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An Assessment on the Effect of Budgetary Control on Return on Assets and Net Profit of Government-Owned Companies in Rivers State

ThankGod O. Imo () and Chika DES-Wosu ()

International Journal of Academic Research in Accounting, Finance and Management Sciences, 2018, vol. 8, issue 3, 277-290

Abstract: This study is an assessment on the effect of budgetary control on return on assets and net profit of government-owned companies in rivers state. Descriptive survey research design was used for this study. Questionnaires were administered to the organizations under investigation. Pearson product moment correlation coefficient and frequency tables were used to analyse the returned data. Statistical package for social sciences version 20 was utilized to test the effect of the independent variable on the dependent variable. The study reveals positive significant relationship between budgetary control and financial performance of government-owned companies in Rivers state on the basis of net profit and returns on assets. Based on the findings, the study concludes that budgetary control system can be used as a control mechanism to strengthen performance measurement systems. Organizations should put in place appropriate budgetary control systems which will assist in accomplishing a principle and element of the budget process. The study therefore recommends that for improved performance in these companies, GOCs should continue to adopt improved budgetary control measures in totality.

Keywords: Budgetary control; Return on Assets; net profit; Government-Owned Companies (search for similar items in EconPapers)
Date: 2018
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