BANK DISTRESS: A CRITICAL REVIEW OF THE COURSES AND POSSIBLE CONTROL IN THE NIGERIAN BANKING INDUSTRY

(A CASE STUDY OF N.D.I.C ENUGU)

ABSTRACT

Bank distress in Nigeria has reached a crisis point that it has become a key issue for discussion of all within and outside the banking industry.

It is undoubtedly one of the biggest and most serious issues facing our society today.

In 1993, it was discovered and reported that out of 116 (one hundred and sixteen) banks in Nigeria 57 (fifty seven) of them were distressed on average of 48%. This has affected the depositions, the industry, that is the banking industry, government and staff of the affected banks adversely.

OBJECTIVES

          The researcher understand that the distress in the Nigerian banking industry and the increasing wave of financial malpractice in banks if not arrested will lead to the collapse of the Nigerian economy.  In this regard, an attempt have been made to identify the possible pills for the total eradication of at least control of these distress in order to reduced the negative impact on the economy.

METHODOLOGY

          The method of investigation used by the researcher is based on the analyses the experience of the Nigeria regulatory authorities that is the Central Bank of Nigeria (CBN) and the Nigeria Deposit Insurance Corporation (NDIC) and success so far achieved like questionnaire and interviews.

 

FINDINGS

          No study known to the researcher has been conducted which directly focuses on control of banks distress in Nigeria. Probably that is because it is a new phenomena in the Nigeria banking industry.

However, banks found and other financial malpractices have become so pervasive that both the government supervisory authorities and the law enforcement agencies have galvanized efforts to forestall the menace.

CONCLUSION

          The feelings generally expressed have been for decisive steps to be taken to salvage the banking industry.  Bank distress has to be reduced to the bearest minimum for a healthy economy to thrive in Nigeria.

These steps are discussed in this research work.

CHAPTER ONE:

Introduction                                                                                      1

• Background of the Study 1
• Statement of the Problem 3
• Objective of the Study 5
• Research Questions 6
• Research Hypothesis 6
• Scope and Limitation 7
• Significance of the Study 8
• Definition of Terms 9

References                                                                      10

CHAPTER TWO

2.0     Review of Related Literature                                         11

• Definitions                                                 12
• Causes of Bank Distress 12
• Techniques for Identifying

Potentially Distress Banks                                             20

• Common Features Used in Identifying

Potentially Distressed Banks                                         21

• Common Features Used in Identifying

Technically Insolvent or Distressed Banks                    28

• Control of Bank Distressed in Nigeria 29

References                                                                      40

CHAPTER THREE

3.0     Research Design and Methodology                                42

• Research Design 42
• Area of Study 43
• Population 43
• Sample and Sampling Techniques 43
• Instruments of Data Collection 45
• Methods of Data Presentation 45
• Methods of Data Analysis 47

References                                                                      48

CHAPTER FOUR

• Data Presentation and Analysis 49
• Test of Hypothesis 59

CHAPTER FIVE:

Findings, Summary, Recommendations and Conclusion                  64

• Findings and Summary 64
• Recommendation 66
• Conclusion 69

References                                                                      71

Bibliography                                                                  72

 

CHAPTER ONE

 

INTRODUCTION

1.1     BACKGROUND OF THE STUDY

          In the past financial report of commercial and merchant bank showed that they usually carried out excess liquidity.  But by the end of 1993, the huge excess liquidity disappeared. The minimum required liquidity ratio was 30%s Nwaigwe K. O. (1995).

In later years, the ratio deteriorated, it was claimed that the issuance of stabilization securities contributed to the above.

Also another development which the researcher was informed about is the fact that a good number of issued bank were grossly under capitalized. To worsen the case, non-performing loan and advances eroded the inadequate capital base since the banks were compelled to make adequate provision for the non-performing credit.

The indemnity also experienced poor management which eventually opened the floodgate for distress to surface in the system.  Poor management of the assets and liabilities of the bank was one of the major causes of the distress in banking industry today. The jungle politics also helped to deteriorate the economy because survey shows a consistent down-turn and the effect the banking industry adversely.

Also, given excessive risk taking by some banks management in a competitive environment and the prevalence of frauds and forgeries in the system, the evil seed for bank distress was sown awaiting germination and harvesting.

However, in 1998, the federal government of Nigeria (FGN) as if in anticipation of the above ugly development had created a Deposit Insurance Scheme managed by Nigeria Deposit Insurance Corporation was created by Sec. 39 and 40 of Dec. 22 of 1998 to restore confidence and security of the public in the banking system to control and manage the distress banks thereby ensure a safe and sound banking system in Nigeria.

It was against background that the researcher resolved to carryout an appraisal of attempting the proffer workable solutions to the problems of the distress.

 

1.2     STATEMENT OF THE PROBLEM

          A distress bank is one whose performance has persistently not confirmed favourably with established parameter for gauging the financial conditions of banks and also when the bank becomes illiquid or insolvent Nwaigwe K. O. (1995).

Insolvent means when the bank can not meet its current obligation as at when due.  On the other hand, a bank is confided insolvent when the total value of its realization assets is less than the banks total liabilities. And also it has a negative net worth.

However, the rate of distress varies from one bank to another and that is based on the degree of insolvency and liquidity.  At this juncture, it is important to note that the regulatory authority (NDIC) use the composite rating “CAMEL” parameters to assess the performance and financial position of banks.

Base on this rating, the banks that are classified unsound has the following characteristics:-

• Compute sweeping away of shareholders funds are due to operating loss of its assets.
• High ratio of non-performing loans, relative to total loans.
• Weak internal control system.
• Poor management information system
• Liquidity-where they could no longer meet customers demand for cash.
• Very low or negative net income as a result of poor asset and liability management.

Based on the above characteristics it was possible for the Central Bank of Nigeria (CBN) to take over the board and management of five distressed banks in 1993.  These banks were adjudged distressed because of the alarming deterioration in their financial condition and the inability to recapitalize them as called for by the monetary authorities.

These take over came as a surprise and an Interim Management Board (IMB) was constituted to handle the affairs of these distressed banks until they revived. The (IMB) was charged with responsibility of seeing to early survival of the distressed banks through ensuring compliance of the bank with the regulations to ensure safe and sound banking practices. This also had the power and duty to recovering loans.

 

1.3     OBJECTIVES OF THE STUDY

          The objectives of this research work is;

• To examine the distress in the banking industry.
• To determine the causes of the bank distress
• To determine the remedies to the distress in the banking industry.
• Banking industries attempts at evolving possible strategies for it eradication.

