IMPACT OF ACCOUNTING SYSTEM ON GOVERNMENT

ESTABLISHMENTS
(A CASE STUDY OF KWARA STATE TEACHING SERVICE COMMISSION)

BY
ASHADE ASHIAT ABIMBOLA
ND/15/ACC/FT/1278

BEING A RESEARCH PROJECT SUBMITTED TO THE

DEPARTMENT OF ACCOUNTANCY, INSTITUTE OF FINANCE
AND MANAGEMENT STUDIES (IFMS), KWARA STATE
POLYTECHNIC, ILORIN, KWARA STATE.
IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR
THE AWARD OF NATIONAL DIPLOMA IN ACCOUNTANCY

JULY, 2017

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 CERTIFICATION
This is to certify that this project was carried out with
the supervision and approved by the undersigned as having
satisfied the condition required for the award of National
Diploma in Accountancy Kwara State Polytechnic, Ilorin.

------------------------ --------------------------
MRS. ADEGBOYE B.B DATE
(Project Supervisor)

------------------------- --------------------------
MR. SAAD TUNDE DATE
(Project coordinator)

--------------------------- ---------------------------
MR. MOHAMMED, K.A.G. DATE
Head of Department (H.O.D)

--------------------------- ----------------------------
MR. ALIU ISMAILA DAUDU DATE
(External Examiner)

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 TABLE OF CONTENT
Title page
Certification
Dedication
Acknowledgement
CHAPTER ONE: INTRODUCTION
1.1 Background to the study
1.2 Statement of research problem
1.3 Objective of the study
1.4 Scope of the study
1.5 Significant of the study
1.6 Hypothesis testing
1.7 Limitation of the study
1.8 Definition of terms
CHAPTER TWO .LITERATURE REVIEW
2.0 Introduction
2.1 Purpose of Budgetary Control
2.2 The fundamental principle of budgetary control
2.3 Objective of budgetary control
2.4 Advantage and weakness of budgetary control
2.5 Types of control
2.6 Installation of budgetary control
2.7 Budget manual
2.8 Master budget
2.9 Human factors of budgetary control
2.10 Budgetary control and it effective use.

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CHAPTER THREE . RESEARCH METHODOLOGY
3.0 Introduction
3.1 Population and sample size
3.2 Sources of data
3.3 Data collection method
3.4 Method of data analysis
3.5 Profit of the case study
CHAPTER FOUR . DATA PRESENTATION AND ANALYSIS
4.0 Introduction
4.1 Analysis of bio data
4.2 Statistical and analysis of responses
4.3 Testing of hypothesis
CHAPTER FIVE . SUMMARY, CONCLUSION AND RECOMMENDATION
5.1 Summary
5.2 Conclusion
5.3. Recommendations
References.

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 CHAPTER ONE: INTRODUCTION
1.1 BACKGROUND TO THE STUDY
Any research inquire is aimed at empirical reality which exist outside the mind of
the observant the aim of this research therefore I to understand the significance effect of
budgetary control on the profit performance of Nigeria company.
The success of an enterprises depends largely on the establishment and execution
it quantitative and qualitative course of action prepared approved prior to the defined
period of time clucet,2004.
Budgetary control is therefore sees as a wheel that rolls the organization toward
the achievement of it long and short term cooperate objective it is therefore evident from
the above assertion that the effectiveness of budgetary control cannot be over emphasized
over the tears, the budgetary control have not been able to achieve the desired result thus
to certain inadequate and deficiencies which constitute both technical and human defect
(omolehinwa,2000).
Most industries in Nigeria today are face with the problem of forecasting future
event lose inflation rate and cost behavior due to unstable economy especially since the
introduction of structural adjustment programmed (SAP) in 1986 lasted in omolehinwa
200.
This project work therefore look into the effect of budgetary control on the profit
performance of company in Nigeria with focus on manufacturing industries and how the
aforementioned inadequate and deficiencies could be rectified.

1.2 STATEMENT OF RESEARCH PROBLEM

The following are some of the problem of this research.
The attitude of management towards budgeting process a positive one?
* what has been the performance of budgeting as a managerial control tool in
manufacturing industries?
* what are the problem been faced in relation to budgeting control in organization?

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*how could the problems associated with budget can be in other to achieve the stated
objective of the organization.
*to what extent has budgeting achieved its objective in organization.
*does budgeting really same time and aid quick production and effective performance in
an organization.
*has budgeting system been able to achieve the objective of cost reduction and revenue
maximization.

1.3 OBJECTIVES OF THE STUDY

The main objectives of this research work is to analysis critically the effect of
budgetary control of the profit performance of company in Nigeria in a manufacturing
industry and the general problem of effect of profit performance of modern business
organization and suggested possible solution.
Specific objectives of this project work include the following.
*to ascertain the effect of budget on revenue generation in manufacturing industries.
*to examine the problem being faced on relation to effect of budgeting control in
organization and provide likely solution.
*to know the contribution of budgetary control in achievement of organization objective.
*how budgeting control has its own deficiency when its being affected by economic
condition these are inflation and seasonal variation government pronouncement and
others.
*to identify whether the budgetary control system has brought about cost reduction in
production and services rendered by the organization.

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1.4 SCOPE OF THE STUDY
The project on the effect of budgetary control on the project performance of the
company and direct question on how it affect the Nigeria industries.

1.5 SIGNIFICANCE OF THE STUDY

The study has enable us to know the significant of the budgetary control and effect
of project performance in Nigeria company. it also help us to know the relevant of
budgetary control in Nigerian industry.
On the completion of this research work it serve as a reference of part of several
institution and person. It will be better appreciated by Nigeria industries and entire
public enterprise those body should seek to improve on the areas of lapses and where the
role of budgetary control has been undermined as they shall be highlighted in this
research work. It will also serve as a pouter for potential weal and foreign company who
will discover the humorous opportunities that derived from this research work.
The scholars will also benefit from this work because it shall add to their existing
knowledge as budgetary control on how it affect performance of Nigeria company.
The government will also benefit from this research work as it shall attempt to
encourage public participation in budgetary planning .

