TABLE
OF CONTENTS
Title page
Approval page
Dedication
Acknowledgements
Abstract
Table of contents
CHAPTER ONE
1.0 Introduction
1.1. Background of the study
1.2. Statement of the problem
1.3. Objectives of the study
1.4. Research questions
1.5. Statement of hypothesis
1.6. Significance of the study
1.7. Scope of the study
1.8. Limitation of the study
1.9. Definition of Terms
CHAPTER TWO
2.0. Review of related literature
2.1. Historical perspective of taxation in Nigeria
2.2. Introduction and definition of deferred tax
terminologies
2.3. Accounting standards on Accounting for deferred
taxation.
2.4. Bases and benefit for providing for deferred taxes
2.5. Implication of corporate risk management
2.6. Corporate risk management strategies
2.7. Effects of deferred taxation in the management of tax risk
References
CHAPTER THREE
3.0 Research Methodology
3.1. Research design
3.2. sources/methods of data collection
3.3. Population and sample size
3.4. Sampling technique
3.5. Validity and reliability of measuring Instrument
3.6. Method of Data analysis
3.7. Techniques for testing Hypothesis
CHAPTER FOUR
4.0. Presentation and analysis of data
4.1. General characteristics of responses
4.2. Presentation of Data
4.3. Analysis of data
4.4. Test of Hypothesis
4.5. Interpretation of results
CHAPTER FIVE
5.0. Summary, conclusion and recommendation
5.1 Summary of findings
5.2. Conclusion
5.3. Recommendations
Bibliography
Appendix
CHAPTER
ONE
1.0. INTRODUCTION
1.1.
THE BACKGROUND OF THE STUDY
Taxes
are one the most important cost drivers in any organization. This is one of the reasons why tax risk
management and the compliance are often high on corporate agenda and why more
and more companies are hiring tax managers for drawing up task risk
policy. This enables them not only to
cope with the growing complexity of the legal compliance requirement but also
to make their tax planning more efficient and forward looking, to assess them
correctly, spot the inherent risk in good time, and generally execute them more
effectively. This builds greater trust
among investors, shareholders, and the public, it also strengthens the company’s
reputation.
It
is pertinent to note that, the amount of tax payable in any particular period
does not necessarily bear direct relation to the amount of profit and loss
shown in the income statement. This is
because tax laws provides for the computation of the taxable income for a
period based on rules different from the General Accepted Accounting Principles
(GAAP) followed in the preparation of income statement. In order to properly account for the tax
effects of all transactions occurring within a period, a deferred tax provision
is necessary, so as to comply with the matching concept.
Interesting,
the statement of Accounting Standards (SAS) 19 and International Accounting
Standard (IAS) 12 made provision for deferred taxation accounting, however it
has been noticed that most organizations do not main deferred taxation
accounting, instead they hire tax managers that is accountants to make
necessary adjustments in the income statement to suite the mount of the tax
they have budgeted to pay for the period.
This increase overhead, which in the long run creates fluctuation in the
profit after tax figure earning per share and shareholders fund.
The
research tends to find out how this can be mitigated.
1.2 STATEMENT OF THE
PROBLEM
Most
organization in Nigeria tends to acknowledge deferred tax, but generally makes
no provision for it. Organization also
lack good strategic management, this often lead to inability to pay task as at
when due and lack of good tax planning policies, as a result spends huge amount
of money annually in hiring tax planners.
1.3 OBJECTIVES OF THE STUDY
1) To
appreciate the concept of deferred tax from both accounting and tax
perspective.
2) To
examine the impact deferred taxation in corporate risk management in selected
companies.
3) To
examine the impact of good tax planning policies as a strategy for managing
corporate risk
1.4 RESEARCH QUESTIONS
(1)
Does deferred tax aid in corporate risk management
(2)
Does organizations make provision for deferred taxation?
(3)
What are the available ways of managing corporate risk?
1.5 STATEMENT OF
HYPOTHESIS
The
following hypothesis has been drawn from the research questions will be tested
for the purpose of the study.
1. Ho: It
is not prudent to provide for deferred tax.
Hi:
it is prudent to provide for deferred tax
2.
Ho: Deferred taxation has no effect in corporate risk management
1.6 SIGNIFICANCE OF THE STUDY
To
the student the research work is a fulfillment of the prerequisite for the
award of Higher National Diploma
The
researcher will help students and staff in the academic environment to
appreciate the concept of deferred taxation from both the accounting and tax
perspective.
The
significance of the study goes beyond the academic environment (perceptive) to
other field of human endeavour some of these includes:
Tax payers:
(companies/individual). The tax payer
will appreciate from the study how to identify good tax planning and use it
effectively and efficiently.
Tax authority: This study is also significant to the tax
authority since it highlight the effect taxation in managing corporate risk;
the knowledge and recommendations will help in easy tax assessment and prompt
collection.
Accountants/managers: through the research work they will come to
appreciate the concept of deferred taxation and its importance.
The
research work will also benefit the general public who are at the receiving end
of good tax administration through the provision of basic amenities such as
good road, hostels, electricity etc.
1.7 SCOPE OF THE STUDY
In
a research of this nature (the impact of deferred taxation in corporate risk
management) it would have been expected to cover a wide range companies from
different sectors of the economy at different geographical areas, covering the
oil and gas sector, banking sectors, manufacturing etc. but due to certain constraints the research
would be as far as fetched.
However
in order to achieve the objective of the study. Samples have been drawn from
different sector of the economy but in a geographical area.
1.8 LIMITATION OF THE STUDY
Some
factors that constitute in the limitation of the research work include:
(1)
Time: Because of the limited time for
the research the researcher was included with lectures and other school
activities.
(2)
Financial difficulties: Finance was a
major constraint experienced; as a result the study was limited to about three
companies.
(3)
Unwillingness of respondent staff to give information/data: Most staff of the organization was
incorporative and unfriendly to the extend that some of the materials necessary
for the work could not be fetched, insisting that they would get order from top
management before releasing information
(4)
Lack of industries within Owerri municipal is another constraints to the research
work, which necessitated traveling far way to get information.
1.9 DEFINITION OF TERMS
Deferred
tax: Is the tax attribute to timing
or temporary differences
Tax risk: Deals with how the decisions activities and
operations of an organization impact negatively or positively on the quantum of
tax payable by that organization.
Dividend: cash or other asset that constitute a
distribution to a class of stock holders of corporation.
Income
statement: A summarization of the
revenue and expenses of an accounting period of a particular enterprise
Profit after tax: The income that is attributable to an
enterprise after tax has been deducted.
Income: Money received during a given period as
salary or income.
Taxation: A compulsory payment levied on the individual
citizens or corporations by the government.