 

 

1.4     RESEARCH QUESTIONS

          For the purpose of this study, the following research question are posed and answered to them will provide a guide to the research investigation.

• Why is there distress in the banking industry
• What are the causes of bank distress?
• How does it affect the banking industry?
• What are the remedies for bank distress?

 

1.5     RESEARCH HYPOTHESIS

          The research work is based on the hypothesis that;

Ho:    Banks are not the engine for growth and development in modern economy

Hi:     Banks are the engine for growth and development in modern economy

 

Ho:    Distress in banks has no serious consequences for the banking industry.

H1:    Distress in banks has serious consequences for the banking industry.

Ho:    Control of bank distress is not a compulsory task and should not be undertaken by the bank management.

H1:    Control of bank distress is not a compulsory task and should be undertaken by the bank management.

 

1.6     SCOPE AND LIMITATION OF THE STUDY

          The research work on bank distress in licneced commercial and merchant banks in Nigeria was conducted through Nigeria Deposit Insurance Corporation (NDIC) because officers of the affected banks did not answer question on their affairs and none agreed to reveal any information relating to their bank.  The major limitations of the research work is time constraints as the research combines the research work with the other lecturers required for the award of Higher National Diploma (HND), that little or not time is left especially with the short direction of the semester.

Another limitation is the alarming degree of bank distress has reached since it started.  The regulatory authorities do not seem to have a picture of the practical ways of resolving the problems. Based on this foreign consultant have several time been limited to give their profession advice on this persistent menace to ensure that total eradication is ensured.

This research work will also highlight the experiences of some foreign countries who have had similar experience. The measure so far taken by the regulatory authorities in Nigeria will be commended in terms of the degree of success achieved.

 

1.7     SIGNIFICANCE OF THE STUDY  

Banking being the “engine” for growth and development in any economy has made this study significance. This has necessitated the need and urgency of controlling distressed in banks to avoid economic collapse.

This research becomes more significance because of the increasing determination in the financial conditions of banks in Nigeria today due to the menace of distress and the possible economic chaos if uncontrolled.  The facts given in this research work will be of immense help to economic planners, investors in banking industry industrialists that need banks for growth and development.

 

1.8     DEFINITION OF TERMS

LIQUIDITY RATIO: This is the ratio of liquid assets to current liabilities. In short it is the ability of a bank to sue its liquid assets to meet its current obligations for licenced banks in Nigeria, the required liquidity ration is 30%.

 

FRAUD AND FORGERIES:  According to Longman dictionary of contemporary English, fraud is defined as a deceitful behaviour for the purpose of gain.

 

INSOLVENT: This means that the value of a bank realizable asset is less it total liability.

REFERENCES

Nwaigwe K. O. (1995)   Managing Distress in Nigeria Banking

Olufdie E. O. (1994)      Fraud in the Nigerian Economy and Its Implication for Banks and Financial Institution, Ibadan 

Okechukwu F. C. (2000) Consolidated Profit & Loss Account, Enugu, Immaculate Publishers.

Ebodaghe J. U. (1995) Boardroom/Management Practice and Distress Journal on Nigeria Banking System.

PAYNE P. B. Prevention of Frauds and Forgeries in Banks Seminar Paper p. 1.

NDIC Quarterly Report Vol. 3 No. 1, June 1993 p.1

The News, a Monthly Magazine Vol. 19 No. 94 March 2002

NDIC Quarterly Report- September, 1995, Vol. 5 p. 3

The News, A Monthly Magazine, Vol. 18 No. 94 March 2002.

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THE NATURE AND CONSEQUENCES OF JUVENILE DELINQUENCY IN NIGERIA: A STUDY OF ENUGU NORTH LGA, ENUGU STATE

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BALACING AND BURGETING CONTROL

IN A MANUFACTRURING AND MARKETING ORGANIZATION (A CASE OF STUDY OF TOTAL NIGERIA LTD)

CHAPTER ONE:

1.1 INTRODUCTION

1.2 STATEMENT OF THE PROBLEM

1.3 BJECTIVE OF STUDY

1.4 SIGNIFICANCE OF STUDY

1.5 SCOPE OF THE STUDY

1.6 IMITATIONS OF THIS STUDY

1.7 EFINITION OF TERMS

CHAPTER TWO:

2.1 REVIEWS RELATED TO LITERATURE

2.2 THE CONCEPT OF BUDGETING ANDS BUDGETING CONTROL

2.3 TYPES OF BUDGET

2.4 BUDGET PREPARATION

2.5 ADMINISTRATION OF BUDGET

2.6 HUMAN FACTOR IN BUDGETING

2.7INNOVATION IN BUDGETING

2.8 HISTORICAL BACKGROUND OF TOTAL NIGERIA LTD

CHAPTER THREE

RESEARCG METHODOLOGY

3.1 INTRODUCTION

3.2 RESEARCH DESIGN

3.3 PRIMARY SOURCE OF DATA

3.4 POPULATION

3.5 SAMPLE TECHNIQUES

3. 6 SAMPLE SIZE

3.7 REMARKS

CHAPTER FOUR

DATA ANALYSIS AND INTERPRETATION

4.1 PRESENTATION OF RELATED DATA

4.2 METHOD OF DATA ANALYSIS

4.3 ANALYSIS OF RELATED DATA

4.4 TESTING OF THE HYPOTHESIS

CHAPTER FIVE

SUMMARY, FINDINGS, CONCLUSION AND RECOMMENDATION

5.1 SAMMRY OF THE FINDINGS

5.2 CONCLUSION

5.3 RECOMMENDATION

BIBLIOGRAPHY

APPENDIX / QUESTIONNAIRE

CHAPTER ONE

 

INTRODUCTION

HISTORY OVERVIEW:

The use of budget in government long preceded its application in business or the business sector. In the stable economic environment of the period before world war, few large companies in U.S.A and U.K used budgets. The result of the use of budget conflicted, some pioneer companies reported it was a significant tool to management but reported it has an ill or even a negative effect on efficiency and productivity. In order to avoid the conflicting result of the large segment still straddled the fence awaiting further information and a more definite result. The world depression of the 1929 and its attendant business worries and trouble made the use of budgeting imperative in order to plane the growth of the enterprise. The population of budgeting was the direct outcome of two inquiries conducted to assess the benefit or otherwise as budget as applied of for the industry. The national industrial conference board sat in U.S.A while the international management institute worked in Geneva. Both were inaugurated in 1930.

 

The concept of business budgeting is even more resent in Nigeria. It was introduced by the first foreign multinational that operated in Nigeria and gradually a small firm adopted it.