1.6 HYPOTHSIS TESTING

Hypothesis 1
It is a test performed in order or whether an hypothesis is true or false. it also
populated for the purpose of accepted or respecting of an assumption.
Ho- budgetary control does not contribute to the accruement of organization objective.
HA- budgeting is no longer useful in managerial control of cost reduction and revenue
generation.

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1.7 LIMITATION OF THE STUDY
Here are limitation attribution to the problem under the study these are.
-time constraints
-cost
The information which may not be released by compares staff due to the agreement of
secrecy and confidentiality .
For purpose of this research effect of budgetary control in manufacturing companies,
for cursed, it is for cursed in operating and financial budget which is otherwise know as
matter budget rather tab capital budget.

1.8 DEFINITION OF TERMS

BUDGET.A budget can be defined as a financial and or quantitative statement prepared
and approved prior to be defined period of time usually showing anticipated revenue or
income and expenditure to be insure in a given accounting period so as to achieved a
basis goal or objective for the organization or establishment. It is blue bruit plan for
future activities (KOLAWOLE 2006).
BUDGET COMMITTEE. Committee responsible for the preparation of budget usually
headed by the chief executive of the organization and comprising of the various
functional head of department of their representative(OMOLEHINWA,2000).
BUDGETARY PLANNING. Is defined as establishment of short term goal designed and
incorporated from the long term corporate objective of an organization such that short
term goals is based on budget (MUBARAQ 2000).
BUDGET CONTROL. Is part of overall system of responsibility accounting within an
organization. it is a system of accounting in which cost and revenue is analyzed in
accordance with area of personal activities so that performance of budget holds can be
monitored (ADENIYI,2004).
BUDGET MANUAL.Is an institution or information manual about the way the budget
operates in the particular organization and reasons for having a budget (ADENIYI,2004).

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BUDGET CENTRE. The budget center is a department of the organization that is
capable of having its own separate budget.
BUDGET TEAM. The budget is created at the beginning of the budgeting system and the
total participating depend upon the 200 size, number of department and financial
capability of the two company the budget team debate on various budget to be adopted.

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 CHAPTER TWO: LITERATURE REVIEW
2.0 INTODUCTION
Literature review involved the systematic identification, location and analysis of
document containing information related to the research problem.
Literature review help to sharpen, define and understand the existing knowledge
in the problem under study. This section therefore contain systematic identification about
the subject matter under the following sub>heading concept of budgetary control
A budgetary serve diverse purpose, it can mean different things to different people such
as.
A plan of work
A prediction
A link between financial resources and human behaviors of accomplish objective.
A mechanism for making choice among alternative expenditure in the government a
record of preference that have prevailed in the determination of national policy.
Owoyemi (2006) observe budget as a plan quantified in monetary term prepared
and approved prior to a defined period of time, usually showing planned in come to be
generated or expenditure to be incurred during the period and the capital to be employed
to attain a given objectives.
According to the institute of chartered management accountant (ICMA)
budgetary system represent an amalgamation of three major component part of budgetary
planning, budget and budgetary control.
Budgetary planning is defined as establishment of short term goal designed and
incorporated from the long term corporate objective of an organization such that the short
term goals is based on budget. The word budgetary control is described as the
establishment of executive on the requirement of a policy and the continuous comparison
of actual with budgetary result either to secure by individual action the objective of that
policy or to provide a basis for it revision.

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 Budgetary control has a similar features of variance analysis. It provides a general
means for continuous appraisal of departmental and overall performance. Therefore
budgetary control aims at maximizing the overall profit for the business, it enables the
management to determine in advance level of profit that can be realized.

2.1 PURPOSE OF BUDGETARY CONTROL

Budget is an instrument financial planning and control and has the following
fundamental purpose.
a. COODINATION PURPOSE: Budget assist to coordinate the activity of the
operation through cooperation and exchange of ideas among departments.
b. COMMUNIOCATION: These function aids in information flows through both
upward and downward movement in the organization. Coordination and communication
are performed simultaneously production department require cooperation of sale
department also except the flow of future sales information.
c. COST AWARENESS: Budgeted help manager and others to be cost conscious
and assist in controlling the income and expenditure in any particular period.
d. PERFORMANCE EVALUATION: Budgeting control system are also serve as a
means of appraising the performance of the operational result through the comparison of
actual with budgeted figures.
There are other function such as:
_ periodic planning
_ goal oriented and motivation

2.2 THE FUNDAMENTAL PRINCIPAL OF BUDGETARY CONTROL

The establishment of budget which coordinate all the activities of the business
will be the first principle in any organization. Proof to the introduction of budgeting a
profit and loss account prepare on conventional accounting line would show the profit or
loss that had been made in the past periods. This could be weekly, monthly, quarterly or

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teary the profit or loss recorded by the manager, will then be reviewed by the manager of
the organization so as to establish budget that will coordinate all the activities of the
business.
Recording of actual performances and cost follow the establishment of budget for
examples, statistic of sales performance in respect of volume selling price and pattern of
sales and production performance in respect of output and efficiency can be incorporated
within planned performance and cost in order to calculate in difference and cost variance
followed the recording of actual performance and cost variance are an aliped and
investigated to ascertain the reasons therefore.
Lastly, corrective action should be taken promptly. The action taken on the
variance is possible the most important part of the control mechanism, and this had to be
taken quickly at the right time and in the corrected place.

2.3 OBJECTIVE OF BUDGETARY CONTROL

A budgetary can be defined as the financial activities or qualitative statement in
advance of defined period of time, outlying the policy to be pursued for the purpose of
achieving a given objectives. It may be as are statement of the pan in financial terms.
It coordinates all the activities of the business the corporate plan in an
amalgamation of all the individual functional plans of the organization.
Activities in each section affect the effort of other section and the corporate plan must
cover every fact of the business so that they work toward achieving the same objective .
it
It combine the ideas of all levels of management in the preparation of budget.
Before a budget can be approved, it must have been deliberated upon by managers of the
company. The sales manager will narrate the availability of materials for the products for
the period, while the production manager will expose their capacity in the terms of labour
and machine. Also the opinion of the staff, ranging from junior staff to senior would be
sought, therefore the final approval of the budget.

