CHAPTER ONE

1. INTRODUCTION

The account department is regarded as the engine room of an organization after the production department because of its role in the promotion of financial transparency and accountability in an organization. The account department is one of the most important department in most organization especially those in the manufacturing and the service sector. The account department consist of secretary, administrator, manager, finance manager, accounts officer, senior accountant and cashier.

1.2 BACKGROUND OF THE STUDY

The number of techniques an accounting department is expected to master has been increasing (Kaplan, 1983; Yoshikawa et al., 1993 ;Bromwich and Bhimani, 1994). Methods such as Activity Based Costing (Cooper and Kaplan, 1991), Total Quality Management (Johnson, 1992), Target Costing and Life-Cycle-Costing (Yoshikawa et al . , 1993), Strategic Management Accounting (Bromwich, 1990 ;Shank and Govindarajan, 1993), and Non Financial Performance Measures (McNair et al ., 1990; Maskell, 1991) all suggest that the accounting department’s role as the provider of information is becoming more sophisticated. The production of information is pivotal for accounting departments as they are assumed to engage in organizational decision-making through the provision of cost-analyses to manage costs rather than just describing costs. They are increasingly seen to aid top management manage the business, and they accordingly have to be more involved in the management of the business organized around their application of this set of new techniques. This view, however, does not capture the variety of roles accounting departments can play as it focuses narrowly on the production and distribution of decision oriented information and de-emphasises the organizational possibilities to implement decisions. For example, there is little attention to delegation and control (Miller, 1982; Merchant, 1985, 1989), little attention to coordination among organizational functions (Galbraith and Lawler, 1993; Munro and Hatherley, 1993; Galbraith, 1994), and little concern for motivation (Hofstede, 1968; Schiff and Lewin, 1974;Luckett and Eggleton, 1991). This limitation is surprising. Since Simon et al.’s (1954) research, the accounting departments’ role has often been seen as more complex as it is seen to vary according to specific organizational conditions (Simon et al . , 1954 ;Hopper, 1980; Sathe, 1982; Mattsson, 1987; Frenckner, 1989; Olve, 1989) deriving its content from and in connection with organizational circumstances (Collins, 1982 ;Armstrong, 1985). A primary focus on accounting ‘techniques’ diverts attention away from the wider organizational implications of their deployment, whereas a focus on accounting departments’ organizational significance typically pays only limited attention to calculative techniques. Clearly, though, since accounting departments’ work involves interplay between the two, a nuanced description of their work can be formed by considering both their ability to master techniques and their involvement mediating organizational issues. The detailed deployment of accounting techniques may depend specifically upon the accounting department’s position in a firm which may be supported by the possibilities of intervention via information reflected by the techniques. Both are aspects of their mobilization of professional expertise (Armstrong, 1985)

1.3 STATEMENT OF THE PROBLEM

Accounting department is one of the most vital departments in an organization. However there are some issues affecting the account department in an organization. Some of the issues are the organizational policy, the level of corruption in an organization and also lack of adequate fund to hire the services of accounting personnel in an organization. Lastly there are lots of researches done on accounting but none of these researchers has tried to identify the link between the account department and organizational performance in the real estate sector.   

1.4 AIM AND OBJECTIVES OF THE STUDY

The study seeks to examine the roles of account department in performance of an organization. The objectives of the study are:

1. To examine the financial statement financial statement discourses ins accounting of palm royale real estate limited
2. To determine the type of accounting system adopted by the palm royale real estate limited
3. To identify the factors affecting the account department of palm royale real estate limited
4. To recommend ways to improve the performance of the account department of palm royale real estate limited

1.5 RESEARCH QUESTION

The following research questions guide the objectives of the study:

1. What is the financial statement financial statement discourses in accounting of palm royale real estate limited?
2. What is the type of accounting system adopted by the palm royale real estate limited?
3. What are the factors affecting the account department of palm royale real estate limited?
4. What are the ways to improve the performance of the account department of palm royale real estate limited?

1.6 STATEMENT OF THE HYPOTHESIS

H0: the account department has no significant effect on the performance of palm royale real estate limited

H1: the account department has significant effect on the performance of palm royale real estate limited

1.7 SIGNIFICANCE OF THE STUDY

The study on the roles of account department in performance of an organisation will be of immense benefit to the palm royale real estate limited. The study will guide the real estate sector on how to improve the accounting department so aso enhance profitability and transparency. The study will also serve as a repository of information to the management of palm royale real estate limited and other researchers that desire to carry out similar research on the topic. Finally the study will contribute to the body of the existing literature on the roles of account department in performance of an organisation.

1.8 JUSTIFICATION OF THE STUDY

 The study wills enhance the performance of the palm royale real estate limited. The findings of the study will show the extent of correlation between the account department and the performance of the palm royale real estate limited. The study will also be applicable to any service sectors that have the account department

1.9 SCOPE OF THE STUDY

The study covers on the roles of account department in performance of an organisation with focus on palm royale real estate limited

1.10 DEFINITION OF TERMS

ACCOUNTING: Accounting or Accountancy is the measurement, processing, and communication of financial and non financial information about economic entities such as businesses and corporations.

REAL ESTATE: Real estate is the land along with any permanent improvements attached to the land, whether natural or man-made including water, trees, minerals, buildings, homes, fences, and bridges.

PERFORMANCE: A performance is an act of staging or presenting a play, concert, or other form of entertainment. It is also defined as the action or process of carrying out or accomplishing an action, task, or function.

PROFITABILITY: the degree to which a business or activity yields profit or financial gain

TRANSPARENCY: Transparency, as used in science, engineering, business, the humanities and in other social contexts, is operating in such a way that it is easy for others to see what actions are performed.