FINANCIAL CONTROL SYSTEM IN A BUSINESS ORGANIZATION, A CASE STUDY OF NINTH MILE CORNER BREWERY PLC ENUGU
FINANCIAL CONTROL SYSTEM IN A BUSINESS ORGANIZATION, A CASE STUDY OF NINTH MILE CORNER BREWERY PLC ENUGU
CHAPTER ONE
INTRODUCTION
The financial function has always been important in management irrespective of any difference in structures, ownership and size. The financial organisation of any business enterprise ought to be capable of ensuring that various aspects of its financial activities including planning and controlling are carried out at the highest possible degree of efficiency. The profitability and stability of a company depends on its accounting and cost control system; the efficiency of its staff and the management adherence to the internal control system as well as to the general financial policy of the company.
Most of the studies conducted on business finance have laid more stress in comparing financial results of public and private sectors undertaking vis-à-vis profitability. The “fiscal approach has often over-shadowed the fundamentals of internal financial management while it is obvious that factors in the financial market, social, economic, political and other external consideration significantly influences internal decisions, is desirable that we focus attention upon “means| and not the result” alone. Profitability is the result of the means and methods employed in planning and controlling various functions of business.
Dynamic profit planning and control is a broad approach to accomplishing the management efficiency, and management function, its development and usefulness have significantly increased in recent years. It is especially significant in that the functional areas of management are brought into focus, a broad mutual enrichment of function between management and accounting that is a vital feature in the successful life of progressive enterprises. However, its full potential is frequently eclipsed in public enterprises by the gap between the mechanics of the system and conceptual and pervasive attitude towards public undertaking and Nigeria Breweries in particular.
Nigeria Breweries PLC was established in Lagos in 1946 with the visiting leadership of Heineken International and Unilever of London with other distributive firms operating in Nigeria. It has since realized operational excellence and has become a model corporate citizen of Nigeria. In 1949, it launched Extra Stout in 1992, Maltina in 1976, Amstel Malta in 1998 and current Heineken in 1996. It built and opened its Lagos brewery in 1949, Aba brewery in 1957, Kaduna brewery in 1963, Ibadan brewery in 1982 and Enugu breweries in 1994. In Enugu presently it has expanded its brewery plant in what has expanded its brewery plant in what will become the largest brewery in Africa. The overall purpose of Nigeria Breweries PLC is to put a smile on every face, to spread refreshment and enjoyment to all Nigerians. Also to enable people relax after a lactic days job, to avoid producing a nation full of stressed people given our numerous problems of traffic jams, no NEPA, no water, no money, no jobs with a lot of dependents etc. Nigeria Brewery PLC takes this mission of bringing enjoyment to all Nigerians also to look after your health but actually to beyond that and just have plain fun passion with control, the Nigeria brewer after all is for pleasure, leisure and fun. There is a well-known adage that says: all work and no play makes Jack a dull boy.
Having known the historical aspect of the establishment of the Nigerian Brewery PLC it is therefore worthy to touch on its organisation set-up; and its financial functions in line with this study being carried out in the area of the company’s profit planning and control for aiding management in accomplishing the objectives within the social and economic constraints.
Financial mismanagement and weak control have been a problem of many public and private establishments. The problem of financial management and poor financial control by an organisation impedes its growth and development. The present trend of “get rich quick” has made many Nigerian brewery’s workers in positions of trust to abuse their trust and misappropriate or embezzle the company’s funds. This misappropriation of funds manifests itself in different forms such as falsification of receipts and invoices; carting away of stock material without proper documentation, etc. The problem of poor control had led to the increasing rate of loss of company’s resources; the company operating below targeted figure with minimal profit margin; and making poor returns.
The study is based on the information collected from the key officers of the company. Explicit in the exposition, however, is the realization that a profit planning and control programme must tailor – made to fit each particular situation and that real essence of financial management is flexibility. Mean and ways of eradicating fund mismanagement, profit planning and adequate control measures are emphasized upon in the study to facilitate the inter-relationship of the areas concept and techniques.
The primary aim of the study is three folds:
The researcher will make recommendations that will help the company to eliminate waste and better the chances of achieving its goals. The study also strives to bring into light such weaknesses which in future are likely to impede the growth and development of the company. It also searches out the means which will enable the organisation to achieve its socio economic objectives with minimum cost.
