ABSTRACT
This study focused on determining the accounting competencies required by Operators for management of small business enterprises in Kaduna State. This study adopted descriptive survey design. The population for the study comprised of all the 105 Accounting Lecturers and Operators of small business enterprises in Kaduna State out of which 15 were lecturers of accounting and 90 were Operators of small business enterprises. There was no sample and sampling because of the manageable size of the population hence the entire population was studied. A structured questionnaire titled, “l Accounting Competencies required by Operators for management of small business enterprises Questionnaire, was used for collecting data for the study. It was an 59- item questionnaire developed by the researcher in line with the literature reviewed and the research questions. The questionnaire was subjected to face validation by three experts in Business Education Department, Faculty of Vocational Teacher Education. Cronbach Alpha reliability method was used to determine the internal consistency of the instrument which yielded a reliability index of 05level of significance. The data collected were analyzed using mean and standard deviation. The accounting competencies required by Operators in management of small enterprises: the means and standard deviation calculated). This gave the value that indicated whether accounting competencies required by Operators for management of small business enterprises was needed or not in each item. This is referred to as performance
| n |
| n |
Gap (P.G) that is PG =
X – X p . Thus: where the difference was zero ( X – X p
= 0) that is
neutral, it means that there was no need for accounting competencies required by Operators for management of small business enterprises on the item because the level at which the item was required was equal to the level at which the accounting lecturers and small business Operators
| n |
could perform the item. Where the difference was positive X –
X p = +), it indicated that
accounting competencies is required on the item because the level at which the item was required was greater than the level at which the Operators could perform the item. Where the
| n |
difference was negative ( X
– X p = – ), it means that accounting competencies is not required.
Data analyzed revealed that accounting competencies are required in the area of prime book competencies, ledger competencies, bank reconciliation competencies, final account competencies and inventory management competencies possessed by Operators for management of small business enterprises in Kaduna State. It was concluded that accounting competencies is required by Operators for management of small business enterprises and therefore recommended that Workshops and seminars should be organized by Institutions and Kaduna State government in collaboration with the Ministry of Education to enlighten institution administrators on the need to organize retraining programming for the Operators on a regular basis so as to assist them develop their desired accounting competencies for management of small business enterprises in Kaduna State.
CHAPTER ONE
INTRODUCTION
Background of the Study
The success of small business enterprises is attributed to the full knowledge acquired by operators in the area of accounting. Accounting and management emerged from the review of the accounting by the various higher institutions in Kaduna State. Oborah (2011) stated that the review was necessitated in order to keep pace with the recent global developments in accounting standards and influence in the labour market. The traditional competencies in accounting especially in the cover of record keeping competencies always get obsolete for the current labour market. These skills have been encouraged in the new curriculum and replaced with modern business transactions and others management courses which will enable the operators to have a clear success in making effort to manage their small business enterprises in Kaduna state.
The goal of accounting is to make the operator fully prepared for office works in the public and private sector of the economy. Accounting, according to Ama (2002), is a set of themes, concepts or ideas, and techniques by which financial data are processed into meaningful information for reporting, planning, controlling and decision making purposes, or simply the process of recording, classifying, reporting and interpreting the financial data of an organization to management and other interested users. Gitenn and Daniel (1987), define accounting as the collection of financial data about an organization and the analysis, measurement, recording and reporting of that information to decision making. Amers and Etuk-Udo (1984) opined that accounting is a statement of dealings expressed in words and figures according to book-keeping form. American Institute of Certified Public Accountants (AICPA) (1986) defined accounting as the art of recording, classifying, and summarizing in a significant manner and in terms of money transactions and events which are of financial character and interpreting the results thereof.
1
Accounting has to do with something that affects people in their personal lives just as much as it affects small business enterprises. It is a well know fact that everybody use accounting ideas when involved in planning what to do with money. The business plan is how much of it will be spend and will be save; and how to design a plan known as budget or the way the operator keep it in his mind at the cost of planning. Accounting is normally referred to counting as used by businesses and other organizations. All details information cannot not be kept in their minds; so the operators are required to keep accounting records that are known as accounting information for analysis. Accounting is the process of collecting, recording presenting and analyzing /interpreting financial information for the users of financial statement (Robert, 2007). Accounting is therefore an essential and indispensable aspect of every business and businesses whether is small, medium or large. Accounting has a wide range of employment opportunities either for self-employment or paid employment; with these above opportunities at the disposal of the operator it help him to be fully reliable and efficient in any area of business he found himself. The field of accounting assist other disciplines in keeping accurate records of the businesses in their professional area, these category of disciplines are computer operators Salesmen, cashiers, marketers, lawyers, Architectures Engineers and others with the intention of planning to operate their own small business enterprises.
