RELATED LITERATURE: ROLES OF AN ACCOUNTANT IN A STATE'S TRANSPORT CORPORATION

CHAPTER TWO
REVIEW OF RELATED LITERATURE
The chapter tries to review different works presented by individuals, books, lectures and observations that are related to the problems of the study. In order to ensure effective review of literature, the following subheadings guided the research:
1.         Historical overview of Accounting                                  
2.         Definition and features of Accounting                            
3.         Roles of Accountant in an organization              
4.    The extent an accountant can assist management to achieve effectiveness in the organization operational process.
5.       The extent an accountant assists management to achieve organizational efficiency in the budgeting process.
6.         The extent an accountant helps an organization to achieve organizational goal.
7.         Strategies of improving on the problems face by an accountant in an organization.
8.         Summary of literature review.


2.1       Historical Overview of Accounting
According to Igben (2009) the recording of transaction in books of accounts in line with double entry principle dates back to the 14th century, when Italian Merchants began to use the double entry system to their transactions. The earliest known double entry records are the accounts of stewards of the commune of Genoa for the year 1340. An Italian monk, LUCCA, PACIOLO, published the first known text on double entry accounting in his book summa Di Arithmetical geometric  proportion et propportionlita (meaning everything about Arithmetic, geometry and proportion) published in 1494, he included a section on double entry accounting entitled De Computis et scripture. The section was later separately published in 1504 under the title La Seuola Perfetta Dei Merchants. The double entry system quickly spread across Europe, particularly after the publication of Lucca Paciolo’s Summa. Due to its Italian origin, the double entry system, in those days was known as the Italian method.
            The level of civilization and technological advancement help to modernize method of accounting. During the period of industrial revolution, there was need for standard accounting method, and then professional bodies were formed, ICAN Scotland in 1854, ICAN English and wale in 1880 and association of public accountants in USA in 1887. In 1965, the institute of chartered accountant of Nigeria was established in 1982. Accounting standard board was also established. Presently, in Nigeria two bodies are recognized: ICAN institute chartered accountant of Nigeria and ANAN Association of institute chartered Association of institute chartered Accountant. 

2.2       Definition of Accounting
It is generally accepted that accounting is a language of business used for communication. It communicates the result of business operation to various parties interested in their business and equally useful to individual to know about source of cash utilized and how it was utilized. Also it enables individual to know about receipt and payment and balance of cash in hand.
            Over the past decades, the concept of accounting and role of accountants have witnessed tremendous revolutionary changes. While accounting has developed from a mere recording system to an information system, the role of accountant was also grown from that of mere record keeping to now includes the rendering of wide range of services to the society.
            According to Chukwu (2004) defined accounting as the process of recording, classifying, summarizing, analyzing and communicating the result to the interested users. Thus, accounting is considered to be a tool to management providing vital information concerning the future of business entry.
            Longe and Kazeem (1999) defined accounting as recording, classifying, selecting, measuring, interpreting and communicating financial data of an organization to enable the users to make decision. However, Igben (2009) defined accounting as the process of collecting, recording, presenting, analyzing, interpreting financial information for the users of financial statements. It is a discipline which comprises a set of theories and concept for processing financial data into information.

Features of Accounting
Accounting is primarily concerned with design the systems for recording, classifying and summarizing of financial data of an organization to internal and external users such as government, creditors, analyst, proprietors etc.
            Thus, it is subdivided into two, financial accounting and management accounting. Financial accounting is primarily concerned with preparation of financial statement, that profit and loss account, balance sheet, cash flow statement. It provides information for use of parties outside the organization. Then, Management Accounting assists management to formulate policies, planning, controlling of the operation of the organization. According to Chukwu (2004) defined management accounting as an Accounting that provides information to internal users while financial Accounting provides information as a whole. However, Kazeem indicates that the most important features accounting play in an organization are:
1.                  It provides permanent record for all financial transaction
2.                  It helps to determine the profitability of business concern
3.                  It provides a means by which finances of a business are controlled.
4.                  The assets and liability of a business are shown and income and expenditure are also shown.
Accounting information is of important not only individuals within the business but also to those outside the business.