The study of this manner also will take into account public and company’s policy. It recognizes the fact that the socio-economic changes that already occurred and other changes that are under way will make the task of financial planning and control more important in future. The expected changes may include: structural changes in the economy; increasing number of the finance department of the company in planning and control of its funds. Thus the time factor and financial constraints, the researcher is limited to do justice to the subject matter between periods 1984 – 1988.
The study is limited to the evaluative of resources, organisation and services as well as the financial control measures of the company. It is also based on the available data collected through the use of questionnaires and other materials which the researchers could lay hands on. The period for the study covered from 1999 to 2002 financial year. The researcher is not meant to expose the financial functions of the managers or the key officers, not to serve as an attack to the authority, rather it is an academic contribution giving constructive criticisms for the sole aim of evaluating the role in different forms such as falsification of receipts and invoices, carting away of stock materials without proper documentation.
The study attempts to provide an orderly frame work for analyzing the major financial problems of Nigeria Breweries emphasizing the separate steps of planning implementing and controlling the various functions of the finance department of the company. The study strives to give a broad vision of the subject with a minimum of attention to mechanics intricacies of accounting, the non-essential details. The study as earlier pointed out is an enquiry into the means and therefore compares the evaluation and performance of financial policies and methods of the company. Profitability, which is the result of planning and control, is not compared. The existing system of financial planning and control in Nigerian breweries is critically examined and analysed.
The ever-increasing influence of government in business demands the complex financial rules and regulation to be clearly understood in formulating financial policy.
The availability of mechanized methods as control devices, the collection and analysis of information also suggests that financial policies and practices can become exact.
H0: The present financial control system in Nigeria Breweries cannot eliminate the incidence of fraud.
H1: The Present financial control system in Nigeria Breweries can eliminate the incidence of fraud.
H0: Is staff efficiency and productivity not attributable to the incidence of fraud in Nigeria Breweries.
The rate at which accounting officers are involved in financial irregularities and misappropriation of funds have made the job of auditors (internal and external) more challenging.
However, the problem remains that some of the auditors’ findings are never implemented. No wonder then why the government establishment panel on recovery of public funds and property. The establishment of the “panel” gave rise to recovery of huge amount of money hitherto forgotten due to non-implementation of audit reports. This study will therefore be of help to Nigeria Breweries PLC, 9th mile corner, Enugu in particular, and other business organisations in general to modify restructure and strengthen the machinery if necessary for achieving greater and effective control over public funds. Also this will be a guide to scholars, researcher or writers who may wish to carry further study on the financial management of the economy. Good financial control measures will guide management on how to take decisions for the day-to-day activities of the business. If the financial statements are not properly analysed and interpreted, interested parties like the equity shareholders, the creditors, the government and the general public will continue to be misled. This study is therefore intended to provide a guide to entrepreneurs in equity shareholding, lawyers, creditors and the management of the business on how best to state the affairs and control cost. Moreover this study has a significance of enabling any organisation that adheres to control techniques to achieve effective control measures.
There are some terms used frequently in this research work which are of great importance to be defined. Words have meanings and their meanings tend to differ directly or indirectly depending on the contexts and usage. It is against this background that an attempt is made to define some of these terminologies as used in this study.
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THE NATURE AND CONSEQUENCES OF JUVENILE DELINQUENCY IN NIGERIA: A STUDY OF ENUGU NORTH LGA, ENUGU STATE
Foreign Transaction For Dollars Payment :
Bank Name: GTBank
Branch Location: Enugu State,Nigeria.
Account Name: Chi E-Concept Int’l
Account Number: 0117780667.
Swift Code: GTBINGLA
Dollar conversion rate for Naira is 175 per dollar.
ATM CARD: YOU CAN ALSO MAKE PAYMENT USING YOUR ATM CARD OR ONLINE TRANSFER. PLEASE CONTACT YOUR BANK SECURITY FOR GUIDE ON HOW TO TRANSFER MONEY TO OTHER BANKS USING YOUR ATM CARD. ATM CARD OR ONLINE BANK TRANSFER IS FASTER FOR QUICK DELIVERY TO YOUR EMAIL . OUR MARKETER WILL RESPOND TO YOU ANY TIME OF THE DAY. WE SUPPORT CBN CASHLESS SOCIETY.
