Improving Business Profitability through Cost Control and Cost Reduction

CHAPTER ONE/INTRODUCTION

Corporate objectives refer to the strategic goals and targets set by a business to guide its operations towards achieving success. These objectives typically include profitability, growth, customer satisfaction, and social responsibility, among others. In pursuit of these objectives, companies are required to maintain accurate accounting records, which are crucial in evaluating their financial performance and making informed decisions.

Disclosing accounting data is an essential aspect of corporate transparency and accountability. This information includes financial statements, which show a company’s financial position, performance, and cash flows over a given period. Companies are required to make these disclosures publicly available to stakeholders, including investors, regulators, employees, and customers.

There are several reasons why the disclosure of accounting data is crucial for companies. First, it promotes transparency, which is critical in building trust with stakeholders. When companies provide accurate and timely financial information, investors can make informed decisions about investing in the company, while regulators can monitor compliance with accounting standards and regulations.

Secondly, disclosing accounting data enhances accountability by allowing stakeholders to monitor a company’s financial performance and assess its compliance with its stated objectives. For example, investors can use financial statements to evaluate a company’s profitability and growth prospects, while employees can use this information to assess the company’s ability to provide job security and competitive compensation packages.

Furthermore, the disclosure of accounting data promotes ethical behavior by discouraging fraudulent activities such as accounting manipulation and financial misstatements. When companies provide accurate and transparent financial information, they are less likely to engage in unethical practices that could harm stakeholders and damage the company’s reputation.

In conclusion, corporate objectives and the disclosure of accounting data are essential components of successful business operations. Companies must set strategic goals that align with their values and disclose accurate financial information to promote transparency, accountability, and ethical behavior. Failure to do so can lead to legal and reputational damage, and hinder their ability to achieve their objectives.

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ABSTRACT

The management of public resources has always been a turbulent issue. This is precisely the heart of any governmental administration. Government business in whatever for, be it policies, programmes, activities or function is run in accordance with the laid down formalities. These formalities in the area of government accounting and financial control and procedures may include laws, rules and accepted norms certain financial memorandum of the local government system. The accounting framework regulates the account format for the preparation of government account in local government system in an instrument for introduction of new policies and guide lines, before inclusion into the financial regulation as a part of a more permanent code of regulation. It is used to aid the achievement of probity and accountability in government. The frameworks specify action acceptable and those doomed unacceptable. The system is set to ensure uniformly and conformity of application.

This work examined the general background and concept of the research topic listing the aims, objectives, statements of problems and the scope and limitations of the research work. The existing literature on the accounting framework was examined so as to create in theoretical base for the study.

CHAPTER ONE

• BACKGROUND OF THE STUDY

The peculiar nature of local government accounting transaction makes it desirable and indeed mandatory to treat it in accordance with specific, cohesive and standardize measurement such as the budgeting system and fiscal policy procedure. The local government financial framework measure all social activities with the control and stewardship of receipts, payment and related activities in the local government system in that the accounting system is maintained on cash basis. The system provides a satisfactory approach or matter of stewardship, accountability and cash programme accordingly. The balance sheet (known as monthly reconciliation of accounts surplus and deficit statement of local government) does not contain information on physical fixed assets, such as building.

In local government accounting framework, specific registers are taken on payment basis for the purpose of controlling fixed assets, such registers are referred to as plant registers or inventory control. The system of accounting principles which is double entry book keeping. They system requirement is that every debit entry be matched with a corresponding credit entry of similar amount. In the accounting system, after the approval of annual budget, the letters of authority are communicated to head of department vote controllers. In local government, transaction is recorded when cash is paid or received irrespective of when goods were supplied or services rendered. Some of such records include department vote expenditure account. This record gives accurate account of goods ordered but not yet paid. Similarly, the registers of bills received or bills issued are kept to show at any time what the local government aspects to receive from its debtors.

Some of the reasons why cash accounting is adopted in local government includes;

• It is a non-profit oriented organization.
• It operates an annual estimate of revenue and expenditure which constitute of basis necessary to meet the estimated expenditure during the financial year concerned.

