OF AUDIT
2.5.3 THE AUDITOR AND TH DANGER OF SELF FULFILMENT PROPHESY
2.5.4 IMPORTANCE OF AUDITING
2.5.5 THE AUDIT COMMITTEES
126.96.36.199 NATURE OF AUDIUT COMMITTEES
188.8.131.52 COMPOSITION OF AUDIT COMMITTESS
184.108.40.206 FUNCTIONS OF AUDIT COMMITTEES
220.127.116.11 QUALIFICATION OF AUDIT COMMITTEES
18.104.22.168 SIZE OF AUIT COMMITTEES
22.214.171.124 AUDIT COMMITTEES RELATIONSHIP WITH AUDIOR
2.6 THE EFFECT OF BUSINESS FAILURES ON A DEPRESSED ECONOMY.
RESEARCH DEISGN AND METHODOLOGY
3.2 RESEARCH DESIGN
3.3 SAMPLNG TECHNIQUES
3.4 QUESTIONNAIRES DESIGN
3.5 DATA COLLECTION TECHNIQUES
PESENTATION OF DATA ANALYSIS
4.1 DATA PRESENTATION AND ANALYSIS
4.2 TEST OF HYPOTHESIS
SUMMARY OF FINDINGS, CONCLUSION AND
5.1 SUMMARY OF FINDINGS
5.3 RECOMMENDATION (S)
5.4 SUGGESTION FOR FURTHER STUDIES
The Nigeria economy within the half of this century experienced quite a lot of business failures. There was a rapid growth in the number of indigenous companies collapsed with the same rapidity with which they were established. Business failures are actually one of the most difficult and complex concern faced by investors in the equity market or the stock exchange market in the recent time. Even with the best of strategic co-operate planning, business failure are still a common occurrence. Business failure can be defined as the inability of a particular business enterprise to continue to function as a going concern. The going concern concept presumed that an enterprise will continue in operation for the foreseeable future, and that there is neither the necessity nor the intention to liquidate.
In general, it was gathered that some of the causes of business failure includes.
a. Lack of capital (inadequate capitalization)
b. Inefficient management
c. Poor remuneration packages
d. Inadequate accounting records
e. Un-adequate accounting records
f. Lack of feasibility study report
Given the devastating effect of business ailments, it because necessary to undertake a research, into the problem and failure of business life as well as making suggestion on ways of ameliorating their adverse effects.
According profession (Auditing) is one of the effective tool of evaluating and predicting business failure. Auditing is a process (carried out by suitable qualified auditing). Where by the accounts of business entities including limited companies, characterize, trusts and professional firms, are subject to scrutiny in such details as to their truth and fairness.
So many parties such as creditors, investors, owners, the firm itself and the government etc are interested with the present and expected future earning and the stability of these earning, and financial business as a going concern, therefore, they need Accounting profession to evaluate and compare the profitability as well as to predict the survival of the business.
Therefore, this study seeks to use statistical tools appraise and predict corporate failure with the aim of putting into place an integrated framework on the subject.
1.1 OBJECTIVE OF THE STUDY
It has been argued in recent times that the monetary value of corporate failure is of colossal notation, which could foster economic growth. Therefore the following are the main aim of this study;
1. To know why business are failing?
2. Investigate whether government policies and actions effects operational performance.
3. Do business rely on Accounting profession (Auditing) as tools for their performance?
4. Identify and analyze strategic corporate plans adopted by business.
5. Assess the remedial dosage of companies to respond to corporate objective.
1.2 STATEMENT OF PROBLEM
Problem is a phenomenon occurring in most, if not all area of human endeovor. The existence of problem cal for the finding of solution aimed of obviating such problem. The seriousness and urgency of solutions to problems are largely depended on the threat posed by the problems. However, some problems appear to defy certain worked out solution to them. Such a situation demands a close examination of the issues;
1. Why is business failure on the increase in Port Harcourt?
2. Why do auditors qualify their report when such concerns are failing?
3. How effective are Accounting profession they use the measurement of their business?
4. To what extent has his failure affected the economy?
1.3 STATEMENT OF HYPOTHESIS
(HO) NULL HYPOTHESIS
I. The rate of business failure has been reduced by professional accountants.
ii. (Hi) ALTERNATIVE HYPOTHESIS
The rate of business failure has not been reduced by professional accountants.
Obviously candidates who are undertaking a study of business failures are likely to encounter similar problems.
Accordingly, this study examines business failure in companies, identifying problems and sating visible suggestion that will be useful to corporate bodies any establishment with survival strategic a period of economic depression. The potential investors will also find work a useful guide.
A part from the research workers, government agencies will also benefit immensely from this study.
1.5 SCOPE OF THE STUDY
This study covered some business port Harcourt. The period of the study covered the last five years and above in the life of some business in Port Harcourt. However, this does not preclude inquiries on the initial capital outlay, the labour strength internal control measures etc.
1.6 DEFINITION OF TERMS
1. BUSINESS FAILURE:
Lack of business success or sudden end of a business performance.
2. CORPORATE COLLAPSE:
A failing of a corporate when the component part fail to provide support
To pay money or make a gift to some one in return for his services.
A venture and the character needed for such a venture.
Improving a given condition of problem.
6. ACCOUNTIGN PROFESSION:
The profession that trains accountant into the act of book-keeping and financial reporting.
Big in size and degree
To make known and reveal a fact.
An idea or preposition not derived from experience but formed and used to explain certain facts to provide the foundation of an argument.
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