ABSTRACT
An attempt was made to examine the relationship
between budgetary control and management performance. In this study, the composition of budgetary
control and management performance were examined, whether it confirms with
conventional rule of industry’s norm.
The problem areas in relationship between budgetary control management
perform lighted and solutions suggested.
The Survey research design was employed in this
study. The questionnaire was the major
research instrument used to collect information from the respondents. The methods of budgeting and budgetary control
was used to analyze the collected.
The findings of this study revealed that the method
of budgeting and budgetary control used in the organization were effective, it
is also lack of time, inadequate information, delays from other staff and
incompetence among some staff. Some of the problems of budget proposal and
implementation were fraudulent practices, leadership tussle, inadequate funds,
delay from other staff and exaggeration of budget figures.
TABLE OF CONTENT
Pages
TITLE PAGE I
CERTIFICATION II
DEDICATION III
ACKNOWLEDGEMENT
IV
ABSTRACT V
TABLE OF
CONTENT VI
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 5
1.5
STATEMENT OF
RESEARCH HYPOTHESES 5
1.6
METHODOLOGY OF
THE STUDY 6
1.7
SIGNIFICANCE
OF THE STUDY 6
1.8
SCOPE AND
LIMITATION OF THE STUDY 7
1.9
DEFINITION OF
TERMS 7
CHAPTER
TWO: LITERATURE REVIEW
2.1 INTRODUCTION 9
2.2 FORMS OF BUDGET 12
2.3 DEFINITION AND CONCEPT OF BUDGETING AND BUDGETARY. 13
2.3 OBJECTIVES OF BUDGETARY SYSTEM 13
2.4 ADVANTAGES OF BUDGETING AND BUDGETARY CONTROL
2.5 DISADVANTAGE OF BUDGETING 16
2.6 TYPES OF BUDGETING
SYSTEM/TECHNIQUES 16
2.7 TRADITIONAL BUDGETING 17
2.8 PERFORMANCE BUDGETING APPROACH 18
2.9 PLANNING, RESEARCH AND BUDGETING (PRBS) 18
2.10 ZERO BASED BUDGETING (ZBB) 19
2.11 PLANNING 21
2.12 BENEFITS OF BUDGETING IN AN ORGANIZATION 22
2.13 BUDGETING AND BUDGETARY CONTROL IN
INTERCONTINENTAL BANK PLC 24
2.14 SATISFACTORY ACCOUNTING 26
2.15 INTERNAL CONTROL MECHANISM 35
CHAPTER
THREE: RESEARCH METHODOLOGY
3.0 INTRODUCTION 45
3.1 RESEARCH DESIGN 45
3.2 STUDY AREA 46
3.3 POPULATION OF STUDY 46
3.4 SAMPLE AND SAMPLE TECHNIQUE 46
3.5 METHOD OF DATA COLLECTION 47
3.6 METHOD OF DATA ANALYSIS 47
CHAPTER
FOUR: DATA PRESENTATION AND ANALYSIS OF RESULTS
4.1 INTRODUCTION 49
4.2 SECTION A: SOCIO- DEMOGRAPHIC DATA OF THE
RESPONDENT 49
CHAPTER
FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.1 SUMMARY OF FINDINGS 69
5.2 CONCLUSION 70
5.3 RECOMMENDATIONS 71
5.4 SUGGESTION FOR FURTHER STUDY 73
REFERENCES 74
APPENDIX 76
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
Planning and control are major activities of
management in all organizations. Budgets
are central to the process of planning and control. The involvement with budget places the
management accountant as a key player in the provision of management
information. A budget is one of useful
tools for monitoring the implementation of a correctly cost operational plan of
entity. Historically, budget emerged out
of a need to control and monitor the project income and the utilization of
funds by entities
Performance measurement and management control are
critical component of impairing organization performance. In this study, budget is set within an
overall organization planning and control framework. A common sub Division of the wider planning
and control framework in organization is strategic planning, management control
and operational or task control.
Strategic planning is the process of deciding on the
goals of the organization and the formulation of the broad strategies to be use
in attaining these goals. It is creative
and involves identifying a company’s strengths and opportunities to grow while
minimizing weakness and threats. It has
a long-term orientation and looks outside the organization at customers and
competitors.
Management control is the process by which
management assures that the organization carries out its strategies. It is more short-time is focused on middle
management and is more rhythmic and routine.
Operational or task control is the process of
assuming that specific tasks are carried out effectively and efficiently. The time scale may be very short-term and
addresses targets of junior management most often is based on the used of
non-financial measures and may be based on clearly defined input/output
relationships.
Generally, an organization’s objectives are
expressed in on and three to five year time frames and are informed by its
mission and vision. Traditionally,
objectives are based on financial measures but increasingly are inclusive of
non-financial measures. Strategies are
the ways in which the organization expect to achieve success. Depending on the uncertainty of the
environment strategies can be developed as a “plan’ or a series of decisions
made in a period of time but either way, for a stipulated time period their
outcomes are consistent with the organizations objectives in that they are
expressed in financial and increasingly, non-financial terms broadly management
control system serve as the foundation for decision-making in all organization
differ, management control systems provide the same structural support for the
activities and goals of the organization ultimately, organizations adopt
management control system with the expectation that they will facilitate better
with the making and leads to improve organizational performance. Over time, the one would expect firms to
adopt their management control system in an effect to maximum firms performance. To Dates, Empirical Research has not fully
examined the effects of management control systems and planning on performance.
