ABSTRACT
This research
gear towards the problems and prospect of small scale business. In this age of
technological advancement, Nigeria is not left out. Economically, she is
largely characterized by small or medium industries and firm. Therefore this
study tends to help educate and guide business owners, proprietors, managers
and people wishing to venture into small-scale business in Nigeria. To achieve
these objectives an expository research through unstructured interview method
was employed. The data collected revealed not only some familiar problems such
as lack of capital, single-entry, incomplete records, but also some salient
problems like issuing of Tax clearance to business owners by Inland Revenue
Office without audited accounts. The collected also reveal the prospects of
auditing too, which included growth, value of money, assist management with
expertise advice, evaluation and control of business activities and so on.
Finally its
enhance the growth and survival of small firms and businesses, the researcher
suggest that government should make provision in the law given a general
distinction between “small”, medium” and “large” firms. Also that the “medium”
firms and businesses should be made to compulsorily employ on a full-time basis
an accounts technician with at least a minimum qualification of Ordinary
National Diploma (OND) in business administration management and technology
(BAMT) holders.
TABLE OF CONTENTS
CONTENTS PAGES
COVER PAGE
CERTIFICATION .. .. .. .. .. .. .. I
DEDICATION .. .. .. .. .. .. .. II
ACKNOWLEDGEMENT .. .. .. .. .. .. III
ABSTRACT .. .. .. .. .. .. .. .. IV
TABLE OF CONTENTS .. .. .. .. .. .. V
CHAPTER ONE
1.1 Introduction .. .. .. .. .. .. .. 1
1.2 Statement of the problem .. .. .. .. .. 3
1.3 Purpose of the study .. .. .. .. .. .. 4
1.4 Research Questions .. .. .. .. .. .. 4
1.5 Scope and limitations of the study .. .. .. .. 5
1.6 Operational definition of terms .. .. .. .. 5
CHAPTER TWO
Review of Related Literature
2.1 Introduction .. .. .. .. .. .. .. 8
2.2 Small Scale Business .. .. .. .. .. .. 8
2.3 Audit .. .. .. .. .. .. .. .. 9
2.4 Problems inherent in auditing of small
business .. .. 10
2.5 Prospects of Auditing a Small-Scale
Business .. .. 14
CHAPTER THREE
RESEARCH METHODOLOGY
3.1 Research Design .. .. .. .. .. .. 17
3.2 Population .. .. .. .. .. .. .. 18
3.3 Sampling Technique .. .. .. .. .. .. 18
3.4 Data Collection .. .. .. .. .. .. 18
CHAPTER FOUR
DATA PRESENTATION, ANALYSIS AND DISCUSSION OF FINDINGS
4.1 Introduction .. .. .. .. .. .. .. 21
4.2 Highlighted Problems .. .. .. .. .. .. 22
4.3 Highlighted Benefits .. .. .. .. .. .. 28
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.1 Introduction .. .. .. .. .. .. .. 35
5.2 Summary .. .. .. .. .. .. .. 35
5.3 Conclusion .. .. .. .. .. .. .. 37
5.4 Recommendation .. .. .. .. .. .. 38
References .. .. .. .. .. .. .. .. 40
Appendix .. .. .. .. .. .. .. .. 40
CHAPTER
ONE
1.1 INTRODUCTION
The
year 2,000 is around the corner. The human society wants to lunch into the new
century politically and economically sound. Governments, international
organizations, business organizations, corporate bodies and individuals are up
and doing, putting in their resources hoping and longing for a more viable
economy in the coming century.
It
is all over the news that Nigerians should try and keep abreast with the
electronic computer system that is going to be in use in the new millennium.
Globally,
so many changes and improvements have been on for some decades looking forward
to making this world a more advanced and better place for man. The effort of
the European community to form one government and gather their resources is
still for the sake of achieving economic excellence and peace.
Nigeria as
mentioned earlier is not left out in this economic and political struggle.
Being a third world country and categorized as developing it needs this
economic revolution more than the developed ones. For the past two decades the
Nigerian government has embarked several projects such as “food for all by the
year 2,000”, “House for all by the year 2,010” “House loan for low income
earners and so on. This is an indication that we need economic and social
development. Infact we need technological development to industrialize.
Following from above aspiration of development and in an effort to allure same
within a reasonable time period, our country needs to encourage all forms of
development oriented efforts no matter from who and regardless of the scale.
Therefore small-scale enterprises deserve federal government’s encouragement
and support through reliable business environment, sound economic policies, low
taxation and political stability.
When
the above federal assistance are provided to the small-scale industries, they
will be more profitable and in that respect will expand to large- scale
organization. As the grow their activities will be translated to the larger society
and this will have overwhelming influence and impact on our national
development through, employment creation, provision of infrastructural
facilities, more tax income, higher national income, higher industrialization
etc.