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 To plan and control income and expenditure so that maximum profitability is
achieved. Since the objective of the business organized has been set based on the income
for a particular period and the relevant amount to be ten for achieving the stipulated
objectives, income and expenditures and controlled and maximum profitability is
achieved.
To direct capital expenditures is the most profitable direct capital expenditure are
always inform of project which involved high amount of money. If a business
organization is not careful, it could run into great loss which can force the company into
liquidation but through budgetary control, capital expenditure is directed into most
profitable direction.
To ensure that sufficient working capital is available for the efficient operation of
the business in the preparation of budget, the objectives to be achieve should have been
established. Therefore the element of working capital which are current asset minus
current liability will be planned in accordance with the objectives in order to achieved an
effective ratio.
To facilitate control and ensure the attainment of the profit and financial object
the control element in budget the variance can therefore be investigated and analyzed to
know the cause and action that are taking at the current time and place profit and
financial objective are therefore attained the control element of the budgetary control.
2.4 ADVANTAGES AND WEAKNESS OF BUDGETARY CONTROL
ADVANTAGES
Many benefit to be derived from budgetary control arise from the fact that policies,
plans and action are co ordinate, integrated to most junior supervisor know the part they
to play to achieve the target set whether bum or recession conduction are being
encountered the best result are likely to be obtained when there is a clear plan action and
there is guiding control through the budget controller .

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 in the measurement of performance production target sales quotes and other
target achieved automatically as part of the system are also controlled the comparison of
the actual with budgeted performance and cost allow the control to the exercise.
Under the suitable conditions, standard costing and budgetary controlling go
hand in hand .the two can harmonizes and make the planning and control more effective.
Details analysis and control possible through standard costing and overall co ordination
and control of budgetary control join to make the almost idea system in order to obtain a
system which is sound effective and flexible enough to encounter all circumstance and
conditions.
Budgeting follows sound management principle delegation of responsibilities is
given positive recognition. The cost variance redial any weakness that exist and the
nature of each weakness variance analysis and management reporting can together reveal
the state of progress any necessary action can be taken quickly and in time to minimum
and performance are maximized this will normally mean that the financial resources will
be used most advantageously.
Budgeting control follow that the most effective uses is made of the productive
resource since cost are kept to a minimum and performance are maximized this will
normally mean that the financial resources will be used most advantageously .
Budgeting aids communication and coordination so that the interest of the
individual manage are subordinated for the interest of the business as a whole the
tendency for empire building is minimized. The master budget bas asset in visualizing
the position of a company at a future point.
The fore if a budget is developed to the fullest it can serve as a simulation, model
a total sometimes called corporate financial planning model.
WEAKNESS
The master budget which assist in visualizing the position of a company may not be
as satisfying as expected.

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 The possible short coming of budgetary control is that too much dependence may
be place on it by the management especially when it is first introduced possibly because
of lack of instruction on the part of budget controller.
On the other hand, the problem of definition of responsibility often there is
overlapping of duties sometime cost are incurred jointly by a number of department so
that allocation of the cost each department will posses a lot of problem.

2.5 TYPES OF BUDGET

The type of budget can be illustrated in two ways, firstly it can be illustrated
inters of time covered by the budget the common types of budget is the annual budget
although it is possible to have budget covering more than one year I addition budget may
be used as tools for long range planning.
Besides, there are capital budget which span overall several years, again we can
have long term budget and perhaps continuous budget some companies distinguish
between planning budgets and control budgets.
For the purpose of this study , we are only identifying short term period budget
which is other wise known as master budget it is usually consist , a statement of cash
receipts and disbursement and supporting schedules.
Conversely, the second illustration of types of budget can be based on the element
contained in the master budget these element are:
A .OPERATING BUDGET
Sales budget
Production budget (for manufacturing companies) the production budget can still be sub
divided into material purchase
Direct manufacturing overhead
Change in investor levels
Cost of good budget (for mechanting and manufactories companies)
Services expenses budget

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Administrative expenses budget
B . financial budget: it consist of
Cash budget (cash receipt and disloursements )
Budget balance stock
Budgeted statement of source and application of fund
Budgeted statement of changes financial position all categories of budget used above is
dependent on sales budgets, the sales forecast is the starting point for expenses are
general geared to the rate of the activity.
The accuracy for estimated production schedule and cost to be incurred depends on the
depends on the detail and accuracy of the entire master budget. The following factor are
important in sales forecast:
There are:
Past pattern of sale
The estimated made by the sales forces
General economics and competitive conduction
Specific inter relationship of sales and economic indication such as gross national
product or industrial production index
Change in prices
Market research studies
Advertising and sale promotion plans
Sales forecasting usually prepared under the direction of the top sales activities.

2.6 INSTALLATION OF BUDGETARY CONTROL

There are some preliminaries necessary for the installation and operation of a budgetary
control system. These are the creation of budgetary centers of department for each of
created area selected should be comply with the natural responsibilities of the supervisor
and executive.

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 Infect , the accounting system should be agreed with organization structure. This is
next to the creation of budget center. The general instruction in techniques follow the
introduction of accounting record instruction are given to various level of managers on
the technicives of budgetary control but
Care not must be taken so that the responsibility of the manager do not over lap.
The preparation of an organization structure or a view of the existing one follows
of the existing organization structure is suitable for the installation of budgetary control.
Then no action is needed where it does not, it need to be review and with budgetary
control. Budget directors need to be appointed. The budget director is usually the
management accountant or somebody responsible to him. He should provide technical
unbiased help to lines executives. He has overall responsibility for establishing preparing
procedure designing forms. Educating and selling ,collecting and coordinating, verifying
information and reporting performance. He should also have a warm support with line
management . the next thing is the establishment of budget committee , the main function
of the committee are:
_To provide historical information to manager
_To issue instruction regarding budget preparation
_To revives budget and recommend budget for approval
_The preparation of budget manual is next to be established of budget committee:
_ The budget manual of the schedule document, or booklet which show in written from
the budgeting organization and procedures of the contents of the budget manual are:
_Objective of the system
_The reports and relevant policy statement
_Dealing dates and budget for budget proposals
_The account codeine use.
_The determination of budget period and control period are follows:
_The period covered by a budget period some forecast can be made for a relatively by
long period up to ten year or even longer in exceptional circumstances.