The objectives of financial accounting, according to Osuala (2009), are to learn how to keep better records for personal and home use; this is to study financial accounting records and reports as an integral parts of the functions of a business enterprise, to understand the concept of assets and liabilities and proprietorships so that the fluctuation in business cycle may be correctly interpreted and to interpret and analysed business papers and records in terms of their business. Osuala further expand the function of financial accounting in Batson (2009) to assist the operator in calculating profit, credit dealing, serving as a tool of control, aiding in planning and providing
the financial position necessary for taxation; however, to excel in accounting, the business man has to be equipped with the accounting competencies.
Accounting is not an end, but rather it is a means to end the final product of accounting information. It is the decision enhanced by the user of that information whether the decision is made by the operators, management, creditors, governmental regulating bodies, labour unions or any other groups that have an interest in the accounting performance of the enterprise.
Accounting is widely used to described all types of business activities, it is sometimes referred to as language of business. Journal, ledger, final account, Bank Reconciliation and inventory management are all accounting competencies required by the operators who have accounting interest in the enterprise. They need a clear understanding of the accounting terms and concepts for the business, if they are willing to understand and communicate effectively concerning their businesses.
According to Jan, Susan, Mark and Joseph (2006) asserted that accounting refers to information, describing the financial resources, obligations and activities of individual or organization. So it is not only professional accountants that need accounting information; those operators need accounting information daily. The accounting information is the means by which small business operators measure and communicate economic activities. The operators whether they are involved in management of business or investing or monitoring how money is receive and used, are said to be simply working with accounting concepts and accounting information.
In order to develop accurate accounting information about the business activities, every accounting system perform the following basic functions: interpret records, keep record of the effect of business transaction, classify the effects of similar transactions in a manner that permits determination of the various totals and subtotal useful to manage the business. These accounting
reports summarized and communicate the information contained in the system for decision making of the business.
The need for accounting opined by Lewis and Pendrill (1988), affirmed that, accounting has a process of identifying, measuring and communicating economic information to permit informed judgments and decisions to users of the information. The importance of accounting principle for reporting by Accounting standard Board is that, the objective of financial statement is to provide information about the financial position, performance and financial adoptability of an enterprise that is useful to a wide range of users for accessing the stewardship of management (operators) for making economic decision which is an important aspect as to why small business operators in Kaduna State need accounting competencies for management of small enterprises. Small Business Enterprises
The word business in this study is the act of buying and selling; while in actual sense business is an all –intrusive term, that embraced all profit-oriented economy, or commercial activities carried on by individual or group of individuals as a means of employment either paid or self-employment. It includes trade, industrial operations, professions, employments and other related areas. The importance of small business enterprises in Kaduna State is creation of employment, man power training, waste utilization, promotion of competition, self-reliance and serving as aid to industrialization process.
There are many ways of owing a business enterprise in Kaduna State these ways includes inheritance, acquisition, launching and franchise. Small business enterprises according to Planhollz and Flamholt (1990), is a business entity in which one person is the owner. The business may employ few or more people, but there is one owner who realizes either profit or loss. One of the major advantages of small business enterprises, is that it is easy to establish and run with little cost and less legal implication (Planhollz and Flamholtz, 1990). Although small
business enterprises are relatively small but with time and effort and proper accountability they rose to become giant companies. Examples of these small businesses are Dangote, Dantata and Sawoe. These businesses have grown as a result of proper accounting competencies in their operations. These accounting competencies enable them to plan ahead and make timely payment of loans, rents, Bills, taxes and effective cash flow management.
A small business operator is an individual who is determined to be self-employed instead of being employed by others to operate alone in business, to take the risk of losses or successes in business, to combine other factors of production, identify new business opportunities, and to be creative and innovative (Osuala, 2004). The definition of operators of small business enterprises is largely determined by a country’s level of development. In defining the concept of operators, some criteria were adopted as follows: initial capital outlay, sales value; financial strength, ownership structure and type of enterprise. However, an operator is used in this context refers to an individual who controls other factors of production and undertakes all the required managerial functions. The operator also is innovative and creative enough to manufacture something new with tangible value which takes calculated business risks and devotes enough time and efforts in the business by keeping proper records and also discover new opportunities and with willingness to continue in business, despite all challenges with the aim of receiving a greater reward on investment and have a personal satisfaction.
