COST ACCOUNTING INFORMATION AND PRICE DETERMINATION

(A CASE STUDY OF NIGERIAN BREWERIES PLC, ENUGU)

ABSTRACT

Increased advancement in industrialization, engineering and general commerce has thrown a great challenge to managers.  There is increased competitions, and the survival of any company lies on the ability of the managers to apply the scare resources efficiently.

Efficient management of resources call for proper control of inventory and revenue therefore, effective system of costing and good pricing policy are central and pre-requisite for the survival and growth of any organization in the global economic village.

The topic “cost Accounting information and price determination’ is aimed at establishing how adequate accounting information can assist management in making sound pricing decision.

Many business organizations in Nigeria collapsed in the recent past because they could not break-even.  In periods of boo, manufacturers are able to show profits notwithstanding the leakages which pass unchecked but in periods of trade competition, concealed inefficiencies have to be tracked down and rigorous control must be exercised to ensure even modest margin of profit, there is not yet an agreed best method of costing products though, it may be helpful to recognize that cost allocations are being used to obtain a mutually acceptable price and not necessarily to portray cause- and effect relationship of cost incurrence.  But price determined from efficient traditional income statement approach and /or contribution margin approach will most probably approximate the price of the product to its value.

LIST OF TABLES

• A simple cost statement showing profit
• A summary of cost in the brewing house
• A summary of cost in the celiar
• A summary of cost in the Filtration
• A summary of cost in the Bottling center
• A summary of cost in engineering cost center
• Total cost for production department
• Estimated cost of brewing star lager bee
• The pricing policy of the company personnel
• The Relationship between marginal costing and costing method
• Cost method adopted
• Application to full absorption costing
• Other considerable factors
• Effect of competitors price of bee
• Basis of pricing decision
• Effect of government legislation on their pricing policy
• Fixed or Determined selling price of the products

4.1.0 Effect of market forces on pricing decision

4.1.1 Contingency table (function of costing information).

CHAPTER ONE

INTRODUCTION

• Background of the study
• Statement of problem
• Objective of study
• Research questions
• Research hypothesis
• Significance of the study
• Background of the firm studied
• Definition of term

CHAPTER TWO

REVIEW OF RELATED LITERATURE

• Costing method
• The flow of cost in a manufacturing firm
• Other theoretical work on cost and pricing
• Limitation of cost oriented pricing
• The nature of pricing problem and theories
• Cost based pricing theories
• Other variable that influence price determination
• Pricing to achieve corporate objectives

CHAPTER THREE

RESEARCH METHODOLOGY

• Research design
• Area of the study
• Population of the study
• Sampling procedure
• Instrument for data collection
• Validity of the instrument
• Reliability of the instrument
• Method of administration of the instrument
• Method of data analysis

CHAPTER FOUR

DATA PRESENTATION

• Test of hypothesis
• Analysis and interpretation of responses

CHAPTER FIVE

DISCUSSION, IMPLICATION, AND RECOMMENDATIONS

• Discussion of results
• Recommendations
• Conclusion

References

Bibliography

CHAPTER ONE

INTRODUCTION

Accounting has often been considered as a series of activities which are linked together and culminate in a progression of steps summarizing and finally communicating information to its users.

We may say therefore that accounting information has a special purpose and that is “decision making”.  The task of the accountant is to transform raw data information.

Cost and management accounting are the parts of accounting discipline which have developed, to meet up with the progress in technological advancement, production, sales and finance.  These aspects of accounting have broadened the boundaries of accounting profession and made it more useful to modern business enterprise.

Cost accounting is probably the field of accounting which has developed most greatly within the last half of this conturing and there is no doubt about its growing importance.  This is partly because of the growing complexity of modern production methods, which results in greater capital investment and higher proportion indirect costs, and partly a reflection for the growing competition and widening markets in the business world.

All these factors necessitate the keeping of systematic and accurate records which will show the cost of goods produced an contracts fulfilled.

The job of accounting has shifted emphasis and focus from recording, interpreting and analyzing historical financial transactions, to a more challenging task of setting controls, devising the most efficient method of collecting, interpretation, analyzing and transformation of costs into useful information which is made use of by management in decision making which effects the future.

A cost/ management accountant is now deeply involved in helping management to set-up control systems that make for co-ordination of all the activities of an organization thereby ensuring proper and purposeful direction and effective control.

The cost accountant will draw on information, provided by the financial accounting system but he will also need to obtain much more detail of the internal workings of the business.  He will use data in monetary and non-monetary forms of house worked capacity of materials used, product manufactured, machine running hours, idel time ect.  He is concerned with finding the actual cost of products operations and departments, often comparing this with an estimated or ideal cost.  The emphasis on decision  making in recent years has brought together different disciplines which once were viewed as separate areas of knowledge.  The accountant has to be knowledgeable over a broad area if, he is to be efficient in providing information, which is relevant and useful for decision making.  The great task of an accountant is to transform raw data into information.  as an information specialist, the management accountant must be aware of the nature of information and its attributes.