2.3       Roles of an Accountant
Accounting information should be properly kept because it is used to operate or manage business. An accountant performs an administrative role of collecting, entry and interpretation of financial date. He maintains the financial records ensuring that it complies with ethical guideline of accounting. He also analyses the financial records to correct discrepancies that may likely occur in business organization.
However, an accountant prepares financial statement ensuring that financial report deadlines are met. He coordinates the auditing process by assisting in financial data preparation. Accountants of business organization are charged with the responsibility of advising the executives, regulatory agencies, stakeholders, creditors and tax personnel’s. He is an information giver; he gives information to the employers about the revenue and financial situation of the organization.
            According to Davis (2013) an accountant performs administrative role within a company operation. He serves as an adviser and interpreter who present company financial data to people within and outside the business. According to Atom (2008) stated that an accountant is an information giver, giving information to employer about the revenue and financial position of an organization. According to Gill (2013) an organization will not effectively and efficiently, survives without an accountant. Therefore, an accountant analyses financial records drawn up by book keeper to see where the organization is spending, saving, progressing and failing. An accountant must also decide on a prescribed system of account to use and choose the most capable of arriving at profit. An accountant use cost accounting to show actual cost over period of time of particular services or departments, this is done to look for improvement profitable area as well as finding area that are not efficient and are loss making.
            However Igben (2009) listed out some accountant’s role in an organization and they include:
I.          Preparation and presentation of timely and accurate financial reports to management.
II.         Identification of areas of inefficiency and restage of resources.
III.       Treasuring functions – raising finance, cash management and so on.
IV.       Setting up effective system of internal and accounting controls.
V.        Preparation of feasibility reports. These reports assist management in assessing the viability or otherwise of proposed capital expenditure such as the opening of a new factory or branch.
VI.       Investigation of the performance/operations of competing business organization to assist management in policy formulation.
VII.      Investigation of fraud within the organization.
VIII.    Assisting the organization to avoid – rather than evade – tax by using his knowledge of the tax laws.

2.4       The Extent an Accountant Assists the Management in Achieving Organization Effectiveness in Operation.
According to Davis (2014), an accountant performs financial functions related to the collection, accuracy, recording, analysis and presentation of a business, organization or company’s financial operations. The accountant usually has a variety of administrative roles within a company’s operations. In a smaller business an accountant’s role may consist of primarily financial data collection, entry and report generation. Middle to larger sized companies may utilize an accountant as an adviser and financial interpreter, who may present the company’s financial data to people within and outside of the business. Generally, the accountant can also deal with third parties, such as venders, customers and financial institutions.

1.         Financial Data Management
            The accounting structure of a company is an essential component to business operations. One of the primary roles of an accountant usually involves the collection and maintenance of financial data, as it relates to a company or firm. The accountant ensures that financial records are maintained in compliance with lawful and accepted procedures and policies on the corporate level. The financial information for any organization should be kept in a pristine system because it is a key component used in operating and managing any business. Managing the financial data of an organization can also include more sophisticated duties, such as developing, data bases, as well as establishing and maintaining control procedures.
2.         Analysis and Advice
            As analysts, accountants may perform certain types of analysis using financial data that is used to assist in making business decisions. From deserting which kinds of supplies to order, payment of bills to payroll, the accountant handles many intricate financial details on a daily basis.
Advising on business operatives can include issues, such us revenue and expenditure trends, financial commitments and future revenue expectations. The accountant also analyses financial data to resolve certain discrepancies and irregularities that may arise. Recommendations may also involve developing efficient resources and procedures, while providing strategic recommendations for specific financial problems or situations.
3.         Financial Report Preparation
            Accountants typically prepare financial statements that may include monthly and annual accounts based upon the financial information that is compiled and analyzed. The preparation of financial management reports can include accurate quarterly and year – end closing documents. Reports compiled may be used in connection with the continual support and management of budgetary forecast activities. The financial reports may be used by a financial director or officer for the development, implementation and operation of a company’s financial software and systems, such as Hyperion, Excel and CODA financial management.
4.         Compliance
            An accountant may also be responsible for ensuring that all reporting deadlines are met, internally and externally for example, quarterly, semi –annual and annual reports all have specific deadlines, as well as some tax implications. Monitoring and supporting taxation issues and fillings can also be a responsibility of an accountant. The accountant also usually coordinates the audit process by assisting with financial data preparations.
5.         External Business Affiliation
            Often, accountant must work with financial professionals from the four major fields of industry, public, management, internal auditing and government accounting. Accountants, may provides data to a public accountant, who acts as a consultant, auditor and tax service professional, corporations, non profits, organizations and government use management accountant to record and analyzed financial information of the business in which they are employed. They usually advise company executives, creditors and tax personnel. Accountants may also work with government officials who are examining and maintaining the financial records of the private business for which an accountant is employed, in connection with taxation and government regulations.

