The Importance of Budget and Budgetary Process among Non-Publicly Accountable Entities (NPAEs): A Survey of Micro Sized Firms in Nigeria

Abstract

Non publicly accountable entities otherwise known as Small and Medium Enterprises (SMEs) has been a major contributor to national development over the years. The survival of the sector particularly the micro-sized firms is important to all stakeholders especially the owners and fund poviders. The aim of this research paper was to ascertain the level of importance attached to budget and budgetary process among micro sized enterprises and the relationship between the budgeting and business performance among the entities. Using a sample of fifty micro sized manufacturing firms, and adopting questionnaires to gather primary data- the Pearson Moment Correlation co-efficient, Z-statistics and simple statistical tools for analysis. The first hypothesis shows result of 0.0106 below the standard 0.5 with the weighted means all below expected ‘3'hence it is concluded that a weak relationship exist, while the second hypothesis, using Z-statistics with relevant calculated values less than 1.96 value at 5% confidence level confirms that there is no formal budget and budget process among micro sized firms. These results indicated that budgets are not given the required pre-eminence by micro-sized firms and therefore cannot enjoy the expected benefits accrued to such. The findings of the study may have implications for the firms' management, as they revealed the several lost benefits of budgeting.  It is recommended that formal budget should be prepared carrying along all staff and ensure controls are put in place to achieve set goals.