The ultimate goal of any business organization is to maximize profit, which can result fo4rm the management conscious effort to increase sale/render efficient service and reduce cost. In the attainment of this subsidiary goal, management must have a careful prepared and articulated business and organizational plane, a rational plane commitment of the scarce resources and a thorough scanning of the environment in which it exist. In the other word, the enterprise was plane and controls its operation for the attainment of the organizational goal.

In a total business environment, business operation is complex and subject to heavy competitive pressure. In such an environment, many kinds of charge occur like frustration in the economy, which call for adjustment in the enterprise. In addition, the ingestible find are scarcer and the cost of such fund is estimably prohibitive. All this complexity put a wedge between business form and attainment of its set objective. But the firm must take a positive action in regarded to the difficulties in order not to go under. The firm must plane ahead. Planning ahead entailed articulation of cooperate mission, determine where a firm is at the moment, deciding on where it want to go and how fast, how to get there and what to do along the way to reduce uncertainty and to mange the risk and changes. Planning ahead entails internal scanning to determine the enterprise strength and weakness which can provide the management with a better understanding of the firm operation n relation to the general environment which increase understanding and leading to a faster reaction of the unfolding events.

Environmental scanning is also carried out which form the basis for the environmental assumption. The business objective must by clearly set out and disseminated t all level of business organization and management, personnel effectively sensitized towards their achievement also essential is the internal co-ordination of the personnel and function. But most importantly, the enterprise must forecast its need for fund over a giving period of time, secure them on very competitive terms and utilize the fund in the most rational ways.

Indeed the survival of modern business involve wise management even more than that, it needs scientific technique and such technique of the budgeting and budgeting control, variance accounting and other high Techniquecal forecasting device have all come to the aid of management to increase the performance of the firm.

 

Budget according to management of institute of chattered accounting (CIMA) is simply a plane management of money and which is prepared and improve prior to the budget and may show under the expenditure and capital employed. On ht other hand, institute of certified management of accountant define it as a financial statement prepared and approve prior to the define period of time of the policy to be pursued during that period for the purpose of archiving a set objective. It serves as a quantitative expression of a planed action and can aid in coordination and implementation. It could be formulated of the organization as a whole or for a small sub – unit.

Once a budget has been prepared and is approved, its usefulness depends upon the wiliness of the company executive to follow up to determine if the cost are been controlled and if the desired income is been earned in accordance with he plane of the operation.

Controlling operating involves management in a number of processes and requires several different kinds of information. It involves converting to management planes into an operating pattern w8ich match the planes into which a company is divided. This change the overall detailed lane into an operating plane, which rates to the management structure of the company, and this thus leads to budgeting

 

Budgets are drowned up for control purpose. It ia an attempt to control the direction and plane the company is taking. This brings up the issue of budgeting control. Budgeting control is the means of deterring the extent to, which the planed goal and objective are attain. It involves assigning responsibilities for the achievement of the budget, measuring the actual performance and compare them with the estimate. Control ensures that the action is taking where necessary and possible to reduce the gap between budgeting and actual performance. That entails taking action in variance and close supervision of the workers in the organization.

Budgeting control can also be said to be the use of budget for assigning responsibility, planning and controlling performance and guiding the managerial and other activities of the firm toward the achievement of the organizational objective

 

STATEMENT OF THE PROBLEMS

In the light of the confusion tumult of the modern business as identified and describe above, some firm have gone under while the others are just managing to exist. It is however interesting phenomena that yet other enterprise does not survive only but go ahead to make super profit. This detail point out to the fact that companies should solves their problem in different ways, which in turn account for success or failure of such firm. Total oil Nigeria plc, the focal point of this study started operation (20) twenty years ago. It was formally a subsidiary of the French multinational company with head quarters in Paris but now in Merger and is now known as the total fianelf. The business of the total oil is the marketing of petroleum and manufacturing and sale of lubricants. Its overriding business objective is maximization of profit. The oil and gas industry is a high-risk business where distribution has not control over price level which is inturn subjected to violent fluctuation.

Amid this vagaries, total oil has continue to make stable progress as judged by the parameter of profit over the years, what specific strategies are employed by total oil to guarantee profit

 

OBJECTIVE OF THE STUDY

The main objective of the study is to examine the organizational structure, the management and financial tool of total oil to assertion;

1. Whether profitability is the direct result of proper budgeting and budgeting control
2. Dose the beget makes possible congruence and co-ordination of the department effort.
3. Is the company reward penalties based directly on variance

 

Hypothesis

Hi: budgeting are effective guide to business growth

1. Ho: budgeting are means to control and synchrony organization personnel’s and function
2. Ho: budget are more effective when reward/penalties are based on goal attainment
3. Hi: budget is more effect when reward/penalties are not based on goal attainment.

 

SCOPE AND LIMITATION OF THE STUDY

This study is a five years trend analysis (1993 – 1997) although it is aimed at determines the quality if budget and budgetary control in the company over the period. This study will not take a detailed look of the companies budget schedules. The financial statement only will be used. The natures of the research situating sometimes impose some limitation on the work of the researcher. This limitation are listed below

 

1. Owing to the use of convenience sample the generalization made in this study are restricted to the interviewees and those responding to the questionnaire. The researcher has no way of determining the amount of bias introduced by the respondent and note what amount of reliability will be place on the answer giving
2. Time: the short time \available has severally limited the depth and the quality of this study
3. Non-response: not every person to whom questionnaire was distributed to respond to them. And it was not in all case that response was given to all the questions contained in the questionnaire. The effect of all this is to reduce the representation of the findings.

 

DEFINITION OF TERMS

1. Budget: this s quantitative expression of plane of action and an aid to co-ordination and implementation
2. Budgetary control: it is the establishment of budgeting relating to the responsibility of the executives to the requirement of policy and continues the comparison either to secure by an individual action the objective of that policy or provide a basis for its revision.
3. Data: can be defining as a fact observed or information in isolation and relating to the subject of the research.
4. Financial statement: these are report on management responsibility over the resources of the organization as a whole.
5. Fixed cost: this are cost that dose vary in direct proportion to the production volume archived.
6. Financial tool: this are instrument used by the company
7. Hypothesis: are the ideas believes or assumption put forward by anyone for the purpose of helping and guiding him in arriving at a reasonable conclusion.
8. Model: is define a simplified presentation of a real phenomenon
9. Population is the totality of cases (item) in a giving investigation
10. Penny pending: find it difficult to spend money in order to cut down cost.
11. Profit: this is define as surpluses giving to the owners of the business as a result of a successful trading
12. Pioneer company: it is a company which has been legally issued with a pioneer certificate
13. Questionnaire: a list of question elating to the aim of the study and hypothesis to be verified to which the respondent is required to answer by writing his response.
14. Relevant range: this is the range within which fixed cost is accepted or used
15. Sample size: this is a process through which a proportion of a population is selected for the study
16. Variance is a different between standard cost and.
17. Variance cost, these are overhead costs that vary in direct proportion to the overhead production values archived.

