ABSTRACT
The study examined effect of public sector accounting on financial management in Nigeria. The specific objective were to examine the effect of public sector accounting on control of public expenditure, to ascertain the effect of public sector accounting on the effectiveness and efficiency of government programme, to ascertain the effect of public sector accounting on financial planning in Government establishment. The research design that was adopted for this study was descriptive survey design and simple regression data analysis technique The sample size of the study was 185 respondents. Empirical result revealed that public sector accounting has positive and significant effect on control of public expenditure, public sector accounting has positive and significant effect on effectiveness and efficiency of government programme and public sector accounting has positive and significant effect on financial planning in government establishment. The study recommended that the Nigeria government should come out with reform programme to strength the public sector accounting to enforce accountability from public servant since this will enhance the control of public expenditure in the country.
TABLE OF CONTENTS
Title Page i
Dedication ii
Acknowledgement iii
Declaration iv
Certification v
Table of Contents vi
List of Table vii
Abstract vii
CHAPTER ONE:
INTRODUCTION
1.1
Background to the Study 1
1.2
Statement of the Problem 3
1.3. Objectives
of the Study 4
1.4.
Research Questions 4
1.5 Research
Hypotheses 5
1.6. Significance of the Study 5
1.7 Scope of the Study 6
1.8. Operational Definition of Terms 6
CHAPTER TWO:
REVIEW OF RELATED LITERATURE
2.1. Concepual Framework 8
2.1.1. Concept of Public
Sector Accounting 8
2.1.2. Concept of Financial
Management 10
2.1.3 Objectives of Public Sector
Accounting 14
2.1.4 Objectives of Financial Management 15
2.1.5. Users of Public Sector Accounting
Information 20
2.1.6 Regulatory Agencies in Public Sector
Accounting 22
2.1.7 Weaknesses in Public Sector Accounting
Framework, Regulatory Agencies and
Standard
Setting Procedures 24
2.1.8.
Stages of Public Financial
Management 26
2.2. Theoritical Framework 28
2.2.1. Theory of Financial
Control 28
2.3. EMPRICAL REVIEW 29
2.4. Gap in the
Literature 34
CHAPTER THREE: METHODOLOGY
3.1
Research Design 36
3.2
Area of Study 36
3.3.
Population of the Study 36
3.4 Sample Size
Determination 37
3.5. Sampling
Technique 37
3.6 Source
of Data Collection 38
3.7 Validity
of the Research Instrument 38
3.8.
Reliability of the Research
Instrument 38
3.9. Data
Analysis Technique 38
3.10. Model
Specification 39
CHAPTER
4: DATA
PRESENTATION AND ANALYSIS
4.1 Return Rate of
Questionnaire 41
4.2.1 Socioeconomic Characteristics of the Respondents 42
4.3. Presentation of Data 44
4.4. Objective
Two? 45
4.2 Regression
Analysis of
Objective One 47
4.3
Test of Hypothesis One 48
4.4 Regression
Analysis of
Objective Two 48
4.3
Test of Hypothesis Two 49
4.5. Regression Analysis of Objective Three 50
4.3
Test of Hypothesis Three 51
CHAPTER FIVE: SUMMARY,
CONCLUSION AND RECOMMENDATIONS
5.1. Summary of Findings 52
5.2.
Conclusion 53
5.3. Recommendations 54
References
Appendix
LIST OF TABLE
Table 4.1: Return of
Distributed Questionnaire from the Respondents 41
Table 4.2: Socioeconomic Characteristics of staff of Ministry of trade and
investment,
Abia State , Nigeria 42
Table 4.3: To examine the effect of
public sector accounting on control of
public
expenditure 44
Table 4.4: To
ascertain the effect of public sector accounting on the effectiveness and
efficiency of government
programme 45
Table 4.5: To
ascertain the effect of public sector accounting on financial
planning in Government
establishment 46
CHAPTER ONE
INTRODUCTION
1.1 Background
to the Study
The
history of public sector accounting in Nigeria can be traced to 1972 when
Nigeria enterprise promotion decree of 1972 took effect on 1st
April, 1974, with its subsequent amendment in 1976, provided a concrete basis
for government’s extensive participation in the ownership and management of
enterprises in the country (Onyeka and Nebo, 2005).