“Information has no value in itself, its value is derived from the changes in decision behaviour caused by the information being available, it follows from this that more detailed information, more accurate information or earlier information is not necessarily better information only if its improves the resulting decisions, the production of information only incurs cost which are frequently considerable.  Benefits only arise from actions”.  Many difficult decisions arise as to whether to buy new equipments which will make new products or save cost and whether to make or buy components, whether to accept work at cut threat prices etc. this often require special cost analysis and studies.

The cost accountant discusses with the engineer about the life span of the plant and machinery, the most economic and efficient way of its use, the most appropriate method of depreciation, whether it will be more profitable to dispose it at a salvage value or to continue its use until it is scrapped.

The supervisor provides the cost accountant with the information needed as to the usage of fuel, gas, energy. Light and heat etc.

The cost accountant will also look into the administration of wages; determine whether it is economical to engage labour at a piece rate or at a time rate, employ more workers and make room for shift futy or pay overtimes, the profitability or otherwise of the firm being machine or labor intensive cost accounting ensures the maintenance of good salaries and wages record, of classes of workers.  Cost accounting has aided management in the formation of a sound and enviable labour policy and the determine the rate of turnover of labour.

Accounting information has assisted managers to control cost of raw materials effectively, determine the re-order level of stocks of raw materials.  That is, after taking into account the minimum stocks develop and the safety stock and also considering the carrying (ware-houseing) and ordering costs, rate of efficiency etc.

The cost accountant laises with the works manager and from him, knows the processes involved in the production or manufacture, the cost incurred at every stage and seeks ways of controlling costs or improving the method of work which leads to reduction in cost and ultimately to increased efficiency.

The cost and management accountant therefore should have an in-depth knowledge of cost in every sphare of the organization in which he works.  He is usually a member of any budget committee set up in the organization and in some cases the chairman.  Hence it is his knowledge about the operational standards and the information which he obtained from the analysis of collated costs that form the basic budgeting tool.  In fact, with the development of cost and management accounting, the job of an accountant has increased from that of a financial historian to that of a financial analyst who provides management with needed information for future decision, for comparison and efficient management. Without an effective system of cost accounting, it is doubtful whether a business of any size can survive in the intensively competitive condition of today.

• BACKGROUND OF THE STUDY

There are no more important decision in market affairs than those connected with pricing.  No matter how intelligently the product distribution and communication mixes are conceived, improper pricing of a product may nullify the effect of all other actions. But, in spite of the importance if pricing decisions, the skills and analysis which are often used in practice do not approach the professional orientation used in the management of advertising, sales promotion or personal selling.  Perhaps one of the reasons is that price decisions cut across all areas of Business Operation and are not central in any of the functional divisions of the firm’s organization.

This research work therefore among other things, intends to highlight on management’s seemingly indifference towards this all important issue.  This research titled “cost accounting information and price determination” as stated, directs attention to the cost structure factor of the price. though the cost structure especially as it affects a manufacturing industry constitutes the major determinant of the price of the products.  There are other factors which influence the price of products of firms which vary with circumstances, types of the commodity services rendered.

Before delving into some of these other factor that influence product prices, let us first and foremost, direct our attention to the most important factor at play in the cost and price of beer, including components of the cost structure.

HISTORICAL ACCOUNTS

These are financial statements prepared from past activities of the enterprise.  Since these are actual figures of cost and revenue obtained in the previous periods, the management can determine the price of its products through the information obtained from this past financial statement.  This method is more reliable when there is steadiness in economic activities.

BUDGETED COST

The budgeted cost is an information system through which cost can be estimated and controlled.  Management most often base it price policy on budgeted cost or estimated prices through observed trends in economic activities.  This is mostly applicable in newly establishment firms whose products are making their first outing to the market.

MARKET FORCES

DEMAND AND SUPPLY:    The price of beer is affected by the forces in the market.  Beer industry being free enterprises market cannot be so rigid in its price policy since it is a price taken, so with a high demand especially when there is a decrease / fall in the prices of other food stuffs, the price of beer will increase.

Equally, the reverse is the case with arise in the price of essential commodities (Food stuffs).

CAPACITY OF FACTORY

          This refers to the quantity or volume of the products that can be produced in a run or an average of the total output possible within a period.  The factory with larger size or capacity will produce and sell at a lesser price than a small sized one.  For examples Nigerian Breweries plc has a capacity of about 750000 hectolitres or 625 million cartons per year while its sister industry, the life Breweries plc has a capacity of about 430 hectolites or 5.8 million cartons per year.  Under normal circumstances and other varioables held constant, Nigerian Breweries beer should be changer.  The reasons are:-

1. Large sized capacity enjoyz quantity discounts, especially in the purchase of materials.
2. Some fixed overheads like depreciations, some types of labour, rants rate etc, are shared by the large quantity of production and this makes the fixed cost to be lower per unit of product. Also the sales expenses per carton of beer will be lower with capacity production.
3. Other costs like maintenance cost, top management salaries, entertainment and promotion expense are cheaper per unit of production with increase in capacity.

