CHAPTER ONEINTRODUCTION1.1 BACKGROUND OF THE STUDYIn most developing countries including Nigerian governmentparticipation in economic activity is usually significant. One of the waysthrough which government has intervened in Nigerian economy isthrough the establishment of public enterprises and statutory bodiesoperating service of an economic or social character on behalf of thegovernment.Since the colonial era, especially after independence 1960,Nigerian public enterprises have witnessed a steady growth unitrecently. Its Olisa (1988-133) pet it. Beginning as a trickle in the periodbetween this era of the second world war and Nigeria risen to floodlevel since independence the establishment of public enterprise inNigeria are many add to available rational capital for the support ofdevelopment and welfare programme, making to be controlled by afew individual, it possible for important profitable enterprise to becontrolled by a few individual or group organization certain criticalactivities national survival and economic stability and providingemployment opportunities (Ademolukun 1983). However, after a longperiod of growing starts intervention in the Nigeria economy throughpublic enterprises, the 1980’s onwards had witnessed a reversed whichhas sometimes been dramatic in public opinion therefore public policy.This has been brought by the persistent losses which stateenterprises that trivet been running over fears. Consequently, therehas been a willingness to look at alternative policy strategies for theachievement of economic development. At the forefront of thesestrategies is the minimization privatization of public enterprises.In Nigeria, public enterprises are engaged in a while spectrum ofeconomic activities including agriculture, mining, construction,manufacturing, commerce and services. The classification of publicenterprises in Nigeria has been made according to varieties of criteriaby different authorities. The public service review commission(1975:101) classified public sector int.Public utilitiesRegulatory of service bodyFinancial institutionsCommercial and industrial enterprisesBeing a mixed economy, individuals also own and operate privateenterprises. A firm classified as private enterprises when it is foundedand managed by an individual and or a group of individual. These firmsare expected to be registered in the local government within whichthey operate.The rational for the establishment of private enterprises arenumerous just like establishment of public enterprises. Theyinclude amongst others; provision of employment opportunitiesgenerating income for the owner of the enterprises governmentinterest in profit growth of the enterprises which performance ofthe public sector through competition. Moreover, the generalpublic is concerned with contribution which makes towards socialenlistment which is exhibit to the environment in which thebusiness is loaded and its willingness to contribute to thedevelopment of the environment.The activities of the public enterprises have been on the increasein recent times which necessitated the introduction of the accountingpractice to check and monitor the financial activities of theseenterprises. In this book, titled principles of accounting, by Bimage(1985) Accounting is defined as a process by which data relating to theeconomic activities of an organization are measured recorded andcommunicated to interested parties for analysis and interpretation. Theearliest methods of accounting records were kept in physicalquantities. These records came from the Eastern (early) civilizationwhich involved in the countries around the Mediterranean Sea such asMesopotamia, Egypt, Crete, Italy etc. Money was recorded as soon asmoney took the place of barter as a medium of exchange and unit ofaccounting practice has been closely related to the economicdevelopment of the country. If the business organizations grows in sizeand complexity management and outsiders groups which includeowners of the firm (stock holder) creditor, government, employer andthe general public.The differentiation necessitated the need to have accountingdepartment in the enterprises to give accurate financial of themanagement and to satisfy the outside demands or the general publicwho are already interest on whether the enterprises in growing or not.The role of accounting in public enterprises in Nigeria is primarily toensure accurate accountability in these sectors and present the timeand fair financial position of the enterprises. The role is of utmostimportance in any organization. An organization can only grow or profitwhen the resources can only be well managed if accountingdepartment of the organization give accurate financial information toknow how much the enterprises having. It only when this is done thatthe firm allocate its resources and knows what is to be done. The roleof accounting seems to be more pounced in the public enterprises. Inrecent times, there are cases of mis appropriation of funds in thepublic enterprises and improper accountability. These factors have ledto a lot of public enterprises go into Obiwon, if the government hasreorganization the role of accounting, all these feeble should not haverisen. No enterprises can more forward without having a well organizedfinancial department to give accurate financial, information about thefirm. This is because if improper accounting records are not minimizedor where possible eradicated these is bound to be cases of publicenterprises failure. Consequently, staff of such enterprises will forceout of their job. This will result to economic and social activities in thesociety.
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