DOWNLOAD THE COMPLETE PROJECT

1091 Users found this project useful

CHAPTER ONE

INTRODUCTION

1.1  BACKGROUND OF THE STUDY

The hall mark of a profession is its commitment to the public service. The commitment can be classified into three. Firstly, there must be satisfaction of the society being served, secondly there must be professional pride invite cra and thirdly the profession should be accorded recognition be fond its national boarders. If we go down into memory, we discover that the need for better accounting principles and standards is a world wide phenomenon, for instance, Noel Hyndman and Robert kink (1989:20) said that one of the main reasons for the dearth of new standards and revisions of same is the fact that the accounting standard committee (ASC) like other standard setting bodies now begin to investigate accounting topics which are extremely controversial. Invariably, most of the new standards involve significant adjustments to both the profit and loss account and the valuation of assets and liabilities in the balance sheet. 

Again, Noel Hyndman and Robert kink (1989:42-44) on then part saw from every practical objective level, most countries have disconvered lack of clear statement of the aims and purpose of financial reporting as the major, short coming in the standard setting processes. According to Hyndman and kink, and citing germany as an example, “financial statement are considered as one of the most important vehicles for communicating with people who have financial interest in business enterprises”. The art of accounting in this circumstances unlike the (former) is to provide a reliable and relevant information to the interested parties. Explaining his own reaction on the global eect of clear statement of the aims and purposes called, “in the united states for example, the stock market crashes of 1929 and 1969 which was blamed on financial report by companies first triggered the establishment of accounting standard in that country”. He went further to say that in the U.K, like Nigeria the establishment of accounting standard committee (ASC) by the six professional bodies were ignited by lack of uniform Nigerian situation was made worse by the Nigerian enterprises promotions decree which attempted to transfer ownership of companies to Nigeria”. 

Foreigners exploited the lack of uniform accounting procedure in valuing their equity in corporations affected by the decree. Practicing accountant is faced to go down memory lane once more, he may admit that the problem emanated from their involvement of those principles and standards that date back to 600 B.C., when accounting as a practice came into being. Ordinarily, he may resolve that all it takes to improve on the principles is a fough body of accounting standards. But could these forestall the disasters in the accounting world most especially in our country? Today, the disaster is becoming more real than apparent in Nigeria with the introduction of the secondary foreign exchange market (SFEM), the recent open market operation (OMD) and foreign exchange market (FEM). According to Okpechi 91990:5) this system has brought in its wake a lot of pressures on management of companies to show profits in the fact of rapidly dwindling revenues. Accounts are most likely going to be massaged and manipulated to show favourable result. Once more, it is in this regard that accounting standards of measurement and reporting and the need for more to be more responsive to developed principles assume greater importance. If members of the profession feel that the present principles and standards have not altogether done much good, shall helplessly ching to them or find something that would be benefical to helping to achieve consistency between standard. Aer all December 20th century dictionary (1985:1022 AND 1261) pointed out the three major qualities of all principles and standard, it defined principles as “consistent regulation of behaviour accord go moral law” and standards as accepted authorities statement of adequacy required. 

According to Oxford English Dictionary second edition volume xii (1991:499) principles is defined as a “general law or rule adopted or professed as a guide to action, a settled ground or basis of conduct or action, especially one consciously recognized and followed and standards as a definite level of excellence, attainment, wealth or the lay or a definite degree of any quality, viewed as a prescribed object of endeavor or as a measure if what is adequate for some purpose. Form the foregoing, one may deduce that principles or standard is consistency applied if it provides adequate treatment for items in question. The adequacy assume its acceptability and the circle continue  here lies our problem. The primary aim of this project, therefore is to find something we could expect would lead to a cutting back of alternative treatments in a longer term. In the short come closer to which could be regarded as our yearning principles or philosophy. Put simple a better account standard evolved to solve our immediate problems. This standard is also expected to fit into the economic like of particular place in question.

1.2  STATEMENT OF PROBLEM 

Okpechi statement presents one of the problems of this thesis. I have been tempted many times, to dispel certain newspaper misconception about why the Nigerian accounting standard Board was established and how. The standard developed so far are carbon copies of those produced elsewhere”… (Okpechi 1990:2) so, the first of the needs of this project is to see how accounting principles development based on our local problems instead of reinventing the present principles with its shortcomings. Again, the study would take a meticutons look at the trend of standards development and revision of the world over, and seek ideal devices of providing good standards of measure and reporting that would remove distrust and attract more acceptance from the public we serve. Finally, the urgent need to hormonize and standardize the skills and knowledge acquired by Nigerians who studied in the two contrasting economies of competitive market of the west or the planned economy for the East would be tackled. This is done to achieve uniformity in the treatment and reporting of accounting information. Among others, it hopes to introduce measures which will enhance the reliability and validity of information reporting in the financial statement.

