Full Project-IMPROVING THE EFFECTIVENESS OF ACCOUNTING SYSTEMS IN PRODUCTION INDUSTRIES IN NIGERIA (A CASE STUDY OF PATERSON ZECHONIS INDUSTRIES PLC ABA)

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CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

The prerequisite for development scientific advancement and adequate management of any business organization is good information system. It is vary important to note that inadequate information in any production industry can influence its activities. A highly productive and organized industry will ensure that the business continues in existence by providing adequate information system. An accounting system consist of the personnel procedures devices and records used by an organization to develop accounting information and to communicate this information to decision makers.

The design and capabilities of these system vary greatly from one organization to the other. In very small business the accounting system may consist of little more than a cash register checkbook and an annual book to an income tax payer. But in large business like production industries an accounting system includes computers, highly trained personnel and accounting reports which affect the daily operations of every department. The basic purpose of the accounting system in business establishment is to meet the organization need for accounting information information as efficiently and effectively as possible it is therefore important that every business including production industries with much emphasis on Paterson Zucchinis Aba be evaluated to know if there is proper accounting system or if there is more. Paterson zochonis since inception has made huge success both in the past and present. Although during the first word war they were faced with a square test as young as they were then but as a result of their royal and committed team of employees the business survived. This research work objective is delving into the utilization of fund and the general accounting and financial control system of production industries with a view of improving the effectiveness of their accounting system of an industry.

1. The appraisal of the performance of Paterson zochonis industries Plc (pz) and to determiner the use of its accounting and financial control measures.

2. Evaluation of the information provided by the accepting system as they are useful for decision making.

3. The evaluation of the information system with the view to identify the sources and measure for investment in thee industry.

BRIEF HISTORY OF PZ INDUSTRIES PLC

The story began in the early 1870, a period many enterprising Europeans started their adventure into the west coast of Africa. George H. Paterson, a high hard Scot and George is zochonis a Greek worked together in the wholesaler ship of small trading company fisher and Randale art scoans Bay free town a sierra Leone. So after their meeting a strong friendship developed between these two people out of shared interest and ambition come to lime light when they set up a trading post of their own. Its official name was simply Paterson zochonis,”.

1.2 STATEMENT OF THE PROBLEM

A significant proportion of any company yearly budget allocation is being brought into the development and improvement of the company objective. The main objective or aim of any organization is profit making. It is wise to say that these production industries are established for profit making. Quite a number of people has seen the ineffectiveness and down fall in the activities of some production industries this may arise as a result of poor management inadequate manpower lack of qualified employees or inadequate funding. Meanwhile much had been said about encouragement of product spending and methods of accounting for the income of these production industries. This research is of the view that the problem is that of interest organization of these production industries, this must have \much to do with computer operation, accounting system producers and control in line with this, the study will dwell on improving the effectiveness of accounting system and control of Paterson zochonis industries plc Aba.

1.3 PURPOSE OF THE STUDY

Based on the background of study and statement of the problem given above the major objective of this Study will be built around the following:

i. To evaluate the accounting and financial control measure of p.z plc.

ii. To analyze the information provided by the accounting system according to their usefulness for decision making that improves the operational efficiency.

iii. To evaluate the financial system with the view to identify the sources of measures for investment to meet the increasing need to replace absolute equipment to meet technological innovated and to examine its effect on financial and budget allocation of the industry.

1.4 HYPOTHESES

This research focuses on the following hypothesis

H0: There is no functional and properly designed accounting system in P.z

H1: There is functional and properly designed accounting system in Pz.

H0 : Poor financial results by Pz. Is not relate to the abuse of stationers disregard to the maintenance staff and lack of effective purchasing agent.

H1: Poor financial results by Pz. Is related to the abuse of stationeries disregard to the maintenance staff and lack of effective. Purchasing agent.

H0 : Income generated are not enough to cover over head expenses.

H1: Income generated are not enough to cover over head expenses.

H0: The office are not well computerized

H1: The offices are well computerized

1.5 DELIMITATION OF THE STUDY SCOPE

This research is focused on a case study of Paterson zochonis industries plc Aba due to limited time and the difficulty of data collection in production industries. The research will evaluate the accounting and financial problem facing the industry with the view to determine the necessary control measure in this area. This study will cover accounting for income revenue reporting budgeting and system of control use of computer system and financial practices of the industry.

1.6 SIGNIFICANCE OF THE STUDY

The researcher strongly believes that much of the administrative failure of most of the production industries as a result of the ineffectiveness of the accounting system of these industries. This research work is geared toward;

i. Bringing the accounting and financial control problem of the production industries to light.

ii. Suggesting a financial structure that suits accounting need of production industries.

iii. Making further research into some other functional areas of production industries.

iv. Serving as future reference for researcher.

1.7 ASSUMPTIONS OF THE STUDY

The following assumption have been made up by the research:
i. The primary objective of the company are known by the employee.
ii. The benefits which may accrue to the industry chosen as a result of correct usage of accounting system can also apply to other firms in the same industry.
iii. That there is substantial and adequate communication and feedback system flowing from top management to all employees and vice versa, within the industry.
1.8 DEFINITION OF TERM PECULIAR TO THE STUDY
For a better appreciation and understanding of the research the following terms have been defined by the researcher below.
ACCOUNTING SYSTEM: These are the system for collecting and summarizing financial data for use in organizing the affairs of a firm and which is aimed at meeting specific needs of the firm.
APPROPRIATIONS: These are resources earmark in a budget for specific purpose and this is recorded in the books of fund as soon as the budget is approved not necessarily when the resources are needed.
BUDGET: A financial statement of estimated income and expenditure covering a specified future period of time and it is usually done before the period begins. A budget is also said to be a financial or quantitative statement prepared and approved prior to a defined period of time of the policy pursued, during that period for the purpose of attaining a given objective. It may include income and expenditure of capital.
BUDGETING CONTROL: Budgetary control is a system of controlling cost which include the preparations of budget co-ordination the department and establishing responsibility comparing actual performance with that budgeted and acting upon result to achieve maximum profitability. It relates expenditure to the persons who incures them so that actual performance on expense can be compared with budgeted expenses. Thus affording a convenient control.
SYSTEM This is a means by which manger of an organization perform their duties co-operatively towards attainment o goals and objectives of the enterprise.
COMPUTER: This is an electron mechanic device capable of accepting strong processing data information and outputting the result of the processing in such a way people can make use of it.
DATA: These are raw fact and figured about flings ideas and events which have not been processed to form an information it could exist in physical numerical or textual form.
INCOME: An amount of money other valuable benefit received or expected to be received by an accounting entity either from its usual activities or form other sources a part from contributions for capital to the entity loans made to the entity and capital receipts.
INCOME AND EXPENDITURE ACCOUNTS: This is a similar account in the business organization to profit and loss account.
INTERNAL CONTROL SYSTEM: This is the whole system of control financial and otherwise established by the management in order to carry on the business of the enterprise in an orderly and efficient manner ensure adherence to management policies safeguarded the assets and ensure as far as possible the completeness and accuracy of the records. OVERHEAD EXPENSES: The general expenses of running a business include rent and rates heating lighting etc.
TERM LOAN: This is a money for a fixed period of time.
FUND STATEMENT: This is a type of statement sometimes used in financial accounting procedure to provide details of a company investment and the sources of its funds for that investment in a particular period it provides an analysis of the flow of funds through an organization and its working capital.

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