INVESTORS RELIANCE ON FINANCIAL STATEMENTS: A CASE STUDY OF UNION BANK
The aim of this chapter is to bring together views of different
relevant literature connected with financial statement analysis in Nigeria. It seeks to discuss the
information available in Nigeria and elsewhere as it is considered pertinent to the study. The study analyses the extent to which investors can place reliance
on financial statement presented by the directors of the company under view. In order that this will be well placed, a general view of the financial statement is
also being considered.
It however, not worthy to mention that there is the shortage of materials for analyzing the degree investors can rely on financial statement of companies in
Nigeria, as it is a relatively new concept. Consequently, what is being highlighted is the diverse discussion and opinions of various writers and commentators.
The present study therefore seeks to bring dierent
views into focus in an attempt to obtain a good understanding of the nature of financial statement
preparation and presentation.
2.2 THE CONEPT OF FINANCIAL STATEMENT
Anao R.A. (1989): posited that financial statement is the procedures which has the special aim of ultimately generating of information which would be
presented to various interested parties for their respective decision. It is the medium for presenting information which can form certain specified standards
with regards to content and style of presentation. These statements are company law, the pronouncement of major professional accounting bodies and in
certain cases also the requirement of the stock exchange.
Professional Accountants tutors (2002), defines financial statement as the means of communicating toe interested parties information on the resource
obligation and performance of the reporting entity, or enterprise. Financial statement shows corresponding figure for the proceeding period. Financial
statements are expected to be simple, clear and easy to understand by all users.
Barton (1979:273), defines financial statements as a report of financial condition or of the financial result of the operation of the business, a government or
Neven P. (1984), defines financial statements as the output of an accounting system through which selected information about the entity economic activities
can be communicated to management, investors and creditors about the past and present financial statement and forming expectation about performance.
Financial statements are the instrument panel of business enterprise in decision-making. They constitute a report on managerial performance attesting to
managerial success of fortune an flashing warning signal of impending diiculties
to read a complete instrumental panel, one must understood the gauges
and their calibrations to make sense out of the array of data they convey.