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THE NATURE AND CONSEQUENCES OF JUVENILE DELINQUENCY IN NIGERIA: A STUDY OF ENUGU NORTH LGA, ENUGU STATE

Foreign Transaction For Dollars Payment :
Bank Name: GTBank
Branch Location: Enugu State,Nigeria.
Account Name: Chi E-Concept Int’l
 Account Number:  0117780667. 
Swift Code: GTBINGLA 
Dollar conversion rate for Naira is 175 per dollar. 

ATM CARD:  YOU CAN ALSO MAKE PAYMENT USING YOUR ATM CARD OR ONLINE TRANSFER. PLEASE CONTACT YOUR BANK SECURITY FOR GUIDE ON HOW TO TRANSFER MONEY TO OTHER BANKS USING YOUR ATM CARD. ATM CARD OR ONLINE BANK TRANSFER IS FASTER FOR QUICK DELIVERY TO YOUR EMAIL . OUR MARKETER WILL RESPOND TO YOU ANY TIME OF THE DAY. WE SUPPORT CBN CASHLESS SOCIETY. 

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AUDITING AS AN AID TO ACCOUNTABILITY (A CASE STUDY OF ENUGU STATE POST PRIMARY SCHOOL MANAGEMENT BOARD (PPMB)

ABSTRACT

An economy moves as efficiently on inefficiently as the people who manage its affairs. Business cannot thrive if we do not have an adequate number of men with their requisite knowledge, skill and competence.

It is in recognition of these fact that an effort is made in this research work to show the impact of Auditing in public sector.

For the sake of clarity a and orderly presentation of relevant materials, the body of this work is divided into five chapters.

Chapter one is the introduction which considers among other things, the Auditing curiosity about Auditing. Historical background of the study, statement of problem, objectives of the study, research questions and hypothesis, significances of the study, limitations and delimitations and equally definition of some technical terms.

The second chapter discussed the review of related literature  which comprises different opinions from different authors. Auditing and accountability declined, origin and development of audit, public and short note of public accountability, government accounting procedures the role of internal audit unit, statutory positions, power and functions of auditor general and audit report.

The third chapter dealt with the methodology and design of the study that is made up of research design data analysis, test applied (personnal interview and questionnaires). oral interview, sampling procedures or methods, data collection (primary and secondary data) and questionnaire applied.

Chapter four x-rays the data analysis and presentation which includes analysis and interpretation of data from responses of the respondents.

The final chapter presents the findings, recommendation and conclusion. The samples of questionnaires and bibliography are under the appendix of the write-up at the back page. Also in the bank page is the application letter to the Enugu State Audit Department.

The structural arrangement was made to accommodate the size and complexity for audit work, which increases enormously with a corresponding effect on the operation of public offices.

These complexities resulted to the inadequate examination and verifications of the books and records in such a way as to uphold a true and fair view of transactions. This however leads to misappropriations and embezzlement of public funds. Sometimes even, defalcation occur. All these occur because there wasn’t effective control of book of accounts and the assets to the business.

In short, all these factors motivated the researcher to try into facts of and rudiment of auditing and explores the impact of auditing and the use of auditing as means of avoiding these anomalies. So auditing should be carried out in all public organisation if actually the yield by these organisation would be satisfactory.

CHAPTER ONE

Introduction

• Historical background of the study 6
• Statement of problem 7
• Objectives of the study 10
• Research questions 11
• Research hypothesis 13
• Significance of the study 14
• Scope, limitation and delimitations 17
• Definition of some technical terms 18

CHAPTER TWO

Review of related literature

• Auditing and accountability defined 22
• Historical origin and development of auditing 34
• The meaning of public and civil service 40
• Short note on public accountability 41
• Government accounting procedures 43
• The rate of internal audit department in public service50
• Statutory position, power and functions of he auditor general 54
• Audit report 59

 

CHAPTER THREE

Research design and methodology

• Introduction 64
• The research questions and hypothesis 64
• Research design 66
• Data analysis techniques 70
• Sample population 71
• Sample test applied 72
• Pilot study 74
• Questionnaire applied 74
• Limitations of the methodology 76

 

CHAPTER FOUR

          Presentation, analysis and interpretation of data

• Introduction 78
• Presentation of data 79

 

CHAPTER FIVE

          Findings, recommendation and conclusion

• Summary of research findings 84
• General examination of the problems of the auditors in the performance of their duties 86
• Conclusion 90
• Recommendations 91

Appendix 1                                                                    98

Appendix 2                                                                    99

BIBLIOGRAPHY                                                          102

 

 

CHAPTER ONE

INTRODUCTION

The question of how to increase efficiency and positive result in audit work in the public sector is a perennial problem in Nigeria, and one that is increasingly warring the generality of he people of this country.

The response has been to upgrade the quality of audit staff and widening of he powers conferred on audit institutions in the public sector. The need for the training of audit staff in modern techniques of auditing which is more effective and result oriented rather than restricting them to the traditional methods of ‘trick and turnover’ which is inadequate and outdated.

Public sector auditing is centered towards ensuring the proper and efficient use of public funds, development of sound financial management, the orderly executive administrative activities and the communication of information to the public through the publication of objective reports since these are necessary for the stability and development of the nation, there is the need to map out the machineries and methods of carrying out a research these functions effectively as to achieve a desired result.

In the past, the emphasis of an audit was on the traditional methods of auditing which has been mainly the compliance audit, seeing that all books and records comply with the laid down procedures and regulation. But now, there is the need for a shift of emphasis to modern concept of effectiveness and efficiency.

Based on these individual views of auditing and its functions, the researcher took a keen inherent to rest empirically auditing as an aid to accountability with to the Enugu state post primary school management board (PPMB).

The increasing incidence of fraud and misappropriation of public fund and property by the accounting officers and chit executives in the Enugu state post primary school management board posses a question as to whether auditing plays any role towards ensuring proper accountability in the state public service.

Auditing is ment to control, deter and find out any fraud or misappropriation of public fund or property by officers entrusted with such duties. It is because of this onerous task that the Enugu state audit department was established to appraise the work of those entrusted with the responsibility of accountability.

