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
Certification: —————————————————————– — iii
Dedication: ———————————————————————- iv
Acknowledgment: ————————————————————- -v
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
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
3.6 Method of Administration and Questionnaire: —————————–52
3.7 Method of Date Analysis: —————————————————— 53
3.8 Decision Rule: ———————————————————————54
CHAPTER FOUR: DATA PRESENTATION, ANALYSIS AND
4.1 Date Presentation: —————————————————————57
4.2 Data Analysis: ——————————————————————– 58
4.3 Hypothesis Testing: ————————————————————-69
CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSION AND
5.1 Summary of Findings: ———————————————————- 84
5.2 Conclusion: ————————————————————————85
5.3 Recommendation: —————————————————————-86
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
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
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
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
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
b. The degree to which the financial report meets the needs of its
c. The extent to which the financial report conform to the established
d. The influence that financial report has on business performance.
e. Finally, to present suggestions and recommendations based on my
In order to determine the impact of financial reporting on the
corporate performance of business organizations, it is pertinent to test the
1. Does the information disclosed in the financial statements adequate
to support good decision making?
2. Does the disclosure requirement of the statutes affect corporate
performance positively or negatively?
3. Do companies comply strictly with the regulation?
4. Does the financial report meet the needs of the various users?
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. The Potential Investors: These are groups who are interested in
committing their financial resources to the buying of the company’s
shares. These set of people will benefit from this study as the result
of this study still arm them with the necessary tools with which to
evaluate the financial report of a corporate organization as it affects
2. The General Public: This group shall benefit from this report by the
knowledge that the business organization exists for them and not
against them, as such has to live up to its full responsibilities.
3. The Regulators of Financial Accounting Report: This group
includes the Nigerian Accounting Standard Board (NASB), the
companies and Allied Matters Act 2004 Cap (20 LFN (CAMA) the
Banking and Other Financial Institutions Act of 1991 (BOFIA),
prudential guidelines for licensed Banks. The Insurance Act 2003.
The study will help them to standardize and harmonize their
4. The Employee Group Including Existing: Potential and past
5. The Government Including Tax Authorities Department who
have Interest in the Financial Reports of Companies: The result of
this work shall be of immense assistance to each to these user
groups in the advancement of their interest.
1.4 RESEARCH HYPOTHESES
The following null and alternative hypothesis shall be tested in this
1. H0: The information provided in financial statements is not
adequate to support good decision making.
Hi: The information provided in financial statements is not
adequate to support good decision making.
2. H0: The disclosure requirements of statements do not affect
corporate performance positively.
Hi: The disclosure requirements of statements do not affect
corporate performance positively.
3. H0: corporate organizations do not comply strictly to the statutory
Hi: corporate organizations do not comply strictly to the statutory
4. H0: Financial reports do not meet the needs of the various users of
Hi: financial reports do not meet the needs of the various users of
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 ser business, utmost good faith and
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
a. The confidential nature of financial accounting information in the
business organization posed as a problem to this business
organization posed as a problem to this study.
b. The researcher was unable to reach all the members of the sample
as a result of their frequent travels and busy schedule.
c. The sample used in the research though representative but it is
relatively small compared to the population, as a result of lack of
financial with which to carry out the research on a greater sample.
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.
Alexander, D. and Britton, A (1996); Financial Reporting (5th edition).
London. Olakanmozco (2007); The Companies and Allied Matters
Act Cap. (20 LFN 2204 (2nd edition) Law Lords Abuja.
DISCLAIMER: All project works, files and documents posted on this website, eProjectTopics.com are the property/copyright of their respective owners. They are for research reference/guidance purposes only and some of the works may be crowd-sourced. Please don’t submit someone’s work as your own to avoid plagiarism and its consequences. Use it as a reference/citation/guidance purpose only and not copy the work word for word (verbatim). The paper should be used as a guide or framework for your own paper. The contents of this paper should be able to help you in generating new ideas and thoughts for your own study. eProjectTopics.com is a repository of research works where works are uploaded for research guidance. Our aim of providing this work is to help you eradicate the stress of going from one school library to another in search of research materials. This is a legal service because all tertiary institutions permit their students to read previous works, projects, books, articles, journals or papers while developing their own works. This is where the need for literature review comes in. “What a good artist understands is that nothing comes from nowhere. The paid subscription on eProjectTopics.com is a means by which the website is maintained to support Open Education. If you see your work posted here by any means, and you want it to be removed/credited, please contact us with the web address link to the work. We will reply to and honour every request. Please notice it may take up to 24 – 48 hours to process your request.