BACKGROUND OF THE STUDY
Accountancy embraces the installation of book-keeping and accounting systems, the writing up of account and the preparations of every kind of financial statement from the simplest receipts and payments of small club to the published accounts of large public companies. It is one of the main work of the accountant in practice to provide client both large and small with necessary advice as to the most appropriate accounting system to in tall what will provide management with up-to date information.
According is always said to be the language of business. Every organization including bank registered under the Nigerian company law, having statutory responsibility f profit and loss account together with statement of the assets and liabilities at the end of its accounting period, to its members shareholders, the public and other users including the government. Accounting system means the system of recording financial transactions in an organization. It could also be referred as an internal control system in an organization depending on the nature of business undertaken by the organization. This is because financial transactions are qualified in monetary terms and this requires proper recording of receipts and payment of funds. It is worthy to note here that any default in the accounting system of an organization could lead to business failure.
In addition, banks by virtue of nature of its services dealing with money are expected to maintain an-up-to-date record of its transactions with or on behalf of its customers.
However, in micro finance bank, this responsibility can be effectively discharged if there is an adequate system of account put in place for recording day to day transactions of the bank. Besides, accounting is not only concerned with recording of transactions but also with the use to which the records are put, their analysis and interpretations for use in making decisions not only for the management usefulness but also to the members and would be investors, government agencies etc.
Recent researchers have shown that one of the main causes of indigenous business failure in the country is due to the failure to maintain proper accounting records. Therefore, these purposes can only be achieved in the light of good design and application of sound accounting system. Thus, the scope of this research work is to make appraisal of relevance and adequacy of accounting system in micro finance banking using “Evergreen micro finance bank Nigeria ltd as a cases study.
STATEMENT OF THE PROBLEM
Accounting being a profession referred to as service activity and accounting as often termed to be the language of business, therefore the importance of accounting system in any organization cannot be overemphasized. The objectives of providing accounting information for decision making cannot be achieve if there is no adequate accounting system in place. In the course of this research work, the following problems will be considered:
i. The effects of inadequate accounting system in banking operation.
ii. Unavailability of timely accounting data.
iii. The falsification of account in the banking sector.
iv. Nonchalant attitude of the management towards the information provided by the accounting system.
v. Poor decision-making
vi. Poor accounting record
vii. Poor audit problem
OBJECTIVE OF THE STUDY
i. To determine the impact of accounting system in micro finance banking.
ii. To determine whether the strategies used by micro finance bank in their accounting system have been very efficient and effective.
iii. To evaluate the factors that will limit the efficacy of micro finance banks in their efficient application of accounting system in their banking operations or activities.
iv. To assess the role9s) of accounting system in proving the activities of micro finance bank.
v. To assess whether they have efficient and effective machinery to implement her planned programmes.
vi. To find out whether accounting system will provide timely accounting data for management decision making.
vii. To find out whether it will facilitate banking activities.
viii. To make recommendations on how to enhance the efficiency and effectiveness of accounting system in micro finance banking.
The following question forms the basis of the frame work for carrying out this research study.
i. Do accounting system have any imp[act in micro finance banking?
ii. Do micro finance bank have efficient machinery to implement it planned programmes for efficient accounting system?
iii. Do micro finance hanks make use of effective and efficient accounting system?
SIGNIFICANCE OF THE STUDY
As it is a known fact that accounting system plays very important role in the life of a business organization, it is termed the determinant factor which determines whether business would fail or survive depending on the manner in which the particular organization records its financial transactions. Therefore, the significance of this project research work is to provide:
i. Management with the importance of accounting information towards ensuring profitability and efficiency in business management.
ii. The relevance of accounting system in micro finance banking.
iii. Evaluation of the role(s) played by management in ensuring adequate accounting system in banking operation