Public
sector accounting refers to all the financial documents and records of public
institutions that relate to the collection of tax payers’ money and the
analysis, control of expenditure, administration of trust funds, management of
government stores and all the financial responsibilities and duties of the
relevant organs. Public sector accounting is also an accounting method applied
to non-profit pursuing entities in the public sector including the states,
local governments and quasi-governmental special corporations for which the
size of profits does nopt provide an effective measurement for evaluating
performance (Okoroafor, 2015).
Public
sector accounting is a system of accountability through which the established
institutions of the public sector render account stewardship on the revenue of
the Nation and how it has been disbursed to various agencies. It includes the
process of recording, analyzing, classifying, summarizing, communicating and
interpreting financial information about the public sector in aggregate
(Onyeka, 2014).
The
important of Public sector accounting on public financial management cannot be
overemphasized. The important of the Public sector accounting should be
determined in line with the need of its users. For instance, Public sector
accounting is used by the administrators in the Public sector to establish a
system for good public governance and is also used as a tool to check and
correct decision making by the management of various institution in the
country. Public sector accounting is also important to the internal and
external users of information in different public institutions. For instance,
the internal users require accounting information in order to ascertain the
various levels of regulatory compliance and whether actual expenditure is in
accordance with the budget. They also ascertain whether or not adequate
information are available for the protection of public resources. Conversely,
the external user require accounting information to ascertain the financial
viability of the public sector organizations and the efficiency and
effectiveness of management (Omelehinwa, 2016).
Also,
Public sector accounting principles often seek to lay a framework for
accounting practices. Afolabi (2015) opine that rather than creating a rule to
follow, the principles allow for an application of basic principle to either
large and small entities or municipalities. An in international set of
accounting principles is also necessary for smaller nations to learn and adopt rules will help them overcome this
problem and typically helps them start on the path better infrastructure
development.
Furthermore,
public sector accounting is assume to have impact on public financial
management. Public financial management is concerned with the planning, organizing,
procurement and utilization of government financial resources as well as the
formulation of appropriate policies in order to achieve the aspirations of
members of that society. Premchand (20150 also sees public financial management
as the link between the community’s aspirations with resources and the present
with future. It lies at the very heart of the operations and fiscal policy of
government.
In
addition, Financial
management refers to the effective and efficient planning, organizing, directing
and controlling of financial activities and processes of an organization. This
includes but is not limited to fund procurement, allocation of financial
resources, utilization of funds, etc. Considering the importance of the finance
function in organizations, the demand for professionals with these skills has
always been steady. Today, it is possible for even non-finance professionals
and accountants to learn finance concepts through a certified financial analyst course. Hence,
the study will examine the impact of effective public sector accounting on public
financial management in Nigeria.
1.4
Statement
of the Problem
The
issue of public sector accounting is a very serious challenge to the national
economy and the economic growth of Nigeria. Every year federal government of
Nigeria keep increasing their budget to tackle infrastructure problem facing
the country. Despite the increasing public expenditure every year, the public
sector performance is still weak which show that the increased expenditure has
not transformed into better public sector. In addition, about £407 billion or £225
billion had been stolen or misappropriated by Nigerian past leaders as at 1999.
