BACKGROUND TO THE CLARITY PROJECT OF IAASB

BACKGROUND OF THE STUDY

        History has it that the concept of accountability of public funds dates backs to the history of ancient Greece.  As old as theory is, it would not be erroneous to say that the idea has been equally lost to antiquity although not much is known about it, this makes the subject, government accounting to remain a myth.

        Accounting in the public sector has received such a wide attention from scholars that the field of public sector accounting scans to be neglected.

        However, there is general awareness all over the world of the need to pay greater attention to the development of government accounting and financial control.  The reason is obvious, government, in most, if not all nations constitute the largest single business entity in many places, the core of the economy.  Government in any society is basically for maintaining law and order.  With changes and the complete nature of the society, government responsibility has automatically changed from the role of maintaining law and order to business like nature in the modern era.  The enormous activities of government, equally call for enlarged government accounting in order to accommodate the immense task.  As a result of this development, the traditional cash procedures of accounting can hardly meet the demands of reasonable accounting for modern government in providing necessary services or information. Therefore, there is need for government accounting to be dynamic in order to accommodate both the fundamental roles and the developments.

STATEMENT OF THE PROBLEM

        The problem of this research is to identify these weaknesses and limitations inherent in the cash accounting system of the public sector (in relation to the accounting system of the sample ministry).

        This is with a view to propose means of eliminating them completely or at least reducing them to the barest minimum.  Put in question form, what are those weaknesses and limitation that militates against adequate and efficient accounting system and financial reporting in the public sector and how can they be eliminated?

        Some of these problem witnessed in the public sector includes: the lack of accountability and abuse of delegated authority by the officers in authority, fraud and misappropriation of government funds, as well as lack of expertise and business acumen on the part of those officers.  Due to the fact that government operation have been termed “Non-profit oriented operations”, there is no pressure on the part of these government officers to perform up to optimum expectation, accounts are kept in messy shape while the officers get away with lack of proper accountability.

        This research is carried out in order to examine the extent to which proper accounts are being kept in the public sector and to offer solution to the inherent problem discovered.

The Enugu State Ministry of Finance and Economic Development is used as a sample ministry for this research work.

OBJECTIVES OF THE STUDY

        The objectives of this research work/study include the following:

-              To determine the extent to which the sample Ministry has installed an accounting system.

-              To determine the factors that promote  or constrain the accounting system of the sample ministry.

-              To determine the impact of the accounting procedures of the sample ministry upon its financial reporting.

-              To make recommendations based on my findings.

IMPORTANCE OF THE STUDY

        This research paper is intended to examine the accounting system common in public sector with a view to exposing and highlighting the inherent limitations in the system.  Therefore, the research paper will be of interest and useful to the general publics, the government as well as the governed.

RESEARCH QUESTIONS

        Three dominant questions being reviewed by this research include;

-              Is the accountancy/accounting system in the public sector effective and adequate?

-              Does the accounting system in the public sector provide for proper financial control and accountability of stewardship?

-              Does the accounting system in the public sector provide useful information for the effective control and management of government operations?

SCOPE AND LIMITATION OF THE STUDY

        As the research topic would suggest at a glance, the scope of this, is essentially focused on the accounting system of the sample ministry as a general overview sample study of the accounting in the public sector.

        Therefore, this study will look into the nature of the accounting system of the sample ministry; how the system operates, the relevance of the system to the environment, problems and prospects of the system.

LIMITATION

-              Scarcity of material:

This aspect of accountancy (as pointed out above) has received very little attention from scholars despite its long historical age.  Consequently, there are few literary publication on the student; the researcher was therefore limited to reviewing few literature which are mostly in origin, through relevant to the study.