5. SALARIES AND WAGES

          This is sub-divided into direct and indirect: direct wages are these that are directly attributable to production whereas, indirect wages are those not associated with the actual manufactures but in all, they constitute the cost upon which the value of product is measured and other things like.

1. Quarantining
2. Hearty overtime or payment for unnecessary overtime

• Number of the expatriate officers in the brewery.

The salaries paid to these expatriates are usually very high and in some cause are paid in hard currency.  All these tend to increase cost abnormally.

6. RAW MATERIAL

Beer brewing requires the following raw materials, viz sorghum, maiza, hops extracts, hops power and caramel.  These raw materials especially soghum and maize constitutes the major cost of bee. Helps and caramel being imported, maize as a raw material forms a significant cost of beer.  For example, when the price of maize was #14,000.000 per tonne, the price of a carton of beer was #300.00 but as the price of a carton of beer rose to #800.00

It should be noted that the above named material are not exhausitive and do not include consumable materials such as the filtration materials (example: ascorbic acid, filter sharets, keto lods) and clearing agents (example: p3, oxonia, litic acid, bar soap).

7. EFFICIENCY

          The efficiency  of management affects the cost of its products.  Efficiency can result from proper control of the enterprises activities, adequate work supervision, reduced wastes and abnormal loss, decreased idle time, employing the minimum labour requirement that is qualitative as against quantitative labour force.  With increase in efficiency, the cost of production decrease and consequently, the profit will be affected.

8. ECONOMIC TRENDS

constant fluctuations in the general economic activities affects every element of the economic system and beer industry, being part of the system must be affected either directly or indirectly.  For instance, before the advent of second-tier foreign exchange market (S.F.E.M), the value of naira was strong in the foreign market.  Then the value of one dollar was approximately 80k but, the rate of foreign exchange has taken a dramatic tum since the introduction of  S.F.E.M.  At the initial time, the official SFEM rate was #12.00 per one us, dollar, currently, with the operation of guided deregulation and Autonomous foreign exchange market (A.F.E.M); The prevailing rate is #185.00 per dollar, for government transactions and #185.00 per dollar for non-Government transactions.  As a result of this, the prices of both imported and local raw materials and spare parts which constitute above 90 percent of the cost of beer escalated similarly.

The enumeration above are those factors that can inflence the cost and price of bbe in this country within the enterprise.  We shall briefly look at other variables that may be take into account before a firm formulates its pricing policy.

1. pricing to meet the welfare of the public. In this cases, the firm is faced with a responsibility to the public.  In such cases, the price which produces satisfactory profits may be unacceptable to the market.  It is unacceptable in the sense that only a small number can take advantage of the product or that the price would bring a deluge of public criticison.  Under such circumstances, a price much lower than the necessary  price to maximize profit or make satisfactory return is used.  The mult-product firm is in a much better position to follow such practices than a single product form as it can cover small losses on some products in the remainder of the lone.
2. Minimization of loss: pricing is another case of pricing below cost, in high fixed cost industries, idle plants are excessivel costly. If by reducing prices, the plant can be utilized, any contribution to fixed cost reduces losses. The firm may set prices which are below total costs but not below average variable cost.

The price decision maker should recognize the fact that the number of prospective as well as the existing firms in the industry has a fundamental impact on the degree to which a firm has discretion.

• STATEMENT OF PROBLEMS

The different between total cost and revenue is the profit or loss.  Revenue is the product of the unit selling price and the quantity produced, therefore, cost and price are the basic factors in determining whether an organization make a profit or loss.

It has been observed that the failure of many products in the market is due mainly to inadequacies on the part of management, to apply cost information in arriving the market price of such products.  Management decision are usually based on information and the failure/ success of any management lies in its ability to take accurate decision, therefore, it implies that the ability of the management to understand, interprets and apply information appropriately is the secret of any successful organization.

• OJECTIVES OF THE STUDY

This study titled “cost information and price determination” is geared towards the solution of the problems encountered by management in pricing and marketing their products, due to inadequacy, misleading or failure to use accounting information.  this research therefore intends to provide several cases and simulations and through proper analysis of these, we will avolve the best methods of analyzing product costs to obtain adequate information, necessary for good pricing policy.  Among other things, the project intend to:

1. Highlight on management’s inadequate concern over proper pricing guide via costing information.
2. X-ray necessary conditions for costing system

• Evaluate the appropriate basis of preparing the cost of products.

