ATTENTION:
BEFORE YOU READ THE CHAPTER ONE/ABSTRACT OF THE PROJECT TOPIC
BELOW, PLEASE READ THE INFORMATION BELOW.THANK YOU!
INFORMATION:
YOU CAN GET THE COMPLETE PROJECT OF THE TOPIC BELOW. THE FULL
PROJECT COSTS N5,000 ONLY.
THE FULL INFORMATION ON HOW TO PAY AND GET THE COMPLETE PROJECT
IS AT THE BOTTOM OF THIS PAGE. OR YOU CAN CALL: 08068231953, 08168759420
INVESTORS RELIANCE ON FINANCIAL
STATEMENTS
CHAPTER ONE
INTRODUCTION
1.1 Background of the study
According to
America Accounting Association, Accounting is the process of identifying,
measuring, and communicating economic information to permit informed judgment
and decisions by users of information. From this definition, it can be seen
that the main objective of accounting is to provide economic information that
will enable the users to make decisions. According to Patrick .A. Casabona
(2006), Investors and creditors throughout the world base their decision on the
information published in various financial and economic reports issued by
business entities. The most important of these, are the annual and quarterly
reports that depicts an entity profitability and financial condition, which
investors and creditors reviews carefully before investing their fortunes. It
is therefore, imperative that these reports convey information that reflects
the economic reality of an entity in a meaningful, transparent and comparable
fashion. Recently however, there have been a host of corporate financial
scandals accompanied by fraudulent financial reporting in Nigeria, which have
affected the very foundation of corporate financial reporting and investor’s
confidence. Obviously, this had an adverse effect on investor’s confidence in
the Global financial reporting process and ultimately on the market values of
corporate equity securities. These activities leads to swift actions by
Government and their regulatory agencies, i.e. accounting and Auditing
standards setter and other financial influential organizations around the
world, in other to restore public confidence in the global financial system.
The use of different accounting standards by different countries over the years
has also had adverse effects on the flow of investment capital across borders,
which has negatively affects international economic growth an security
valuations. However, due to economic, political and regulatory developments,
progress toward attaining a convergent set of Global financial accounting
reports in which users of accounting information base their opinion has to some
extent be encouraging. Financial accounting statements are summaries of
monetary data about an enterprise and are used in an attempt to help make
informed decision in the present and future. However, financial statement
portrays the operation of transaction and other event by grouping them into
element according to their economic characteristics. Many entities of the world
utilize financial statements, those financial statement may be drawn up for private
individuals non-profit organization manufacturers and service industries but it
is worth noted, that the these groups that takes much advantage of the
usefulness of financial statements are large corporations, governments and the
third one which is the topic of discuss “investors”.Financial statement plays a
decisive role in each of these entities. Corporations decided how much credit
to extend to customers and how much should be distributed to investors as
dividends. Investors use company’s financial statement to decide whether or
not, it would prove advantageous to invest their fortuned money and if so, what
percentage to invest. The government uses financial statement to determine how
much an entity is required to pay as taxes, each decision stated above does not
always require the same financial information however, a balance sheet would be
used in the decision making process for assessing a competing firm and
determining a customers credit unit. It provides the users with data about
available resources as well as the claims to those resources. An income
statement is prove useful in determining credit extension to customers,
distribution of dividends, taxes and investment opportunities. It provides the
users with data about the profitability of the enterprise. Detailing source of
revenue and the expenses, which reduce profit. A cash flow statement would be a
useful tool in each instance because it gives a brief description of how much
cash is coming in, going out and where exactly, it reports on cash flow from
investing, financing and operating activities. Although each one is unique in
its own respect, each financial statement is a necessary tool in making any
financial decision.
1.2
STATEMENT OF THE PROBLEM
Research
work is carried out to investigate into some areas where attention has not be
focused. Some of these problem is researcher attempts to solve is the inability
of most business organizations to sustain their existence on the long run which
is attributed to academic weakness. However investors today no longer rely
alone on the financial statements produced by the directors of company (Union
Bank, Nig Plc), because of lost of confidence on the statements, that the set
of financial statement might not represent the true and fail view of the company’s
financial position, investors might also have the fear that the company have
declared adequate profit through cash flow analysis in other to build investors
confidence whereas that is not the true position of the company economic
situation. Financial statement also does not guarantee the viability of the
company and it does not reflect the substance of the company on the long run.
These and many more problems a worth assessing in other to, advance a more
realistic measure in making in investment decisions
1.3
OBJECTIVE OF THE STUDY
This
research aims at achieving the following objectives,
1. To determine if the state of Affairs of the
company can attracts more investors to invest through than annual reports,
analysis, advertisement or publication.
2. To find out the confidence investor lay on
the financial statement presented by the directors of the company.
3. To ascertain if the fluctuation’s on the
profit after taxation will attracts / dis-attracts investors in their
investments decision and confidence build on the company
1.4 RESEARCH
HYPOTHESES
In
attempting to reach a decision, it is useful to makes assumptions about the
population involved in the study. Such assumptions which may not be true are
called hypothesis. In this study the hypothesis will,To determines if there is
any significances relationship between the state of affairs of the company and
investors in their investment decisions.
Ho: There is
no significances relationship between the state of affairs of the company and
investors in their investment decisions.
