Accountant’s Role in Project Feasibility Essay

umpteen forward-looking regurgitates which have laddered countless feasibleness and viability judgement studies have been sunk by un anticipate events such as flood. fire, burglary, changes in legislation, plague, demographic shifts, an inability recruit and/or keep desirable staff, the misfortune of a major customer, seasonal demands, health sc atomic number 18s, product recalls due(p) to poor quality, withdrawal of financial support, weather, tonic technology and poor direction to list but a few. Many disgorges of course can pass feasibility tests and studies and be brought und one by sheer incompetence or downright dishonesty. A key factor in any feasibility lead must be ensuring that you ar dealing with crystallise facts, correct assumptions and up to date financial information. Al intimately daily, Tanzanian Newspapers Larry prominent stems of new manufacturing ventures soon to be launched by individual or by local anaesthetic groups.Perhaps, tomorrow a state government go away be rotund us how college industries will stem the flow of y forthhs from rural to urban argonas. From the headlines merely Tanzanians cannot escape the feeling that the rest holds great promise for unprecedented scotch and social progress. But these expectations will be fulfilled merely if most of the specific construes survive their early lives. Besides, not all those new projects will be completed. Some that get completed will not upraise juicy and may soon close down. According to Nwoko (198834) summits that in elementary terms one reason for which new projects may not be completed but have to be abandoned or profitable ventures may get choked up by controllable environmental factors and circumstance is that proper feasibility analysis was not conducted before transfer off of project. According to Ume 9197710).. stated that proposals schemes or projects for social, environmental and economic organic evolution demand feasibility and viability appraisa l.See moreManifest Destiny establishIn fact the two fundamental questions which feasibility and viability appraisal stress to answer be inevitable for prudent decision making at all levels in the society. The entrepreneur must have a languish range outlook on the intended business investment, examine the preference purposes of capital and account for inflation in prospective value of coin flows, and forecast future events and financial requirements and carry sensitivity and risk analysis.These are highly technical areas of knowledge that calls for expertise skills. Therefore this category of military rating holds out limitless opportunities and boundless scope for service and rewards for the accountants, economists, valuers or appraisers. This area provides an analysis and illustration of the principles of feasibility and viability appraisals and highlights the essence of the subject matter. It also brings into penetrating focus the accountants essential contributions whi ch have hitherto tended to be lost in wide diffusion1.1Background.The teach is divided into two sections. Section one which comprises chapter 1,2 and 3 deals with the main basis, scope and methodology of he research. Specifically, chapter two provides an evaluation of the theoretical concept of investment appraisal. Hence, the contributions of various writers with regard to the concepts of feasibility and viability studies as well as the character reference of the accountant there off are examined under the heading literature review. The second section comprises chapter 4 and 5, and focuses on feasibility and viability case study on a applicatory illustration of feasibility and viability case study of a household manioc-starch production.1.2Statement of the hassleOne of the riddles of a successful industrialization in the developing countries is doubtlessly lack of formulation of a project in such a way that its potential profitability either from the public or hole-and-corne r(a) view point can be estimated on a sign basis. According to Ezeanagu (199114). This assertion is evidently proved by the survival esteem of the national directorate of employment supported small scale enterprises in Nigeria which has been put at a mere 15%. According to Uwakaneme (19801) this riddle can be pinned on the tendency in Nigeria entrepreneurs to neglect thought through their plans carefully in the beginning in form of feasibility and viability study before committing scarce funds and energy apart from short starting capital and shortage of skilled technical and managerial manpower.Many sound business ventures are abandoned after plunging in capacious amounts of money because their originator just embarked upon them in that they feel there is grocery store demand and they could get enough funds to execute the project. According to Ughamadu 9199018) regrettably, as Uwakaneme (19803) puts it, many Nigerian businessmen see feasibility studies not as a vital part of their project but as an double-dealing and an absolute necessity for fulfilling loan requirements or for attracting equity participation.Thus, the more embellished the report the better. Available evidence indicates that even trusted accountants, consultants prepare project reports and projections to befit their clients requirements and earn their fees insensitive of the credibility to Olashore 919855), consequently, the proposals get rejected by the bankers, or share the facilities granted, the business proprietors soon find themselves in trouble when they are faced with real life situations as distinct from the rosy go out painted by the initial projections by the accountants.1.3Research objectives1.To determine the main techniques of appraisal commonly adopted for analytical purposes and to determine the reasonableness of such in practical situations. 