2.5       The Extents an Accountant Assist Management to Achieve Organizational Efficiency in the Budgeting Process
            According to Chukwu (2012) a budget is a plan quantified  in monetary terms prepared and approved prior to a defined period of time usually showing planned income to be generated and or expenditure to be incurred during that period and the capital to be employed to obtain a given objective, in regulating to a period of time. Put differently, it is a standard with which to measure the actual achievement of people department firms, etc. A necessary planning component is budget. Budgets outline the financial plans for an organization. There are various types of budgeting process a company must take into account ongoing operation, capital expenditure plans, corporate financing.
·        Operating Budgets: A plan must provide definition of the anticipated revenues and expenses of an organization and more. These operating budgets can become fairly detained. The process usually begins with an assessment of anticipated saves and proceeds to a detailed mapping of specific inventory purchases, staffing plans, and so forth. The budgets, often times delineate allowable levels of expenditure for various departments.
·        Capital Budget: The budgeting process must also contemplate the needs for capital expenditure relating to new facilities and equipment. These evaluated logically to determine whether an investment can be justified and what rate and duration of pay – back is likely to occur.
·        Financial Budgets: A company must assess financial needs, including an evaluation of potential cash shortages. These tools enable companies to meet with tenders and demonstrate why and when additional support may be needed.
·        Directing: These are many good plans that are never realized. To realize a plan requires the initiative and direction of numerous actions. Often these actions must be well coordinated and timed. Resources must be ready and authorization needs to be in place to enable persons to act according to the plan. By analogy imagine that a composer has written a beautiful score of music. For it to come to life requires all members of the orchestra, and a conduction who can bring the orchestra into synchronization and harmony. Thus; the accountant help in putting business plans into action.
o   Generally, the process of budgeting includes: identifying, collecting, summarizing and communication financial and non – financial information of a particular organization. In a business organization, the accountants assist to arrange the financial or commercial obligations coming in the business process. Therefore to a greater extent, an accountant of an organization will help that organization to achieve efficiency in the budgeting process in the following ways:
1.         Planning the Cost Action that Helps to Foresee the Future Transaction
           
An accountant provide information to an organization that help the organizational management to efficiently plan the course of action that helps to foresee the future transaction, financial and non – financial events and other activities. The budget allows the company to establish source common goal for future. It ensures the minimum desire level of revenue, and it is required for the corresponding for the creation of the targeted revenue. The organization sets some long – time goals. Chukwu (2012).
2.         Accountants provide Information to Management of an Organization that Assist them to Arrange the Financial Obligations coming in the Business Process.
            Accountants are responsible in providing information that involves the accumulation, identification, communication, comprehension, calculation, research and conveyance of business data. They prepare reports that maybe proved as an effective deciding tool for non managerial groups such as creditor’s regulatory, shareholders, tax authorities and other agencies. Chukwu (2012).


3.         Accountant Provide Information that Helps the Management of an Organization to Ascertain that the Prepared Budgets Works in Conjunction with Long Term Goals of the Firms

            Under the long term goals, a company takes annual operating plans; such planning involves the preparation of budgets. The accountant of an organization is responsible with the duty to ascertain that the prepared budged works in conjunction with long term goals of the firm on the other hand, short term goals are taken after long term goals have been developed. It involves, planning in detail every part of the organization. Once management of an organization has established the short terms goals, the accountants of an organization takes the charges for preparing the budget. They go through each and every step of preparation while setting the future goal. Chukwu (2012).  
2.6       The Extent Accountants Helps an Organization to Achieve its Organizational Goal.

Accountant can make or break an organization. Every organization needs strong support of good accounting help. In fact, this accounting department is one of the most important areas of the company. Most successful business knows the value of outsourcing some or all of their accounting needs. From a financial point, this business owners knows that this cost paid to an outsource accountant will always be less than this salaries of your in house accountant department. Business owner should look for experienced accountants in their specific industry properly management, retail, and distributions.
            An accountant is charged with the responsibility to organize collection of computerized and manual accounting processes, procedures and controls  created to collect, record, classify, summarize and interpret accurate and reliable financial data for decision making by management. Accountants are also responsible in prevention and detection of fraud, waste and thrift and to generate financial statements for managers, creditors and lenders. According to Brown (2014) accountants perform four key responsibilities that aid an organizational goal, they are:
(1)              Timeliness: Time is a resource that should never be wasted, since it can never be recovered. An accounting system that is timely is an asset to any organization, because if presents information to users as and when received. A timely accounting system provided by an accountant is able to produce the required reports for decision making just in time to make major decisions.
(2)              Cost-Effective: Accountants of an organization usually set the accounting system in a way that will have the goal of saving costs, especially when training staff. When implementing a new accounting system, the cost of operating it should not be greater than the benefits it provides. It is therefore the responsibility of the accountant to tailor the accounting system to the specific needs of the firm to avoid waste generated by a system with functions that companies will not need.
(3)              Informative: Accountant ensure  that management, the board of directors, and other users of financial statements get sufficient information necessary to enable them to make informed decision for the business. Information is power, and a firm with a highly informative accounting system is able to make effective plans to make the firm grow in its industry. In short an accountant should be able to provide an informative accounting system that should be able to satisfy the needs of various users like managers, creditors, owners and government.
(4)              Reliability: An accountant provides reliable accounting system that should produce information that is free from bias. It faithfully represents what is seeks to represent. This information should be trustworthy and dependable so users can make decision. For the information to be reliable, it must be neutral and faithful in representing the general condition of the firm.

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