Hi: There is significance relationship between
the state of affairs of the company and investors in their investment decisions
Ho: There is
no significances relationship between the financial statement and the
confidence build on the company.
Hi: There is significance relationship between
the financial statement and the confidence build on the company.
1.5
SIGNIFICANCE OF THE STUDY
The study
plays significant role in student, lecturers, analyst, government, institution
and companies’ activities on their investment interest and judgment. However,
the study should be able to help investors to realize the importance of
analyzing financial statement by using ratio on a single year data before
decision taking. The study is considered crucial for highlighting and analyzing
the following views;
1. Informing actual or potential investors
whose concern are their returns on investment.
2. Informing creditors who rely on the current
financial position and solvency of the firm as a parameter for measuring the
firms liquidity.
3. Informing as many users of accounting
information the need of proper analysis therefore taking decision
1.6 SCOPE
AND LIMITATION OF THE STUDY
This
research cantered on the investor’s reliance on the financial statement of the
company. It shows the extent to which investors can make analysis of the Bank
financial statement and for taking meaning decision as to, whether to invest /
continue in businesses or to doctrine from investment on the company under
review. The researcher encounters some constrain which limited the scope of the
study;
a) AVAILABILITY OF RESEARCH MATERIAL: The
research material available to the researcher is insufficient, thereby limiting
the study
b) TIME: The
time frame allocated to the study does not enhance wider coverage as the
researcher has to combine other academic activities and examinations with the
study.
c)
Organizational privacy: Limited Access to the selected auditing firm makes it
difficult to get all the necessary and required information concerning the
activities
1.7
DEFINITION OF TERMS
Section 331
of companies and Allied Matter Act 1990 (CAMA); defines “financial statement as
those records required to prepared and kept by every directors of a company
containing the day to day transactions of accounting information to take
adequate decision about the organization. Those records include;
1. Balance sheet: Which can also be referred to
as the statement of financial position or condition, it reports on the
company’s assets, liabilities and net equity as of a given point of time.
2. Income statement: This can also be referred
to as profit and loss account, it reports on a company’s income, expenses and profit
/ loss over a given period of time profit / loss account provider information
on the operation of the enterprise. This information includes sales, and
various expenses incurred during the processing state.
3. Statement of return Earning: This explains
the changes in a company are retained earnings over the reporting period.
4. Statement of cash flow: This reports on the
company’s cash flow activities particularly its operating, investing and
financing activities Professional Accountancy Tutors pointed out the following:
5. Accounting information: There are set of
data that are found in a financial statement of an enterprise.
6. Accounting period: These are referred to as
the times span, usually one year, which the financial statement of an enterprise
covered. However, some organization produces quarterly, half year and some
annual report.
7. Notes on the accounts: This forms an
integral part of a financial statement and provides detailed or supplementary
information in respect of items disclosed in the Balance sheet and profit and
loss account.
8. Sources and application of find statement:
This provides information on the derivation and utilization of funds during the
period covered by the financial statement.
9. Value added statement: This reports on the
wealth created by an enterprise during the period covered by the financial
statement. It usually shows how the wealth created is distributed among various
interest group (e.g. employees, government, creditors and proprietors).
10. Historical financial summary:
This enables an instant comparison over a period. Usually five years, of vital
financial information about an enterprise- turnover, profit before and after
tax, dividends, assets employed, issued and paid up capital, reserves, medium
and long-term liabilities, earnings and dividends per share.
1.8
ORGANIZATION OF THE STUDY
This
research work is organized in five chapters, for easy understanding, as follows
Chapter one
is concern with the introduction, which consist of the (overview, of the
study), historical background, statement of problem, objectives of the study,
research hypotheses, significance of the study, scope and limitation of the
study, definition of terms and historical background of the study. Chapter two
highlights the theoretical framework on which the study is based, thus the
review of related literature. Chapter three deals on the research design and
methodology adopted in the study. Chapter four concentrate on the data collection
and analysis and presentation of finding.
Chapter five gives summary, conclusion, and recommendations made of the
study
HOW TO GET THE FULL PROJECT WORK
PLEASE, print the following instructions and information if you
will like to order/buy our complete written material(s).
HOW TO RECEIVE PROJECT MATERIAL(S)
After paying the appropriate amount (#5,000) into our bank Account
below, send the following information to
08068231953 or 08168759420
(1) Your project topics
(2) Email Address
(3) Payment Name
(4) Teller Number
We will send your material(s) after we receive bank alert
BANK ACCOUNTS
Account Name: AMUTAH DANIEL CHUKWUDI
Account Number: 0046579864
Bank: GTBank.
OR
Account Name: AMUTAH DANIEL CHUKWUDI
Account Number: 2023350498
Bank: UBA.
FOR MORE INFORMATION, CALL:
08068231953 or 08168759420
AFFILIATE LINKS:
myeasyproject.com.ng
easyprojectmaterials.com
easyprojectmaterials.net.ng
easyprojectsmaterials.net.ng
easyprojectsmaterial.net.ng
easyprojectmaterial.net.ng
projectmaterials.com.ng
googleprojectsng.blogspot.com
myprojectsng.blogspot.com.ng
https://projectmaterialsng.blogspot.com.ng/
Comments
Post a Comment