ACCOUNTING SYSTEM IN LOCAL GOVERNMENT

By

UDEH DEBORAH IFEYINWA

Presented To

Department of Accountancy

TABLES OF CONTENT

TITLE PAGE

APPROVAL PAGE

DEDICATION

ACKNOWLEDGEMENT

TABLE OF CONTENTS

CHAPTER ONE:

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

1.2 STATEMENT OF PROBLEM

1.3 PURPOSE OF THE STUDY

1.4 SIGNIFICANCE OF STUDY

1.5 DEFINITION OF TERMS

CHAPTER TWO

2.1 DEFINITION

2.2 ACCOUNTING PRINCIPLE

2.3 WORKING PAPERS

2.4 PREDATION OF VOUCHERS

2.5 ORGANIZATIONAL STRUCTURE OF TREASURY UNIT

2.6 TREASURY FINAL ACCOUNT

2.7 THE RECONCILIATION UNIT

2.8 HISTORY OF GOVERNMENT ACCOUNT IN NIGERIA

CHAPTER THREE

3.1 SUMMARY OF FINDINGS

3.2 RECOMMENDATION

3.3 CONCLUSION

3.4 REFERENCE

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Accounting is defined as the act and science of recording business transactions in a systematic manner so as to show the true state of affairs of a business during a specific period usually called accounting period.

Financial accounting is concerned with the qualification of economic events or it is aimed at measuring economic activities with a view to provide information for policy making. Account is a discipline which based on accounting principles, concepts and conversion and legal requirements.

1.2. STATEMENT OF OBJECTIVES

This study entitled accounting system in Local Government attempts to

determine the problems involved in establishing and applying standards accounting system in Local Government with practical application to Isi-Uzo local government area.

1.3. PURPOSE OF THE STUDY

The purpose of this study are to: -

1. Identify the problem inherent in accounting of the local government

2. enable business organization appreciation the standard requirement for making financial statements'

3. Keep the local government concerned learn how to keep proper accounting statements.

1.4. SIGNIFICANCE OF THE STUDY

There are three categories of people that are going to benefit

from this study.

They are: -

1. The chief accounting officer

2. Financial officers and

3. Auditor general

During this study, it indicates that majority of local governments in Enugu, Onitsha particularly and some other places in Nigeria are not aware of the local government legal requirements for recording, processing and presenting information about the transaction carried on in the business they are managing. Some do not keep proper account of their business therefore, statutory requirements for financial accounting system are carefully set out in this study.

Having a well defined system of recording processing, and presentation o financial transaction that took place in any business will enable the government lower to take appropriate decision for the development and assurance of continuous existence of their business. The finance also requires complete and accurate accounting and other records to assist in controlling the business, safe-quarding the asset of the government, preparing financial statement ad complying with legal requirements.

Manager should also note that a good accounting system help in assembling accounting information and appropriate analysis to enable the financial statement to be prepared so that all transaction which should be incorporated have in fact been recorded and also ensure that errors are being rectified.

Also, accounting students need a well defined systematic approach in order to recollect the chain involve in presentation of accounting information and it will also serve as a future reference to some students for research purposes.

The government need the final account or financial statements of a company for income tax purposes is by showing the tax collectors or tax board the financial statement for them to asses him based on his income.

1.5. DEFINITION OF TERMS

The following definitions are given for reference purposes.

Accounting: This is the act and science of recording business transactions is a systematic manner so as to show the financial position of the business any time need.

Accountability/Accounting Standard: - These are standard issued by professional accounting bodies in Nigeria to regulate the practice of accountancy profession such as Statement of Accounting Standard (SAS).

Financial Statement: - These are trading, profit and loss account, sources ad application of finds, statements, value added statement and balance sheet.

Financial Accounting System: - This is the whole system of recording and processing transactions and assets, its adequacy as a basis for the preparation of financial statement.

Legal Requirements:- These are legal requirement as provided by the Company and Allied Matters decree of 1990 (CAMAD 1990), statements and Accounting Standard and other guidelines issued by the professional bodies.

The Cash Basis: - It is the basis of accounting under which revenue are recorded only when cash is received and expenditures recorded only when cash is paid, irrespective of accounting period in which the service was rendered or the benefit received.

This is the basis upon which the preparation of government accounts in most countries including Nigeria depends.

Accrual Basis: - These are where revenue are recorded when earned and expenditure are recorded as the result in liabilities are known or when benefits are received not with standing the fact that the receipt or payment of cash could take place wholly or partly in another period.