ACCOUNTING INFORMATION SYSTEM AS A MEANS OF ENHANCING FINANCIAL MANAGEMENT OF TRANSPORT COMPANY (A CASE STUDY OF THE NIGERIAN RAILWAY CORPORATION ENUGU)

                                    CHAPTER ONE



                                    INTRODUCTION



1.1 BACKGROUND OF THE STUDY



  The Nigerian Railway Corporation (NRC) has been in existence for years. It is


regarded  the  largest  transport  corporation  in  Nigeria and  has  a  high  network


operations.



  The Nigerian railway corporation is One Hundred and Fourteen years (114) old


and  it  runs  a  unilaterally  designed  track  system  of  1067mm  charge  gauge.  Only


30km of its track distribution is in double track and that is within Lagos area.



  Nigerian Railway Corporation actually commenced rail business activities with


the construction of the first rail line from Lagos to Ibadan 193m between 1998 and


1901.  By  1964  when  the  construction  of  640km  Kano-Maiduguri  rail  line,  then


known as Bornu extension, was completed, the present core of the railway network


hard been put in place. 



  Presently, the railway system is  made up of 3’505 route kilometers and 4332


track  kilometers.  In  addition  to  this  is  the  19km  1067mm  gauge  extension  from


Port-Harcourt to one deep sea port and the 277km standard gauge rail construction
                                                                                     

 

of  1435mm  from  Ajaokuta  to  Warri.  Nigerian  railway  was  transformed  from  its


first and initial name.



    “Government  Department  of  Railway”  to  Nigerian  Railway  Corporation  in


1955 through  the  instrumentality  of  the  statutory  act  of  parliament  which,  apart


from changing the name of the railway industry in Nigeria, equally conferred on it


absolute  monopoly  as  the  institution  recognized  by  law  to  carry  out  railway


services. 



The general aim and object of the statutory act of parliament of 1955 for Nigerian


railway is to recognize same as carrying out its function of effecting “carriage of


passenger and goods in a manner that will offer full value for money, meet cost of


operation, improve market share and quality of services, ensure safety of operation


and maximum efficiency, meet social responsibility in a manner that will meet the


requirements of rail after, trade, commerce, industry and general public”.



      The headquarters of the corporation is located at Ebute-metta in Lagos state


while  the  entire  network  is  for  administrative  convenience,  divided  into  seven


autonomy districts viz.Lagos (Ebute-Metta junction), west (Ibadan), north (Zaria),


east  Enugu),  North-west  (Minna),  north- central  (Kanfanchem)  and  North-east


(bauchi) 
                                                                                       

 

      The  railway  system  has  been  undergoing  same  rehabilitation  and


modernization  with  the  full  political  and  financial  support  of  the  federal


government  through  the  federal  ministry  of  transport.  The  rehabilitation  of  the


railway  system  includes    track  spot  removal of  Lagos  to  Kano  and  Maiduguri  to


port-Harcourt, supply of 25 new locomotive engines from brazil south America to


boost  the  registry  motive  power  base  of  the  corporation,  up  grading  of  the


signaling and telecommunication  system  from  manual to  semi  automatic, as  well


as  rehabilitation  of  carriage  and  wagon  workshops,  re-equipping  the  workshops,


supply  of  service  support  (spare  part  consumables),  strategic  rebranding  of  the


corporation, rehabilitation of stations and marshalling yards inter alia. 



      Equally,  new  railway  lines  are  being  constructed  in  standard  gauge


(1435mm). These include: Ajaokuta-Warri of 277km, Kaduna-Abuja (Idu) line of


186km while the scope of work for Lagos-Ibadan segment is under review together


with its cost implications.



The  Nigerian  Railway  Corporation  has  contributed  amenably  towards  the


improvement of social life and the development of the national economy. This is


through to be extended to every part of the country that is the haven stages which


will  lead  to  permanent  prosperity  confident  was  such  an  ultimate  triumph  of  the


railways. 
                                                                                     

 

However,  regardless  of  the  huge  success  made  by  the  corporation,  it  is  facing  a


hard time.



1.2 STATEMENT OF PROBLEMS 


Nigeria Railway Corporation which dominated the transport sector of the economy


in the sixties is presently being delegated by other means of transport such as road


transport, sea, and air transport. The corporation has lost her passengers and freight


mainly to road transport; this is because of inability of the corporation to compute


effectively in order to meet the age longed challenges. 



Ordinarily  there  should  have  been  growth  in  both  road  and  railway  transport  but


the railway transport seems neglected. The truth of the matter is not just neglected,


but a problem of cash flow difficulty and management these affect the purchase of


spare  parts,  repair,  payment  of  salaries,  inadequate  infrastructure  support  and


enhance service rendering. 



Given  the  above  condition  of  the  Nigerian  Railway  Corporation  in  the  nations


transport  industry,  the  problem  which  looks  for  detailed  analysis  and  solution


includes the following questions. 