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_While other can safety cover a few month only the identification of keys factors follow
the period. This is the factor that extent of whose influence must first be assed to ensure
that the functional budget are reasonable capable fulfillment. The following are likely
factor.
_Material availability of supply restriction compose by license.
_ Labor general shortage for special skills.
_ Plan due to lack capital due to lack of space bottleneck in certain key processes.
_ Sales market research studies changes in price general economic and competitive
condition advertising and sale promotion plan.
_ Management top level managers operating managers.
_ Money low capital source of finance.

2.7 BUDGETING MANUAL

The budget manuals are the schedule, document or booklet which is in written form,
the budgeting organization: Annual should be well written indexed, and divided into
district sectors, so the each department manager can be issued with the sections
appropriate to his work responsibilities.
The loose _ led types of manual facilities division into section and easy distribution to
the person affected.
Some of the most important matters covered in a budget manual are as follow
_ Introduction and brief explanation of the principles of budgetary control, including its
objectives and benefits to be derives from its use.
_ Explanation of responsibilities functional and departmental i.e. budget centers
organization chart may be woeful in supplementary the description function covered
would included these connected with preparing budget as well as the duties related to
operating the system.
_ Time table for all stages of budgeting to the manager involved.

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_ Budget period and control period, should be defined as the period covered by the
budget- the length of its being stated.
The procedure to be followed throughout the system many of these procedure will be
covered on connection with responsibilities under budget centers.
The account classification to be employed other review of the turnover classification of
account if use.
Report and statement to be employed these are the specimens turns, number of copies to
be used, the p[purpose of each form and the budget centers involved should all be stated
in new form should be allowed or introduced without the constrict of the budget
committee comprises of
i. the budget director as sectary
ii. The chief executive as chairman
iii. The top line executives
Authority; It normally goes along with responsibilities special attention should be given
to exploring the routine to be followed obtained the necessary approve of budget vouches
and all forms and documents which authorized the spending of money.

Advantage of Manual Budget

These are many advantages attaching to the use of well prepared manual budget.
The problem and difficulties which inevitable rise from the operation of many any
complex system can be settled quickly and easily through manual budget.
Through the manual budget method and procedure become standard sizes of the
organization in the employments control system this practice would simply ensure that
more attention is pay to studying and selecting the most efficient method and procedures.
In another way, through the help of budgetary control the overall coordinated plan
show all personal to what part each manager is expected to play in maximizing profit.

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 Lastly, there is these very important advantage that is well conceived and arranged,
should help to persuade all level of management that budgetary control is worth while
and essential.

2.8 MASTER BUDGET

The master budget summarize the goal of sub unit of an organization i.e. sales,
production, distribution and financial unit. It quantities target for sales, production not
income and cash position and for any other objectives that management specified. The
master budget usually consist of a statement of expected future income.
The principle advantage of building is probably that if forces manager to think ahead
to anticipate and prepare for to visualize the relationship of their department and to other
department and to the company as a whole master budget has to be co ordinate
effectively.
Master budget consolidates an organization overall plans for a short spans of time
and we usually prepared on an quarterly basis for the three remaining quarters.
Step 1: the sales for cast is the starting point for budgeting because inventory level
purchase and operating expenses are generally geared to the rate of sale
Step 2: After sales are budget, the purchases budget may be prepared the total mechanize
needed will be fulfill budgeted sales demand the total need will be particularly net by the
beginning inventory, the reminder must come from planned purchases. Therefore, these
purchases are computed as follow:
Purchase: desired ending inventory cost of goods sold giving inventory.
Step 3: The budgeting of operating expenses is dependent on various factors many
operating expenses are directly influenced by mouth influence sale volume.
Examples are sales stated commission and delivery expenses.
Step 4: The production budget is designed to plan the resources recovered to produce the
output envisaged by the sales forecast a pre- condition to an agreement as to the size of

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the budget is the adjacency of the production capacity or living or purchasing additional
plant and equipment.
Step 5: This is the cash budget that consist of the estimates of cash receipts and cash
payment arising from the planed leveled of activities and used of resources the cash
budget is complete survey of the financial implication of expenditure plan both of a
current and a capital nature during the year, moreover by comparing the anticipated
outflows of cash with the expected flow the cash budget enables management to
anticipate any deficits so that the necessary financing arrangement may be made, and to
decide up on a policy for placing any cash surplus as its excludes expenses of non-cash
nature, such as depreciation. This cash budget is one of the last budget to be prepared
because if depend upon the other budgets which from part of the budgeting process.
Step 6: this is the budgeted income statement ,to summarize the integrated all operating
budget so as to measure the end result on the income for.
Step 7: Budgeted balance sheet is the final stage and also the projection of the budgeted
result on the forms financial position of the end of the year.
Successfully, the budgeted planning depends on a number of other factors for
example, a sound organizations structure which designates clearly areas of authority and
responsibility, as well and accounting in information system, which allows effective
financial contacts.

2.8 HUMAN FACTORS IN BUDGTARY CONTROL

The human factors must be given adequate consideration in order to ensure the
source budgetary control system. The budgetary must not be looked upon as purely
mechanistic. in those are, fears and self centeredness must be removed their education
and selling cannot be over-emphasized.to management must enthusiastically support the
system.
The budget should not be an unpleasant instrument of harassing employee properly
used. It will be positive and in selling standard of performance in motivating towards

21
goal in interviewing result and in directing attention to the areas that need investigation.
The budget in –automates: however its administration is a delicate took because everyone
that is affected must understand accept the nation that the budget is primarily designed to
help not to hinder the supreme important of the human relation aspect of budgeting
cannot be over emphasized too often, top management and its accountant and overly
concerned with the mechanical budgets where as the effectiveness of any budgeting
system depend on whether the manager effect it and accept it.