1. Dissect and analyse the elements of cost involved in the brewing of beer and the extent to which the cost or price of beer is being influenced by the actual cost of production.
2. Know other factors at play in the determination of the price of beer through the idea of the actual cost figures involved.
3. See the practical application of the principles enumciated by cost accounting and to determine any shortfall in its application and if fully applied the advantage thereto.

• Research into the existence or usefulness of cost information, by appraising the existing principles both as they exist in theory and as they are practically applied, to formulate some other efficient wages of determining price through costing information, especially as it concerns a beer industry.
• Determine an appropriate condition and environment for proper collation and analysis of costs.

• RESEARCH QUESTIONS

1. How is the cost information generated by the accounting system applied in arriving at the selling price of a product.
2. To what extent does the management of an organization make use of cost accounting information in determine the price of its products.

• RESEARCH HYPOTHESIS

1. HO: Pricing decision is a function of costing information

HI:     Pricing decision is not a function of costing information

2. HO: The price of a product is determined by market price

HI:     The price of a product is not determined by market forces.

• SIGNIFICANCE OF THE STUDY

The essence of cost accounting information comes to mind when one realizes that in the modern world of rapid industrialization, no firm can survive without properly costing its products.

Proper cost accounting – collection of costs, interpretation of costs, analysis of costs, its allocation and control, is the mother of efficiency and any firm that does not know its information as regards costs, stands the chance of pricing itself out of the market.

In a face market economy, particularly in an industry where homogeneous goods are being produced, the greatest weapon which a firm can use against its opponent is to maximize efficiency and this is active through proper costing.  Even if price ceitin exists, the firm will still be in a position cost without equivalent reduction in price leads to increased profit.

Even in periods of slump and low prices proper costing information assists a firm to produce at a price which will cover its varible costs and part of its fixed costs and thereby reducing the loss due to excess capacity.

The essence of cost information as it affects price comes readily to mind when we consider it in relation to the government, we should looked at it from two area:

EXCISE DUTY: This is a sort of tax paid to the Nigerian customs and excise department on goods manufactured in the country.  This duty varies with level of production.  The effect of this on output is glaring as it must be paid, whether sales are made or not and whether or not, profit is made.

1. TAX BASES ON THE REPORTED PROFIT:- this tax is not only important to the government, because of the fund generating but also as one of its tools in the control of the whole economy in the form of fiscal policy.  The more costs are immunized based on information garried, the high profit will be and thus, a positive increase in government tax.  Where there is a high fixed capital costs, using the actual cost figure to determine price will make it so exorbitant and leads to decrease sales, it cannot halt production otherwise it stands to lose so much.  The firm can produce  and sell below total cost with the knowledge of the proportion of the variable cost to the fixed cost.  However, this condition can only arise when there is no other alternative way to channel the resource or a particular product in one of a form’s many lines of products in which the particular product is being produced not for its own profit but to help maintain other lines of product or the finished goods will reach and it becomes marketable (split-off-point) but might need further processing or refinement.  Cost information aids the firm to know whether it is profitable to process further or to sell at the split off stage.  Other significance of the study includes.
2. To create the awareness of benefits derivable from proper data analysed with modern costing technique especially as it affects our case study where adequate cost classification is lacking.
3. To dissvade the use of the “market watch department” as the pricing guide to some manufacturing industries especially the beer industry in which our case study, the Nigerian breweries plc is not exempted.

• BACKGROUND OF THE FIRM STUDIES

Nigerian Breweries plc, the pioneer and largest brewing company in Nigeria, was incorporated in 1946 and recorded a landmark when the firs bottle of star larger beer rolled off the bottling lines in its Lagos brewery in June 1949.  this was followed by Aba Brewery which was commissioned in 1957.  Kadun Brewery in 1963 and Ibadan Brewery in 1982.  in September 1993, the company acquired its fifth Brewery in Enugu.  On April 9, 2001, it laid the foundation for yet another brewery in Enugu which was completed recently (Last year).  From its humble beginning in 1946, the company now have six operational breweries from which its high quality product are distributed to all parts of this great country.

Nigeria Breweries plc has a rich portifolio of high quality brands namely:- star larger beer (1949), Gulder large bee (1970), maltina (1976) which now has four varieties (Maltina principle, Legand extra stout 91992), Amstal malta (1994) and schwepper range of carbonated soft frinks launched in 1996 (Schweppes Bitter lenon, shweppes tonic water and schwappes soda water).  This was followed by the launch of crush orange in November 1997, and Schweppes principle in October 1999.

The company has earlier launched in the Nigerian market Heineken larger in June 1998.  however, in August 2001, the company decided to exit the car-Bonated soft drinks market because of the need to concentrate on its area of core competence, the Schweppes franchise was therefore sold off.

Nigerian Breweries plc keeps place with key international developments thus, ensuring that its systems, processes and operational procedures is always in conformity with the world class standards.  It is in line with this policy that the company established a research and development center in 1987, to enhance its research activities on all aspects of brewing operation.

