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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.




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.

  1. Relevance
  2. Understandability c. Reliability
  3. Completeness e. Objectivity
  4. Timeliness

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.


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 ;

  1. The extent to  which  a  standard financial  report  contributes  to  or detracts from the growth of a business organization.
  2. The extent to  which  the  financial  reports  of  corporate  business organization comply with statutory provisions.
  3. 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.


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:

  1. The adequacy of  the  basis  and  the  fundamental  that  guides  its preparation.
  2. The degree to  which  the  financial  report  meets  the  needs  of  its various users.
  3. The extent to which the financial report conform to the established standard.
  4. The influence that financial report has on business performance.
  5. Finally, to present suggestions and recommendations based on my findings.


In  order  to  determine  the  impact  of  financial  reporting  on  the corporate performance of business organizations, it is pertinent to test the following question;

  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 them.
  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 operations.
  4. The Employee Group  Including  Existing:  Potential  and  past employees.
  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.


The following null and alternative hypothesis shall be tested in this research works:

  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.

  1. H0: The  disclosure  requirements  of  statements  do  not  affect corporate performance positively.

Hi:    The  disclosure  requirements  of  statements  do  not  affect corporate performance positively.

  1. H0: corporate organizations do not comply strictly to the statutory regulations.

Hi:    corporate organizations do not comply strictly to the statutory regulations.

  1. H0: Financial reports do not meet the needs of the various users of financial information.

Hi:    financial reports do not meet the needs of the various users of financial information.


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.


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.


The limitations encountered by the researcher of this work are given as follows:

  1. 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.
  2. The researcher was unable to reach all the members of the sample as a result of their frequent travels and busy schedule.
  3. 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.


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.


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