 

1.2 STATEMENT OF PROBLEMS

There are many or numerous reasons for appraising (checking) the financial framework. Among the major reasons for appraising the financial frame work include:

1. MISAPPROPRIATION OF PUBLIC FUND

Misappropriation according to oxford advanced learners dictionary is simply “taking somebody or money or property for yourself especially when they have trusted  you to take care of it”. This act is very common in most local government, where those “in-charge” use public funds for their personal motives. They sometimes tell a lie about the purpose they use the fund for by using the so called “shortcut” and diverting public money into their personal purpose.

2. INADEQUATE FINANCIAL RECORD KEEPING.

This also is another problem encountered in checking the financial framework of local government. Funds are easily misused due to the fact that the financial record keeping are not enough and not also enough, hence a problem.

3. LACK OF FINANCIAL PROBITY

It is rare mostly in the local government to see someone who has the quality of being completely honest especially in terms of finance. They mostly use public funds for personal motives. Hence this call for checking the structure of the financial system.

If the guidelines for the management of local government finances are not strictly observed chances are those misappropriations will happen. It is reasonable to conclude that there will likely be a state of financial recklessness in the local government in Nigeria, this phenomenon cannot be allowed to continue indefinitely without caution, control or application of appropriate sanctions. It is in this respect that the financial framework in Nigeria is issued by the ministry for the financial business of local government. Finance is like a thread that runs around a cloth if the thread is pulled wrongly at one end, it will affect the design of the cloth. This is to say that finance is to an organization as thread is to cloth. It must be disbursed in accordance with financial regulations.

 

1.3.  OBJECTIVES OF THE STUDY

The intention is to reinforce the checks and balance in deliberate effort not only to enhance judicious utilization of public resources, but also to preserve the gains made in building the local government services. The study will specifically dwell on the following:-

1. Determining the yardstick for achievement of probity and accountability in local government.
2. Streamlining of duties and responsibilities of the arms of the local government executives and legislatures.

• Determining the role of individuals key officers and other organs in the local government such as the executive committee.

1. Ensuring strict adherence to estimates as any deviation may bring about unpalatable consequences.
2. Providing financial accounting services by means of accurate and detailed analysis of expenses in the course of discharging the function of the local government.
3. Strengthening control and accountability in the local government by way of highlighting to weakness with respect to financial matters. It is imperative to assert that is not the exclusive concern of any part of the organization or any one person or category of persons but rather the generality of individuals in the organization from the highest to the lowest to ensure financial regularity by way of ensuring that their field of operation and responsibility, proper value is obtained for money spent.

Control system is also to be designed to combat malpractice.

• RESEARCH QUESTIONS

This research will examine the following questions with regards to an appraisal of the accounting framework in local government system. In Mbaitoli L.G.A.

Based on the definition, the following research question would be formulated to address the study.

• Does public finance expert believe that a better way of eliminating the problem of accounting framework in our local government system is through operating a cash accounting systems?

 

• Do you think that misappropriation of public fund in the local government system is a result of lack of proper financial record keeping?

 

1.4   RESEARCH HYPOTHESIS

1. a) Proper financial record keeping does not lead to misappropriation of public fund in the local government system.
2. b) Operating a cash account system is a better way of eliminating the problem of accounting framework in our local government system.
3. c) An appraisal of the accounting framework in our local government system.

1.4.  SIGNIFICANT/JUSTIFICATION OF THE STUDY

The provision of the financial framework in the local government system is a unique feature in the administration of finance. Hence, this study will add to the effectiveness of the operators of the systems.

Information  contained in this work will serve as a very useful guide to executive council as well as various heads of units seeking to achieve better result. More importantly is the power of the council over the budget prepared and presented to it by the executive.

This study will also help internal auditors. Internal auditors are those who officially examine the financial records of a company within. It will help them evaluate the effectiveness and responsibility of the information they have.

In addition, supporting staff such as those on industrial training attachment, those of Youth services and also casual workers re to benefit immensely from the study.

 

1.5   SCOPES/DELMINATION OF THE STUDY

The study is limited to Owerri. Even though there are other local governments with similar problem, we decided to take Mbaitoli local government as our case study.

 

1.6   LIMITATIONS OF THE STUDY.

In the process of carrying out this study, we encountered some problems which militated against the research project and also the major constraint of the research time.

The slow time frame did not allow for proper coverage of a wide area.

Finance is another factor. The money needed for going thro and fro Mbaitoli Local Government.

