CHAPTER ONE
INTRODUCTION
1.1
BACKGROUND
OF STUDY
Before
the “Structural Adjustment Programme (SAP)” can be clearly defined, one must
have a better understanding of the situation into which it was introduced. At
the conclusion of a Debate/Symposium on “Devaluation” held in 1982 at the
Institute of International Affairs, the consensus emerged that the economic
problem of Nigeria was structural.
The
intention of SAP is to adjust the structure of the Nigerian economy, but what
is the structure of the economy and why does it need adjustment? The relevant
dictionary meaning of the word “structure” is “the arrangement or interrelation
of all part of a whole”.
At
the summary of overall economic level which the economist call “The macro
level”, the structure f the economy is its composition as seen through the
shares or proportion of the various component parts or economic aggregated, in
the total sum of goods and services produced in a period usually a year.
Therefore,
the structure of the economy is shown by the shares of the various economic
sectors in the Gross Domestic Product (GDP). Just like any other theory, accountants have discovered that they
need to make certain assumption before they can prepare financial statements.
These assumptions, which underline
the preparation of financial statements, are also known as principles,
postulates, conventions, concepts, and standards etc. The origination from such
concepts as entity, going-concern, periodicity realisation, matching,
consistency and historical cost concept.
They
have been described as the basic points of agreement upon which the preparation
of financial statement are based. They act as filters in the process of
preparing financial statement and therefore assist immensely in selecting data
to be processed and also indicating the processing method and thereby affecting
the final result.
Accounting
Principles are usually rules and conventions, which have been adopted as a
general guide to action by the accountancy profession. These principles are
formulated in such a way that the practical details of accounting may differ
greatly from one company to another. To ensure acceptance, an accounting
principle must be useful in coping with a practical recording problem, it must
be reasonably objective, that is, provide a similar answer in the hands of
qualified practitioners, and it must be feasible, that is, it should not be
expensive to apply.
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