Government undertakes various transactions through its representatives or agencies and as such, they are required by law to give account of their stewardship. To achieve these purpose, the constitution of the federal republic of Nigeria provides a law established audit departments both at the federal and state levels section 125(1) of the 1999 constitution provides that there shall be an audit general for each state of the federation who shall be appointed in accordance with the provision of section 126 of this constitution. The sub-section (2) of this section provides that the public accounts o a state and all offices, ministries, parastatals and the courts of the state shall be audited by the auditor – general for the state who shall submit his reports to the House of Assembly of the state concerned, and for that purpose the auditor –general or any person authorized by him in that behalf shall have access to all the books, records, returns and other documents relating to those account.

The sub-section (3) of this constitution also states that nothing sub-section (2) of this constitution shall be constrained as authorizing the auditing – general to audit the accounts of or appoint auditor for government statutory corporations, commissions authorities, agencies, including all persons and bodies established by law but the auditor – general shall, (a) provide such bodies with

1. A list of auditors qualified to be appointed by them as external auditors, and from which the bodies shall appoint their external auditors and
2. A guideline on the level of lies to be paid to external auditors and

• Comment on their annual accounts and auditor’s report there on. The sub-section (4) of this section also states that the auditor – general for the state shall have power to conduct periodic checks of all government statutory corporations, commission, authorities, agencies, including all persons and bodies established by a law of the House of Assembly of the state.

Inspite of all these provisions and safeguards. One still hears or reads every now and them of the alarming rate of fraud and misappropriation of public funds and properties by those entrusted with their safeguards. In view of the foregoing, this study is aimed at appraising the functions of the Enugu state audit department, problems affecting its efficiencies performance and possible suggestion to enhance its effectiveness.

The researcher aims to examine the major cause of fraud or misappropriation of public funds in the state public service and offer useful suggestions to arrest the ugly situation. this study will be of immense importance for it will appraise the performance of the Enugu state audit department and assess the extent it has been able to achieve its objective.

The research will also offer useful suggestions on how best to achieve accountability in the state public service.

 

 

 

• HISTORICAL BACKGROUND OF THE STUDY

In oral interview with the chief internal auditor in the Enugu state audit department on the origin the audit department, he said. “the audit department is as old as Nigeria”. he said that the present Enugu state audit department had its root from the colonial masters. As of the time, there was one audit in the federation known as the colonial audit. The colonial master had their representatives in Nigeria and they were responsible to the Queen of England. The country was divided into four regions, East West, North and South. Each of the regions had its own audit department but still under the control of the colonial administration. This give rise to regional audits.

Section 61 (1) of the Eastern Nigeria 1958, constitution state, “there shall be a director of audit for the region whose office shall be an office in the public services of the region. In 1976, thee was a further creation of states in the country and it was then that the former Eastern Central State was divided into two viz; Anambra state and Imo state following this each of the states no w has her own audit department with a director of audit.

Section 118 (1) of the constitution of the federal republic of Nigeria 1979 states, ‘the director of audit of a state on the recommendation of the state commission subject to the confirmation by the House of Assembly of the state.

Following the creation of Enugu state in 1992, the state was empowered by section 25 (2) of the 1999 constitution of the federal republic of Nigeria and section 4(2) of chapter 13 of the audit law, to have its. Audit department in the state respect of post primary school management board, and is being headed by the state auditor –general and other members of staff are responsible to him.

 

• STATEMENT OF PROBLEM

There has been an entry of poor accountability in the states public services. A case in point is the recent radio announcement of over N27.3 million fraud in Lagos state and also a report on champion newspaper of the embezzlement of over three million naira methodology for Enugu state ecology last time. The problem is the identification of the reasons for the ugly situation and why the state audit department has not been able to bring it to a health.  The Enugu state government is loaded with a lot of financial burden and as such cannot afford to continue losing most of her funds by way of fraud and misappropriation. This calls for proper accountability and effective working of the machinery public established for excreting control over public fund.

The problems of auditing affect both the management and audit unit, company’s shareholders board of directors, researchers and businessmen. It therefore need to be discussed to find solutions. From the view point of misconceptions, superstitions, and prejudices of auditing and its functions as mentioned earlier, we are sure:

1. That inadequate auditing leads to misappropriations, embezzlements and insincerity.
2. That organisations do not perform well due to inadequate auditing.
3. Inadequacy of information in an organisation hinders the efficiency of the operation of audit in the post primary school management board.
4. Non-challent attitude on the part of some staff in an organisation constitutes a problem to the internal audit department of an organisation.
5. Inadequate payment of salaries and remunerations of the workers in an organisation causes fraud, embezzlement and misappropriation of fund in the post primary school management board.
6. Poor line of communication existing between the management and the internal audit unit causes inadequacy of internal control in the post primary school management board (PPMB).
7. Poor division and assignment of responsibilities in a public sector causes mismanagement of public fund.
8. Lack of management skills hinders auditing practice in the post primary school management board.
9. Poor delegation of authority and improper appointment of people to assume duties also contribute to the mismanagement of public fund.

Among other problems, this research work will be keenly undertaken as part of my efforts to find out though the methodology and design of the study whether or not auditing is an instrument for ensuring accountability or whether the impact of auditing is positive or negative. It is my belief that this research work will not only after solutions to the problems but will highlight the main functions of auditing and useful suggestions.

 

• OBJECTIVE OF THE STUDY

The sole aim of this research work is to evaluate and identify.

1. The roles being played by external and internal audit department towards the protection of public funds and properties.
2. The extent these roles have been achieved in the state.
3. The extent of compliance with the financial regulations on public fund by the authorities concerned.
4. The problems facing the government auditors, which hinder their performance.
5. The effectiveness of audit report and their implementation.
6. The find out whether the standard of auditing has fallen in recent year and if so.
7. What is responsible for this.
8. To evaluate the impact of auditing in a public sector with a view of making useful suggestions for the improvement of the programme in the post primary school management board.
9. To make management understand that public fund is not an individual fund and as such should exercise professional skill on it.
10. It is also aimed at making the staff on the internal audit designation of carrying out continuous internal audit.             
11. The study also aims at making the auditors understand that they should act as watch dog and not bloodhound.

 

• RESEARCH QUESTIONS

          The researcher made use of the following sleeted research questions in this study. They are:

1. What are the role being played by the internal and external audit department towards the protection of public fund and properties?
2. To what extent have these have these roles been achieved in the Enugu state post primary school management board?
3. what is the extend of compliance with the financial regulations in fund by the authorities concerned?
4. what are the problems facing the government auditors that hinders their performance.
5. Has the standard of Audit fallen in recent year? And if so.
6. What are responsible for this?
7. What are the impact of Audi tics in a public sector.
8. Do management understand that public fund is not a individual fund and as such should exercise professional skill on it?
9. Do the staff of the internal Audit department understand what Audit is all about and the important of caring out continues internal Audit
10. Do Auditors understand that they should act as watch dog and not bloodhound.

