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ACCOUNTING INFORMATION SYSTEMS AS A MEANS OF ENHANCING FINANCIAL MANAGEMENT OF TRANSPORT COMPANY

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ACCOUNTING INFORMATION SYSTEMS AS A MEANS OF ENHANCING FINANCIAL MANAGEMENT OF TRANSPORT COMPANY

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

The Nigerian Railway Corporation (NRC) has been in existence for years. It is regarded  the  largest  transport  corporation  in  Nigeria and  has  a  high  network operations.   The Nigerian railway corporation is One Hundred and Fourteen years (114) old and  it  runs  a  unilaterally  designed  track  system  of  1067mm  charge  gauge.  Only 30km of its track distribution is in double track and that is within Lagos area.   Nigerian Railway Corporation actually commenced rail business activities with the construction of the first rail line from Lagos to Ibadan 193m between 1998 and 1901.  By  1964  when  the  construction  of  640km  Kano-Maiduguri  rail  line,  then known as Bornu extension, was completed, the present core of the railway network hard been put in place.  Presently, the railway system is  made up of 3’505 route kilometers and 4332 track  kilometers.  In  addition  to  this  is  the  19km  1067mm  gauge  extension  from Port-Harcourt to one deep sea port and the 277km standard gauge rail construction of  1435mm  from  Ajaokuta  to  Warri.  Nigerian  railway  was  transformed  from  its first and initial name.  “Government  Department  of  Railway”  to  Nigerian  Railway  Corporation  in 1955 through  the  instrumentality  of  the  statutory  act  of  parliament  which,  apart from changing the name of the railway industry in Nigeria, equally conferred on it  absolute  monopoly  as  the  institution  recognized  by  law  to  carry  out  railway services.  The general aim and object of the statutory act of parliament of 1955 for Nigerian railway is to recognize same as carrying out its function of effecting “carriage of passenger and goods in a manner that will offer full value for money, meet cost of operation, improve market share and quality of services, ensure safety of operation and maximum efficiency, meet social responsibility in a manner that will meet the requirements of rail after, trade, commerce, industry and general public”.  The headquarters of the corporation is located at Ebute-metta in Lagos state while  the  entire  network  is  for  administrative  convenience,  divided  into  seven autonomy districts viz.Lagos (Ebute-Metta junction), west (Ibadan), north (Zaria), east  Enugu),  North-west  (Minna),  north- central  (Kanfanchem)  and  North-east (bauchi)  The  railway  system  has  been  undergoing  same  rehabilitation  and modernization  with  the  full  political  and  financial  support  of  the  federal government  through  the  federal  ministry  of  transport.  The  rehabilitation  of  the railway  system  includes    track  spot  removal of  Lagos  to  Kano  and  Maiduguri  to port-Harcourt, supply of 25 new locomotive engines from brazil south America to boost  the  registry  motive  power  base  of  the  corporation,  up  grading  of  the signaling and telecommunication  system  from  manual to  semi  automatic, as  well as  rehabilitation  of  carriage  and  wagon  workshops,  re-equipping  the  workshops, upply  of  service  support  (spare  part  consumables),  strategic  rebranding  of  the corporation rehabilitation of stations and marshalling yards inter alia.  Equally,  new  railway  lines  are  being  constructed  in  standard  gauge (1435mm). These include: Ajaokuta-Warri of 277km, Kaduna-Abuja (Idu) line of 186km while the scope of work for Lagos-Ibadan segment is under review together with its cost implications. The  Nigerian  Railway  Corporation  has  contributed  amenably  towards  the improvement of social life and the development of the national economy. This is through to be extended to every part of the country that is the haven stages which will  lead  to  permanent  prosperity  confident  was  such  an  ultimate  triumph  of  the railways. However,  regardless  of  the  huge  success  made  by  the  corporation,  it  is  facing  a hard time.

1.2 STATEMENT OF PROBLEMS 

Nigeria Railway Corporation which dominated the transport sector of the economy in the sixties is presently being delegated by other means of transport such as road transport, sea, and air transport. The corporation has lost her passengers and freight mainly to road transport; this is because of inability of the corporation to compute effectively in order to meet the age longed challenges.  Ordinarily  there  should  have  been  growth  in  both  road  and  railway  transport  but the railway transport seems neglected. The truth of the matter is not just neglected, but a problem of cash flow difficulty and management these affect the purchase of spare  parts,  repair,  payment  of  salaries,  inadequate  infrastructure  support  and enhance service rendering.  Given  the  above  condition  of  the  Nigerian  Railway  Corporation  in  the  nation transport  industry,  the  problem  which  looks  for  detailed  analysis  and  solution includes the following question

1. Is  the  accounting  information  used  in  the  corporation  adequate  for   managements short and long term plans? 

2. Have  the  accounting  officers  in  the  corporation  has  the  needed  professional skills to cope with demands of the job?

3. Is there any serious effort made by the corporation to boost operation?

4. Do the accounting officers perform their duties without the interference of the management?

5. What  is  the  mode  of  approaching  the  chief  accounting  officer  of  the  corporation? 

 Answer  to  these  questions  above  constitutes  the  basic  problem  of  the  researchers work. 

1.3 OBJECTIVES OF THE STUDY 

Bearing in mind the above mentioned problem study is aimed at finding out among  other things such as:- 

The  organization  of  accounting  department  in  Nigerian  Railway  Corporation  with  particular  interest  in  the  eastern  division  of  the  corporation  and  how  the  accounts  department  contributes  to  the  achievement of  overall  goals  for  the   corporation.                                                                            

2. Whether  the  accounting  information  is  actually  one  of  the  effective  management tools in the railway corporation.

3. Whether the  accountants in the  corporation adequately  perform  their duties  in   conformity with the statement of accounting standards (SAS)

4. In  where  the  tools  of  the  accounts  department  to  the  performance  of  the   individual workers

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