You are on page 1of 14

THE

PROFESSIO
NAL
ACCOUNTAN
T IN A
CHANGING

1
ENVIRONME
NT

PROFESSIONAL ACCOUNTANT IN A CHANGING

ENVIRONMENT

INTRODUCTION:

The topic is about the modalities that could be employed by the

Professional Accountant to make his impact in the environment

where he operates. The Professional Accountant will employ some

financial tactics to bring about a good change in the environment.

2
It is the onus of the Accountant to address financial issues, setting

of targets and compliance with lay down procedures for good

result. The Accountant is a watch dog of the firm and adviser to

the Management on the present operations of the firm relative to

previous year for comparative purposes. As the financial

Management Officer of the organization, the Accountant relates

with the board of management on investment decision criteria to

be taken. When a firm wants to expand its operational base,

funds, human and material resources are required. It is the

Accountant that will do the cost effect evaluation and report back

to management on the way forward.

Chapter One

1:1 What is accounting: Accounting is the


systematic recording, analyzing and summarizing of
financial transactions in a prescribed manner over a given

3
period of time. It is the careful sorting and recording of
every transaction on the basis of the accounting concepts
applicable to such transaction. Accounting is a living
subject because of its versatile nature. It lends itself to
changes and modification with time. The accounting
concepts are strictly followed to avoid distortion in
reporting the operational results in any given year. The
work of accounting could be done by a secondary school
certificate holder, Ordinary National Diploma or Graduate
in accounting. You do not require a professional
experience to function as an accounting officer in a firm.

1:2 Types of Accounts:


1:2(a) Nominal Account: This type of account
is created to record the Income and Expenses of the
firm relating to the period in question. Such expenses
includes administration, salaries & wages, Transport,
Electricity bills etc. It is referred to as intangible account
because of the nature of the services rendered.

1:2(b) Real Account: This account records


tangible or physical assets of the firm. It is an account
that shows at a glance the cost and net book value of
an asset. Assets that fall within this category are plant
and Machinery, Land and Building, Motor vehicle,
Fixtures and Fittings

4
1:3(c) Personal Account: This type of account
is opened for individuals such as Savings, joint account,
Current account etc.

Chapter Two

5
2:1 Who is a Professional Accountant?
There are so many professions such as Engineering,
Legal, Medical Practice, Banking including the
Accountancy profession. All these professions have
differing regulations to modify their professions. Also
there are postulates or ethics that distinctly regulate the
operations of the various professional bodies. For anyone
to practice as an Accountant in Nigeria, he or she must
have obtained his degree in Accountancy from an ICAN
accredited University or passed through The Nigerian
College of Accountancy an auspices of the Association of
National Accountant of Nigeria after writing the
prescribed examination. Also he would have completed
his professional examinations under the Institute of
Chartered Accountants of Nigeria. The Accountant is a
highly recognized personality in the economy of any
given country due to its versatility.

2:2The Body regulating the Profession:


Institute of Chartered Accountants of Nigeria is a
professional body with a high moral discipline inculcated
into the members of the institute.
The Institute of Chartered Accountant of Nigeria (ICAN) is
the highest professional Accountancy body regulating the
activities of the profession. ICAN is the apex body that
spells out the ethics of the profession which must be
followed strictly by all other accounting
6
bodies in the country. No one is allowed to practice as an
Accountant in Nigeria without passing through the
Institute professional examination.
Association of National Accountants of Nigeria is the only
chartered professional accountancy body in Nigeria
empowered by law to teach as well as examine all its
students. Besides, it is the only body having the absolute
power to advance the science of accountancy.

The Association is a truly national accountancy body with


education and training programme reflecting the national
environment which would meet internationally accepted
accountancy standards. It was born out of a burden
shared by a number of well meaning Nigerians for a home
grown and home spun professional body. It sought a
thoroughly Nigerian and community based approach to
the definition of accountancy standards and practices.

All accountancy graduates with B.Sc. and HND from


Nigerian Universities and Polytechnics, are eligible to
commence a three-year training programme to qualify
with the Association and earn the designation Certified
National Accountant (CNA). This is similar to the system

7
adopted by the Institute of Chartered Accountants of
Scotland (ICAS). All students aspiring to become
members of the Association must attend the Nigerian
College of Accountancy, Jos in preparation for the
Association's examination programme, consisting of FIVE
PAPERS at Professional Examinations 'A1 (PEA) and SIX
PAPERS at Professional Examination 'B1 (PEB) details of
which are contained in the later Section Of this brochure.