2.10 BUDGETARY CONTROL AND ITS DIRECTIVE USE

Budgetary control is the establishment of budget relating to the responsibilities at
executives to the requirement of the budget and the period comparison actual
performance with the budget to secure the attainment of the budget of provide a basis for
its revision.
A budget has also been defined as a quantitative expression of the plan of a
business to be perusals with a given period the principal advantage of budgeting is
probably that it force manager to think ahead to anticipate not a solution for a
specifically in company.
In particulars budgetary control will bring to light the fact that a mistake has be
trade during the course of course of control and other statistical technique must be
sought in the preparation of the budget and forecast.
So also the control element of the budgetary and control shall not be emphasized.
Deviation from the pre determined plans are brought to light by comparing the action and
budgeted performance and costs. The variance can the be analyzed and could be costs.
The variance can the be analyzed and could be taken at the right time and in a correct
place.

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 CHAPTER THREE
RESEARCH METHODOLOGY
3.1 Introduction
Empirical data on budgetary control is scarcity and the study provide level step to
ward a quantities insight into the effect of budgetary control in manufacture companies in
Nigeria. This explain the empirical activities of data collection carried out with the choice
of method used among available on possible characteristics considered ones, the
population, the sampling with then choice made and used among available other the
scope the appropriate sample ad interpretation sample and interpretation carried out with
appropriate choice of techniques samples data.

3.2 POPULATION AND SAMPLE SIZE

Considering the series of data analysis and evaluation techniques available in the
procedure was adapted in this research work. A personal interview session was held with
the company manager selected form branch which are of department like accounting
department, transition department e.t.c,
For the purpose of this study non probability sampling method is convenient for
type of the study and therefore the season for it being employed. The reason for the
using this method is convenient for is type of study and therefore the season for it being
employed. The reason for the using this method is due to limitation mid term of time
and fund which face researcher in the course of the study. As a result of high cost and
time involved in probability sampling method. The population of this study includes
manufacturing industries in Nigeria.

3.3 SOURCES OF DATA

Both primary and secondary data is been use in conducting this research, these
mater method use in conducting this research, work is personal interview which is the
basics primary source of information also used are textbook and journal which are

23
secondary source of information the respondent supply supplementary data the interview
granted the respondent was basically on the subject of study and direct assessment were
made by the secondary source enable the researcher to present the data in appropriate
form.

3.4. DATA COLLECTION METHOD

This is the process of gathering the instrument use to carried out the research work for
effective implementation of the questionnaire is the most common use instrument for
research work on which is the one we use in the research work in other to make it
understandable for many interested readers, the questionnaires will be designed in both a
close ended and open ended manner.

3.4 METHOD OF DATA ANALYSIS

The simple percentage and chi-square method will be used for data analysis and
hypothesis testing respectively. The percentage will be used to evaluate the responses of
the respondent to each question, while the chi-square will be used to determine weather
the observed discovered.
The chi-square will be base on the level of significance of 5% and a degree of freedom of
(n-I ) of chi-square distribution X2
X2 = ∑(O-E)2
E
Where: X2 = chi-square
O = Observation frequency
E = Expected frequency
∑ = Summation
3.5 PROFILE OF THE CASE STUDY
The seven up was formed in 1959 and negotiated franchise to produce product
from seven up international of New York.

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It was proportion time for our country as at that period, the planning process was on the
way for our country’s independence.
Company’s planning also was wasted on and on the first of October 1960 was the birth
of our nation and that of the company this come to be one hour which the company is
very proud of
The founder a well-known and respected figure with in both the business and
wider community at large, Mr. Mohamed el-khahil, his still the chairman till date and
take a likely interest in the offices of the company and its employees he laid the
foundation and foundation has been carried on by the second generation by MR. Answer
elkalali, who went to build up the fabric of the organization with some farsighted
planning , in the early sixties.
This built unto the early vision of the chairman who set the company on his
course as he know it today MR. Answer who maintain his personal investment and
interest in the executive post of deputy chairman .
The idea of raising other plant to supplement the introduction of the company and
its product throughout the world began through the largest request of (people and the
executive interest).It was introduce into Nigeria on 27th day of June 1969 with the local of
office at Lagos, it was when Land throughout the world began through the largest request
of (people and the executive interest). It was introduced into Nigeria on the 27 th day of
June 1969 with the local office at Lagos, it was when Lagos plant set up and its activities
and function its to supply the product to all part to the country and in particular Lagos
state and its environment.
Therefore, the costs that will be used in carrying out all the distribution activities
are relatively high when compared to the state volume. Another problem is that of
distance, these factors create a lot of difficulties for the company. It was as a result of the
factors creates a lot of difficulties for the company. It was the factor that call for the
establishment of the other plant in the country.

25
 Ilorin plant of 7up company was formerly inaugurated on the 10 th of February 1981
at the coca-cola bodies area in Ilorin, which is the capital of Kwara state with the setting
up of Ilorin plant, some burden were removed from Lagos plant, in the sense plan that
Ilorin would be responsible for the supplying of the product (seven up) to the area with
Ilorin and out its environment.
The activities were also carried out effectively by setting up where the product are
been supplied to place for easy distribution and to reduce cost of transportation
Conclusively, it was through all these factors that necessitate and encourage the
spreading of the product throughout the country and the world as a whole.
It was as result of these development that makes it gain the international recognition.