The company in 1994 established an education trust fund of #100 million, to take more active  part in the finding of educational and research facilities in higher institutions.  Nigerian Breweries plc is the foremost sponsor of sports by variety in the country with sponsorship covering footsball, talole tennis, lanon tennis, cyching, chess, glp, badminton, boat racing and ayo.  The aim is to develop Nigerian sportsman one woman to participate in national and international sports and boost the sports profile of the country.

The Nigeria Breweries plc bought the assets of Diamond Brewery in semptember 1993 and fulfilled its desire to have a brewery in Enugu.  Their aim is to improve the company’s service to its costomers in Enugu axis.  There exist within the organization, three categories of labour:  the management, the senior / staff and the junior staff.

• DEFINITION OF TERMS

1. ACCOUNTING: Accounting is defined as the application of book keeping technique using professional knowledge and skill in preparing information regarding business transactions.
2. COST ACCOUNTING: Cost accounting can be defined as that aspect of accounting which deals with ascertainment of costs of products and services and comparing these costs with the resultant benefits or services in order to arrive at either profit or loss.

OR

The application of accounting and costing principles, methods and techniques in the ascertainment of cost and the analysis of saving / or excesses as compared with previous experience or with standards.

3. MANAGEMETN ACCOUNTIN: Management accounting can be defined as the application of cost accounting method , principles and techniques, professional knowledge and skill in order to provide information for the management for decision making, planning and control.
4. A COST: This may be defined as the amount of expenditure (actual or notional) incurred on or attributable to a specified activity or transaction.
5. INFORMATION: Information may be defined as knowledge gained or idea obtained from news, strong, discussion, transaction or through the analysis of collected data.

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THE IMPACT OF MONETARY AND FISCAL POLICIES ON THE INDUSTRIAL AND AGRICULTRUAL DEVELOPMENT IN NIGERIA

ABSTRACT

The research project is a very crucial study for the development of agriculture and industry in Nigeria.  The study was motivated by the necessity to establish the extent of the effect of monetary and fiscal policies adopted by the government and monetary authorities in Nigeria on agricultural and industrial development.  The need for industrialization and agricultural develo9pment have been of great concern since after Nigeria’s independence.

To solve the research problem both primary and secondary data were collected.  The research instrument used in collecting the data were questionnaires and oral interview.  The respondents comprised of the industrialists and agricultural.

In organizing and presenting data collected, tables and percentage were used, there various hypothesis were tested using the chi-square.

Data analysis and interpretation gave the pillowing findings: logs in monetary policy, poor implementation inadequate planning, look of proper supervision, and political instability.

Based on the findings, I recommend that, grassroots planning and review should be made before policy formulation, defaulting banks on credit extension guidelines should be punished, monetary and fiscal policies should be flexible.

The conclusion of the study is that monetary and fiscal polices has not been used in on efficient and effective manner, but it the application of these polices are improved, there will be appositive change and development in the agricultural and industrial sectors.

CHAPTER ONE

1.0     Introduction

• Background of the study
• Statement of problem
• Objectives of the study
• Statement of hypothesis
• Research questions
• Significance of the study
• Scope and limitation
• Definition of terms

CHAPTER TWO

• Literature review

2.1     Concept of monetary

2.2     concept of fiscal policy

• Stance of monetary policy
• Phases of monetary policy in Nigeria
• Instruments of monetary and fiscal policies
• Agricultural credit policies in Nigeria
• Impact of monetary policy on industrial an Agricultural development
• Internment problem of Nigerian monetary and fiscal polices

CHAPTER THREE

RESEARHCE DESIGN AND METHODOLOGY

3.0     Introductions

• Population of the study
• Sample of Design
• Source of Data
• Data collection techniques

CHAPTER FOUR

4.0     Data Analysis

• Data Analysis Design
• Test of Hypothesis

CHAPTER FIVE

• Summary

5.1     Conclusion

• Recommendation

Bibliography

CHAPTER ONE

1.0                        INTRODUCTION

Monetary and other financial sector policies in a fiscal programme perform specific role including helping to stabilize the economy, enhancing the efficiency of resources use and supporting output and employment growth. It is however, difficult to achieve some economies objectives of the government without employing monetary and fiscal policies.  It come is not taken, however, in the formulation and implementation of these polices, a conflict may arise between monetary and fiscal polices to the extent that one renders the other impotent.

Monetary policy is a rule made by the government and monetary authorities aimed at controlling such economic variables as prices, output ad growth, through a deliberate manipulation of the availability and cost of money and credit.  Fiscal policy on the other hand, deals with the manipulation of the economy by the government through its revenue and expenditure programme.

• BACKGROUND F THE STUDY

Various opinions have been expressed on the manager in which these police could be used to achieve the desired economic objective.  Some believe that the present system of control has been highly unsuccessful, and that the role of government and the monetary authorities in the process of economic development in Nigeria has not been adequately defined.  However, it is often necessary for government to intervene using monetary and fiscal polices in free market economies for a variety of reasons including the fact that, on their own, market forces may fail to achieve the set objectives of economic policy.

