A CRITICAL REVIEW OF THE IMPACT OF GOOD ACCOUNTING SYSTEM IN THE GROWTH AND DEVELOPMENT OF INSURANCE INDUSTRY
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Insurance accounting as related to insurance company is a district and specialized account that is always referred to as ‘specialized account” just like taxation is a specialized area. Though it employs the general accounting principles, concepts and conventions, there are needs for a clear understanding of its preparations.
In the days of T-form presentation of financial statement an insurance company account could be easily recognized from the sides of the “T” to which income and expenditure items are posted, they are not in conventional form. The convention was placing revenue to the right of the “T” insurance company revenue items to the left of the “T’ and expenditure items to the right.
Nowadays, there are other features that distinguish accounting system in insurance industry or company or company’s from their accounting system, they are:
i. Requirement by law for remitting of quarterly and annual returns to central bank of Nigeria (CBN) and Nigerian Insurance supervisory bank (NISB).
ii. Prescription by law of the type and level of investment of insurance
iii. Requirement by law for condition of returns to the Nigerian Insurance supervision board (NISB) with stated deadline.
iv. Requirement by law of the maintenance reserves known as “TECHNICAL RESEARVES” comprising of insurance funds, reserves for outstanding losses reserves for incurred but not reported and contingency reserves.
All these are in addition to rendition of the required returns to the corporate affairs commission (CAC) being and incorporated company under in pursuant to the companies and allied matters decree (CAMD) 1991.
From the above, it can therefore be seen that without a proper understanding of intricacies involved in both the interpretation of the decree as well as items that makes up insurance accounts and right treatment is afforded to the financial statement as narrated wil not give a true and fair view of the statement of affairs and of profit and loss for the period.
Having read and studied the above insurance industry, the researcher felt it work bring out a detailed research work in order to benefit the students in higher institutions and readers alike.
1.2 STATEMENT OF THE PROBLEM
Some of the problems facing accounting system in insurance industry includes:
1. Good accounting system has not been adequately carried out in insurance.
2. Inadequate accounting management in insurance industry causes fraud.
3. financial statement mis-interpretation also causes a problem.
1.3 OBJECTIVES OF THE STUDY
The objectives of this research work is to find solution to the above mentioned problems and at the same time explain and illustrate some of the items so as to practically assist staff of the account department of the insurance industry as follows:
1. To examine why good accounting system has not been adequately carried in insurance.
2. To evaluate how inadequate accounting management in insurance industry can cause fraud.
3. To explain how financial statement misinterpretation can cause problem.
1.4 RESEARCH QUESTIONS.
Some of the research questions are:
1. Why is good accounting system has not been adequately carried out in insurance?
2. How is inadequate accounting management in insurance industry caused fraud?
3. Explain how financial statement mis- interpretation also caused a problem?
1.5 RESEARCH HYPOTHESIS
In this research work, Null Hypothesis (Ho) and alternative hypothesis (Hi) will be used, Null hypothesis (Ho) will use for rejection while alternative hypothesis (Hi) will be used for acceptance.
1. Ho: Good accounting system has not been adequately carried out in insurance.
Hi: Good accounting system has been adequately carried out in insurance.
2. Ho: Inadequate accounting management in insurance industry causes fraud.
Hi: Inadequate accounting management in insurance industry does not causes fraud.
3. Ho: Financial statement mis-interpretation also causes a problem.
Hi: Financial statement mis-interpretation does not causes a problem.
1.6 SIGNIFICANCE OF THE STUDY
Industry keeps growing which shows an increase in the public funds placed in another person’s hand in form of premium. There is the need for proper and adequate reporting so that confidence in the industry can be established. Capital market internalization distress in the economy and subsequent need for merger and acquisition as a means of survival calls for proper understanding as well as to treatment is based, which will be used for all these.
The following are the significance of the study
1. It is important to me in partial fulfillment of HND degree.
2. It is important to the insurance industry to their accounting section.
3. It is important to the financial industry on their accounting management.
4. It is important to the society on their day to day transactions.
5. It is also very important to the economy special in oil and gas sector.
NOT THE TOPIC YOU ARE LOOKING FOR?
Once payment is made, kindly send us your project topic, email address and payment name to +234 810 144 4147
Once payment is confirmed, Project materials will be sent to your email
Public authorities and central banks around the world are closely monitoring developments in digital currencies and studying their implications for the economy, the financial system and central banks. This lack of physical form allows nearly instant...
insurance with the view to arousing the awareness of thepolicyholders and prospective ones. This will be achieved by highlighting13the insurance mechanism, discovering the weak areas that need to bestrengthened and recommendations will be proffered f...
nsurance industry. The study adopts descriptive and analytical method of historical and time series data. The study was conducted to cover the period from 1986 to 2011 (twenty-five years). The secondary data used for the study was obtained from the C...
Appreciation of the topic to be discussed will not be fully attained if a brief historical review of the steel industry is not given. In the past, developing countries, Nigeria inclusive did not have a balance of economy and they ur...
At this time, the Nigeria government is intensifying efforts to boost the country’s economy, the need to research on the fact that led to economic growth in Nigeria cannot be understated. This study will aid our understanding of economic developmen...
It is common to report of business failing than business succeeding almost always, the failure or success of a business can be attributed to its management. When a business is mismanaged, it will lead to liquidation the company will not meet their s...
Due to the high level of illiteracy in the Nigerian society, many people are unaware of insurance policies. However, with the enactment of Insurance Decree[1], the awareness of insurance policies was enhanced. Thus, more people took steps to insure t...
In Nigeria the issue of taking life assurance policy has been neglected, in the sense that at this present time, it is estimated that not up to two percent (2%) of Nigerian’s own life assurance policies, from the research made on the internet, lif...
1.4 Research Question The following are the research questions: (1) Does Enugu State Pension Board pay pension regularly? (2) Does retiree suffers after retirement because of non implementation of gratuity? (3) What ...
Globalization means the whole world is becoming a global village, the world are coming together to be one in unity, things are happening generally people don’t produce to satisfy the market people around them, but they produce for the whole market....
Message Us on WhatsApp »
