The importance of accounting system in any organization cannot be over emphasize. It does not only facilitate proper control and safeguard of assets of the organization but also helps management in its planning for the organizational objective by the information that the system supplies. Lack of efficient accounting practices lead to a series of financial problems, fraud, frustration among employees, loss of public confidence and possibly, the collapse of the organization. It is therefore imperative for State Insurance Company a government own company to put in place efficient accounting system to meet its stated objectives.
This study considers State Insurance Company Ltd (SIC), which is both government own and profit making company. Furthermore, the company’s financial statements have been qualified for the past three years due to the weaknesses in the accounting and control system as well as the valuation of assets and the presentation of the financial statements has not been timely over the years.
1.2 STATEMENT OF THE PROBLEMS
State Insurance Company (S I C) provides insurance covers in various areas such as fire, accident, aviation, marine, motor and life, which are paid in cash or on credit. Since the concept of insurance is not well embrace in a developing country like Ghana, S I C provided credit facility as a way of attracting customers.
This brings the problem of valuing debtors and also reveals the deficiencies in the accounting systems which give room for collusion duplication of activities and consequently fraud and errors It is against these problems that the study is done.
1.3 OBJECTIVES OF STUDY
The objectives of the study are:
1. To examine the accounting and related control systems, 2. To assess and evaluate the accounting system of State Insurance Company. 3. To identify the causes of the problem in the accounting systems. 4. To suggest alternative courses of actions
1.4 RESEARCH QUESTIONS
To achieve the above objectives the following research questions will be considered in the light of State Insurance Company Ltd.
1. How does the Accounting system operate?
2. What are the strength and weakness of the accounting system? 3. How can the weakness be overcome?
1.5 RESEARCH METHODOLGY
In this study, I used both primary and secondary data sources. The primary data consist of interviews with top management and some staff of the finance department as well as some customers of the company. Convenience and purposive sampling techniques were used to select the interviewees because it is quite easier to obtain the required sample size even though for instance the purposive sampling is usually not considered to be statistically representative of the total population and the possibility of neglecting a number of the qualified units. The secondary data sources comprise of Accounting manuals, journals, publications, and the Internet sources. Data were analyzed qualitatively and presented using tables and charts.
1.6 SIGNIFICANCE OF STUDY
This seeks to add to what had already been done in the area of accounting system. It shall prove useful to the academia as a source of reference for other discussion and open room for further studies in this area.
Furthermore, it will be useful to practitioners in the insurance industry especially State insurance Company to strengthen the control and accounting systems.
1.7 SCOPE AND LIMITATION
The study focus on State Insurance Company and it’s the Accounts Department and the study limited to the procedures and controls of the accounting system. Also discussions will focus only on general business (non-life) insurance. To achieve the objectives of the study, time, finance, manpower and logistics in terms of data collection and depth of analysis made were constraints.
1.8 STRUCTURE OF THE STUDY
The study is...