By mid 1986, the economy was on the brink of total collapse.  It vbecome obvious that the measlures taken since 1982 were mere palliatives as their effectiveness was constrained by many factors, including distortion and rigidities introduced into the economy by over-regulation.  In other words, the progressive reinforcement of controls in the effort to solve the problems only aggravated them ad created new ones.  This was the scenario in which the Nigeria economy was when the federal Government adopted the structural Adjustment Programme in July 1986 to improve the functioning of the economy.  This date is very important in the history of economic stabilization in Nigeria, as it market the end of a highly regulated regime and opened up a new chapter that reflects government efforts at deregulating the economy with emphasis and market forces.

The structural Adjustment programme was specifically aimed at achieving fiscal balance by altering and restructuring the production and consumption patterns of the economy eliminating price distortions, reducing the heavy dependence on crude oil exports and consumer good imports, enhancing the non-oil export sector and achieving sustainable growth. The main strategies of the programme was the deregulation of the economy.

Overtimes, government has intervened in the working of the press market economy, because the uncontrolled market economy may not allocate resources efficiently nor can they distribute national income equitably. These inadequacies of the free market system makes government to employ monetary and fiscal policies to restructure the economy

The question then is, why have Nigeria’s monetary and fiscal polices failed to realize the economic and political objectives of the country?

1.3     OBJECTIVES OF THE STUDY

Based on the problems stated, the study will address the following objective.

1. To identify the factor that tends to hamper the full achievement of monetary ad fiscal policies objectives.
2. To evaluate the influence of both policies on the economy of Nigeria.
3. To appraise whether monetary and fiscal policies have contributed to the set-back on industrialization and agricultural development.
4. To appraise the various instruments employed by monetary and fiscal policies.
5. To determine the extent to which monetary and fiscal policies have influenced the industrial and agricultural development.
6. To make recommendations as to how to make effective monetary and fiscal polices and their efficient and effective implementation

1.4     STATEMENT OF HYPOTHESIS

In order to determine the validity and reliability of the information so gathered, the following hypothesis were formulated.

1. Ho: Monetary and fiscal polices do not influence industrialization ad agricultural development in Nigeria.

Hi:     Monetary and fiscal polices influence the industrial and agricultural development in Nigeria

2. Poor implementation does not after achievement of monetary and fiscal polices objectives.

Hi:     Poor implementation affects the achievement of monetary and fiscal polices objectives.

• RESEARCHE QUESTIONS

The following questions were posed to guide in my search for the solution to the research problem.

1. Has monetary and fiscal policies speeded up industrial and agricultural development in Nigeria?

1. Has both policies reduced the piece in industrial and agricultural development in Niger?
2. What factors have affected monetary and fiscal polices implementation?
3. What is the attitude of farmer and industrialist towards monetary and fiscal policies?

• SIGNIFICANCE OF THE STUDY

The research work is very timely, especially today that all hands are on deck to enhance the development and growth of Nigeria’s economy. This research work will be of immense benefit to the government and monetary authorities to determine the extent of their polices effectiveness.

In addition, the study will determine the factors or problems limiting monetary and fiscal policies  effectiveness of the government.  It is expected that the findings will help to bridge any gap that may exist and to make government monetary and fiscal polices and their execution effective and efficient.

Through its study, financial institutions will understand their role and sourt comings in enhancing industrial and agricultural development  and will subsequently adopt measures aimed at improving industrialization and agriculture.

The study will be of great importance to farmers, industrialists, researchers, students, analysts and banks as it will aid in problems solving as it

• SCOPE AND LIMITATIONS

The scope of this works is limited to the monetary development in Nigeria but must especially carried out in Enugu and Abia State.

In carrying out the study, the following problems or limitations were encountered.

1. Financial constraint
2. Lack of full o-operation by questionnaire respondents.
3. Lack of sufficient time

• DEFINITION OF TERMS

1. POLICY: This is a plan or courses of action in policy is the instrument that inform and guide, individuals, employees so that their whole actions are consistent with the object of goal of the organisation, government or business.
2. OBJECTIVE: Objective is the purpose of a plan. It is that which the government or an organisation wants to achieve for making polices.
3. INFLATION: A situation of rising price: when purchasing power or value of money in real terms is falling.
4. MONETARY POLICY: This is a measure which deals with the discretionary control of money supplied, by the monetary authorities with a view to achieving stated macroeconomic objective.
5. MONETARY THEORY: Refers to propositions made by various schools of though as to the impact of money and its supply on the economy.
6. FISCAL POLICY: This is the policy pursued by the government to influence economic activities by varying its expenditure, taxation and public debt.