1.3   OBJECTIVES OF THE STUDY

David Allem, (1989:35-48) made it clear that given the rapid globalization of business in recent years, it seems reasonable to predict that an effective system of accounting for danging price levels and other economic uncertainties must address the present economic situation. Taking that as on premise, this study hopes to change those practical detents which are traceable to the difficulties of narrowing areas of difference in practices. The aim is to ensure that financial statements that are presented to both local and foreign users are structurally uniform and meaningful. Secondly, it hopes to enhance accounting standards and hence accounting information that reflects our economic environment but at the same time, satisfies the anticipated needs of the users of the information. Among others, it hopes to introduce measures which will enhance the reliability and validity of information reported in the financial statements.
1.4   HYPOTHESIS OF THE RESEARCH
In order to guide the researcher in planning the course of this in quality in choosing the necessary data in deciding the appropriate statistical treatment and in examining the outcome of this study, the following hypothesis were formulated:
1. Hi: There is need for review of the accounting principles and standards to reflect contemporary problems.
2. Hi: Lack of trust in the professional competence of promulgation of the companies and allied matters Decree.
3. HI: Thirteen accounting standards launched by the Nigeria accounting standard Board were mere carbon copies of those produce elsewhere?
1.5  SIGNIFICANCE OF THE STUDY
The word ‘Empirical” attached to this study “The development of accounting principles and standard was defined in the 20th centrury chamber dictionary as the system which reflecting all knowledge, vest solely on experience and induction “(Kink Patrick 1943: 409). Taking this as premise, the meaning or importance of this project lies on the light quality thoughts of protocohe members of the profession relating to the use of present day accounting principles and standards. As we have rightly been informed, some failure in the current standards all over the world have compelled members of the profession, to seek ways of correcting them. In the process, they discovered that lack of clear statement of the aims and purposes of financial statement is because economic life differs from other country to country. This in turn has led to disparities in the standards and quality of practice between accountants. This letter has a strong effect on the profession because it has resulted to doubt from the public which we server, as to how competent we are. Therefore, this study has its importance, very strong quest to be satisfied, and it goes thus: in the face of above divergent conditions and situations, is there no means we can evolve standard fashioned for the contemporary period and also for a specific economic life? 
1.6   LIMITATION OF THE STUDY
The sample size is restricted to Nigeria only even though the study went beyond the national boarders. The reason advanced for a professed as a guide to action, especially one consciously recognized and followed; and standards as a definite level of excellence attainment, whether or the like or a definite degrees of any equality viewed as a prescribed object.
1.7  DEFINITION OF TERMS
The main thrust of this chapter is to look closely at what different authorities are saying on the topic view. 

Accounting: According to Okpechi (1990:3) accounting is the application of standards of procedures transactions and procedures and methods in order to reflect the impact of transactions and conditions on the financial position of an enterprise”. On standard, we described it as reference points to which other measures are expected to confirm” (Okpechi, 1990:2). Garbutt Douglas 91984:0101) sees accounting as a discipline concerned with the recording, analysis and forecasting of income and wealth of business and other entities. He went further to define accounting principles as the rale and conventions which have been adopted as a general guide action by the accountancy profession. “On accounting standards he regards it as methods of accounting approved by the authoritative bodies in whose departure the financial eect should be disclosed and explained’. Besides, Lawrence Isung (1990:14) and Nwoko Chinedu (1990:1-3) have similar definitions as one above, but went beyond to distinguish between concepts and principles as contain in the statement of accounting standards. Referring to the statement, Isung work about Accounting concept saying “concepts qualified as fundamental and are the underpinning of the preparation and presentation of financial statement and principles as the rule that accountants must follow when it becomes necessary to exercise judgment about the choice and the application of conflicting fundamental concept. The forgoing seems to be saying that accounting principles and standards are o-shoos or conventions deprived from experience of years ago A background knowledge of those past experiences in the accounting profession becomes apparent, if one must judge contemporary issue correctly.
1.8  REFERENCES
1. Allen D. (1986) Accounting for charging price level international Dimension management, Accounting The bulletin of the Accounting standard committee, United Kingdom Page 116

  DOWNLOAD THE COMPLETE PROJECT