26
 CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
4.1 INTRODUCTION
These chapter deals with the analysis of data collected using tables and
percentages while chi-square were employed to test the hypothesis.
Thirty (30) copies of question were administered and all were received from the
respondent.
4.2 ANALYSIS OF BIO DATA
The data collected from respondent was from manufacturing enterprises in Ilorin
metropolis.
The respondent are distributed accordingly to gender age, and education
qualification, post held and working experience, these are present below.
Table 4.2 distribution of respondent according to gender.
Gender Number of respondent percentage
Male 18 60%
Female 12 40%
Total 30 100%
Source: Authors survey 2017
The tables revealed that of the respondent 60% are male while 40% are female.
This means that there are more male than female in the opinion poll.
Table 4.2.2 Distribution of respondents accordingly to age.
Age Number of respondent percentage
18-30 years 8 26.7%
31-40 years 13 43.35%
41-50 years 7 23.3%
51 and above 2 6.7%
Total 20 100
Source: Authors survey 2017

27
 From the above analysis 18-30 years has 26.7%, 31-40 years has 43.3%, 41-50
years has 23.3% while 51 and above has the lowest percentage of 6.7%i in the survey
Table 4.2.3 Distribution respondent accordingly to their qualification
QUALIFICATION NUMBER OF PERCENTAGE
RESPONDENT
SSCE 3 10%
OND/NCE 15 50%
HND/BSC 10 33.3%
PROFESSIONAL 2 6.7%
QUALITATIVE
TOTAL 30 100
Source: author survey 2017
The above table reveals that of the respondent, 10% are SSCE holders, 50% are OND\
NCE holders and 33.3% are HND\BSC while the remaining 6.7% are these that have
professional qualitative.
Table 4.2.4 Distribution of respondent according to position held.
Position Number of respondent Percentage
Top management 7 23.3%
Middle management 13 43.3%
Lower management 10 33.3%
Total 30 1oo
Source: authors survey 2017
From the above table it is cleared that middle management has the highest percentage
of 43.3% followed by lower management that has 33.3% and top management that has
least percentage of 23.3%

28
4.3 STATISTICAL ANALYSIS OF RESPONSES
From a sliver questionnaire, responses were given by respondent to the question by
either closing strongly agree (SA), agree (A), undecided (U), disagree (D), or strongly
disagree (SD).
The analyses of these responses are shown below:
4.3.1 Budgeting help allegation of responsibilities to individual in the organization.
Table 4.3.1
Option Number of respondent Percentage
SA 6 20%
A 12 40%
U 2 6.7%
D 7 23.3%
SD 3 10%
TOTAL 30 100
Source: author survey 2017
From the table shown above 60% (i.e strongly agree) are of the opinion that budgeting
helps in delegation of responsibility to individuals in the organization as against 33.3%
(i.e opinion of those that disagree and strongly disagree) that holds a negative view
towards this assertion while 23.3% an undecided.
Table 4.2.3 distribution of respondent to the above question.
Option Number of respondent Percentage
SA 8 26.7%
A 13 43.3%
U 1 3.3%
D 5 16.7%
SD 3 10%
TOTAL 30 100%
Source: authors survey 2017

29
 70% of respondent strongly agree and disagree that budgeting ensures that capital
invested in business is used efficiently and effectively while 26.7% hold contrary opinion
on this budgeting motivates workers to work increase efficiency.
Table 4.3.3 distribution of respondent to the above question.
Option Number of respondent Percentage
SA 4 33.3%
A 3 26.7%
U 4 6.7%
D 2 16.7%
SD 5 16.7%
TOTAL 30 100%
Source: authors survey 2017
As show in the table respondent that strongly agree and agree that budgeting
motivate workers to efficiency are 3.23.3% while those that disagree and strongly
disagree from a larger percentage of 63%.
4.3.4 Budgeting is used as a standard for performance evaluation.
Table 4.3.4 distribution of respondent to the above question.
Option Number of respondent Percentage
SA 10 33.3%
A 8 26.7%
U 5 6.7%
D 5 16.7%
SD 3 16.7%
TOTAL 30 100%
Source : author survey 2017
Table 4.2.3 distribution of respondent to the above question.

30
 Respondent that strongly agree that assertion that budgeting is used as a standard
for performance a evaluation 60% while those that disagree and strongly agree 33.4%
they survey show that 6.7% undecided.
4.3.5 Management attitude toward budgeting is positive one.
Table 4.3.5 Distribution of respondent to the above question
Option Number of respondent Percentage
SA 5 16.7%
A 9 30%3
U 4 13.3 %
D 7 23.3%
SD 3 16.7%
TOTAL 30 100%
Source: authors survey 2017
The table above shows that 46.7% of respondent strongly agree that management
attitude towards budgetary is a positive are as apist 40% that holds a contrary opinions
while 13.3% undecided.
4.3.6 Budgetary control does not contribute to the achievement organization
objective.
Table 4.3.6 Distribution of respondent to the above question.
Option Number of respondent Percentage
SA 3 10%
A 2 2.7%
U 3 10%
D 16 33.3%
SD 6 20%
Total 30 100%
Source: authors survey 2017

31
4.3.7 Management enjoys budgeting process
Table 4.3.7 Distribution of respondent to the above question
Option Number of respondent Percentage
SA 2 6.7%
A 6 20%
U 1 3.3%
D 10 33.3%
SD 11 36.3%
Total 30 100

Source: authors survey 2017

26.7% shown in the table above strongly agree and agree that management enjoy
budgetary process. However 70% strongly disagree and disagree that management enjoys
budgetary.
4.3.8 Budgetary control shown on the degree that by which actual result varies from
standard.
Table 4.3.8 Distribution of respondent to the above question
Option Number of respondent Percentage%
SA 2 6.7
A 6 20
U 1 3.3
SD 10 33.3
D 11 36.7
Total 30 100
Source: authors survey 2017
26.7% as shown in the table above strongly agree and agree that management
enjoy budgetary process. However 70% strongly disagree that management enjoy
budgetary process.