REFERENCES

Okereke Onuoha E. “Inherent problems of Nigeria Monetary                       and Fiscal Policies” The financier Vol.12                        No 7, 1990 P9.

Onyido Borji C.   “The Role of the Central Bank in the                      Management of the Nigerian Economy,                     with Emphasis on monetary Policy” The                       Bullion April/June 1993 vol.17 No2 P.20

Oyo M.O. “A Review and Appraisal of the Monetary and                        other financial sector policy measures in                         the Federal Government Budget for                         1999” The Bullion January/March 1999                          Vol. 24 No.1 P.40

Uduebo M.A. “The Role Monetary and Fiscal Policies in                          Industrial and Agricultural Development                           in Nigeria” Central Bank of Nigeria                           Economic and Financial Review                           March, 1985 Vol.23 No. 1 P.5

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HAZARDS OF AUDITING, AN ANALYSIS OF THE JOB OF AN AUDITOR AND ITS INHERENT PROBLEMS, DANGERS AND DIFFICULTIES.

ABSTRACT

The inherent problems, dangers and difficulties is one of the felonies of which an auditor should take care of, in order to achieve a set objective of an organization.  The auditors’ roles and procedures are the yardstick through which the obstacles affecting an organization cab be tackled.  This research work is aimed at informing the management on how the problem of frauds, its prevention and detection of frauds as well as other irregularities could be curbed within and organization.  It also emphasized on the duty and responsibilities or an auditor in carrying out an appropriate application of the audit procedures necessary to enable the expression of an opinion on the accounts under examination.

However, this work will be of immense help to users such as shareholders, debenture holders, creditors and other to know what exactly an auditor is expected to do.  It will as well be of great assistance to individuals to know who an auditor is.  This study is presented in five chapters.

Chapter one covered the introduction into the work.  Literature review is found in chapter two.  Research methodology is found in chapter three.  Chapter four deals with data presentation and analysis, finally, chapter five deals with summary of findings, recommendation and conclusion.

Chapter One

Introduction                                                                                                1

• Statement of the problem 3
• Objectives of the study 5
• Significance of the study 6
• Scope and limitations of the study 7
• Statement of hypotheses           8

Chapter Two

Literature Review                                                                              9

• Definitions of Auditing 9
• The Origins of Auditing 10
• The role of Auditing in society 12
• Position of Auditor under the CAMD 1990 15
• The objectives of an audit 19
• Secondary objective (Discretionary) 19
• Qualifications and qualities of an Audit 21
• The Problems, difficulties ad hazards of auditing 24
• Auditors Liability 25
• Auditors independence 27
• Auditors limitations 30

Chapter Three

Research Methodology                                                                     33

• Sources of data 34
  • Primary sources of data 34
  • Secondary sources of data 35
• Questionnaire design and interview structure 36
• Analytical tools used 37
• Validity and reliability of measuring instrument 37
• Determination of the sample size. 38

Chapter Four

Data Presentation and Analysis                                                                 39

• Questionnaire Information Presentation and Analysis 39
• Interviews conducted
• Test of hypothesis 69

Chapter Five

Summary of findings, recommendation                                            77

• And conclusion                    77
• Summary of findings 77
• Recommendations 80
• Conclusion 83

Bibliography                                                                           83

Appendices                                                                                       87

CHAPTER ONE

INTRODUCTION

This study aims at ascertaining the hazards of auditing and investigations, and analysis of the job of an auditor and its inherent problems, dangers and difficulties.

Accounting is an old profession; records of business transactions have been prepared for centuries.  However, it was only during the last half century that accounting as a profession was accepted with the same importance as the medical and legal profession.

Since the turn of 19^th century, the accounting has grown tremendously all over the world.  In fact, during the first sixty years of 20^th century major economic and social forces have thrusted the profession to new frontier and responsibility.

The factors contributing to this growth are the increase in number of large corporate businesses in coupled with its size and complexity.  Government influence in the affairs of business through its taxation and regulation are also factors contributing to the growth of the profession.

It stands to say, there is the need to sanitize the profession, which keeps and records the transactions of business/organizations.

This can be done through auditing by a qualified person acknowledged by the law.  In other words, auditing is carried out by an auditor to give a true and fair view of a business entity so that third parties can rely on them to take decisions.  Nevertheless, there is a statutory requirement that all registered limited liability companies must have their financial records audited annually by a firm of Chartered Accountants so appointed.

The auditor is a professional person who offers his services and those of his employees to companies, which need their services.  Such services among others include auditing, investigations, tax and other consultancies.  The auditor exercises his duty with skill care and diligence but must offer his integrity and reputation to the public who relies on this judgment and opinion.  The auditor thus employs diligence on carrying out his duty so as to meet the needs of his/her client in order to given and independent and honest opinion of financial representation of business entity.

Finally, for the purpose of emphasis, in summary, auditing is the life wire or every business entity and consequently the whole national economy in that third the distribution of the size n > 30 can be used to represent the population of the sample.

