THE QUALITY OF CORPORATE FINANCIAL DISCLOSURE IN BANKING INDUSTRY IN NIGERIA . A RESEARCH PROJECT MATERIAL ON BANKING AND FINANCE
ABSTRACT
Due to the study on corporate reports in the banking industry, the research took interest to study an empirical analysis on the quality of corporate financial disclosures in Nigeria banking industry.
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF STUDY
In any Business entity, whether profit or non-profit making, has sets of objectives. It mobilizes resources from various sources to achieve the set goal at the end of the period. This is necessary to determine how well these resources have been utilized.
Where there is separation of ownership from management, the owners will want to know how judiciously these resources have been used. This is the stewardship function of accounting. This function is discharged by the presentation of a report of the activities to owners by management. Such reports are usually conveyed by means of financial statements. Statement of Accounting. Standard 2 (Information to be disclosed in Financial Statement) and Section 334 (2) of Companies and Allied Matters Acts provide that financial statement shall include the following:
· Profit and loss account,
· Statement of account policies,
· Balance sheet,
· Notes to the accounts,
· Auditors report,
· Directors report,
· Value added statement and
· Five year financial summary.
The financial statements must accurately represent the underlying economic activities of the organization. It is possible to have a discontinuity between the activities of an organization. When this occurs, the credibility of such statement induces doubt and uncertainty in the minds of the various users of the statement. This therefore means that, the information asymmetry (i.e. lack of uniformity) between information available to management and information available to the investing public.
There are two sources of information asymmetry as regards to financial statements.
1. Management’s understanding of underlying activities may not be accurately represented in financial statements.
2. Investing publics understanding or perception of information represented in financial statement may be different from that which has been documented.
Financial statements more or less make a case for reporting entity in their quest for invisible funds.
Leave a Reply
You must be logged in to post a comment.