IMPLICATION OF AGENCY RELATIONSHIP ON MANAGEMENT CONTROL SYSTEMS IN SMALL AND MEDIUM SCALE BUSINESS IN CROSS RIVER STATE

ABSTRACT

This research work is carried out to ascertain the implications of Agency relationships on managements control systems in Small-and Medium Scale Business in Abi L.G.A of Cross River State of Nigeria. It was aimed at identifying the root cause of Implication of Agency  relationships on physical security over the asses of the organization in cross river state. And also to ascertain the implications of Agency relationship on adequacy of documentation and record keeping of organization on Cross River State. Finally to ascertain the implication of Agency relationships on management overrides in organization in Cross River State.

The research used the questionnaires approach in collecting data that were analyzed with statistical tool such as parametric, percentage and student, t-test. The questionnaires were distributed to two category of SME_S forming the sample size. The research find out that, Agency relationship has increased the practice of segregation of duties which enhance the productivity of their organization or business. Agency relationship has impacted positively on the physical security of their organization or business. SMEs in Abi L.G.A have adequate documentation and record keeping and that Agency relationship has impacted positively on management system even as management override has greatly reduced. Based on this, we recommend that the government should evolve deliberate policies to develop small and medium scale business as they constitute the bedrock of micro economic development in the state.

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IMPLICATION OF AGENCY RELATIONSHIP ON MANAGEMENT CONTROL SYSTEMS IN SMALL AND MEDIUM SCALE BUSINESS IN CROSS RIVER STATE

THE DEPARTMENT OF ACCOUNTANCY

FACULTY OF MANAGEMENT SCIENCES

IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE AWARD OF POSTGRADUATE DIPLOMA (PGD) IN ACCOUNTANCY

TABLE OF CONTENTS

Title page

Approval      

Certification             

Dedication                

Acknowledgments  

Abstract        

List of Tables

Table of contents                

CHAPTER ONE:    INTRODUCTION                                                             

1.1       Back ground of the Study

1.2       Statement of Problem

1.3       Objective of the Study

1.4       Research Question

1.5       Hypotheses of the Study    

1.6       Significance of the Study   

1.7       Scope of Study

1.8       Limitation of the Study

CHAPTER TWO: LITERATURE REVIEW

2.1       Theoretical Framework

2.2       Agent

2.3       Creation of Agency

2.4       Agency Relationship

2.5       Share Holds Versus Managers

2.5.1   Possible Solution

2.6       Creditors Versus Share Holders

2.6.1   Relation between the principal and third parties

2.6.2   Duties of the Principal

2.7       Management

2.7.1   Why Management Control Fail

2.8       The system and process of Controlling

2.8.1   Two prerequisites of control systems

CHAPTER THREE: METHODOLOGY

3.1       Research Design

3.2       Population of Study

2.3       Sampling Design

3.4       Survey Instrument

3.5       Method of Analysis

3.6       testing of the Hypotheses

CHAPTER FOUR: FINDINGS

4.1       Analysis of Data

4.2       Testing of Hypotheses

CHAPTER FIVE:  DISCUSSION

5.1       Introduction

5.2       Discussion Findings

CHAPTER SIX:      SUMMARY, CONCLUSION AND RECOMMENDATION

6.1       Summary

6.2       Conclusion

6.3       Recommendations

6.4       Recommended Areas for further Research

            References

            Appendices

LIST OF TABLES

Table One:                Listing Frame of SMEs in Abi L.G.A                    30       

Table two:                From the responses received from the

Questionnaire, it was observed that the

SMES have Agency relationship in operation.    32

Table  Three:           Listing of SMEs with Agency Relationship         33

Table  Four:             Listing of SMEs Without Agency Relationship  34

Table Five:               Transaction Record of SMEs with

Agency Relationship (X₁ –X₁₀)                             35

Table six:                  Transaction Record of Selected SMEs

without Agency Relationship (Y₁  - Y₁₀)              36

Table 7:                      Implication of Agency relationship on

effective segregation of duties                               40

Table 8:                     Agency relationship on physical security                        41

Table 9:                     Implication of Agency relationship on

documentation and record keeping                       42

Table 10:                   Implication of Agency Relationship on

Management Override                                             43

Table 11:                   Average Sales of SMEs with Agency

Relationship against Sales of Those Without

Agency Relationship                                               44

Table 12:                   Average Total Expenditure of SMEs with Agency

Relationship against Total Expenditure of those

without Agency Relationship                                 47

Table 7:                     Average Net Income of SMEs of SMEs With Agency Relationship Against Net Income Of Those Without Agency Relationship                                                            50

IMPLICATION OF AGENCY RELATIONSHIP ON MANAGEMENT CONTROL SYSTEMS IN SMALL AND MEDIUM SCALE BUSINESS IN CROSS RIVER STATE

DEPARTMENT OF ACCOUNTANCY

FACULTY OF MANAGEMENT SCIENCES

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