32
4.3.9 Budgetary control shows that degree by which actual result varies from
standard.
Table 4.3.9 Distribution of respondent to the above question
Option Number of respondent Percentage%
SA 16 33.3
A 14 46.7
U 0 0
D 3 10
SD 3 10
Total 30 100
Source: authors survey 2017
The table indicates that 80% of respondent strongly agree and agree that budget
control show the degree by which result varies from standard 20% respondents do not
support this view.
4.3.10 Good budgetary control gives directive to correction
Table 4.3.10 Distribution of respondent to the above question
Option Number of respondent Percentage%
SA 8 43.3
A 12 28.3
U 2 10
D 7 16.7
SD 1 23.3
Total 30 100
Source: authors survey 2017
Respondent that strongly agree and disagree that good budgetary control system gives
directive to correction from t66.6% of the survey which 40% strongly disagree and

33
disagree that good control gives direction to correction undecided respondent from 10%
of the survey.
4.3.11 the objective of an objective of an organization can be spelt out in financial terms
through a system.
Option Number of respondent Percentage%
SA 8 26.7
A 12 40
U 2 6.7
D 7 23.3
SD 1 3.3
Total 30 100
Source: authors survey 2017
This table shows that 66.7% strongly agree that the objective of an organization can
be spelt out in financial terms through a budgetary control by system. Respondents that
are of a contrary opinion are made up 26.8% of the survey.
4.3.12 A budget committees is needed to oversee the budgetary process and budgetary matters.
Option Number of respondent Percentage%
SA 6 20
A 14 46.7
U 3 10
D 4 13.3
SD 3 10
Total 30 100
Source: author survey 2017
From the survey as shown in the table above 66.7% respondent are of the opinion that
a budgetary committee is needs to oversee the budgeting process and budgeting matter

34
while 23.3% hold a contrary view 10% of respondent do not hold any opinion i.e.
undecided.
4.3.13 the best budgeting period of organization should have be that which concedes
us fiscal year.
Table 4.3.13 Distribution of respondent to the above question
Option Number of respondent Percentage%
SA 7 23.3
A 6 20
U 6 20
D 7 16
SD 7 23.3
Total 30 100
Source: authors survey 2017
The table can be analyzed this 43.3% of respondent are of the school of thought that
the best budgeting period in an organization should have be that which concedes with
fiscal year while 36.6% are of a negative opinion 20% of respondent neither have a
position of negative opinion towards this.
4.3.14. Budget guideline made be the budget committee set the tone for the budget
and governs budget preparation.
Table 4.3.14.Distributioin of respondent to the above question
Option Number of respondent Percentage%
SA 5 16.7
A 9 30
U 6 20
D 3 10
SD 7 23.3
Total 30 100
Source: authors survey 2017

35
 The above table reveals that 46.7% of the respondent agree that budget guideline
made by the budget committee set for the budget and govern budget preparation 33.3%
of the respondent that disagreed while 20% of the respondent are undecided.
4.3.15. Internal and external factors consider in the preparation of an initial budget
aids good budgeting.
Table 4.3.15. Distribution of respondent to the above question
Option Number of respondent Percentage%
SA 2 6.7
A 5 16.7
U 10 33.3
D 9 30
SD 9 13.3
Total 30 100
Source: authors survey 2017
From the above analysis it is clear that the respondent that disagreed with an external
factors are being considered in the preparation of an initial budget aids good budgeting
are 43.3% as against those that agree 23.4% while the undecided has 33.3% of the total
respondent.
4.3.16. Negotiation between manager of responsibility center on initial budget
proposal representing the core or main activity in budget preparation.
Table 4.3.16. Distribution of respondent to the above question
Option Number of respondent Percentage%
SA 16 46.7
A 18 26.7
U 0 0
D 6 20
SD 2 6.7
Total 30 100
Source: author survey 2017

36
 The analysis of the responses of the respondents shows that 73.4% agree that
negotiation the core or main activity in budget preparation while 26.6% disagree.
4.3.17. Consistency with the budget guideline and budgeting objective achieved
through review and approved.
Table 4.3.17. Distribution of respondent to the above question
Option Number of respondent Percentage%
SA 7 23.3
A 13 43.3
U 3 10
D 4 13.3
SD 3 10
Total 30 100
Source: author survey 2017
The analysis of the above table shows that 66.7% of the respondents disagreed with
the regular budget revision encourage responsibility center is not to prepare their budget
without due intelligence which 20% agree that regular budget revision encourage
responsibility centers 13.3% of the respondent are undecided.

4.4. TESTING OF HYPOTHESIS

Hypothesis are ideas, belief assumption put forward the purpose of helping and
guiding the researcher in arriving at a reasonable conclusion. The general purpose of
testing is to examine the reasonableness of a statement (or hypothesis) specifying the
parameter of a particular population;
These assumption are believe to the and correct but the result of the researcher
may prove otherwise, this, there is need to test each of the hypothesis for the purpose of
this research work chi-square (X2) distribution at 50% level of significance is used.

37
4.4.1. TEST OF HYPOTHESIS ONE
How budgetary control does not contribute to the achievement of organization
objective.
Question 6 relates to this hypothesis. This is statistical banaly7sis is being used.
STATISTICAL COMPUTATION FOR HYPOTHESIS ONE
Responses Oi ∑i Oi∑i (Oi-∑i)i Oi-∑i2/∑i
Strongly agree 3 6 -3 9 1.5
Agree 2 6 -4 16 2.67
Undecided 1 6 -5 25 4.17
Disagree 10 6 -4 16 2.67
Strongly agree 11 6 -5 25 4.17
Total 30 30 91 15.18
Degree of freedom =30-1029 (n-1)
DECISION RULE
Accept if X2 calculated is greater than X2 tabulated reject if calculated X2 is less than
tabulated X2
DECISION
Reject hypothesis are that budgetary control does not contribute to the achievement of
organization objectives.
4.4.2. TEST OF HYPOTHESIS TWO
How budgetary is not longer useful in management control of cost reduction and
revenue generation.
In order to test hypothesis, analysis question 7 is being adopted.

