BACKGROUND OF THE STUDY
The preponderance of vast number of small scale industries in Nigeria suggest that the situation offers substantial opportunity for the intensive development and improvement of this sector, with appropriate injections of technology, improved management, efficient marketing techniques and so forth (Echu, 2002). The contributions of small industries to development are generally acknowledged.
Small industries face many obstacles that limit their long term performance and invariably their development and growth. Some of the causes of failure have been traced to poor management and lack of knowledge of proper accounting system employed by these industries (Akande, 2011).
Manufacturers employ various system of accounting which requires a timely, relevant and accurate measure of cost, resources consumed in manufacturing their product and managerial decision making. Since the system of accounting used by industries is one of the key things that determine industrial growth and profitability, they must make use of a system of accounting which will enable them determine the volume of sales, cost of product and profitability at any given time (Okoli, 2011). Despite these efforts, most small scale industries in Nigeria still fail mostly because of lack of sound professional principle that is capable of providing information on the activities and decision process of the industry. Small scale industries cannot boast of professional Cost Accountants capable of providing cost accounting information on the activities and decision process of the industry.
It is recognised that appropriate cost accounting information is important for successful management of an industry whether it is large or small (European Commission-Enterprise and Industry Directorate-General, 2008). Without proper knowledge of cost accounting, one will find it difficult to provide adequate administrative management that will ensure the survival of small scale industries in Nigeria.
Cost accounting can be defined as the collection, accumulation, classification, coding, analysis, processing and recording of cost information to assist management in planning, control and decision-making (Adeniji, 2009:2). Cost accounting can be seen as a branch of accounting that determines the actual cost of operations that the company indulges in. Cost Accountants provide a company’s management with such cost accounting information.
Cost accounting information is relevant and appropriate to an industry because it is useful for managerial planning, control and decision-making. The value of cost accounting information lies in the action taken as a result of receiving it. Therefore, it is really imperative that small scale manufacturing industries pay great emphasis on the impact of Cost Accountants.
1.2 STATEMENT OF THE PROBLEM
Gross inefficiency and non-application of sound professional principles have been known to be a serious factor contributing to the failure of small scale...