1.5       RESEARCH HYPOTHESIS

      In order to arrive to a reasonable conclusion in the study of Auditing as an Aid to accountability, it is very eminent to formulate a set of testable hypothesis based on available data. To ensure the true and fairness of this study, the under mentioned hypothesis should be tested in the study.

 

Hi.  Auditing Aids accountability in the Enugu state post primary school management board.

Ho.   Auditing does not Aid accountability in the Enugu state post primary school management board.

Hi.    Inadequate auditing leads to misappropriation embezzlement and defecation.

Ho.  Inadequate auditing does not lead to misappropriation embezzlement and defalcation.

Hi.      Internal Audit unit in the management board is a watchdog.

Ho.      Internal Audit unit in the post primary school management board is not a watchdog.

Hi.         Auditing has lost its public taste.

Hi.         Auditing has not lost its taste.

 

• SIGNIFICANCE OF THE STUDY

     The growing nature of the Nigeria society and the complexity of Governmental operations have today given rise to frequency loss of public fund. The significance of this study can be from the no of tribunals, special investigation panels (SIP) being set up to look into loss of public fund. If the field auditors are given a free hand to conduct their inspection in a manner capable of achieving a desired audit result, the tribunals and panels should not arisen. To some accounting clerks and other staff, accounting sound fearing, shivering and at time swearing. With the help of this research, they will be exposed fully to the main rudiments and purpose of auditing in the management of public fund. No doubt, the outcome of the research will be of great aid to the non-accountants managers, students, the staff of the state of post primary board and the interested readers by revealing some of the important solution that need to be considered in the programme. The solutions if considered properly will not only increase the effectiveness and efficiency of the programme but will also will stimulate the management board and the businessmen whom the Auditing is meant for. This material will also be significant in the sense that it will highlight  the functions of Auditing, the role it plays in our society and the auditors in the state post primary school management board communicate with their functionaries. Again, the concept of compliance and efficiency were examine to determine whether to sacrifices complain totally for efficiency or to modify it and in what precise way, may the criterion by pursed .What administrative, legal or constitutional adjustment are necessary ie any to effect the desired change and to what extent may the change be brought to any adjustment in the constitution, law and administrative regulations and financial circulars. In a nutshell the significance as follows;

• The auditing will find this work very eminent for it will explore deeply their areas of operation and the section of the constitution that empowered the operation of Audit in the public service.

• A though this work is referenced to the state board, the member of the board of directors and the shareholders will also find this work useful for it will make them understand the usefulness of carrying out a research contemnors audit in their establishment.
• It will also make them understand that adequate remuneration of their staff will reduce misappropriation and embezzlement in their establishments.
• The management both in the private and in the public sector will also be taught the need to put the machinery in motion towards establishing adequate internal check which will certify the efficiency and effectiveness of their internal control.
• The state Audit department which is the central focus of this work will also be benefit from this research ie the suggestions made to them will be fully implemented.
• The students and would be researchers who would want to research on a similar topic will also has provided some researchable question for them.

1.7               SCOPE AND LIMITATIONS AND DELIMITATION

The scope of the study centered on the usefulness of auditing in a public sector titled, “Auditing as an aid to accountability” with a particular reference to the Enugu state post primary school management board. It also looked into the problem of the internal audit department and solution to their problems. The internal audit  units of some selected government establishment s in the state were also part of this work. coming to limitation of this study, the writer spend much time and money on transportation, writing of this manuscripts and collation of data. Again, a lot of difficulties such as harassment, redtap office procedures were uncounted during the curse of the research work. Time and space also limited the volume and ingredients of this paper. Some of this limitations forced the researcher to purposefully eliminate some aspects of this research. All thing being equal, all department in the state were supposed to be and reported upon, but this will make this work look too voluminous and time consulting. However, these limitations did not prevent the writer from bringing this project to justifiable end.

 

1.8    DEFINITION OF SOME TECHNICAL TERMS

It is very eminent to define some professional terms and language used in this work to make it easily understandable to interested readers of other disciplines.

PUBLIC FUND; This the government independent and accounting entity with a self-balancing set of accounts recording cash and or other resources together with all related liabilities, segregated for the purpose of caring on specific activates or attaining certain objectives in accordance with special regulation, restriction, or limitation.

AUDIT;      Ajembi O.A (1995) describe audit as an examination by an individual or a firm of a set of financial statement and to the underlying books and records which result, the auditing provides an opinion on the financial statement.

ACCOUNTABILITY;   This simply defined as the process of keeping and documenting all the relevant data of a event.

STEWARDSHIP A COUNT: This is an account required of the stewards or agents to render to the person they are subject to the management of a firm render stewardship account to the members of the boards of directors.

COMPLIANCE AUDIT: This is a kind of audit method carried to ensure that all books and records are in agreement with the laid down procedures and regulations.

 

NOTES

Howard R. Leshie, Principles of Auditing, 20^th Edition (MacDonald

and Evans: London and Plymouth (1981) P. 1 and 2.

Millicamp A. H. Auditing, An instructional manual for accounting

students, 3^rd Edition (D. P. publications Ltd Estheigh, Hampshire 1984).

Ikeoma A. N, “Definition of Audit, objectives of audit and qualities of

an auditor”. Introduction lecture to newly recruited auditor at Audit department/headquarter Enugu 11^th Jan 1988.

Ibueze J. C. “Accountability and social objectives”  Business Time,

Monday, March 31, 1995. p 8.

Federal Republic of Nigeria – company and Allied Matters Decree,

1990. Federal Government printers Lagos, 1990

Institute of Chartered accountant s of Nigeria members

Handbook.

1. C. Nwabueze: Guide to Audit. Immaculate Publication Ltd,

Enugu, 1997.

 

Chinedun Nwodo, Internal Control 2^nd edition. Gethsemane

Consulting & publishing. Enugu 1997.

Okorie Onovo, Understanding Advanced financial accounting part two

immaculate publication Ltd Enugu, 1998.