1. Is  the  accounting  information  used  in  the  corporation  adequate  for


  managements short and long term plans? 
                                                                                       

 

2. Have  the  accounting  officers  in  the  corporation  has  the  needed  professional


  skills to cope with demands of the job?



3. Is there any serious effort made by the corporation to boost operation?



4. Do the accounting officers perform their duties without the interference of the


  management?



5. What  is  the  mode  of  approaching  the  chief  accounting  officer  of  the


  corporation? 



  Answer  to  these  questions  above  constitutes  the  basic  problem  of  the


  researchers work. 



1.3 OBJECTIVES OF THE STUDY 


Bearing in mind the above mentioned problem study is aimed at finding out among


other things such as:- 



1. The  organization  of  accounting  department  in  Nigerian  Railway  Corporation


  with  particular  interest  in  the  eastern  division  of  the  corporation  and  how  the


  accounts  department  contributes  to  the  achievement of  overall  goals  for  the


  corporation.
                                                                               

 

2. Whether  the  accounting  information  is  actually  one  of  the  effective


  management tools in the railway corporation.



3. Whether the  accountants in the  corporation adequately  perform  their duties  in


  conformity with the statement of accounting standards (SAS)



4. In  where  the  tools  of  the  accounts  department  to  the  performance  of  the


  individual workers in term of their output.



1.4 RESEARCH QUESTIONS 


  Despite  the  problem  mentioned  above  concerning  the  Nigerian  railway


    corporation, these  questions  are  been  asked  towards  their  accounting


  department. 



1. Dose  the  account  department  of  railway  corporation  Enugu  contribute  to  the


  achievement of the overall goals of the corporation?



2. Is the accounting information actually one of the effective management tools in


  the railway corporation Enugu?



3. Dose  the  accountants  adequately  perform  their  duties  in  conformity  with  the


  statement of accounting standards? 
                                                                                     

 

4. What  are  the  tools  of  the  accounts  department  to  the  performance  of  the


  individual works in terms of their output? 



1.5 HYPOTHESIS OF THE STUDY 


The following hypothesis where postulated as a guide to the researcher:



1. Ho:- accounting information is not an  indispensable tool in the management of


  Nigerian railway corporation.



  HI:- accounting  information  is  an  dispensable  tool  in  the  management  of


  Nigerian railway corporation.



2. Ho:- The activities of unqualified and incompetent accounting officers are not


  responsible  for  the  poor  performance  of  the  accounts  department  in  Nigerian


  railway corporation. 



  HI:- The  activities  of  unqualified  and  incompetent  accounting  officers  are


  responsible  for  the  poor  performance  of  the  accounts  department  in  Nigerian


  railway corporation. 



3. Ho:- The absence of computer system application dose not affects the timeless,


  accuracy  and  availability  of  accounting  information  in  Nigerian  railway


  corporation.
                                                                                    

 

  HI:- The absence of computer system application  affects the timeless, accuracy


  and availability of accounting information in Nigerian railway corporation.



1.6 SIGNIFICANCE OF HE STUDY 


The  role  of  accounting  information  in  the  management  of  large  business


organization cannot be over emphasized. It is based on the fact that the research is


to study  and  appraise  accounting  information  system  as  a  tool  of  management


using the Nigerian Railway Corporation Enugu as a possible ways of minimizing


the problem for better and enhanced performance as the corporation.



The  knowledge  about  these  problems  and  their  way  out  will  help  remedy  other


transport corporation in similar state. This study is to make recommendation that


would boost the operation performance of the account department in the Nigerian


Railway Corporation Enugu if being implemented. Beside, the study of this work


is to help as well as serve as a term of reference for those who may be interested in


using it.



1.7 SCOPE AND LIMITATION OF THE STUDY 


This study is on the Nigerian Railway Corporation Eastern division, the limitation


of this study in Nigeria railway corporation eastern division Enugu. This is due to


some constraints; those constraints were financial difficulties which prevented the

 

running  down  from  one  relevant  railway  corporation  division  to  another  for


sources of information necessary for this study. 



Another  constraints  are  the  time  limit  within  my  disposal,  the  demand  from  the


academic  activities  and  limit  within  this  study  is  to  be presented  constitute  the


constitutes 



1.8 DEFINITION OF TERMS 


FRIGHTS: This is the volume of revenue acquired by all haulage of goods by the


good train. 



PASSENGERS FARE:  This  complies  of  the  returns  made  from  ticket sales  and


penalties by defaulting passengers. 



LOLLING STOCK: This include the entire carrying system which is made up of


the locomotive engine, coaches, wagons, (both covered and uncovered) and tanks.


They are used in the haulage of goods and in carrying passengers. 



LOCOMOTIVE  ENGINE:  This  is  the  enquire  mechanism  at  the  head  of  the


rolling  stock  that  pulls  then  along  the  truck  in  the  movement  of  goods  and


passengers trains. 
                                                                                       

 

COACHINGS:  These  are  revenue  from  country’s  produce,  luggage,  parcel  and


livestock.