THE IMPACT OF FINANCIAL ACCOUNTING ON THE CORPORATE PERFORMANCE OF BUSINESS ORGANIZATION
ABSTRACT
The research work “The impact of Financial Accounting Reporting on the corporate performance of Business Organizations”, basically aims at ascertaining how financial accounting reporting has helped in advancing the objectives of corporate organizations. In the process, it investigated the effected that financial accounting bear on the performance of a business. Furthermore, if sought to ascertain the compliance of relevant statues by corporate organizations and the overall satisfaction of stakeholders in a corporate organizations. The study obtained its data basically from primary and secondary sources. The primary sources of data collection employed were questionnaire, oral interview and observations, while the secondary sources of data included textbooks, journals. in the analysis of the data collected, the chi-square was used to analyze the responses gathered. The study revealed that a loot of problems were inherent in financial reporting ranging from non-disclosure of vital information, subjective judgments of prepares of the financial information and most times non-compliance to relevant statues. There were recommendations given such as strict compliance to the relevant statute were made to the companies, the government needs to strengthen its regulatory agencies in order to ensure that the financial statements show a “true and fair view and comply with the relevant statues at all times.
TABLE OF CONTENTS
Title page ---------------------------------------------------------------------- ii
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Certification: ----------------------------------------------------------------- -- iii
Dedication: ---------------------------------------------------------------------- iv
Acknowledgment: ------------------------------------------------------------- -v
Abstract: ---------------------------------------------------------------------------vi
Table of contents: --------------------------------------------------------------vii
CHAPTER ONE: INTRODUCTION
1.1 Background of The Study: ---------------------------------------------1
1.2 Statement of The Problem: -------------------------------------------- 3
1.3 Objective of The Study: ------------------------------------------------ -4
1.4 Research Hypotheses: -------------------------------------------------- 6
1.5 Significance of The Study: ----------------------------------------------7
1.6 Scope of The Study : ----------------------------------------------------- 8
1.7 Limitation of The Study: ---------------------------------------------------8
1.8 Definition of Terms: --------------------------------------------------------- 9
1.9 reference: ------------------------------------------ --------------------------10
CHAPTER TWO: REVIEW OF RELATED LITERATURE
2.1 Overview of the financial Accounting System: -----------------------11
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2.2 Financial Accounting Records: -------------------------------------------11
2.3 The Subsidiary Books the General Journal (proper) ----------------12
2.4 Source Document: -----------------------------------------------------------17
2.5 The Ledgers: ------------------------------------------------------------------- 19
2.6 Classification of Accounts: ---------------------------------------------------19
2.7 The Trial Balance: --------------------------------------------------------------20
2.8 The Trading Profit and Loss Account: -------------------------------------20
2.9 The Balance Sheet: ------------------------------------------------------------21
2.10 Principles and Assumption Underlying Financial Standards: --------21
2.11 Accounting Standards: --------------------------------------------------------28
2.12 Controversial Issue in Financial Accounting Reporting: --------------31
2.13 Cross Sectional Analysis of Selected Companies in Enugu State: -36
2.14 Brief History of the Companies: ---------------------------------------------36
References: ---------------------------------------------------------------------------- 45
CHAPTER THREE: RESEARCH DESIGN AND METHODOLOGY
3.1 Research Design: --------------------------------------------------------------47
3.2 Sources of Data: --------------------------------------------------------------- 48
3.3 Method of Data Collection: ---------------------------------------------------50
3.4 Determination of Population Size: -------------------------------------------51
3.5 Determination of Sample Size: -----------------------------------------------51
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3.6 Method of Administration and Questionnaire: -----------------------------52
3.7 Method of Date Analysis: ------------------------------------------------------ 53
3.8 Decision Rule: ---------------------------------------------------------------------54
Reference: --------------------------------------------------------------------------------56
CHAPTER FOUR: DATA PRESENTATION, ANALYSIS AND INTERPRETATION
4.1 Date Presentation: ---------------------------------------------------------------57
4.2 Data Analysis: -------------------------------------------------------------------- 58
4.3 Hypothesis Testing: -------------------------------------------------------------69
CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS
5.1 Summary of Findings: ---------------------------------------------------------- 84
5.2 Conclusion: ------------------------------------------------------------------------85
5.3 Recommendation: ----------------------------------------------------------------86
Bibliography:-------------------------------------------------------------------- ---87
Appendices: -----------------------------------------------------------------------89
CHAPTER ONE
INTRODUCTION
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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.
a. Relevance
b. Understandability
c. Reliability
d. Completeness
e. Objectivity
f. Timeliness
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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.
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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 ;
a. The extent to which a standard financial report contributes to or detracts from the growth of a business organization.
b. The extent to which the financial reports of corporate business organization comply with statutory provisions.
c. The uniformity and conflict which exist in the financial reporting regulations given the multiplicity of regulators.
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
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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:
a. The adequacy of the basis and the fundamental that guides its preparation.
b. The degree to which the financial report meets the needs of its various users.
c. The extent to which the financial report conform to the established standard.
d. The influence that financial report has on business performance.
e. Finally, to present suggestions and recommendations based on my findings.
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