IMPACT OF EFFECTIVE ACCOUNTING SYSTEM ON NON-PROFIT MAKING ORGANIZATION IN NIGERIA

Abstract

This study examines the evaluation of designing an effective accounting system for non-profit making organization in Nigeria. The objective of this study is to find out if organization has a proper accounting and internal control system and also to find out if the members of the non-profit making organization are being exploited by the administrators. The data for this study are collected through questionnaire and personal interview. However, the questionnaire forms the major instrument of data collection. The simple random sampling method is used to select the respondents of the study. It was found out that organization structure of the association impose accounting leaders and does not give them enough liberty. The study concludes that account and financial statement of the organization are subject to both internal and external auditing. It was recommended among others that comprehensive budget should be drawn up and as much as possible it should be made for revision if necessary.

TABLE OF CONTENTS

Title Page                                                                               

Certification                                                                           

Dedication                                                                   

Acknowledgements                                                               

Abstract                                                                                 

Table of Contents                                                                  

Chapter One: Introduction

1.1    Background to the Study                                                     

1.2    Statement of Problem                                                  

1.3    Objectives of the Study                                                         

1.4    Research Questions                                                              

1.5    Statement of Hypothesis(es)                                       

1.6    Significance of the Study                                                      

1.7    Scope of the Study                                                                

1.8    Limitations of the Study                                                       

1.9    Definition of terms                                                                

Chapter Two: Review of Related Literature

1. Introduction

2.2    Who needs Accounting?

2.3    Activities of Non-Profit Making Organization

1. Accounting System in Non-Profit Making Organization

2.5    Objective of Financial Management

2.6    Resource Management

2.7    Accounting Systems and Records

2.8    Problem of Accounting in Non-Profit Organization

2.9    Internal Control

2.10  Essentials of Effective Internal Control

2.11  Budget and Budgetary Control

2.12 Need for Organization Audit

2.13  SAS/IAS Provision in Respect to Accounting

Chapter Three: Research Method and Design

3.1    Introduction                                                                          

3.2    Research Design                                                          

3.3    Description of Population of the Study                      

3.4    Sample Size                                                                           

3.5    Sampling Techniques                                                  

3.6    Sources of Data Collection                                         

3.7    Methods of Data Presentation                                              

3.8    Methods of Data Analysis                                                     

Chapter Four: Data Presentation, Analysis and Interpretation  

4.1    Introduction                                                                          

4.2    Presentation of Data                                                             

4.3    Data Analysis                                                                        

4.4    Hypothesis Testing                                                                

Chapter Five: Summary of Findings, Conclusion and Recommendations

5.1    Introduction                                                                          

5.2    Summary of Findings                                                  

5.3    Conclusion                                                                            

5.4    Recommendations                                                                

          References                                                                             

Appendix I                                                                             

Appendix II                                                                            

CHAPTER ONE

INTRODUCTION

Background to the Study

The word non-profit making organizations explained that the organizations are not established for the purpose of making profits. Non-profit making organizations such as clubs, societies, charitable organizations and social organizations are established basically for the purpose of promoting the welfare and activities of the members and not for profit motive unlike business enterprise. 

This organization normally has founders, presidents, some executives and members. The formation of the non-profit making organization cannot be traced to a particular age. Most non0profit making organizations has in their deed the right to partake in little business to maintain their organization and meet up with its expenses. 

Statement of Problem

The non-profit making organization is expected to be an exemplary means of exhibiting the love for humanity, as a result of which we know, if this associations reach out to research the problem affecting the common man, the needy and less privileged in the society who are helpless, from the bunk of revenue collected as donation, fines, subscription sold etc. 

Research Questions

1. Are the non-profit making organization members of the opinion that they are being exploited by the administrators?
2. Does the organization have a proper accounting and internal control system?
3. Does the increase in the financial position of the body relate to the increase in membership?

Objective of the Study

The main objectives of this research are:

• To find out if the organization have a proper accounting and internal control system. 
• To ascertain if the financial position of the body is related to the increase in membership of non profit making organization in Nigeria. 
• To find out if the members of the non-profit making organization are being exploited by the administrators. 

Statement of Hypotheses

The study provides the following as the research questions:

Hypothesis One

Ho:  The members of the non-profit making organization are not of the opinion that they are being exploited by the administrators.

Hi:   The members of the non-profit making organization are of the opinion that they are being exploited by the administrators.

Hypothesis Two

Ho:  The organization does have a proper accounting and internal control system.

Hi:   The organization has a proper accounting and internal control system.

Hypothesis Three

Ho:  The increase in the financial position of the body  is not related to increase in membership.

Hi:   The increase in the financial position of the body  is related to increase in membership.

Significance of the Study

It is hoped that this study will be of benefit to the government, members and the management of the organization in knowing and arising to their responsibilities in Nigeria.

Scope of the Study

This study examines an evaluation of designing an effective accounting system for non-profit making organization in Nigeria. This study will be centred on investigating the designed accounting system set up for the origination as well as what the members feel or think about pertaining the management of the organization funds in Nigeria between the period of 2008-2013.

For the course of this study, the researcher used a sample size of 40 for effective survey.

1. Limitations of the study

During the process and course of this research, a number of problems were encountered which include the following;

1. Time, finance and access to book record of the organization and journals, but as much as possible objectivity was observed.
2. Due to the uniqueness and the controversial nature of the research, we have had to be very subtle in eliciting information so as to avoid prejudicing or giving our blessing to any claim or opinion as they stand publicly. Even then total cooperation in obtaining information was not possible.
3. Relevant books and literatures were not readily available in the school library and the organization consulted.
4. Where some journals, papers, articles were seen, they were so much of foreign nature than the domestic environment of Nigeria was not depicted.
5. The tense academic environment was a bi constraint to the research because we had to execute the project and yet contend with the continuous assessment of the policy of polytechnic.   
   1. Definition of Terms

For the purpose of clarity and easy understanding, the following terms are defined in the content of their usage in this study.

Organization: This is a body or a firm established for a purpose or object comprising of materials, structures and humans.

President: In some of the non-profit making organizations there is the post for a head or leader called the president to give directives to the operation of the organization.

Executive: These are persons appointed to assist the president in the running of the organization.

Subvention: This is a source of income to the organization. It is money granted to it to support its activities.

Fines: These are money charged on the members as a punishment to their misdeed.

Income and Expenditure: The method of designing accounting system for the organization which is non-profit oriented but has income and incurs costs as well as having assets and liabilities.

Internal Control: This is the system of control both financial and otherwise designed to regulate the efficiency and effectiveness of the organization. Therefore the designed accounting system and the auditing is part of the control system.

Audit: This is an examination of the underlying accounting records so as to form an opinion as to the fair and have position of the designed accounting system and accounting results on information. For the purpose of members it is necessary whether profit or non-profit organization.

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