ABSTRACT

The Accounting system is aimed at ensuring a maximum amount of information is available to the users that will enable them to take meaningful decisions regarding their interest in a reporting entity. This study was carried out on the impacts of the accounting system in the public sector. The scope of the research work was limited to Nigeria Airspace Management Agency (NAMA) across different levels of organizational hierarchy. The design adopted for the study is survey design. A sample size of One Hundred and ten (110) was chosen from the total population. The primary data were collected through a questionnaire that was administered to employees of Nigeria Airspace Management Agency (NAMA). The SPSS statistical package was used for analysis in order to minimize any intended error. The study revealed that the accounting system has a significant effect on management decision-making at a statistically significant level. The study also revealed that the public sector needs to inform financial decisions that would enhance overall performance. The study shows that an accounting system depends on the perception of the quality of information by the user. The study recommended that companies should consult professional accountants when starting a business to learn about the various laws that affect them also to familiarize themselves with the variety of financial records that they will need to maintain.

 

 

 

CHAPTER ONE

INTRODUCTION

1.1  Background to the Study

History has it that the concept of accountability of public funds dates back to the history of ancient Greece. As old as the theory is, it would not be enormous to say that the idea has been equally lost to antiquity although not much is known about it, this makes the subject, government accounting to remain a myth. Accounting in the public sector has received such wide attention from scholars that the field of public sector accounting scans to be neglected.

However, there is general awareness all over the world of the need to pay greater attention to the development of government accounting and financial control. The reason is obvious, government, in most, if not all nations constitute the largest single business entity in many places, the core of the economy. Government in any society is basically for maintaining law and order. With changes and the complete nature of society, government responsibility has automatically changed from the role of maintaining law and order to business-like nature in the modern era. The enormous activities of government, equally call for enlarged government accounting in order to accommodate the immense task. As a result of this development, the traditional cash procedures of accounting can hardly meet the demands of reasonable accounting for modern government in providing necessary services or information. Therefore, there is a need for government accounting to be dynamic in order to accommodate both the fundamental roles and the developments.

From the earliest time, the process of levying and collection of taxes by the government called for proper record keeping and reporting. Such accounting records prepared by Tax collectors served as a basis to reinforce the business need for accounting systems and controls.

The development of social life especially the formation of states or sovereignties and levying of taxes necessitated in addition to the knowledge of numbers, power of holdings, counting, and recording in this we find the origin of science in accounting.

 

Early civilization shows that the Babylonian businessmen recorded their sales and money lending some thousand years ago in day tablets. Egyptians used papyr, to describe the collections before 1000bc.

According to Richards Brown. (yr) the History of Accounting and Accountant Volume 2, he stated that Greek and Romans had well developed record keeping system especially for government purposes. Emperor Augustus was said to have instituted a governmental budget. Inspectors from the central government in Rome were sent out to examine the accounts of provisional governors. The Grecian also have their accounts engraved on stone and exposed in. public specimen, such accounts are among the Elgin marbles in the British Museum. In Great Britain, the earliest systems of accounting of which there is record are those of exchequers of England and Scotland.

The oldest, which has been preserved is the English pipe roll of 1130-1131. From the above, there are many existing records of early development of accounting not mentioned, it is an evidence to show that so many accounting activities have taken place in the past.

The modern methodology of keeping accounting record began with the introduction of double entry in the thirteenth and early fourteenth centuries. This was the period of rapid expansion of commerce and industry. Among the records based on the double entry system to the book of a French form, the Fremes Bonis of Mortauben, which were kept during the years 1345.

This form the use of books to obtain a review of its position and made up a list of its debtors and creditors. l.C.B Niclcerson reported in his book Accounting Hand Book for Non-Accountants, that book has been preserved from 1297 belonging to Riherio and Baldo Fini in which accounts were opened not only for personal, but for things and two classes were debited and credited vice versa in regular fashion. The book keeping records in this period were in the rudimentary stage without any definite period of balancing.

In some certain situations, the account are not even kept in the monetary unit for example, it was reported that in sleveterly loccite page 309 that firemes Banis opened an account in 19th December 1345 and records were continued in this account without intermission to the 11th December 1358, debit and credits were also by no means separated by often place one below the other as they occur.

Finally, there were no attempt to balance and in some cases the accounts were not even kept in the same monetary unit.

The records that bring out a complete double-entry system in account is the one discovered in Genwa in the year 1340 in accounts of the stewards to the Local authority. The date when this entry actually commenced could not be determined. Another record in Genoa kept on double entry system is that preserved in Venice. These records belong to traders, neither bankers and stewards of Local authorities.

The records of the Merchant of Venice can be described as complete since every debit has a corresponding credit and the profit or loss account is even transferred to the capital account.

