1.1 INTRODUCTION AND BACKGROUND OF STUDY
Budgeting can be traced to the 18th century period when it was used to check the powers of the king concerning taxation as a source of revenue and the governments expenditure. It involves management development plans developed in order for the terms of marketing to be served, the production and distribution process to be used and the facilities and personnel required.
Controls can be seen as single procedures or whole systems they are established by management either directly or by means of external consultants e.g auditors, accountants, etc to maintain orderliness in the business enterprise. Internal control activities can be defined as the whole system of controls financial or otherwise established by the management in order to carry out the business of the enterprise in an orderly and efficient manner, ensure adherence to managements policies, safeguard the assets and secure as far as possible the completeness and accuracy of records. Controls in relation to finance are those activities that involve planning and control of all aspects of production or marketing of commodities using the budget as a tool.
Corporate governance as a term covers all the general mechanisms by which management are led to act in the best interest of companies’ owners statutory control of corporate governance has been with us for a long time and has increased overtime. While it is impossible to have a crime free society, the need to spell out the rules of the game cannot be overemphasized. Corporate governance means the system which companies are directed in the best interest of the owners and investors in this case through the use of budgets.
The study will be taken from four angles. The first is centered on the preparation of the budget. The guidelines or rules which the firm follows in preparing budgets and the consideration given in preparing a budget. It now leads to the question of how an organization prepares it budget. The second point of reference is how the budget preparation influences the organizational performance and also the individual performance. The third point of reference is centered on how the control system works and its ability to properly direct the staff of the organization. Finally, we look at the weaknesses or strength of budgeting and control activities in an organization in relatives to the performance of its staff.