Watter W. Bigg – Spicer & Pager’s practical Auditing 15^th Edition,

HFL publishers Ltd London, 1972,

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APPRAISAL OF FINANCIAL MANAGEMENT PRACTICES IN A MANUFACTURING INDUSTRY (A CASE STUDY OF THE EAGLE CEMENT COMPANY PLC. NKALAGU)

PROPOSAL

Finance is the life-wire of any organization and proper management means a sustained increase in the life of an organization.  Owing to the broad view of this project when settled for an elaborate detail about it, this report or write up has been divided into five different chapters as follows:

Chapter One: which is the introduction, deliberates or the introduction of the topics as regards the background, objectives scope and significance of the study, the statement of problems, research questions and hypothesis of the project.

Chapter Two: elaborates on the literature review as in the evaluating financial performance, accounting system, accounting procedure and internal control etc.

Chapter Three: deals with the research methodology as in research design, area of study, population of study, sample and sampling procedures, instrument for data collection, validation of the instrument, reliability of the instrument, method of data collection or administration of instrument and method of data analysis.

Chapter Four: deals with the data presentation and analysis test of hypothesis and summary of result.

Chapter Five: presents and gives discussion, implication and recommendation as in discussion of result, conclusion, implication of the results, recommendations, suggestions for the further research and limitation of the study.

CHAPTER ONE

1.0.  Introduction

1.1.  Background of study

1.2.  Objectives of study

1.3.  Statement of problems

1.4.  Scope of study

1.5.  Research questions

1.6.  Hypothesis

1.7.  Significance of study

CHAPTER TWO

• Review of literature
  • Evaluating financial performance of a company
  • Accounting systems
  • Accounting procedures
  • Internal control systems in accounting procedures
  • Summary

CHAPTER THREE

• Research methodology

3.1   Research design

• Area of study
• Population of study
• Sample and sampling procedures
• Instrument for data collection
• Validation of the instrument
• Reliability of the instrument
• Method of data collection or administration of instrument
• Method of data analysis

CHAPTER FOUR

• Date presentation and analysis

4.1   Test of hypothesis

4.2   Summary of results

CHAPTER FIVE

• Discussion, implication, recommendation

5.1   Discussion of result

5.2   Conclusion

5.3   Implication of the result

5.4   Recommendations

5.5   suggestions for further research

5.6   limitation of the study

Bibliography

Appendices

CHAPTER ONE

1.0           INTRODUCTION

Almost all kinds of business activities directly or indirectly involve the acquisition and use of funds.  There exists an inseparable relationship between finance on the hard and production and other functions on the other.  In a business set up, the functions of recruitment and promotion of employees are clearly the work of the personnel department.

Sales promotion policies come within the functions of the marketing department.  These activities performed by these departments (personnel and marketing departments) require outlay of funds and therefore affect resources.  The finance function of raising and using money although has a significant effect on other functions but it need not necessary limited the general running of the business.  Generally firms formulate their policies (marketing productions, personnel and other policies) most of the time, to tally with the financial resources of the company available to them.

The word “Finance” is viewed from different perspective by different group thus: –

1. A layman sees finance as the volume of money in his prose, vault and at the bank.
2. Investors sees finance as the provision of funds as at the time it is need for investment. It goes beyond coursing and applying the fund for profit maximization as well as the state of sharing the profits.
3. Academic sees finance as the science of fund management.

The investor view about finance shall be upheld in this write up.  This because it emphasizes on profit making for the maximization of shareholders wealth.  Wealth maximization is one of the corporate financial objectives of a firms.  This can only be achieved by efficient and effective management of the company’s resources.

Financial management involves all the activities that are concerned with planning cash and credit requirement, including the effective control of the financial resources

The activities could be segregated as follows

1. Forecasting the future availability of and requirements of cash
2. Converting forecasts into plans and budgets

• Planning the appropriate capita structure

1. Raising of cash from outside the business
2. Controlling cash balances and flows in accordance with plans and changing circumstances
3. Investing surplus fund

In financial planning, this involves estimating and

planning of the future flow of cash receipt and disbursements. Also this is useful in raising of funds organizing and ensuring that funds necessary for carrying on the operation of planning is available.  The wise use of funds by allocating such funds ensuring efficient use of funds.

In financial controlling, monitoring financial operations to ensure that cash flows are proceeding according to plan.

As a company is part of financial community, its financial management can be fully interpreted only within the context created by the workings of financial institutions and markers.

The variables considered in the framework of financial management are:

1. The financial goals of the company
2. The valuation of the company and the extent to which this valuations uninfluenced by company decision.
3. The means of measuring the performance of the company. When it goals have been identified and the method of valuation chosen, the company’s performance must be monitored and measured accordingly.

The researcher here wants to access the financial health of

a manufacturing industry, its strengths, weaknesses, recent performances, future prospects and the implementation of its financial policies.  This involves a review of the financial policies.

This involves a review of financial statements followed by careful consideration of their use in evaluating financial performance.

 

ASSESSING THE FINANCIAL HEALTH OF A

MANUFACTURING COMPANY

The most important source of information for evaluating the financial health of a company is its financial statement consisting of a balance sheet and a income statements. EAGLE CEMENT is a public liability company and as required by law, it is expected to submit her annual account to the registrar, corporate affairs commission, Abuja.  The account so prepared is for the consumption of many interest group like: the shareholders, tax authorities, investors, creditors etc.

For the purpose of evaluating the financial health of the company (EAGLE CEMENT), the use of financial statement for 1999 year shall be reviewed and analyzed.  See chapter four on data presentation and analysis.

1.1           BACKGROUND OF STUDY

The research work is based on the NIGERIAN CEMENT Company Plc. Nkalagu in Ebonyi State.  As miller puts it, “we cannot understand the attitude of either management of workers unless they are seen in their historical context”.  Here the history of NIGERCEM Nkalagu is briefly narrated and derived from the management audit enquiry of NIGERCEM, 1976.

The history of NIGERCEM dates back to colonial days in Nigeria.  I the early thirties of this century, several district officers, geologists had report tot he existence of large deposits of limestone in Nkalagu area – various over sees had as a result of this shown interest in working of deposit.

On 23^rd August, 1954, the Nigerian government signed an agreement with F. L Smith and company for the erection of a cement works at Nkalagu.  By the same agreement, F. L. Smith and company limited as managing agents.  The Nigerian Cement Company Limited, Nkalagu was incorporated on 13^th Novemenber 1954 to operate this cement project.  Mr. E. E. Sabben – Clare became the first chairman of the board of directors.

On December 20, 1957, the governor general of Nigeria, Sir, James Robertson, opened the factory officially.  Commercial production commenced on 1^st January, 1958.

Once of such investors is flour mills of Nigeria which Chief Emmanuel Ukpabi said arrears of staff salaries alone in Nigrecem in conservatively put at N1.4billion according to him. Liabilities to individuals and corporate bodies are estimated at several billions of naira.  He recalls that there had been desperate move by cement importing companies to either buy wholly or acquire majority shares of ailing cement manufacturing firms.  But they all shunned Nigercem because of the said liabilities.