This said amount equal all the western aid given to the Africa (Ike, 2010). Ike
also mentioned that the former EFCC Chairman, Nuhu Ribadu disclosed that
£220billon was wasted between independence from Britain to the return of
democracy in Nigeria (1960-1999). This stolen fortune equals exactly with the
£220 billon of western aid given to Africa between 1960 -1997. The amount been
misappropriated in the country may as a result of poor public sector
accountability in the country with poor accountability in the country
Furthermore,
the bane of public sector financial mismanagement in Nigeria can be traced to
the oil boom period under which there existed structurally weak control mechanism, which created a variety of
loopholes in public sector accountability that have tended to facilitate and
sustain corrupt practices. This is occupied with the fact that there is a near
total absence of the public affairs in the country, (Bello, 2011). The Nigeria
public sector is filled with stories of
wrong practices such as stories of ghost workers on the pay roll of ministries,
Extra-ministerial department and Parastals, fraud, embezzlement and setting
ablaze of offices housing sensitive documents and corruption are found
everywhere in the country (Okwoli, 2014). According to Bello (2011), huge
amount of money lost due to misapplication of total tax revenue, capital and
recurrent expenditure which is causes by lack of proper public sector
accounting report has had an adverse effect on the economic growth of Nigeria
over the years. Based on fact above, the study will examine impact of public
sector accounting on financial
management of government establishment in Nigeria.
1.3. Objectives of the Study
The
broad objective of the study is to examine
effect of public sector accounting on Financial management in Nigeria. The specific
objectives are:
1. To
examine the effect of public sector accounting
on control of public expenditure.
2. To
ascertain the effect of public sector accounting on the
effectiveness and efficiency of government programme
3. To
ascertain the effect of public sector
accounting on financial planning in
Government establishment.
1.5. Research Questions
1.To
what extent does public sector
accounting affect control of
public expenditure ?
2.
What are the effect
of public sector accounting on the effectiveness and efficiency of
government programme?
3.
How does public sector
accounting affect financial planning in
Government establishment?
1.5 Research Hypotheses
The
following hypotheses will be stated in null form
H01: Public
sector accounting has no significant
effect on control of public expenditure
H02: Public
sector accounting has no significant
effect on the effectiveness and
efficiency of government programme
H03: Public
sector accounting has no significant effect financial planning in Government
establishment
1.6. Significance of the
Study
The
study is to examine effect of public sector accounting on Financial management of Government Establishment in Nigeria. This research work will be of immense benefit
to the following group;
Public Sector
This
findings and recommendations of the study will enlighten the concept of public
sector accounting as well as the best strategies to be adopted to monitor fund
disbursement and curb corruption the public sector
Government
The
findings and recommendations of the study will assist government in
implementing policies that will help strengthen the use of public sector
accounting in the local government area.
Policy Makers
The
findings and recommendations of the study will help policy makers in
formulating policies that will help to reduce the issue of corruption and other
sharp practice going on in the public sector in Nigeria.
Economic Planners
The
findings and recommendations of the study will help the Economic Planners in
modifying the methods and approaches used by different ministries, parastatals
and other inter-ministerial departments in their financial control system and
also it will help them in improving revenue generations and minimizes
expenditures.
Students and Researchers
Researchers
and students interested in a similar field of study in future will find this
work useful conceptual guide and reference material.
1.7 Scope of the Study
The
study will focus on effect of public sector accounting on Financial management of Government Establishment in Nigeria. The
study will be conducted in Ministry of
Works in Umuahia, Abia State.
1.8. Operational
Definition of Terms
Public Sector
The
public sector is a term used to identify the portion of a nation’s economy that
is focused on providing basic services to citizens through the framework of a
governmental organization.
Public Sector Accounting
Public
sector accounting refers to all the financial documents and records of public
institutions that relate to the collection of tax payers money, and the
analysis, control of expenditure, administration of trust funds, management of
government stores and all the financial responsibilities and duties of the
relevant organs.
Control System
It
consist of all measures taken by the organization for the purpose of protecting
its resources against waste, fraud and inefficiency thereby ensuring accuracy
and reliability of accounting and operating data, compliance with policies and
procedure and evaluating the level of performance in all the units of the
organization.
Recording
Recording
involves the process of documenting the financial transactions and activities
in the necessary books of accounts like cash book, ledger, and vote book.
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