Accounting System In Community Banking

Accounting System In Community Banking

Title of the table of contents Acknowledgments

Purpose Abstract Table Of Contents

First Chapter 1.0 Introduction

1.1 Description Of The Problems.

1.3 Importance Of The Study 1.4 Hypothesis Statement 1.5 Scope Of The Study 1.6 Limitations Of The Study 1.7 Terms Defined

2.0 Literature Review Of Related Chapters

2.1 History of Ogui Urban Community Bank Nigeria Limited.

2.2 Significance Of Accounting Method

2.3 Banking Operations at Ogui Urban Community Bank in Nigeria.

2.4 Applications Of Accounting Data Provided By Community Banking.

2.5 Balance Sheet Structure of Ogui Urban Community Bank Nigeria Ltd.

2.6 Advantages Of Appropriate And Sufficient Record-Keeping In Business.

2.7 Repercussions Of An Inadequate Accounting System on Community Banking.

Section Three

3.0 Methodology And Design Of Research

3.1 Sources Of Information.

3.2 Study Population 3.3 Location Of Data

3.4 Methodology Of Research

Section Four

4.0 Data Display, Evaluation, And Interpretation

4.1 Analysis Of Response To Questionnaire

4.2 Summary Of Interview Questionnaire Responses.

4.3 Hypothesis Test

Section Five

5.0 Summary Of Findings, Concluding Statement, And Recommendation.

5.1 Summary Of Results:

5.2 Summaries

5.3 Recommendation

Bibliography Questionnaire

FIRST CHAPTER 1.0 INTRODUCTION

Accountancy encompasses the installation of bookkeeping and accounting systems, the writing of accounts, and the compilation of every type of financial statement, from the simplest receipts and payments of a small club to the published accounts of large publicly traded corporations. It is one of the primary responsibilities of the accountant to provide both large and small clients with the necessary advice regarding the most appropriate accounting system to implement in order to provide management with up-to-date information.

According to common belief, the language of business is accordance. Every organization, including banks registered under Nigerian company law, is obligated to provide a profit and loss account and statement of assets and liabilities at the end of its accounting period to its shareholders, the public, and other users, including the government. Accounting system refers to an organization’s method of recording financial transactions. Depending on the nature of the organization’s operation, it may also be referred to as the organization’s internal control system. This is because financial transactions are quantified in monetary terms, necessitating the accurate recording of cash receipts and cash disbursements. It is important to note that any error in an organization’s accounting system could result in business failure.

In addition, banks are required to maintain an up-to-date record of their transactions with or on behalf of their consumers due to the nature of their services.

However, this responsibility can be effectively discharged in community banking if an adequate system for recording the bank’s daily transactions is implemented. Moreover, accounting is concerned not only with the recording of transactions, but also with the use to which the records are put, their analysis and interpretations for use in decision-making not only for the management’s benefit, but also for the benefit of members, potential investors, government agencies, and so on.

Recent research has shown that failure to maintain accurate accounting records is one of the leading causes of business failure in the country. Therefore, these objectives can only be accomplished with a well-designed and implemented accounting system. Consequently, the purpose of this study is to evaluate the relevance and adequacy of the accounting system in community banking using “Ogui Urban Community Bank Nigeria Limited” as a case study.

1.1 DESCRIPTION OF THE PROBLEMS.

Accounting is often referred to as the language of business and is considered a service profession; therefore, the significance of accounting system in any organization cannot be overstated. If an adequate accounting system is not in place, the goals of providing accounting information for decision-making cannot be met. Throughout the course of this investigation, the following issues will be examined:

The repercussions of an insufficient accounting system on banking operations.

ii. Lack of timely accounting information.

iii. account falsification in the financial industry.

iv. The management’s indifference towards the information provided by the accounting system.

v. Poor decision-making

Poor accounting history

vii. Poor audit problem

1.2 PURPOSE OF THE STUDY

The study will seek to achieve the following aims:

i. To determine the impact of community banking’s accounting system.

ii. Determine if the strategies employed by the community bank’s accounting system are highly efficient and effective.

iii. To assess the factors that will limit the efficiency with which community banks apply accounting systems to their banking operations or activities.

iv. Evaluate the function(s) of the accounting system in demonstrating the community bank’s activities.

v. to determine whether or not they have efficient and effective apparatus to carry out her planned programs.

vi. Determine whether the accounting system will provide management with timely accounting data for decision-making.

