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 CONTENT
Title page
Approval page
Dedication
Acknowledgment
Abstract
Table of content
CHAPETR ONE
1.0Â Â INTRODUCTIONÂ
1.1Â Â Â Â Â Â Â Â Background of the study
1.2Â Â Â Â Â Â Â Â Statement of problem
1.3Â Â Â Â Â Â Â Â Objective of the study
1.4Â Â Â Â Â Â Â Â Research Hypotheses
1.5Â Â Â Â Â Â Â Â Significance of the study
1.6Â Â Â Â Â Â Â Â Scope and limitation of the study
1.7Â Â Â Â Â Â Definition of terms
1.8Â Â Â Â Â Â Organization of the study
CHAPETR TWO
2.0Â Â LITERATURE REVIEW
CHAPETR THREE
3.0Â Â Â Â Â Â Â Â Research methodology
3.1Â Â Â sources of data collection
3.3Â Â Â Â Â Â Â Â Population of the study
3.4Â Â Â Â Â Â Â Â Sampling and sampling distribution
3.5Â Â Â Â Â Â Â Â Validation of research instrument
3.6Â Â Â Â Â Â Â Â Method of data analysis
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS AND INTERPRETATION
4.1 Introductions
4.2 Data analysis
CHAPTER FIVE
5.1 Introduction
5.2 Summary
5.3 Conclusion
5.4 Recommendation
Appendix
CHAPTER ONE
INTRODUCTION
- Background of 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. Most business organizations either profit driven or not, engage in decision making on a daily basis in order to keep the organization abreast with recent developments in the business environment they operate. Accounting system provides requisite financial information that enhances and improves the quality of decision made by non-profit organizations (Barth, 2001). Hence, it can safely be concluded that Accounting System is not an end in itself but a means to an end i.e. decision making to improve corporate performance and financial structure. Gone were the days when business organizations – profit oriented or not – were simply required to make a profit, survive and provide a fair return to investors’ on their interest. Meyer (2007) opined that, modern business organizations find itself in the atmosphere of global uncertainties, cut-throat competition locally and internationally and unprecedented change in the economy. Hence, a great demand is often placed on the managers of these organizations to make pragmatic and informed decisions if the organization is to move forward as the success or otherwise of any organization is often a function of the sum of the decisions taken in the past (Minton, 1996). However, the quality of decisions taken by managers and other relevant personnel in the organization rests upon the substance and accuracy of information provided by accounting systems available to them. An accounting system is one of the most effective decision-making tools of management, as it provides an orderly method of gathering and organizing information about the various business transactions so that it may be used as an aid to management in operating the business. Accounting information also help managers understand their tasks more clearly and reduce uncertainty before making their decisions (Chong, 2001). Nicoloau (2000) opined that accounting system produces detailed and comprehensible accounting information which are an invaluable basis for decision making. In recent times, it has tended to be a system of information that does not stop at limits of data and financial information, but also it include data and descriptive and quantitative information which is useful in decision making for users distinct with plurality and diversity. Such users include current and potential investors, lenders, suppliers, creditors, customers, governments and the public in addition to the administration, which is its responsibility to prepare the accounting programs and display it, such information must be capable of achieving the goal that it has been prepared for. Hence the role of Accounting Information System for effective decision making cannot be over emphasized. It is against this background that the researcher deemed it of pertinent concern to embark on a research Non-profit organisations are organisations that are prohibited by law from distributing profits to their members or officers. They are usually organised and operated for educational, social, professional, religious, charitable or any other non-profit purposes. Globally, there is a paradigm shift in the governance and accountability processes of organisations including non-profit organisations as they are equally corporate citizens just like other profit making corporate entities. Moreover, because non-profit organisations usually source for funds externally, it behoves them to keep accurate records and meet disclosure requirements expected of them either from the regulators or their sponsors. Financial reporting is a key component of good governance in any organisation. Accountability is all the more important in every sector of the economy as Nigeria is making a lot of effort to address the issue of money laundering in the country and also generate more income from taxation. In a bid to standardize the practice of financial reporting and accounting by non-profit organisations in Nigeria, the Financial Reporting Council (FRC) of Nigeria has drawn up a guide for preparing financial reports and accounts for these institutions.
The Financial Reporting Council (FRC) of Nigeria is a federal government agency established by the Financial Reporting Council Act, No. 6, 2011 and under the supervision of the Federal Ministry of Trade & Investment. The FRC is responsible for, among other things, developing and publishing of financial reporting standards to be observed in the preparation of financial statements of public entities in Nigeria; and for related matters. Some of the Council’s main objectives are to: enhance credibility of financial reporting; improve the quality of accountancy, audit services & corporate governance; and to protect the interests of investors and other stakeholder. In line with the powers conferred on it by the Act, and in a bid to foster accountability in the non-profit sector, the FRC formulated the Statement of Accounting Standards (SAS) No. 32; an accounting system that applies to non-profit organisations in the country including faith based organisations which requires them to report financial transactions periodically with effect from 1st July, 2011. Non-profit organisations are equally expected to comply with the provisions of the International Financial Reporting Standard (IFRS) with effect from 1st January, 2013.