There
should be positive ambition of a small-scale enterprise, given all the
necessary government support and management. However, you discover that most
small-scale enterprises hardly survive few years after they are set up. Many
factors have been discovered to be responsible. There include inability of the
operators of such businesses to regard them as corporate persons, thus keep in
to the philosophy of treating a business as a separate entity outside the
existence their owners. Some have been crippled by lack of finances, lack of
proper maintenance of records, bad management, wrong business involvement’s and
unfavourable government policies and business enviorenment.
This
research work is not aimed at discussing indept the root causes of these
problems with the objective of finding resolutions, it will however be aimed at
considering the problems of auditing small scale enterprises which could be
made worse by inadequate maintenance of financial records. The researcher will
consider such problems as incomplete records, single entries, lack of
segregation of duties, adequate internal control, systems, lack of adequate
accounting systems etc. their causes their impacts and ways of resolving them.
It will be concluded by highlighting the likely prospects of such small
business if they should maintain audible environment in their operations.
1.2
STATEMENT
OF THE PROBLEM
Many
research works have been carried out on small-scale business in Nigeria.
It
is evident in our society that small-scale businesses operate for some period
of years and die off. Those that survive for a long time remain stagnant
without expansion.
Indeed
the causes of these problems have been highlighted by researchers, these
include lack of funds or capital, bad management improper maintenance of
financial records and lack of transparent accountability. These factors have
led to the closure of many small businesses even though many are pringing up
day after day despite these drawbacks.
Also
moving along the streets of major urban areas Nigeria one will always see countless
signboards with business names ending with the word “Limited” as required by
the law guiding registered business. However, it is amazing to know that many
have no proper financial managerial accounting systems, let alone a standard
audited financial report at the end of each accounting period.
With
the ignorance on accountability displayed by many small scale business
proprietors and owners, this research seeks to expose the problems inherent in
auditing them and the benefits that goes with it.
1.3 PURPOSE OF THE STUDY
The
purposes of the study are:-
1.
To highlight the reasons why small-scale owners shy
away from audits.
2.
To identify their views conceptions of audit and
auditing.
3.
To wipe out ignorance on area of accountability.
4.
To advice on the need and importance of auditing.
5.
To educate the business owners on the benefits of
keeping a financial record and audit report.
1.4
RESEARCH
QUESTIONS
Is
there any reason why small scale owners shy away from audits.
- How do you identify the views and
conceptions of audit and the auditing.
- Do
you wipe out ignorance on the area of accountability.
- How
do you advice on the use and Importance of auditing.
- Why do
you educate the business owners on the benefit of keeping a financial record and audit report.
1.5 SIGNIFICANCE
OF THE STUDY
Significance of the research, it is hoped to
be of immersed help to the teaming population of small-scale business owners in
Nigeria,
both present and future. It will also serve as a guide to persons who are
wishing to venture into small-scale businesses. As for the exiting ones it will
revolutionize and transform them into big industries.
For
the purpose of clarity in understanding and proper digestion for this work,
some of the terms or words used in the context of this study are explained
below:
1.6 SCOPE
AND LIMITATION OF THE STUDY
The
researcher has deliberately decided to study some few selected small-scale
businesses in Port Harcourt
city and its environs. Some of the firms are into manufacturing of various
products such as wood works, (furniture), others are engaged in manufacturing
of finished goods, the study also covered those who are engaged in buying and selling of variety of
manufactured products.
Sincerely,
this study would have been carried out in the whole of Rivers State
and indeed the entire nation but for the following factors:-
a. In most
cases the researcher was seen and treated as a tax collector or tax assessment
officer.
b. Lack of co-operation from the
respondents especially the business owners. C. Constrains
in terms of time and capital for the project.
d. Again
of school identification card and project writing introduction letter also
contributed more to the limitations.
However,
despite these limitations, the deep desire of the researcher was still met.
1.7
OPERATIONAL
DEFINITION OF TERMS
For
the purpose of clarity in understanding and proper digestion of this work, some
of the terms or works as used in context of this study are explained below:
Transparent Management:- This
refers to clear and detailed co-ordination of resources both human, materials
and money available to the managers, with dignity and respect.
Management:- For the purpose of
this research management refers to managers directors and owners who are
directly involved in the translation of the whole activities and process of
administering small scale business in order to achieve set objectives.
Going-Concern:- This is simply
the assumption that the business unit will operate perpetually, without the
least expectation to terminate or die off at a pre-determined time period.
Accountability:- The duty to
give a satisfactory report of that which is under ones care, often in money
terms or other units of property. They could be entrusted to or owned.
Entity:- Every business
irrespective of its nature and size exists and operates separately on its own,
and it is different from its owner(s), director(s), management, staffs,
customers and so on.
Independence of Auditor:- This explains the
freedom of the person acting as auditor to a business. Apart from the statutory
freedom, the freedom that sterms from an attitude of mind characterized by
integrity is mostly the researchers concern in this study.
Statutory Freedom:- Independence of the
auditor as required by statute or law.
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