STATISTICAL COMPUTATION FOR HYPOTHESIS TWO

38
Responses Oi ∑i Oi∑i (Oi-∑i)i Oi-∑i2/∑i
Strongly agree 4 6 12 4 0.67
Agree 2 6 -4 16 2.67
Undecided 4 6 -2 4 0.67
Disagree 90 6 3 9 1.5
Strongly agree 11 6 5 25 4.17
Total 30 30 91 15.18
Degree of freedom =30= 29 (n-i)

39
 CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATIONS
This chapter entails of comprehensive, summary of research finding carried out
in this summary which is based on analysis of data collected in proceeding chapters.
5.1 SUMMARY
The research work was carried on the effort of budgetary control on the profit
performance of company in Nigeria. A case study of Nigeria bottling company 7up
located in Ilorin. The need to carry out necessary due to the inestimable role of budgeting
and budgetary control in the achievement of the organizational objective and problems
encountered in ensuring that those tools achieve it purpose. Relevant literature written by
great is budgeting preparation, concept of budgeting.
Finding also reveal problem of budgeting, objectives of budgeting, types of
budget, as well as budgeting process.
5.2 CONCLUSION
It can be emphasized that budgeting control are important tools which
organisation should not be overlook, because its communication serves as a main stay for
an organisation it must know that budgeting render essential and indispensible services to
any organisation and also occupy sensitive position particularly in resource allocation.
Budgeting encourage the organisation to plan ahead, that is it enable management
to plan for future. In this respect, early warning of impending problem e.g. shortage of
cash and early warning of business opportunities e.g. surplus of cash, special purchase of
machines or way material is given.
Furthermore, to assist the control of cost by providing a budget yardstick by
which actual cost cause measured. Budgeting and budgetary control assist in decision
making e.g. identifying the budgeted. Cost and budgeted review of the capital
expenditure proposal. The resources of the business can be identified so that they can be
utilized in the most efficient manner.

40
 A comprehensive profit planning and control of budgeting is a systematic and
formalized approval for starting and communicating of forms expectation and
accomplishing the planning, coordination and control responsibilities of management in
such way to maximize the use of given resources.

5.3 RECOMMENDATIONS
In the light of the result of the finding of the research duty, the following
recommendations are suggestion. If strictly adhere to, there is surely going to be
successful changes in the area of budgeting in the manufacturing industries.
These will in turn and consequently the profit of an enterprises in other worlds the
benefits that accrues from budgeting will automatically accrue to the company or
organisation.
The accounting system must be supportive and effective i.e. the actual result must
be capable of being measured and compared with budget at regular time interval.
Budget techniques and budget should be reviewed at regular time interval for
good management use and isolate reason for poor management.
Budgeting should be capable to change when circumstance change so that the
yardstick is a realistic and attainable one.

41
 BIBLIOGRAPHY
Adams R.A (2000) public sector accounting and finance 3 rd edition lagos corporate
publisher venture.
Adeniyi A.A (2004) “An insight in to management Accounting. 3 rd Edition-Lagos, value
Analysis consult 398-306”
Akinnowo .J. (1997) introduction to management according.
Awoyemi, P.F (2006) “ Management Accounting” volume one warm olad Publisher.
ICMA (1993) “Management Accounting Techniques” 4th Edition Ilorin BPP Publishing
(ICMA study text).
LUCET “(1999)” costing 3rd editon london DP publication.
Lucy, T. (2003) “Management Accounting “ 5th Edition, London DP Publisher 386
Umbrage (2000) Management Accounting” volume one Ilorin.

42
 QUESTIONAIRE
ACCOUNTING DEPARTMENT
INSTITUTE OF FINANCE MANAGEMENT STUDIES,
KWARA STATE POLYTECHNIC, ILORIN
The research is an undergraduate of Kwara State Polytechnic Ilorin the research is
basically for academic purpose on the effect of budgetary control confidential and treated
as such:
Please tick as appropriate ( )
SECTION A
1. SEX: A MALE ( ) B FEMALE ( )
2. AGE A 18-30 YEARS ( ) (B) 41-40 YEARS ( ) (C ) 41-50 YEARS ( ) (D) 50
YEARS ( ) AND ABOVE ( )
3. EDUCATION QUALIFICATION (A) SSCE( ) ( B) ONDLNCE ( ) ( C)
HND/BSC ( ) ( D) PROFESSIONAL QUALIFICATION ( )
4. POSITION HELD (A) TOPE MANAGEMENT ( ) (B) MIDDLE
MANAGEMENT( ) (C) LOWER MANAGEMENT
5. WORKING EXPERIENCE (A) BELOW STEERS ( ) (B) 5-10 YEARS ( ) (C)
10-20 YEARS ( ) (D) 20 YEARS AND ABOVE

43
 SECTION B
SA - Strongly Agree
A - Agree
U - Undecided
D - Disagree
SD - Strongly disagree
SA A U D SD
1. budgeting helps in the delegation of responsibilities to
individual in the organization
2. Budgeting ensure that capital invested in business is used
effectively and efficiency.
3. Budgeting motivates workers towards increased efficiency
4. Budgeting is used as a standard for performance evaluation
5. Management attitude towards budgeting is a positive one
6. Budgeting control does not contribute to the achievement
or organizational objective
7. Management enjoys budgeting process
8. Budgeting control shows the degree by which actual result
varies from standard
9. Good budgeting control system gives directive to
correction
10. The objective of an organisation can be spelt out in
financial items through a budgetary control system
11. A budget committee is needed to oversees the budgeting
process and budgeting matters
12. The best budgeting period an organisation should have be
that which coincidences with its fiscal year

44
13. Budget guideline made by the budget committee set the
tone for the budget and governs budget preparation
14. Internal and external factors considered in the preparation
of an initial budget aids good budgeting
15. Negotiation between manager of responsibility center of
initial budget proposal represent the core or main activity in
budget preparation
16. Consistency with the budget guideline and budgeting
objective is archived through review and approval
17. Budgeting is no longer useful in management control of
cost reduction and revenue generation

45