AN EMPIRICAL INVESTIGATION OF THE USE OF MANAGEMENT ACCOUNTING TECHNIQUES IN NIGERIA CONSTRUCTION COMPANIES
AN EMPIRICAL INVESTIGATION OF THE USE OF MANAGEMENT ACCOUNTING TECHNIQUES IN NIGERIA CONSTRUCTION COMPANIES
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Date
1999-06
Authors
LADAJAU, Augustine Dachi
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Abstract
ABSTRACT
Building and Civil engineering aspect of the Nigerian economy is referred to as
construction industry. The building construction comprises the establishments engaged in the
erection of residential and non-residential buildings, offices and commercial structures etc.
The second category is the civil engineering works which involves the construction of roads,
bridges, ports, airports, dams, canals etc.
In her take-off stage Nigeria has undertaken a series of construction projects. A
serious short-coming of some Nigerian contractors is the inadequate attention given to
planning and control of construction projects using modern accounting techniques. All
aspects of planning generally involves planning for financial resources, acquisition of raw
materials, technological development etc. It is therefore important that the accountant should
know how the planned programme will affect the growth and profitable operation of an
organization.
A study of the usefulness/degree of use of the various Management accounting
techniques in the construction industry has been undertaken in this work. However, due to
time and space constraints in a study of this nature, only those techniques that are discernibly
relevant to the construction industry were examined. These techniques include Absorption
costing, Marginal costing, Break-even analysis, Long-term forecasting and planning, standard
costing, and Budgetary control.
A sample of the construction companies scattered all over the country was selected for
this study with the following consideration in mind:
(a) The need to fairly reflect the different types of construction organisation in the
country.
(b) The need to obtain an appreciatiable sample size.
(c) The need to be careful not to favour only easily accessible region or to ignore areas
that may be some distances away.
Therefore every Nigerian construction company had the same chance of being
selected. It was for this reasons that samples were drawn from five cities across the country :
Kaduna, Lagos, Jos, Benin City and Abuja.
Through the use of questionnaire and personal interviews with the accountants and
chief executives of the various construction companies operating at different levels of
capitalization; and through an analysis of the data obtained, the usefulness and degree of use
of the various techniques, and the problems militating against their use were ascertained.
The study went further to find out the reasons for the frequent abandonment of
construction works, especially government contract jobs. The study also tried to ascertain
whether or not the construction companies make adequate provisions for the Nigeria peculiar
inflationary trend while estimating their contract costs.
The problems militating against the application of the various management
accounting techniques in the industry were also examined.
Recommendations meant to solve these identified problems have been made. A
suggestion for further research in this respect has also been offered.
Description
PRESENTED TO AHMADU BELLO UNIVERSITY, ZARIA
IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR
THE AWARD OF MASTER'S DEGREE IN ACCOUNTING &
FINANCE, M.SC. (ACCOUNTING & FINANCE)
Keywords
EMPIRICAL INVESTIGATION OF THE USE OF MANAGEMENT,, ACCOUNTING TECHNIQUES,, NIGERIA CONSTRUCTION COMPANIES