CHAPTER ONE INTRODUCTION Background of the Study
The impact of financial reporting on the corporate performance of a business organization is becoming more apparent to user groups of a financial statement.
Accounting is a not an exact science neither are business operations without some subjective and judgmental errors when it comes to reporting them. A financial reporting therefore is a document statement which informs the various interest groups to a business on the operations and performance of their business in a period under review its present state of affairs as well as its anticipated future, in accordance with the statutes. If a financial report is to service its purpose it ought to be characterized by the following.
In the accounting process of an organization is to provide the information required to prepare a financial report which shall have the above characteristics then the transaction doing the period must be recorded prompt by and accurately and interpreted in conformity with the Generally Accepted Accounting Principles (GAAP), Statements of Accounting Standard Board (NASB), International Accounting Standard committee and the companies and Allied Matters Act cop LFN (CAMA)
Financial accounting reporting become necessary with the obvious need for accountability of stewardship from the managers to whom investors entrusted their financial resources. The Railway age in the UK. Occurred between 1830 to 1870 and for the first time the world same the emergence of multimillion corporations with large numbers of shareholders. It was a period of disorder but it brought the basis for the present day system of corporate financial report. Financial reporting is a duty of stewardship assigned to the directors of a company by section
334 of the company and Allied Matters Act Cap L20 LFN, equally the mandatory responsibility of companies to keep accounting records derives its strength from section 331 and 382 of the same act. These sections explicitly defined the necessary content and manner in which financial records should be kept.
1.2 STATEMENT OF THE PROBLEM
The study “The impact of Financial Reporting on the corporate performance of business organization” aims at investigating the financial reports of selected companies in Enugu State with a view to determine the following ;
Therefore, bused on the above statements, the researcher shall investigate the financial accounting reporting standards and every regulation their bear on the financial statement and to the extent the selected company (s) has either complied with or disobeyed the relevant statutes.
1.3 OBJECTIVES OF THE STUDY
The objectives of this study are to critically examine the financial reports of the selected company and to probe into the fundamental for their preparation as well as its presentation with a view to determining:
In order to determine the impact of financial reporting on the corporate performance of business organizations, it is pertinent to test the following question;
This study will offer solutions to ones raised it is my believe that the result of these finding will go a long why to helping researchers in this area of study, it will also enhance the understanding of the structure of published reports and accounts by the users.
The various users groups of the published financial report have their benefits from this study as follows:
1.4 RESEARCH HYPOTHESES
The following null and alternative hypothesis shall be tested in this research works:
Hi: The information provided in financial statements is not adequate to support good decision making.
Hi: The disclosure requirements of statements do not affect corporate performance positively.
Hi: corporate organizations do not comply strictly to the statutory regulations.
Hi: financial reports do not meet the needs of the various users of financial information.
1.5 SIGNIFICANCE OF THE STUDY
This study is a very important one and most significant at this period of economic situation which has witnessed the collapse of giant corporate with impressive profit and loss accounts and balance sheet statement, because the financial report serves is a “prima facie” evidence on the state of attains of such companies as well as its performance and could be relied upon as a certificate because it had the auditors certification, financial reporting could be done with every business, utmost good faith and diligence.
1.6 SCOPE OF THE STUDY
This study could have covered the impact of financial accounting reporting on corporate performance of all the sectors of the Nigerian economy but due to the challenges of such a task especially the financial resources with which to execute it, it is limited to braving industry. The study used the Nigerian Breweries plc, Enugu.
1.7 LIMITATIONS OF THE STUDY
The limitations encountered by the researcher of this work are given as follows:
1.8 DEFINITION OF TERMS
Auditor: a person who is qualified to examine the accounts of an organization to see that they are in order.
Balance Sheet: a business as at a specified date.
Bank: a financial institution whose responsibilities among others is to keep deposits for their client and customers.
Government: an institution of the state whose responsibility is to maintain law and order in the society.
Prima facie: sufficient to establish something legally until disprove later.
Researcher: an enquiring basically concerned with search knowledge.