The operator is a person who independently owns and operates a small business enterprise with or without any employee and relatively low volume of sales (Rendarski, Edward and Baran, 2004). The small enterprises operators defined their businesses based on economic strength. An operator of small business enterprise is defined in this context as an individual who controls other factors of production and undertakes all the required managerial functions is innovative, creative enough fee produce something new with value calculated risks devote
enough time in the business and with a good business opportunities and willing to continue despite all obstacles with proper accountability of the business and with the aim of receiving rewards of monetary and personal satisfaction and with a capital based of N200,000 to N5m excluding land.
In Kaduna State we have variety of operators of small business enterprises who are dealers of varieties of products ranging from industrial goods, commercial products, consumers products e.g Ginger, Mangoes, Cassava, yams, sewing machines, consumers’ goods’, and other provisions like sugar, detergents, etc. and other unprocessed goods like books, bread, meat, rice, soap, recharge cards, furniture’s, generators.
Some operators of business enterprises in Kaduna State have experiences in terms of business management; while others do not have. Those with experiences have 5-10 years and those that are less experienced are those with 1-4 years. The small business operators are both males and females in different businesses.
The small business operators in Kaduna State play a significant role in terms of providing required goods and services; so they require to competent knowledge of accounting in their businesses in order to reduce risks of failures in management of their enterprises (Eze 2006).
It therefore become imperative that accounting competencies is required by operators in managing their small businesses, since must of them lack knowledge, skills and attitudes in area of record keeping. The lack of these accounting competencies leads to mass failure in their businesses which causes lack of payment of loans, rents, bills, taxes cash flow management etc; leading to disclosure of some of these business in Kaduna State.
Competency as a concept involves all the relevant skills, knowledge and attitude needed to carry out a particular operation or task effectively. Hornby (2010) defined competence as having enough skills, knowledge to do something to a satisfactory standard while in Cambridge
international English Dictionary (2002) defined competency as the ability of doing something to an acceptable level; this is related to accepting of keeping accounting records in a manner that is desirable by an operator.
Competency according to Maduabam (1992) is a combination of knowledge, skills, attitudes and values displayed in the context of task performance. It does not only defines what a person must do as an operator, but also how a person does it. It is a combination of knowledge, skills and attitudes that can be developed through adequate training for accomplishing some specific tasks. Some of the tasks will be in the area of operators interest based on the business. Competency as opined by Gove (1993) is a quality or state of being functionally adequate or having sufficient knowledge and judgment for a particular duty.
Competency according to Olaitan (2003) means that the individual has acquired the knowledge, skills, attitudes and judgment which are required in other to performed successfully at a specified proficiency level in a given work. Osinem and Ugo (2010) defined competency as individuals ability to use, apply and demonstrate a group of related knowledge, skills and attitudes in order to perform tasks and duties successfully. This according to the authors can be measured against accepted standards (levels) required in employment as well as assessed against provided level of achievement at work location. It is expedient to succeed and competes favourably with other competitors. There is the need for operators to acquire and equip themselves maximally with the necessary accounting competencies in management of their small business enterprises.
Accounting competencies in the context of this study is the knowledge skills and attitudes needed by the operators in handling accounting books that are required to be kept by the operators in managing their enterprises in Kaduna State. These books of accounts required by the operators to be competent are subsidiary books, ledgers, final account, bank Reconciliation and
inventory management. It is imperative for the business operator to be competent in the use of subsidiary books; ledgers, final account, Bank reconciliation and inventory management.
According to Robert (2007), these accounting books are necessary to the operators in management of all transactions of the small business enterprises. In the same view, Omuya (2008) classified certain books of account as important to the business operators; an example of this book is the ledger, which is classified into sales ledger, purchase ledger, general ledger, etc. The records of both the cash transaction by the operator must agree with the bank transactions kept in the bank by the operator which is known as bank reconciliation or agreement in transactions.
The accounting competencies enables the business operator to keep track of the expenditures of the small business in an accurate form to enable him/her determined the actual profit or loss incurred during the business year in focus in Kaduna State. The failure of record keeping competence leads to business failure by the operators in managing their enterprises. So there must be continuity in the part of the operators in handling these books of accounts; maintain for the successful achievement of these businesses in Kaduna State.
Statement of Problem
Small business enterprises has become highly influential in every day affair; policy makers, economist, academicians, public and private organization are involved in it. Seminars, conferences and workshops are being organized every year across the world on the relevance of entrepreneurship which emphasizes the importance of small business enterprises factor development of a country which is also in practice in Kaduna State. If the right and effective accounting and record keeping is effectively employed in our businesses given the right conditions, the business can accelerate based on the knowledge, skills and attitudes acquired in
accounting by the operators. These will go a long way motivating and engaging the operators to do more in their businesses.