2.To appraise the potential of feasibility and viability studies in successfully carrying out a project ideas. 3.To identify t he general role of the accountant in the formation and development of business. 4.To identify the specific role of the accountant in feasibility and viability appraisals. 5.To illustrate the principles and applications of feasibility and viability studies suing a small scale cassava starch plant as a case study chief(prenominal) objectiveSpecific objective1.4Research questions.Following from the problems identified in the problem statement as stated above, the following fundamental questions have income desperate for this study 1.What are the underlying principles and significance of feasibility and viability appraisals? 2.What impact do feasibility and viability appraisals have on the survival o failure of new projects? 3.What is the role of a professional accountant in the preparation of conceivable feasibility and viability appraisals in order to help avert project failure1.5Scope of the studyThis study does not dwell much on the truth or otherwise of the failure of accountant s to carry out their role in feasibility and viability appraisals but merely examines what that role should be using a case study. Hence, there is no hypothesis or any produce of such.Research works in Nigeria especially those adopting interview approach, are rile with a lot of limitations which include mass illiteracy, dearth of reliable inessential data prejudice against the research himself and ensure secrecy. Many of these limitations were experienced in the course of its study.The study was carried out mainly in Enugu although some data were gathered in Lagos. Therefore, the case study may not be regarded as a fact accompli report for investment purposes as only a limited investment has been conducted and a number of assumptions made.These limitations not withstanding it is believed that the findings of the study could be useful and should form the basis for further studies on the subject.1.6significance of the studyIf a project is well formulated and thoroughly appraised, a good follow-through on the subsequent stages of the project will see to its goals existence achieved. Appraisal involves a careful checking of the basic data, assumptions and methodology utilize in project preparation, an in-depth review of the work plan, cost estimates and proposed financing, an assessment of the projects organizational and management aspects, and finally the validity of the financial, economic and social public assistances expected from the project. On the basis of such an assessment, a judgement is reached as to whether the project is technically sound, financially justified and viable from the point of view of the parsimony as a whole.The target audiences of this study are students of accountancy in the tertiary educational institutions and all those interested in the field of project evaluation. Since there appears to be no existing literature on the role of the accountant in feasibility and viability studies, this project attempts to till that gap for the benefit of accounting students. It would also help young entrepreneurs and indeed the management of venial business to appreciate the necessity of feasibility and viability appraisal which will metamorphose to the survival of their business which will in turn enhance the acquirement of the government objective of rapid industrialization 1.7Limitation and delimitation of the study1.8DEFINITION OF termThe following are the contextual definition of some terms used in the studyACCOUNTANTPROJECTA project is the use of one or more scarce resources during specific time full point for the purpose of producing some economic returns or output at a later time. A project is the consumption in the near future of scarce or at least limited resources in the apprehend of obtaining in return over a longer is an optimum bunch in the investment oriented by means of which a be continuation of human and material resources is expected to cause a unflinching amount of economic and social developm ent. According Nweze (198734)INVESTMENTAccording to SIR D.C Osuagwu (200331) investments are carried out primarily for maximizing an entities wealth and can be wide-ranging into Mechanization of process where a firm wants to change its manual remains of production to installation of a machine or expansion is a process. Investment is an economic activity designed to increases, improve or find the productive qualify of the existing stock of capital. According to Nweze (198734). NB project evaluation, investment analysis or appraisals are for the purpose of this study, synonymous and thus used interchangeably here.FEASIBILITY AND VIABILITYFeasibility and viability have been explained in specific elsewhere in this study. But for the present purpose let it glut that respectively the mean practicability and profitability