Nigercem owned by the five south-eastern states ran into hitches from the late 80’s due mainly to gross mismanagement.  The development led to break down of three of firms vital machines which remained unserviceable with the only functional one operating at low capacity for some time until it finally got grounded.  The south-east governors who are the major investors in the company had also contemplated many options aimed at reviving the company.

At recent meeting of the five south-eastern governors in Owerri the Imo State capital, various options for the revival of Nigercem topped the agenda of their parley.  The host governors Achike Udenwa who spoke with news men said Nigercem will be privatized if the governor’s ratify is being considered for privatization.  The government of the five eastern states are already considering this in order to improve efficiency and productively.

The chairman of Nigercem “Nze Clement Maduako noted that eastern Rukeem company limited producers of Eagle Cement, was the major shareholder in the privated Nigercem with a controlling share of 60 percent.  Expressing confidence on the ability of new management to kick-start Nigercem now called Eagle Cement again, he said the new board has the first general manager of the cement company as member, while another employee of the company is expected to join the six-member board.  Member of board, who emerged from the election conducted by the 165 shareholder in attendance were Nze Maduako, chairman; captain I.A Hastrup, Mr. H.N Onugbogu, Mr. Coran Wejdmark, Mr. S.A Oludemi and Dr. J.O Ojukwu.

The plant stopped production in 1999, but had a text run in 2001 for only three months in preparation for the privatization.  Some of shareholders who spoke said they had not been paid for the past 40 months and pleaded with the new board to consider clearing the arrears then works commences in the factory.

 

1.2           OBJECTIVE OF THE STUDY

The overall purpose of the study is to understand the financial management practices that equips them with the conceptual and analytical knowledge requires to make skillful, informed, sound, objective and reliable decision of the company.  Specifically the objective of the study on this project is stated as follows:

1. To evaluate the financial performance of EAGLE CEMENT Company.
2. To evaluate the management levels of control of financial performance of the company.
3. To identify the accounting systems and procedures and check whether the financial polices of the company are implemented accordingly.
4. To prefer solution to ineffectiveness in financial management of the company.

 

 

 

1.3           STATEMENT OF THE PROBLEM

 

1. It is believed from the evaluation of financial status of the company that the company is not financially healthy.
2. It is also established that there is inefficient and ineffective management of the company’s resources
3. It equally discovered that the financial policies are not properly implemented.
4. Exposing financial fraud noticed. It include as follows:
5. Cash advance

Staff and management do apply for cash advance but over spend the amount approved for them only to come back to claim a very huge amount as their balance

1. Car repairs:

Outside, manager do not allow their official  cars to be repaired by the company’s employed mechanics.  They prefer repairing it outside only to present an inflated biill to the company payment

 

• The provision that all purchases should be routed through the purchasing department is just in principle not in practice.

1. Price invoicing:

The company allows suppliers to inflect the prices of their suppliers because of the interest some of them have.

1. price variation:

Some supplier do after some months of supply sent a price increase to the company for items already supplied and the company will honour such claim.

1. Supply of item, which do not agree with the specification of item actually required by the company.

• Contract prices are unjustifiable inflated
• Cheque exchange granted to some staff or managers take more than one year before it is redeemed.

 

1.4           SCOPE OF STUDY

The study covers the area relating to financial manger of EAGEL CEMENT.  It also touched on the effective implementation of financial policies of the company.

 

 

1.5           RESEARCH QUESTIONS

1. What are the levels of the financial management control of the company?
2. What are your accounting system and procedures relating tot he receipt and disbursements of the company money?

 

1.6           HYPOTHESIS

1. Financial management practices EAGLE CEMENT COMPANY are not in line with the approved policy
2. The accounting procedures are not in line with the approved policy

• The internal control system of the company are not in line with the establishment system.

 

1.7           THE SIGNIFICANCE OF THE STUDY

1. The study will reveal the ineffectiveness of financial management practices in the company
2. The study will equally reveal the weaknesses in the internal control system of the company
3. The study will also over haul the accounting procedures of the company as to see how adequate they are.

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ABSTRACT
The research work revealed that the product has been able to satisfy the customer to a very high level It was also discovered that customer partronse product which involves fund transfer and then the most prominent reason for their patronael is based on the convenience the introduction of the production has improved the profitability of the finance. Finance is to meet the ever grow needs of customer.
In research work close four of the production, measured the extend to which they have been able to satisfy the customers.
TABLE OF CONTENT
CHAPTER ONE
1.1 INTRODUCTION
1.2 STATEMENT OF THE PROBLEM
1.3 AIM OF STUDY
1.4 SIGNIFICANT OF THE STUDY
1.5 RESEARCH HYPOTHESIS
1.6 SCOPE AND LIMITATION OF THE STUDY
1.7 DEFINITION OF TERM
REFERENCE
CHAPTER TWO
1.2 REVIEW OF RELATED STUDY
REFERENCE
CHAPTER THREE
3.1 RESEARCH DESIGN AND METHODOLOGY
3.2 SOURCE OF DATA
3.3 LOCATION OF DATA
REFERENCE
CHAPTER FOUR
4.1 SUMMARY AND FINDINGS
4.2 TEST OF HYPOTHESIS
REFERENCE
CHAPTER FIVE
5.1 RECOMMENDATION AND CONCLUSION
BIBLIOGRAPHY

INTRODUCTION
CHAPTER ONE
In initiating and setting up any business concern, the first and the most important issue that quickly comes to mind is finance (money).
This is because the availability of adequate fund will enable the investor to employ the necessary input labour, equipment and machinery power, utilities, suppliers and even management. However, it is the pre-occupation of this project to trace the grass0root of what is finance in a bid to excavate its meaning as it concerns the scope of this work. Therefore, without negating the points already stated above, finance can be viewed as those basic human functions of production and marketing that involves financial decision-making.
In this paper therefore, it is partiment to discuss briefly the issue of industrial finance in the past in an attempt to identify the origin of Nigeria’s present structural problem therefore, subsequent sections of this paper will shift to the pattern of financing medium scale and large scale companies excluding those engaged in banking finance or investment

1.2 STATEMENT OF PROBLEM
Pre-independence Nigerian entrepreneurs did no have much financing problems because, at that time, labour intensive agricultural activities dominated the economy. The unfortunate situation however, directed Nigerian economy into activities that offered little or no opportunity for economy enlargement
So with independence and the realization that the perpetuation of such economic relationship