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THE ROLE OF ACCOUNTANT IN PROJECT FEASIBILITY AND VIABILITY APPRAISAL


CHAPTER ONE

INTRODUCTION

1.1   BACKGROUND OF THE STUDY

One of the major constraints to effective project implementation especially in developing economics is lack of adequate knowledge of how to package it to appeal to the public. Project packaging constitutes a vital aspect of investment decision process. Project packaging should help to decide the practicability and worthiness to embark upon a project. A project feasibility study sometimes referred to as project study is an investigation, which ascertains the viability and worth wideness of an exiting, or a new undertaking. It is often used for securing financial assistance for project execution. It guides promoters, business managers, financial executives and other interested groups in determining the actions they must take on a project in order to bring about its successful execution. For a feasibility study to be practicable, it must involve problem identification and definition. The collection of data collected, which are relevant to all aspect of the project, the analysis of data so collected and formulation of recommendations based on the analysis. An entrepreneur who is embarking on a project must have a long-range outlook on the intended business investment examine the alternative uses of capital and account for inflation in future values of cash flows, and forecast future events and financial requirement and carry out sensitive and risk analysis. These are highly sensitive areas that require expertise skills. Project analysis was two dimensions. Firstly, the assessment of the probability of its successful implementation and also the appraisal of the contribution of the project to the specific objectives. These two aspects are referred to as the feasibility and viability appraisal. This study provides an analysis and illustrations of the principle of feasibility and viability of a project and highlights the essence of the subject matter. It also relates the accountant’s contribution in order to make a project worthwhile. 
OVERVIEW OF THE STUDY 
The study is divided into two sections, Section one which comprises chapters 1,2 and 3. These chapters’ deals mainly on the scope and method of the research project specifically, chapter two will deal mainly on an evaluation of the theoretical concepts of investment appraisal. Hence the contributions of various authors which relates to the concept of feasibility and viability studies as well as the writers definitions of the role the accountant play in making a project feasible and viable hence “Literature Review”. The second section comprises chapter 4 and 5 and focuses on a practical illustration of feasibility and viability case stuffy of a household cassavastarch production. 
1.2  STATEMENT OF THE PROBLEM 
Every project is affected by factors outside and within itself. Often, success or failure depends more in the general business environment or climate in which it operates and on the general reputation on its sponsors. The problem of a successful industrialization in the developing countries is lack of knowledge of how to formulate a project in such a way that it’s potential and profitability either from the public or private viewpoint can be estimated on a firms basis- Ezenagu (1991:14). The project executors should be conversant with both projects objectives and the decisions to be taken to realize these objectives. They should be conversant with the available resources needed for the project. In the course of the project execution, some factors can effect the programme of activities. The project implementation should be alert to detect factors intervention signal that could multiage against the project and remedial actions taken to ensure that the objective of the project are Met Orjil (2001: 241).
re that the objective of the project are Met Orjil (2001: 241). According to Uwakaneme (1980:1) this problem can be pinned on the tendency in Nigeria entrepreneurs to neglect thinking through their plans carefully in the beginning (in form of feasibility ands viability study, before commuting scarce funds and energy apart from insufficient starting capital and shortage of skilled technical and managerial manpower. Available evidence indicates that even trusted accountants, consultants prepare project reports and projections, to suit their clients, requirements and earn four fees; insensitive of the credibility of such projections. Consequently, the proposals get rejected by the bankers, or share the facilities granted, the business proprietors soon fund themselves in trouble when they are faced with real life situations as distinct from the picture painted by the initial projections by the accountants. 
1.3   OBJECTIVES OF THE STUDY 
The objective of the study emanates from the above-identified problems. Therefore the major objectives of this study are as follows: - To appraise or bring to view the feasibility and viability studies on order to successfully carryout a project ideas. - To enlighten the role the accountants play in feasibility and viability appraisal in formulation and development of a business. - Using a cassava starch illustration of case study to illustrate the principle practice and application of feasibility and viability studies. - To appraise and determine the potentials of feasibility studies in a small-scale enterprise. - To determine the main techniques of appraisal commonly adopted for analytical purposes and to determine the reasonableness of such in practical situation using cassava starch small-scale business as a project study 
1.4  THE RESEARCH QUESTIONS 
1. Does accountants really have any significant role in project? Feasibility and viability appraisal? 
2. What are the role of professional accountant in preparation of a credible feasibility and viability appraisal in order to avert project failures if any? 
3. What significant are attached to a feasibility and viability appraisal? 
4. What are the underlying principles of this study? 
5. How would a small business enterprise be evaluated viable by an accountant example Cassava starch project. 
6. What advice can these accountants give to the potential investor in the cassava-starch production project. 
1.5  SIGNIFICANT OF THE STUDY 
The principal targets of this study are students in Accountancy departments in the Tertiary Institution and other accountants in Federal Ministries. There has not been any book written on the role the accountants play in feasibility and viability appraisal of a project. But this project will serve as one for the benefit of those students who graduate without immediate employment and it will equally benefit other accountants in their efforts to boost their title. The project will also serve as a guide to young entrepreneurs and indeed the management of small and medium scale enterprises to appreciate the necessary and necessity of feasibility and viability appraisal which will translate to the survival of their business which will return boost the Gross domestic product of the economy when the business succeed. The growth of a feasible and viable project will also bring about industrialization. 
1.6   SCOPE AND LIMITATION OF THE STUDY 
This study does not extend as much as examining the success or failures of accountants to carryout their role in making a project feasible and viable but it merely examines their role in feasibility and viability appraisal of a cassava-starch project of a small enterprise. Hence, no hypothesis can be used. The study will base mainly in Enugu Metropolis although some data will be collected from AwkaTown. Therefore, the case study may now be regarded as a “Fact accompli” report for investment purposes as only a limited investment has been conducted and a number of assumptions made. 
1.7   SCOPE OF THE STUDY 
This study was to determine the role of Accountant in project feasibility and viability appraisal of a cassava starch project in Awgu. This study focused attention on feasibility and viability appraisal hence it will be based on the accountant in Federal pay office Enugu- since most of them have wealth of experience in Accounting. 
1.8   RESEARCH HYPOTHESIS 
1. Ho Null Hypothesis: There are no underlying principles and significance of feasibility and viability appraisal 
H1 Alternative Hypothesis: There are underlying principles and significance of feasibility and viability appraisal. 
2. Ho feasibility and viability appraisals created no impact on the survival and failure of no projects
H1 feasibility and viability appraisals created impact on the survival and failure of new projects.
3. Ho Professional Accountants have no role to plat in the preparation of a credible feasibility and viability appraisal in order to help avert project failures. 
H1 Professional Accountant have much role to play in the preparation of a credible feasibility and viability appraisal in order to help avert project failure. 
4. Ho A small-scale cassava starch project cannot be evaluated by an accountant in order to properly advise a potential investor on such project. 
H1 A small-scale cassava starch project can be evaluated by an accountant in order to properly advise potential investor on such project.

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