Bearing in mind that my research topic “Hazard of Auditing, analysis of the job of an auditor and its inherent problems, dangers and difficulties” strictly concerns auditing matter hence my using exclusively some chartered accountants “(accounting) firms as against using the whole system.

Parties that get inaccurate financial information are bound to make wrong decisions and plans which will result to “National doom” but if otherwise, the reverse will be the case.

• STATEMENT OF THE PROBLEM

One of the problems under investigation lingers on the age-long argument that it is the duty of auditors to detect fraudulent act, which to a great extent is not true.  The public generally believes that one a company has been audited, then it is fool proof to mismanagement, fraud, etc.  An example is concerning the failed banks tribunal inaugurated by late Abacha’s administration.  The tribunal of recent (1995 – 1996) has been able to unearth loopholes in some banks undertakings even when it is on record that their accounts and report had regularly been audited.

Striking compromise between public expectations especially from shareholders and prospective ones.  The legal and professional code of conduct expected of them poses a difficulty which the auditor faces when carryout his work.

According to American Accounting Association (1996) accounting is defined as the art of recording, classifying, summarizing and presentation of transactions in a significant manner in terms of money.  This is not fully observed by the accountant or person responsible for such an accounting work.

In such cases the work of the auditor would not be two easy, as opinion finally expressed would not exclusively be objective though he may qualify it in his report.  This indeed is a problem only to the auditor and third parties who rely on the report.

In other words, difficulties are experienced by the auditor when carrying out his compliance and substantive tests on the organization under investigation.

The final problem is, to what extent can an auditor be chargeable for negligence when discharging the fiduciary duty imposed on him by subsection (1) of section 367 of Companies and Allied Matters Decree 1990 as amended up to date.

• OBJECTIVE F THE STUDY

The purpose of this research is to understand the roles of auditor and auditing, and to make useful recommendations where necessary towards the improvement of these roles as it affects statutory audits.

The objective of this research is therefore listed under the following headings.

• Position of auditors under Company and Allied Matters Decree 1990 and other regulatory bodies.
• Since the different users make use of financial statement to take decisions, hence this study will look into the role of the external auditor informing an opinion.
• Critically and dangers or auditing.
• Generally, the researcher aims at arousing interest on the conceived problems, hazards and difficulties faced by the profession and proffers ways of reducing them to the barest minimum.

• SIGNIFICANCE OF THE STUDY

The importance of accounting profession can be defined in relation to its role as information supplier.  The information supplied can be said to be authentic and objective if only an independent professional person called an auditor forms his opinion on it.

Therefore, this work will in part be of immense help to users such as shareholders, debenture holders, creditors and others to know what exactly an auditor is expected to do.  I mean those that make use of financial statement of a company including the management team.

In addition, this project will be of great assistance to individuals (including accounting student) to know who an auditor is and the dangers, difficulties being faced by them when carrying out their duties and responsibilities.  Furthermore, this work will be of great assistance to all those who may wish to carry out further study on the said project topic.

• SCOPE AND LIMITATIONS OF THE STUDY

The scope of this study was restricted to five Chartered Accountant firms all in Enugu metropolis.

Much as the researcher can claim to have carried out an almost hitch free exercise, she encountered some problems that almost tended to impair the smoothness of the exercise.

Time was another constraint.  As usual with student’s researches, the time allowed for the all-important work would hardly be adequate.

• STATEMENT OF HYPOTHESIS

These hypotheses are postulated with a view to confirming them or disapproving them.

H₁:     (a)     All auditors are aware of the implications of the auditors’ liabilities.

(b)     There are inherent problems, dangers and difficulties in auditing.

(c)      Auditing has played significant role in Nigeria economy.

H₀:     (a)     All auditors are not aware of the implications of the     auditors’ liabilities.

• There are no inherent problems, dangers and difficulties in auditing and investigation.
• Auditing has not played significant role in Nigeria

Alternative hypothesis:  Hypothesis accepted.

Null hypothesis:   Hypothesis accepted to disapprove a claim.

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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. 

OR
PAY ONLINE USING YOUR ATM CARD. IT IS SECURED AND RELIABLE.

form>DELIVERY PERIOD FOR BANK PAYMENT IS  LESS THAN 24 HOURS

CALL OUR  CUSTOMERS CARE  OKEKE CHIDI C ON :  08074466939,08063386834.

AFTER PAYMENT SEND YOUR PAYMENT DETAILS TO

08074466939 or 08063386834, YOUR PROJECT TITLE  YOU WANT US TO SEND TO YOU, AMOUNT PAID, DEPOSITOR NAME, UR EMAIL ADDRESS,PAYMENT DATE. YOU WILL RECEIVE YOUR MATERIAL IN LESS THAN 2 HOURS ONCE WILL CONFIRM YOUR PAYMENT.

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