ROLES OF FINANCIAL ACCOUNTABILITY IN A PUBLIC LIMITED COMPANY

CHAPTER ONE

1.0 INTRODUCTION

Accountability as seen by Iwumenne (1982: 56) is the sole of any business continuity. A mismanaged economy cannot sustain her subjects. In the micro sense, a mismanaged firm is for failure. The main aim of business is profit maximization. This cannot be achieved if financial mismanagement is endowed in any form. In any business setting, the priority of management is to enable the firm to continue to finance its undertakings. This cannot be achieved without due regard to prudent financial administration.

According to Mucha Otanka (1975:4)2. The spirit of continuity of a business is the careful administration that well administers the financial undertakings. The issue of financial impropriety has made many a business, collapse. There are many ways to check the menace in both public and private life. Any method used is subsumed in an effective control system that primarily cue’s from internal control. According to Jonah Jenny (1982.12)3, internal control can be perceived in the following ways.

– Good record keeping of all transactions in the factory.
– Good stock control system.
– Well co-ordinate channel of raw material procurement.
– Efficient redundantly control.
– Good personal administration
– Avoidance of waste.
– Control of acquisitions
– Effective trade union administration.

There, he said are not exhaustive, it is whom management recognizes the necessity of an effective internal control system, management of materials and resources is very much possible.

Akinloye Oyibanji (1999: 86)4 observed that many factors contributed to the reason why banks failed. The banks collapsed due to a lack of financial prudence which is a clear-cut example of management incapacitation.

To have effective control of materials, men, and machines, management needs grassroots control affected through monitoring of any financial disbursement. The issue at stake is that good internal control is a necessary condition for the efficiency of any organization. To state it differently, any organization that opts for a continued business entity must be prepared to timely check the personal, procure the right type of personnel, train them on the technical aspect of the work and teach equity and justice in financial appropriation. The financial manager must be a model of the sound background of prudent handling of money. The subject of financial accountability has been a controversial issue even among the early philosophers. Plato condemned using, (i.e. the use of money in trade) according to him, for the attendant “social ills” and “unethical” reasons.

In addition to the above, the peculiar nature of the Nigerian economy has made any topic in accountability, financial or otherwise, worth discussing. Nigeria has had her fair share of financial impropriety both in the public and private sector, not quite unconnected with her political ups, the history of the evolution of her financial institutions and level of the country’s development.

The research has therefore been reduced to the firm (micro) level and Nigeria breweries Plc, Enugu has been carefully selected to be used in drawing a line of parallel between the level of accountability in the public and private sectors.

Control is an adjunct of accountability. The extent of financial accountability therefore should be reflected the extent of the working control mechanisms within the particular organization.

The fact that both public and private sectors need and make use of control measures is undisputable. The extent to which they employ this and how it has improved their finances is called to question. The effective means, by which they employ internal control to safeguard assets, collect debts or pay creditors, etc is the issue at stake. In the words of management experts, “internal control comprises the plan of an organization to co-ordinate method and measures adopted within a business to safeguard its assets, check accuracy and reliability of its accounting data, promote operational efficiency and encourage adherence to prescribed managerial policies. The general conception of internal control here is that it should be effective enough to cause probity in all the organization’s activities with a resultant disciplined financial atmosphere in the organization.