The Study of Accounting System
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND
The importance of accounting system in any organization cannot be over emphasize. It does not only facilitate proper control and safeguard of assets of the organization but also helps management in its planning for the organizational objective by the information that the system supplies. Lack of efficient accounting practices lead to a series of financial problems, fraud, frustration among employees, loss of public confidence and possibly, the collapse of the organization. It is therefore imperative for State Insurance Company a government own company to put in place efficient accounting system to meet its stated objectives.
This study considers State Insurance Company Ltd (SIC), which is both government own and profit making company. Furthermore, the company’s financial statements have been qualified for the past three years due to the weaknesses in the accounting and control system as well as the valuation of assets and the presentation of the financial statements has not been timely over the years.
1.2 STATEMENT OF THE PROBLEMS
State Insurance Company (S I C) provides insurance covers in various areas such as fire, accident, aviation, marine, motor and life, which are paid in cash or on credit. Since the concept of insurance is not well embrace in a developing country like Ghana, S I C provided credit facility as a way of attracting customers.
This brings the problem of valuing debtors and also reveals the deficiencies in the accounting systems which give room for collusion duplication of activities and consequently fraud and errors
It is against these problems that the study is done.
1.3 OBJECTIVES OF STUDY
The objectives of the study are:
1. To examine the accounting and related control systems, 2. To assess and evaluate the accounting system of State Insurance Company. 3. To identify the causes of the problem in the accounting systems. 4. To suggest alternative courses of actions
INTRODUCTION
1.1 BACKGROUND
The importance of accounting system in any organization cannot be over emphasize. It does not only facilitate proper control and safeguard of assets of the organization but also helps management in its planning for the organizational objective by the information that the system supplies. Lack of efficient accounting practices lead to a series of financial problems, fraud, frustration among employees, loss of public confidence and possibly, the collapse of the organization. It is therefore imperative for State Insurance Company a government own company to put in place efficient accounting system to meet its stated objectives.
This study considers State Insurance Company Ltd (SIC), which is both government own and profit making company. Furthermore, the company’s financial statements have been qualified for the past three years due to the weaknesses in the accounting and control system as well as the valuation of assets and the presentation of the financial statements has not been timely over the years.
1.2 STATEMENT OF THE PROBLEMS
State Insurance Company (S I C) provides insurance covers in various areas such as fire, accident, aviation, marine, motor and life, which are paid in cash or on credit. Since the concept of insurance is not well embrace in a developing country like Ghana, S I C provided credit facility as a way of attracting customers.
This brings the problem of valuing debtors and also reveals the deficiencies in the accounting systems which give room for collusion duplication of activities and consequently fraud and errors
It is against these problems that the study is done.
1.3 OBJECTIVES OF STUDY
The objectives of the study are:
1. To examine the accounting and related control systems, 2. To assess and evaluate the accounting system of State Insurance Company. 3. To identify the causes of the problem in the accounting systems. 4. To suggest alternative courses of actions
Bibliography: 1. ACCA Student Accounting Manual (2002) Financial Reporting (2002) 2 3. Aklvin Arevis and Jones K Loebbecka, Auditing, An Integrated Approach, New Jersey, 0763, 6th Edition 1994 4 5. Coppers and Lybrand, student Manual of Auditing. Thelford Press Limited, Great Britain, 1986. 8. J.O. Irukwu, Insurance Management In Africa (1977) 9 10. Meigs and Meigs Accounting. The Basis for Decision. McCraw Hill book Company. 7th Edition. 1993 11 [4] Aklvin A. and J. Loebbecka, Auditing, Integrated Approach, New Jersey, 0763 Chapter 7, 6th edition [5] Norman Boorish, System Analysis for Effective Administration (New York Wazmalle Company, 1951 pg.3) 8 Coppers and Lybrand, student Manual of Auditing. Thelford Press Limited, Great Britain, 1986. 9 Standard Auditing and Related Services.2001 (ICA Ghana) 10 Aklvin Arevis and Jones K Loebbecka, Auditing, An Integrated Approach, New Jersey, 0763, 6th Edition 1994 11 Columbia Encyclopedia, (2004) 12 J.O