Accounting and reporting standards for Non-Profit Organisations
The Statement of Accounting Standards (SAS) No. 32 prescribes a uniform accounting and financial reporting system, and, among other provisions, stipulates that financial statements for not-profit organisations shall include- statement of accounting policies; statement of financial position; statement of activities (income and expenditure); statement of changes in net assets; statement of cash flows; notes on accounts and five-year financial summary. Presently, the system of accounting and reporting for non-profit entities is not uniform and this makes assessment and comparison cumbersome. Thus the purpose of the new accounting standards is to establish a uniform basis of reporting for non-profit organisations whilst ensuring accountability in the activities of such organisations.
The SAS No. 32 also prescribes that statements of non-profit organisations shall state a clear and concise description of the purpose and activities of the reporting organisation, its legal form and the legal form of other affiliated entities, its relationship with any overseas organisation, its community of service and its status under the income tax regime. No doubt adequate reporting is the first step towards accountability and probity of these organisations and the financial obligations of any organisation can easily be ascertained where there has been proper accounting and reporting as required by law. By S.57 of the Financial Reporting Council Act of 2011, every financial report or statement must comply with the accounting and financial standards developed by the Council. The Act further provides that the accounts, financial reports, annual returns or any other document required to be filed by statute with the other regulatory authorities: Central Bank of Nigeria, Securities & Exchange Commission, Corporate Affairs Commission, Nigerian Investment Promotion Commission, Federal Mortgage Bank of Nigeria, National Pension Commission,  and the National Insurance Commission would be adopted by the financial reporting council for that purpose and where there is a conflict in standards, the guidelines of the FRC shall prevail to the extent of the inconsistency. This means that organisations would not be required to prepare any additional reports specifically for the FRC. Thus no additional burden is placed on organisations. 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.
1.2 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.
1.3 RESEARCH QUESTIONS
- Are the non-profit making organization members of the opinion that they are being exploited by the administrators?
- Does the organization have a proper accounting and internal control system?
- Does the increase in the financial position of the body relate to the increase in membership?
1.4 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.
1.5 STATEMENT OF HYPOTHESES
The study provides the following as the research questions:
Hypothesis One
H0:Â Â The members of the non-profit making organization are not of the opinion that they are being exploited by the administrators.
H1:Â Â Â The members of the non-profit making organization are of the opinion that they are being exploited by the administrators.
Hypothesis Two
H0:Â Â The organization does have a proper accounting and internal control system.
H2:Â Â The organization has a proper accounting and internal control system.
Hypothesis Three
H0:  The increase in the financial position of the body is not related to increase in membership.
H3:  The increase in the financial position of the body is related to increase in membership.
1.6 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.
1.7 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.
- LIMITATIONS OF THE STUDY
During the process and course of this research, a number of problems were encountered which include the following;
- Time, finance and access to book record of the organization and journals, but as much as possible objectivity was observed.
- 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.
- Relevant books and literatures were not readily available in the school library and the organization consulted.
- Where some journals, papers, articles were seen, they were so much of foreign nature than the domestic environment of Nigeria was not depicted.
- 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.
- 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:Â This is a body or a firm established for a purpose or object comprising of materials, structures and humans.
President:Â 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:Â These are persons appointed to assist the president in the running of the organization.
Subvention:Â This is a source of income to the organization. It is money granted to it to support its activities.
Fines:Â These are money charged on the members as a punishment to their misdeed.
Income and Expenditure:Â 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:Â 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:Â 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.
1.10 ORGANIZATION OF THE STUDY
This research work is organized in five chapters, for easy understanding, as follows. Chapter one is concern with the introduction, which consist of the (background of the study), statement of the problem, objectives of the study, research questions, research hypotheses, significance of the study, scope of the study etc. Chapter two being the review of the related literature presents the theoretical framework, conceptual framework and other areas concerning the subject matter.    Chapter three is a research methodology covers deals on the research design and methods adopted in the study. Chapter four concentrate on the data collection and analysis and presentation of finding. Chapter five gives summary, conclusion, and recommendations made of the study.
This material content is developed to serve as a GUIDE for students to conduct academic research
IMPACT OF EFFECTIVE ACCOUNTING SYSTEM ON NON-PROFIT MAKING ORGANIZATION IN NIGERIA>
A1Project Hub Support Team Are Always (24/7) Online To Help You With Your Project
Chat Us on WhatsApp » 09063590000
DO YOU NEED CLARIFICATION? CALL OUR HELP DESK:
09063590000 (Country Code: +234)
YOU CAN REACH OUR SUPPORT TEAM VIA MAIL: [email protected]
09063590000 (Country Code: +234)