To determine if it will facilitate banking activities.

To make recommendations on how to improve the efficacy and effectiveness of community banking’s accounting system.

1.3 Importance of the Research

As it is well-known that accounting systems play a crucial role in the success or failure of a business, the manner in which an organization documents its financial transactions is considered the determining factor. Consequently, the significance of this research project is to: i. inform management of the significance of accounting data in assuring profitability and efficiency in business management.

The significance of accounting systems in community finance.

iii. Evaluation of management’s role(s) in assuring an adequate accounting system for banking operations.

1.4 STATEMENT OF HYPOTHESIS

The following hypothesis serves as the foundation or framework for this research study.

Community banking has no impact on accounting systems.

Accounting systems have an effect on local banking.

The strategies employed by community banks in her accounting system have not been particularly efficient or effective.

Community banks’ accounting strategies have been highly efficient and effective.

Ho: The Ogui Urban community bank lacks the necessary equipment to implement her planned accounting system programs.

Ho: The Ogui Urban community bank has efficient equipment to implement her planned accounting system programs.

1.5 RADIUS OF STUDY

The scope of the investigation will be limited to “Ogui Urban community bank Nig. Ltd in Enugu.” Since the research cannot encompass the entire bank population, a sample will be drawn from a specific department within the bank.

1.6 LIMITATION OF THE STUDY

The primary factors limiting the scope of this research are available time for conducting the research, insufficient financial resources, and obstacles encountered during data collection.

1.7 DEFINITION OF TERMS

i. Deferred tax: This is defined as taxes owed on income that is not taxable within 12 months of the current year due to differences between tax profits and reported profits.

ii. Deposits: This includes all deposit liabilities of banks, such as other accounts and allocations by other banks, as well as time and current deposits.

iii. Dividend: This refers to the entire dividend paid to either common or preferred shareholders.

iv. Earnings per share: This is calculated by dividing profit after taxes by the number of outstanding ordinary and founders shares. To facilitate comparison, it is presumed that each share is worth one Naira.

v. General Reserves: These reserves include profit and loss balances, reserves for exchange revaluation, and other reserves.

vi. Interest margin: This is the difference between received and paid interest income.

This includes investments in all calls money, fixed deposits, negotiable certificates of deposit with other banks, bankers acceptances, quoted and unquoted investments, and bankers acceptances.

Loans and advances: For all loans and advances provided to customers, the net of provision advances are used.

Lateral Acquisition refers to the investigation of other business categories besides banking.

x. Bills of Exchange: This simply refers to an unconditional order writing address by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand, or at a fixed or determinable future time, a specified sum of money to a specified person or to the bearer.

Cheque is defined as a bill of exchange drawn on a creditor and payable upon demand.

Drawee: This refers to the bank on which the check is drawn.

Payee: This refers to the recipient of an order cheque or the cheque’s bearer.

A cheque that can be redeemed over the counter is referred to as an open cheque.

Crossed checks cannot be redeemed over the counter; instead, they must be deposited into an account.

Profit after taxes: This is the profit before taxes. Less taxation is imposed.

This includes all reserves that are no longer available for distribution as cash dividends, such as loans, stock redemption accounts, deposits for shares, and allocations for incentive issues.

Contra Assets and liabilities: These are business-related contingent liabilities. These obligations may include acceptances, guarantees, and other similar commitments made on behalf of customers. Typically, the bank will have a corresponding contingent asset owed by customers.

xix. Fixed Assets: Assets purchased for lease to a customer and classified as fixed assets.

This comprises all issued share capital and differentiates between ordinary and preference shares.

This consists of share capital, statutory capital, and general reserves.

xxii. Profit before taxation: This is the gross income minus all expenditures, including the loan, minus the provision, but prior to taxation.

Net Asset per share is the total shareholders, fund, minus preference shares, divided by the number of ordinary shares.