2:3The Functions of an Accountant


Amongst others, the functions of the accountant are as
follows:

• The Accountant is deeply involved in the financial


budgeting of the organization and ensures the strict
compliance with the budget guideline
• Internal financial controller of the firm’s financial
undertaken. The Accountant sets financial expense
ceiling for the various departments through constant
review of the sectoral allocations.
• The Accountant also performs the duty of either an
Internal or External Auditor in the firm.
• Status financial report of the organization is given by
the Accountant to the management team for decision
purposes.
8
• The Accountant is involved in financial forecast in the
areas of sales, purchases, production and marketing.
• The Accountant renders advisory services to
Management team on financial issues. It is the
Professional Accountant who advices the
management on when to take an overdraft facility
and for what purpose.

• The financial history of the firm is embedded in the


Accountant. The Accountant has all the financial
details with respect to the organization.

9
Chapter Three

3:1 THE DYNAMIC ENVIRONMENT


There is no hypostatic position in any given environment.
Changes keep occurring in the course of time. These
changes could be adverse or favorable in the economic
environment of any given firm or government. It is the
Accountant that determines if the economic environment
is volatile and therefore requires some measures to beef
up the living standard of the populace. In a firm if the
production target is not realized, it could be traceable to
lapses on the part of the production engineer. Other area
of changes in the environment includes the market,
liquidity level of the firm, profitability and assets
coverage. Another factor that could lead to changes in
the economic environment of a firm is inflation and
government policy.

Professional accountants, with their historic background


in audit, taxation, financial reporting, measurement and
costing have become increasingly involved in

10
environmental sustainability.

Accountants must determine specifically which


components of their theoretical frameworks,
methodologies and techniques are applicable to the
problems and issues associated with environmental
sustainability. If they fail in this task, both the
environment and their professional status will suffer.

3.2 Accounting knowledge: A diverse tool

The application of accounting knowledge has expanded


to include virtually all areas of business and thus
substantially diversified away from its origins in
bookkeeping. Initially, the expansion was into the areas
of financial accounting, then to auditing and taxation.

More recently accounting expertise has come to include


management consultancy, particular forms of marketing,
finance, economic forecasting, even recruitment
consultancy and the implementation of information
systems.

3.3 Environmental accounting

Various approaches to conceptualising “environmental


accounting” have evolved over time in the accounting
literature.

11
Historically, corporate accounting systems were argued
to be unsuitable for this purpose as they had tended to
provide incomplete data and unrealistic targets,
systematically under-report environmental costs, and fail
to correctly identify the contributions of various products
or processes to environmental costs and revenues.

Improving environmental performance information


capture and disclosure does not necessarily require a
major overhaul of traditional accounting systems.

At a minimum, companies can merely extend current


practice to include common environmental costs in
budgets and general ledgers, thereby integrating
economic and environmental criteria to provide
management with the necessary information to manage
and communicate their environmental performance
efforts.

Nevertheless, despite the steadily increasing presence of


environmental accounting in both the literature and in
practice, evidence suggests that relatively few corporate
‘leaders’ have embraced the potential of environmental
accounting by successfully integrating environmental
performance measures into their accounting information
systems.

The amount of environmental information reported by


companies remains limited and differs widely in terms of
quality, generally lacking perceived credibility since the
selection of reported environmental information is often
perceived by stakeholders to be very much at the
discretion of management and neither independently
verified or in a regulated format.

12
While some organisations in industries of “environmental
concern” such as mining, petro-chemical and government
appear to have higher rates of adoption of these
performance measurement and reporting practices, the
widely anticipated move to institutionalised
environmental accounting has not yet occurred.

Instead accountants generally stand accused of a


reluctance to move away from traditional attitudes and
paradigms and of taking a very ‘light green’ view of
environmental accounting as they seek to modify
information systems without significantly altering their
substance.

CONCLUSION
The Accountant has a dominant role to play in the
financial wellbeing of the firm and the general economic
environment of the nation. In view of this laudable task of
the Professional Accountant, he has the professional
know how to revamp the dwindling economy.

13
14