OR
PAY ONLINE USING YOUR ATM CARD. IT IS SECURED AND RELIABLE.
form>DELIVERY PERIOD FOR BANK PAYMENT IS LESS THAN 24 HOURS
CALL OUR CUSTOMERS CARE OKEKE CHIDI C ON : 08074466939,08063386834.
AFTER PAYMENT SEND YOUR PAYMENT DETAILS TO
08074466939 or 08063386834, YOUR PROJECT TITLE YOU WANT US TO SEND TO YOU, AMOUNT PAID, DEPOSITOR NAME, UR EMAIL ADDRESS,PAYMENT DATE. YOU WILL RECEIVE YOUR MATERIAL IN LESS THAN 2 HOURS ONCE WILL CONFIRM YOUR PAYMENT.
WE HAVE SECURITY IN OUR BUSINESS.
CHAPTER ONE
INTRODUCTION
- BACKGROUND OF THE STUDY
The financial function has always been important in management irrespective of any difference in structures, ownership and size. The financial organisation of any business enterprise ought to be capable of ensuring that various aspects of its financial activities including planning and controlling are carried out at the highest possible degree of efficiency. The profitability and stability of a company depends on its accounting and cost control system; the efficiency of its staff and the management adherence to the internal control system as well as to the general financial policy of the company.
Most of the studies conducted on business finance have laid more stress in comparing financial results of public and private sectors undertaking vis-à-vis profitability. The “fiscal approach has often over-shadowed the fundamentals of internal financial management while it is obvious that factors in the financial market, social, economic, political and other external consideration significantly influences internal decisions, is desirable that we focus attention upon “means| and not the result” alone. Profitability is the result of the means and methods employed in planning and controlling various functions of business.
Dynamic profit planning and control is a broad approach to accomplishing the management efficiency, and management function, its development and usefulness have significantly increased in recent years. It is especially significant in that the functional areas of management are brought into focus, a broad mutual enrichment of function between management and accounting that is a vital feature in the successful life of progressive enterprises. However, its full potential is frequently eclipsed in public enterprises by the gap between the mechanics of the system and conceptual and pervasive attitude towards public undertaking and Nigeria Breweries in particular.
- HISTORICAL BACKGROUND OF THE COMPANY Nigeria BREWERIES PLC.
Nigeria Breweries PLC was established in Lagos in 1946 with the visiting leadership of Heineken International and Unilever of London with other distributive firms operating in Nigeria. It has since realized operational excellence and has become a model corporate citizen of Nigeria. In 1949, it launched Extra Stout in 1992, Maltina in 1976, Amstel Malta in 1998 and current Heineken in 1996. It built and opened its Lagos brewery in 1949, Aba brewery in 1957, Kaduna brewery in 1963, Ibadan brewery in 1982 and Enugu breweries in 1994. In Enugu presently it has expanded its brewery plant in what has expanded its brewery plant in what will become the largest brewery in Africa. The overall purpose of Nigeria Breweries PLC is to put a smile on every face, to spread refreshment and enjoyment to all Nigerians. Also to enable people relax after a lactic days job, to avoid producing a nation full of stressed people given our numerous problems of traffic jams, no NEPA, no water, no money, no jobs with a lot of dependents etc. Nigeria Brewery PLC takes this mission of bringing enjoyment to all Nigerians also to look after your health but actually to beyond that and just have plain fun passion with control, the Nigeria brewer after all is for pleasure, leisure and fun. There is a well-known adage that says: all work and no play makes Jack a dull boy.
Having known the historical aspect of the establishment of the Nigerian Brewery PLC it is therefore worthy to touch on its organisation set-up; and its financial functions in line with this study being carried out in the area of the company’s profit planning and control for aiding management in accomplishing the objectives within the social and economic constraints.
- STATEMENT OF THE PROBLEMS
Financial mismanagement and weak control have been a problem of many public and private establishments. The problem of financial management and poor financial control by an organisation impedes its growth and development. The present trend of “get rich quick” has made many Nigerian brewery’s workers in positions of trust to abuse their trust and misappropriate or embezzle the company’s funds. This misappropriation of funds manifests itself in different forms such as falsification of receipts and invoices; carting away of stock material without proper documentation, etc. The problem of poor control had led to the increasing rate of loss of company’s resources; the company operating below targeted figure with minimal profit margin; and making poor returns.