This period was 1416-1440. It was from this venice that the first treatise on the subject was given to the world in 1494 by “Luca Paciolo” who was one of the most celebrated mathematicians of his days. The purpose of the work was not in the first place to give instructions in book-keeping, but to summarize the existing knowledge of mathematics. However, he brought an end to the works by coding the treatise of book­keeping.

 

1.2 Statement of Research Problem

A critical examination of the management process shows that management is into business for the purpose of maximization of profit.

This can be achieved when decisions made by managers of the business are channeled towards the following areas.

1. Investment decision
2. Sources of fund decision
3. Dividend policy decision.

The future destiny of an organization is planned and controlled by management. When good decisions are made through the use of accounting system at the end of this research work, the following problems must be critically analyzed.

• Can good management contrive realistic ways to achieve the company’s or business objective without accounting as a basis for management decision making tool?
• Can management manipulate the controllable variables and plan for the non-controllable variables without accounting as a basis of enhancing decision-making?
• How proactive are the decisions of management/managers without accounting as a basis for management decision making tool?
• Can we measure the performance of managers by planning and decision making which determines management competence without taking into consideration the accounting system as a tool to enhance decision making in any organization.

All these will serve as our statement of problem in this research work.

1.3 Objective of the studies

The main objective of this research study is to examine the Impact of accounting system in public sector in the context of Nigeria Airspace Management Agency (NAMA). However, the specific objectives of the study are to:

1. Assess if accounting system have any effect on management decision.
2. Examine if there is any relationship between the perception of the employees and accounting system of the firm.
3. Evaluate whether accounting system affect the company performance positively or negatively.

 

1.4 Research Questions

The study is poised towards providing answers to the following research questions

1. Does accounting system have any effect on management decisions?
2. Is there any relationship between the perception of the employees and accounting system of the firm?
3. Does accounting system affect the performance of the company positively or negatively?

 

1.5 Research Hypotheses

The following Null hypotheses are advanced and shall be tested in the course of the study

 

Hypothesis one                                                                                

H_o: Accounting system does not have any effect on management decision making

Hypothesis Two

H_o: There is no significant relationship between the perception of employees and accounting system

Hypothesis Three

H_o: Accounting system does not have any effect on the company’s performance.

1.6 Relevance of the Study

This research work will be focusing on how effective and profitable decisions can be made through the accounting tools and accounting knowledge.

The research work will assist in the following areas.

1. Planning
2. Organization
3. Staffing and human resource management
4. Leading and interpersonal influence
5. Budgeting
6. Forecasting and
7. investment

 

1.7 Scope of the Study

The scope of the research work will be based on the decision making by management of organization, which will be limited to our case study (NAMA) management decision art across different levels of organizational hierarchy.

The research work shall be limited to the different levels like lead of departments, head of units, sectional heads, group heads and regional heads of NAMA. This research work shall also be extended to decision making areas like:

Capital budgeting decisions

Cost decisions

Budgeting and budgeting control decisions

Inventory control decisions

Performance evaluation decisions

Pricing decision and

Profit analysis decision.

 

1.8       Limitation of the study

The major problems which served as limits to the extent of this research work were as follow:

The entire branches of NAMA in the country could not be visited due to financial and time constraints.

The concerned offices were not willing to give adequate responses to the research questions.

Relevant data available were not be sufficient enough for the purpose of the research.

The researcher is financially constrained, this limit the extent of the research works to that which is affordable.

 

1.9 Operational Definition of Terms

Some of the terminologies the research will contain are:

• The directorates of NAMA:
• Directorate of Human Resources (DHR)
• Directorate of Finance (D()F)
• Directorate of Air Traffic Service (DATS)
• Directorate of Electronics Services (DSES)
• Directorate of Corporate .Affairs / Legal (DCALS)
• Directorate of Aeronautical Information (DAIS)
• Directorate of Commercial and Big Developments (DCBD) etc.

Management: A social process entailing responsibility for the effective and economic planning and regulation of the operation of an Organization in fulfillment of a given purpose or task.

Accounting: 1s the process of identifying measuring and communicating economic information to assist the users in making judgments and decisions.

Management Process: Is a set of inter-departmental activities used by management of an entity of execute the functions of management which includes planning, organizing, staffmg, heading and controlling.

Management control: Is a proves by which managers ensure that resources are obtained and used effectively in the achievement of the organizational goal.

Strategic Planning: The process of deciding on objectives of the organization on changes in the objectives and on the policies that is to govern the acquisition use and disposition of these resources.

Operational control: The process of pursuing that specific tasks are carried out effectively and efficiently. This will also represent the pre-occupation of the low management cadre. Corporate Strategy: Is a long term plan which looks into what the organization intends to achieve and the means or resources regard to achieve them.

Business strategy: This is concerned with decision about how to compete in a particular market. This therefore likely to focus on individual unit i.e. product or market within the organization.

Operational strategies: These are concerned with how different functions of the organization like marketing manufacturing, accounting operate.