However, despite huge government commitment at different levels in Kaduna State on the integration of entrepreneurship, most of the businesses surprisingly, has not achieved the desired goal due to the incompetency on the part of operators. The deficiencies have been traced to the incompetency on record-keeping of these businesses by the operators in Kaduna State leading to the close down of shops /businesses, despite the huge amount invested in some of these businesses either from loans, government aids, relations, etc.
Secondly, the inability of the operators of the small business to managed the inventory in the organization at the right time with the appropriate methods of leasing out their products in the practice of first in first out (FIFO) and last in first out (LIFO) caused hindrance to the success of the businesses in Kaduna State.
For small business enterprises particularly in Kaduna State to function effectively, it is imperative to identify and understand the necessary accounting competence required by small business operators in managing these enterprises. These knowledge, skills and attitudes are found in the new requirement for consolidated financial statements which has to do with record keeping such as in Journals, ledgers, final accounts, Bank reconciliation and inventory management procedures: therefore in order to breach the job of failure of these business in Kaduna state this study becomes essential for operators of small businesses to identify accounting competencies required for management of their enterprises in Kaduna State.
Purpose of the Study
The purpose of this study is to determine the accounting competencies required by operators for the management of small business enterprises in Kaduna State. Specifically, the study seeks to:
1. determined the prime book competencies required by operators for management of small business enterprises in Kaduna State.
2. determined the ledger book competencies required by operators for management of small businesses enterprises in Kaduna State.
3. determined the bank reconciliation competencies required by operators for management of small business enterprises in Kaduna State.
4. determined the final account competencies required by operators for management of small business enterprises in Kaduna State.
5. determined the inventory competencies required by operators for management of small business enterprises in Kaduna State.
Significance of the Study
The finding of this study will benefit the small business operators, students, lecturers, curriculum planners, higher institutions and researchers.
The findings of the research study will assist the small business operators to adopted a new approach of record keeping based on prime books, posting ledgers, final account, reconciling statements of accounts and keeping proper inventory and managing the investments properly and at least enhanced better profit.
The findings of the research study will assist lecturers in higher institutions to improve in teaching and learning on topics that relates to business management by graduates of their institutions for better knowledge, skills and attitudes in record-keeping/accounting.
The finding of the research study will be of emerge benefit to curriculum planners on the accounting topics that will enhanced better understanding of establishing businesses and how to also practicalized those topics in the school system before graduation.
The students learning in various higher institutions in Kaduna state will understand the importance accounting principles and practice as prerequisite for establishing a successful business organization. The result of this study will stimulate the entrepreneurs centers development to adjust or add accounting competences in their curriculum and also the curriculum planner will see the need of making accounting compulsory in the entrepreneurship centers across all the courses in the school system in Kaduna State.
Research Questions
The following research questions will guide the study:
1. What are the prime book accounting competencies required by operators for management of small business enterprises?
2. What are the ledger accounting competencies required by operators for management of small business enterprises?
3. What are the final accounting competencies required by operators for management of small business enterprises?
4. What are the bank reconciliation accounting competencies required by operators for management of small business enterprises?
5. What are the inventory management accounting competencies required by operators for management of small business enterprises?
Research Hypotheses
The following hypotheses was tested at 0.05 level of significance.
Ho1: There is no significant difference in the mean responses of lecturers and small business enterprise operators on prime books competencies required by operator for management of small business enterprise.
Ho2: There was no significant difference between the mean responses of lecturers of accounting and small business operators on ledger competencies required by operators for management of small business enterprises.
Ho3: There was no significant difference between the mean responses of lecturers of accounting and small business operators on final account competencies required by operators for management of small business enterprises.
Ho4: There was no significant difference between the mean responses of lecturers of accounting and small business operators on bank reconciliation competencies required by operators for management of small business enterprises.
Ho5: There was no significant difference between the mean responses of lecturers of accounting and small business operators on inventory management competencies required by operators for management of small business enterprises.
Scope of the Study
The study was delimited to the accounting competencies required by operators of small business in management of small business enterprises in Kaduna State. The study was to explored prime books journal, ledger, final account, bank reconciliation and inventory management competencies required by operators for management of small business enterprises in Kaduna State. The study solicited the opinions of lecturers of accounting and small operators of business enterprises to determine the accounting competencies required for management of small business enterprises.
This material content is developed to serve as a GUIDE for students to conduct academic research
ACCOUNTING COMPETENCIES REQUIRED BY OPERATORS FOR MANAGEMENT OF SMALL BUSINESS ENTERPRISES IN KADUNA STATE.
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