- BRIEF SUMMARY OF THE PROBLEMS
- Mismanagement of resources as a result of poor financial control in the organisation has impeded its growth and development.
- The present trend of “get rich quick” has made many Nigeria Brewery’s workers in positions of trust to abuse their trust and misappropriate the company’s funds.
- Misappropriation of funds materials itself in organizational departments associated with comparatively rapid expansion of the company; continually rising price levels and variations in the types of financial institutions will require the use of sophisticated techniques.
The study is based on the information collected from the key officers of the company. Explicit in the exposition, however, is the realization that a profit planning and control programme must tailor – made to fit each particular situation and that real essence of financial management is flexibility. Mean and ways of eradicating fund mismanagement, profit planning and adequate control measures are emphasized upon in the study to facilitate the inter-relationship of the areas concept and techniques.
- OBJECTIVE OF THE STUDY
The primary aim of the study is three folds:
- To examine the existing financial control in Nigeria Breweries PLC
- To investigate the present system of cost control and material management of the company.
The researcher will make recommendations that will help the company to eliminate waste and better the chances of achieving its goals. The study also strives to bring into light such weaknesses which in future are likely to impede the growth and development of the company. It also searches out the means which will enable the organisation to achieve its socio economic objectives with minimum cost.
The study of this manner also will take into account public and company’s policy. It recognizes the fact that the socio-economic changes that already occurred and other changes that are under way will make the task of financial planning and control more important in future. The expected changes may include: structural changes in the economy; increasing number of the finance department of the company in planning and control of its funds. Thus the time factor and financial constraints, the researcher is limited to do justice to the subject matter between periods 1984 – 1988.
- LIMITATION OF STUDY
The study is limited to the evaluative of resources, organisation and services as well as the financial control measures of the company. It is also based on the available data collected through the use of questionnaires and other materials which the researchers could lay hands on. The period for the study covered from 1999 to 2002 financial year. The researcher is not meant to expose the financial functions of the managers or the key officers, not to serve as an attack to the authority, rather it is an academic contribution giving constructive criticisms for the sole aim of evaluating the role in different forms such as falsification of receipts and invoices, carting away of stock materials without proper documentation.
- THE SCOPE OF THE STUDY
The study attempts to provide an orderly frame work for analyzing the major financial problems of Nigeria Breweries emphasizing the separate steps of planning implementing and controlling the various functions of the finance department of the company. The study strives to give a broad vision of the subject with a minimum of attention to mechanics intricacies of accounting, the non-essential details. The study as earlier pointed out is an enquiry into the means and therefore compares the evaluation and performance of financial policies and methods of the company. Profitability, which is the result of planning and control, is not compared. The existing system of financial planning and control in Nigerian breweries is critically examined and analysed.
- RESEARCH QUESTIONS
- Has the present financial control system in Nigeria Breweries helped in checking the issue of fraud, waste of resources and staff in efficiency n addition?
- Is the company’s financial policy adequate to present financial abuse?
- Is staff adequate to present staff involvement in fraud?
The ever-increasing influence of government in business demands the complex financial rules and regulation to be clearly understood in formulating financial policy.
The availability of mechanized methods as control devices, the collection and analysis of information also suggests that financial policies and practices can become exact.
- THE NULL AND ALTERNATIVE HYPOTHESES
H0: The present financial control system in Nigeria Breweries cannot eliminate the incidence of fraud.
H1: The Present financial control system in Nigeria Breweries can eliminate the incidence of fraud.
H0: Is staff efficiency and productivity not attributable to the incidence of fraud in Nigeria Breweries.
- SIGNIFICANCE OF THE STUDY
The rate at which accounting officers are involved in financial irregularities and misappropriation of funds have made the job of auditors (internal and external) more challenging.
However, the problem remains that some of the auditors’ findings are never implemented. No wonder then why the government establishment panel on recovery of public funds and property. The establishment of the “panel” gave rise to recovery of huge amount of money hitherto forgotten due to non-implementation of audit reports. This study will therefore be of help to Nigeria Breweries PLC, 9th mile corner, Enugu in particular, and other business organisations in general to modify restructure and strengthen the machinery if necessary for achieving greater and effective control over public funds. Also this will be a guide to scholars, researcher or writers who may wish to carry further study on the financial management of the economy. Good financial control measures will guide management on how to take decisions for the day-to-day activities of the business. If the financial statements are not properly analysed and interpreted, interested parties like the equity shareholders, the creditors, the government and the general public will continue to be misled. This study is therefore intended to provide a guide to entrepreneurs in equity shareholding, lawyers, creditors and the management of the business on how best to state the affairs and control cost. Moreover this study has a significance of enabling any organisation that adheres to control techniques to achieve effective control measures.