Also, the money need to cover the area to administer questionnaire.

Another limitation is the level or degree of literacy of the respondent. Some of the respondent could not read and write hence a problem.

Also, it is the nature f the topic of study. We found it difficult to get information from sources like internet, newspaper, books etc. concerning the topic of the study.

Lastly, it is the problem of easy access to information from the local government. This is because those in authority who have the right to give out information were restrictive of management of information which is benchmark data for any meaningful research also posed a problem.

 

        DEFINITION OF TERMS

Some of the following terms relevant to the course of study are defined below:

1. LOCAL GOVERNMENT:- This can be defined as a unit of government administration at the local level established by law to perform some specific function within a given area of jurisdiction.

 

1. COUNCIL: According to advance learner’s dictionary. Council is of people elected to give advice, make rules and manage affairs.

 

 

1. BUDGET: A budget is defined as a financial pal that serves as an expenditure for decision making. According to Abubakar 1998, he sees it as a conscious and systematic allocation of resources prepared and based on the forecast of key variables adopted to achieve certain policy objectives which may or may not set explicitly. Performance target for the achievement of objective relates anticipated revenue and form the basis against which all revenues can be measured.
2. STRONG ROOM: This is a place in the treasury where all cash, monetary and other valuables are kept.

ACCOUNTING:- This is defined as the identification, collection measurement, processing, evaluation and communication of financial information to facilitate decision regarding activities and resources.

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THE EFFECT OF STRESS ON EMPLOYEE PRODUCTIVITY

 

 

CHAPTER ONE

1.0                                          INTRODUCTION

1.1 BACKGROUND OF THE STUDY

It has been acknowledged that job stress plays a role in employee performance. This nation has its root in what is called attention theory. Simply put attention theory asserts that the experience of stress has the effect of reducing on individual ability to concentrate on multiple tasks. Anyone who has worked feverishly to meet a deadline understands this relationship intimately. It has been “standard fare” in basic management training to point out that there exist some optimal level of stress below which employees are unmotivated and above which they are over whelmed. Unfortunately managers who attempt to find an optimal stress level for their work group frequently find their effort inconsistent result or downright negative results.

Stress is a universal element and persons from nearly every work of life have to face stress. The universality of stress is such that it is experienced by employees all round the globe and has become a major problem facing employers, particularly in developing nation where the employers do not realize the impacts of stress on employee productivity.

The work place stress is indeed a costly epidemic, Rebecca Maxan in her article published by FDU magazines in 1999 noted that three out of every four American workers described their work as stressful and the problem is not limited to those shores, in fact occupational stress has been defined as a “global epidemic” by the united nations international labor organization.

Stress is a factor in every one’s life. Particularly during major events such as marriage divorced or buying a home. But according to the Holmes-Rachs life event scale, which rates the level of stress caused by such event, many of the most stressful events are related to the work place firing business re adjustments, change in financial status line of work, trouble  with the boss, varieties in work hours or conditions retirement and vacations.

Surprisingly, stress is not always a bad thing. It can stimulate creativity and productivity. According to Robert Osterman, professor of psychology at FDUS Tecnneck-Hackensack campus, “No one reaches peak performance without being stressed whether an athlete, an office worker or a manager” the natural pattern of human behavior is to experience a stress-causing tension and then return to a normal realized state. The problem occurs when stress is so over whelming or constant that this pattern is broken and that is to say that stress leads to old age. An internationally applicable measure of occupation stress develop by Osterman, named SWS for Situation (s) work (w) and self (s), encompasses all three dimension because Osterman says survey that only look at work factors are not giving the full picture” for factory workers, stress    such as dealing with dangerous heavy equipment or working in an uncomfortable environment in contrast office workers are more likely to experience stress that is related to interpersonal relationship on job “people pressures” such as under supervision, tension among team members and fear aversion of conflict can cause stress “for many people, the core of their social life is the people with whom they work with” explains Ostermam” but work is not a socio situation to good relationship such as rumors and power play among executive who are comparing for the next promotion”.

Occupational stress is not related only to what goes on at work conflicts between the demands of the work place and of home life are increasingly common. According to a survey completed for the US department of labor, ten percent (10%) of people who are married or living with children less than 18 years experience several work-family conflicts and an additional twenty five percent (25%) report moderate levels of conflict. Definitely, every problem has a corresponding solution, hence some techniques can be implemented to prevent or reduce excessive stress. These techniques and their implementation constitute the process involved in stress managements.