Previous studies suggest budgets are very unpopular
with managers. There is scant evidence
linking budgetary control and planning directly to organizational performance,
the focus of this study.
The study thus provide an analysis of budgeting
process, control and planning among organization in Nigeria and a particular
reference to industrial sector with the
ultimate aim of demonstrating the role of management accountant in the process.
The study will examine the link between budgetary
control and organization performance in Access Bank of Nigeria Plc.
1.2 STATEMENT OF THE PROBLEM
The budget is perhaps the most important instrument
of government. But the concept, the
policy and legal framework, the process and how it can be analyzed and
evaluated is not understood by majority of managers.
Budgeting on the budget. It refers to the procedures and mechanisms by
which the budget is prepared, Implemented and monitored. Budgeting is very crucial for the growth of
the organizations. Good budgeting can
lead to productivity growth and profitability.
But to prepare a good budget requires a responsible leadership, special
staff assistance, broad accurate and reliable information, completion plan, a
financial calendar and effective monitoring and control over the execution of
the budget plan. Research have however
shown that 80% of the companies in Nigeria are dissatisfied with their planning
and budgeting with their planning and budgeting processes and it has been
estimated that these processes use up to 20% of all management time (Salihu,
2005).
The study thus provide an analysis of the budgeting
control process and planning in financial institution in Nigeria. It will discuss budgets in a wider planning
and control context and discuss a number of issues surrounding the generation
and use of the budgets.
1.3 OBJECTIVES OF
THE STUDY
The broad objective of the study was to examine the
links between budgeting as a tool for management control and Planning in an
organization with particular reference to Access Bank of Nigeria Plc.
This research work aim at achieving the following
objectives.
1. To evaluate the impact of budgeting and budgetary
control on the support of top management staff
2. To identify the role of budgeting and budgetary
control on accountability
3. To examine the effect of Budgeting and budgetary
control on the performance of an organization.
1.4 RESEARCH
QUESTIONS
Taking cognizance of the above, the research
problems can be optimized by means of the following questions:
·
How was the
budget developed?
·
To what extent
the Access Bank of Nigeria Plc finance sources of revenue attained?
·
To what extent
the budget problem named the performance of budget in financial institution in Nigeria.
·
What are the
roles of account department in Access Bank of Nigeria Plc.
·
To what extent
the budget can influence the design of the budget objectives in the budget
planning phase?
1.5 STATEMENT OF
RESEARCH HYPOTHESES
The following are the hypotheses to be tested.
H0: That there is no significant relationship
between Budgeting and budgetary control on the support of Top management staff.
HA: That there is significant relationship
between Budgeting and budgetary control on the support of Top management staff.
H0: That there is no significant relationship
between budgeting and budgetary control on Accountability.
HA: That there is significant relationship between
budgeting and budgetary control on Accountability.
H0: That there is no significant relationship
between budgeting and budgetary control on the performance of an organization
HA: That there is significant relationship
between budgeting and budgetary control on the performance of an organization
1.6 METHODOLOGY OF
THE STUDY
This research work employs both primary and
secondary sources of data generation. The primary data is sourced through
questionnaire that is administered to the management and staff of Access Bank
Plc. In addition, the research would conduct personal interview with various
persons who are not staff of the bank but form anther banks.
Secondary source of data used include textboxes,
documented records relevant to the study, example include the annual statement
of account and reports of Access Bank and the past budget statement of the
bank.
1.7 SIGNIFICANCE OF
THE STUDY
Budget is a reflection of the operational plans of
an entity. A budget is an action plan for a specific period of time covering
all departments/function/facets of an organization and containing targets to be
achieved both in physical and financial terms, which serve as important
criteria of performance.
Previous research has tended to focus on the
antecedents of budgetary control, rather the effects of budgetary control. For
example Simons (1987) found that a firm’s strategy was related to its choice of
control systems. More recently, Widener (2007) finds that in certain strategic
conditions, information processing needs are such performance measure both
interactively and diagnostically suggesting multiple interdependent and
complementary relations among the control system.
1.8 SCOPE AND
LIMITATION OF THE STUDY
The research work is carried out on Access Bank
Nigeria Plc. The study covers the process, formation and budgetary control in Access
Bank Nigeria Plc and it ranges form 2001-2007 accounting years.
The major limitations tots the study are time for
completion of the study and financial constraints. Other limitation includes
reliability and death of information.
1.9DEFINITION OF
TERMS
·
Budget:
Is a plan quantified in monetary terms prepared and approved prior to a defined
time usually showing planning income to be generated and/or expenditure to be
incurred during that period and the given objective employed of attain a given
objective.
·
Operational plan:
Is derived from a broad strategies plan of an entity.
·
Budgetee:
Is a subordinate manger that arranges a budget proposal according to the
requirement of the requirement of the superior manager.
1.10 ORGANIZATION OF
THE STUDY
The research work is planed to be divided into five
chapters.
Chapter one covers the introduction, statement of
problem, objectives of study, significance of the study research methodology,
scope and limitation of study, research question and research hypothesis.
Chapter two covers the literature review and
theoretical frame work of budgeting. It also includes overview of Access Bank
Nigeria Plc.
Chapter three explains research methodology.
Chapter four covers data analysis and interpretation
of results.
Chapter five contains summary, findings,
recommendation and conclusion of the study.
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