- DEFINITION OF TERMS AND ACRONYMS
There are some terms used frequently in this research work which are of great importance to be defined. Words have meanings and their meanings tend to differ directly or indirectly depending on the contexts and usage. It is against this background that an attempt is made to define some of these terminologies as used in this study.
- Finance: It is a term used in referring to the management of money. It refers to any thing concerning money.
- Control: This word as used in the study refers to measures adopted in regulating excessive waste of materials and fund of a company that tends for curb the incidence of fraud.
- Costs: This refers to expenses incurred in the course of realizing or implementing a project; it could be fixed variable and semi variable in natures.
- Fraud: This term as used in this work refers to a criminal act, loss of fund through a wrong means or alteration of financial records as originally recorded in books of accounts.
- Costing: This refers to the subject and process of estimating expenses revenue and profitability of production processes of the company.
- Vouchers: This is an accounting document used in analyzing daily expenditure of the company for approval by all the authorised signatories.
- Stock materials: This term refers to both finished and raw materials; a pile of raw materials and finished products meant for sales.
- Internal Control: This is an internal technique or measure adopted by the company that checks against mismanagement of funds and materials.
- Internal Audit: This term as used refers to the department allocated with the authority to work in such a manner as to afford checks on the routine transaction of day to day work by means of the work of one person being proved independently by another, or the work of one person being complimentary to that of another and so affording a means whereby fraud is easily prevented or detected
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COMPLETE MATERIAL COST N2,500 Or $10. FRESH PROJECT MATERIAL COST 50,000 NAIRA FOR UNDERGRADUATE, OTHERS 100,000 -200,000 NAIRA.
THE NATURE AND CONSEQUENCES OF JUVENILE DELINQUENCY IN NIGERIA: A STUDY OF ENUGU NORTH LGA, ENUGU STATE
MAKE YOUR PAYMENT INTO ANY OF THE FOLLOWING BANKS:
GTBANK
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ACCOUNT NUMBER: 0138924237
First Bank:
Account Name: Chi E-Concept Int’l
Account Name: 3059320631
Account Name: Chi E-Concept Int’l
Account Name: 3059320631
Foreign Transaction For Dollars Payment :
Bank Name: GTBank
Branch Location: Enugu State,Nigeria.
Account Name: Chi E-Concept Int’l
Account Number: 0117780667.
Swift Code: GTBINGLA
Dollar conversion rate for Naira is 175 per dollar.
ATM CARD: YOU CAN ALSO MAKE PAYMENT USING YOUR ATM CARD OR ONLINE TRANSFER. PLEASE CONTACT YOUR BANK SECURITY FOR GUIDE ON HOW TO TRANSFER MONEY TO OTHER BANKS USING YOUR ATM CARD. ATM CARD OR ONLINE BANK TRANSFER IS FASTER FOR QUICK DELIVERY TO YOUR EMAIL . OUR MARKETER WILL RESPOND TO YOU ANY TIME OF THE DAY. WE SUPPORT CBN CASHLESS SOCIETY.
OR
PAY ONLINE USING YOUR ATM CARD. IT IS SECURED AND RELIABLE.
form>DELIVERY PERIOD FOR BANK PAYMENT IS LESS THAN 24 HOURS
CALL OUR CUSTOMERS CARE OKEKE CHIDI C ON : 08074466939,08063386834.
AFTER PAYMENT SEND YOUR PAYMENT DETAILS TO
08074466939 or 08063386834, YOUR PROJECT TITLE YOU WANT US TO SEND TO YOU, AMOUNT PAID, DEPOSITOR NAME, UR EMAIL ADDRESS,PAYMENT DATE. YOU WILL RECEIVE YOUR MATERIAL IN LESS THAN 2 HOURS ONCE WILL CONFIRM YOUR PAYMENT.
WE HAVE SECURITY IN OUR BUSINESS.
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