1.2 STATEMENT OF THE PROBLEM

There has been increasing amount of talk about “employees stress” over the decades. Despite the availability of other companies within the environment of Afikpo North Local Government Area, the employees or the workers experiences allot of stress on workers’ productivity in an organization or firm. This research is aimed at understanding and bringing out an encompassing view of stress and its relationship with employees performance (productivity). The researcher thus will give an over view of work stress, productivity and their inter-relationship in an organization. Hence, the effects of stress on workers’ productivity. Lawal (2006:10) this is the type that leads to anxiety depression, frustration, fatigue and low self-esteem.

Behavioral effects: This is the type that leads to accident proneness, substance abuse impaired speech, restlessness and forgetfulness. Cognitive effect: this is the type of stress effects that affects our through process lead to difficulty or fear of meaning  discussion forgetfulness hypersensitivity mental blocks and difficult concentrating and thinking clearly and this may be intensified by substance abuse.

 

1.3 OBJECTIVE OF THE STUDY

The study is aimed at indept analysis of the work place stress. Hence, understanding its effects on productivity.

Therefore the objective of the study include:

1. To have in dept understanding about work stress
2. To know the various types of stress
3. To evaluate the negative effects of stress on workers
4. To evaluate the positive effects of stress on workers
5. To understand how stress effects productivity
6. To understand the various strategies and method of effective stress management.

1.4  RESEARCH QUESTION

The questions that will asked in this research to enable collection of the required data for the study will include:

1. Is stress a necessary condition for the attainment of optimum productivity?
2. Does stress encourage productivity in organization?
3. Does high stress beget high productivity or otherwise?
4. Does low stress beget low productivity or otherwise?
5. Does mild stress have a negative effect on workers’ productivity?
6. Does mild stress have positive effect on workers’ productivity?

1.5  SIGNIFICANT OF STUDY

1. This study will be of great use to students who want to know about the topic.
2. It will also serve as a reference material for future study
3. This study will enlighten managers in all field of work and employees all round the globe to add knowledge on this that is studied
4. It will widen the horizon and increase the level of understanding on the effects of stress in the area of study,

1.6 SCOPE OF THE STUDY

The researcher narrowed down the study to a particular organization, Edwin and  Emmanuel table water Afikpo North Local Government  Area of Ebonyi State.

1.7 LIMITATIONS OF THE STUDY

Definitely the study is not without limitations, the limitations includes the following

1. TIME: among all, time is the highest possible limitation to the study. The time available for the study was limited the horizon to which the researcher may wish to expend the study. He will confine all his activities within the given time available for the research.
2. FINANCE: the fact that the researcher is still a student who has no external financial assistance; he was faced with financial challenge. The researcher is still a student and has no external financial support from any institution, this limit the extent he may wish to carry the research as he will not exceed his financial capabilities.
3. QUESTIONNAIRE ADMINISTRATION: in the cause of administering the questionnaire, the researcher was not be given adequate attention. This posed a challenge to the efficacy of the study.
4. LEVEL OF LITERACY OF RESPONDENTS: in the area of study, majority of the employees are just SSCE holders, this posed some limitations to the researcher as it limited the questions to the level they can possibly answer.

1.8 DEFINITIONS OF TERMS

1. STRESS: a physiological and emotional response to stimulate that which places physical or psychological demands on an individual.
2. STRESS MANAGEMENT: this refers to the wide spectrum of techniques and psychotherapies aimed at controlling a person’s level of stress, especially chronic stress for the purpose of improving functionally on daily basis.
3. MANAGEMENT TECHNIQUES: these are special methods and procedure professionally designed for application to managerial problems by manager in their managerial functions and duties.
4. PERFORMANCE: this refers to individuals output at a work place.
5. PRODUCTIVITY: this refers to an organization output calculates thus total production per total input calculated thus: total production per total input (man, materials, money and machines).
6. EMPLOYEE: individual employed to work in an organization or any given business establishment.

PSYCHOTHERAPIES: these are techniques or procedure that is used as palliatives to any mental emotional or behavioral disorder like those caused by stress.

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