AN ASSESSMENT OF PUBLIC SECTOR ACCOUNTING AND ITS IMPACT ON FINANCIAL CONTROL SYSTEM IN NIGERIA

AN ASSESSMENT OF PUBLIC SECTOR ACCOUNTING AND ITS IMPACT ON FINANCIAL CONTROL SYSTEM IN NIGERIA

Background of the study

Accounting has been defined as the business language, and the accounting profession as the backbone of the corporation. This is due to the fact that accounting, in addition to its functions, serves as the custodian of an organization's resources and also serves as a vehicle for deploying these money in such initiatives as to support survival and growth. According to Akeju (2011), while public sector accounting is theoretically identical to private sector accounting, the focus of public sector accounting is considerably different. The majority of government organizations and municipalities must track monies earned from tax revenues as well as expenditures tied to projects or allocations. Furthermore, governments may be required to adhere to a set of accounting standards that differ from those used in the private sector. The development of an international accounting standard assists nations in adhering to comparable norms in order to display information in a consistent manner.

Government accounting, according to Ibhahulu (2012), is the process of evaluating, documenting, summarizing, reporting, and interpreting the financial transactions of government entities. Olakunrin (2008) developed a more comprehensive definition as the process of recording, analyzing, classifying, summarizing, communicating, and interpreting financial information about the government in aggregates and detail, reflecting all transactions involving the receipt, transfer, and disposition of government funds and property.

According to Olakunrin (2008), government accounting often employs a set of procedures that track financial data. Rather than attempting to calculate how much money a public sector institution has made, the entity is required to publish financial information to interested parties, typically citizens. Because money is separated into several categories, it is more difficult for a government agency or municipality to spend money on unapproved activities. To move monies between government fund accounts, elected authorities or legislatures must make appropriations or spending authorizations. This procedure seeks to limit free-will expenditure of money that can soon deplete an agency resource. As a result, the goal of any government accounting should be to establish a standard of ethics and accountability for a country's financial information. Standard public accounting rules will also make auditing a country simpler. When governments use public sector accounting norms, it is also more difficult for them to conceal illegal financial activities.

1.2 Statement of the problem

Adoption of inadequate and unsuitable public sector accounting principles and standards has resulted in a lack of financial control in the public sector. This is obvious because the accounts of local, state, and federal governments are marked by deficiencies such as incorrect maintenance and bookkeeping of accounts and other relevant documents, misappropriation of public funds, particularly by senior officials, making internal control difficult in the sector. Strong internal controls, according to Meigs and Meigs (1970), are required in the public sector not just for purchases and sales transactions, but also for all other sorts of activities. They emphasized the need of maintaining effective internal controls over transactions involving cash receipts and cash payments. Thus, internal controls are so crucial that they influence all of a sector's assets, liabilities, income and costs, and all aspects of operations. However, in the absence of appropriate financial supervision, resources are squandered, fraudulent activities occur, and public sector inefficiency becomes unavoidable. Owing to the gap in literature on recent studies, the researcher perceived a need to understudy an assessment of public sector accounting and its impact on financial control system in Nigeria

1.3 Objective of the study

The main objective of this study is to appraise the impact of public sector accounting in Nigerian financial control system. Specifically, the study seeks to 

1. To ascertain the extent at which accounting ethics are adhered to in the public sector
2.  To ascertain whether the control of public fund adopted by the local government is appropriate.
3. To determine if the accounts of  government are characterized by inadequacies such as, improper maintenance and book keeping of accounts and other necessary records, embezzlement of public funds especially by the top officials.
4.  To recommend strategies by which the local government can use in detailing out funds and prevent revenue leakages.

1.4 Research Question

1. What is the extent at which accounting ethics are adhered to in the public sector?
2. Is  the financial control of public fund adopted by the local government is appropriate? 
3. what  are the inadequacies  characterized by  government account s?
4. What are strategies by which the local government can use in detailing out funds and prevent revenue leakages.

BUY THIS TOPIC ON WHATSAPP

Related Project Materials

ABSTRACT

This study examines the domestic water supply and consumption in Ibadan north east local government area of Oyo state, Nigeria....

BACKGROUND OF THE STUDY

In fact many researches have been conducted in many countries, especially in Ni...

ABSTRACT

The methods of Upward Continuation and Statistical Spectral Depth Analysis were applied on Aeromagnetic data over Kaltungo Area...

ABSTRACT

The study examines the relationship between accounting principles and quality of financial reports in Niger...