Preparation Of Financial Statements And The Nigerian Accounting Standard

Preparation Of Financial Statements And The Nigerian Accounting Standard

Chapter One

Preface

Background To The Study

In the once decade business terrain undergoes a number of significant changes. A great elaboration has taken place in the operation operation and their liabilities on meeting these dynamic changes.

fiscal statements are formulated by legal and regularized institutions within a country and also encyclopedically.

The purpose of these statements is to apply compliance between nations of the world and to bring transnational adjustment of fiscal reporting to bare. These statements also help any anthology in the understanding and the interpretation of fiscal statement and the information bared therein. exponent of counting adjustment argue that community of fiscal statement worldwide is necessary for the globalization of capital request. fiscal statement community would make it easier for investors to estimate implicit investment in foreign securities and thereby take advantage of threat reduction made possible through transnational diversification. It would also simplify the evaluation by transnational companies of possible foreign take over targets from the other side with adjustment, companies could gain access to all capital request in the world with one set of fiscal statement. One set of widely accepted account norms would reduce the cost of preparing worldwide consolidated fiscal statement and the auditing of these statements also would be simplified.

Multi-national companies would find it easier to transfer account staff to other countries. In Nigeria, Statement of Accounting Standard is formulated, edited and controlled by the Nigerian Account Standards Board( NASB). They’re the only known body to formulate account statements and programs and regulate the issue of fiscal operation then in Nigeria. They work in cooperation with the Government and the Institute of Chartered Accountant of Nigeria( ICAN).

Due to the energy of moment’s society operation has shouldered lesser responsibility in account for the companies they manage. One of the most accepted instruments for the dimension of operation responsibility and performance is the “ Annual Financial Statement ”.

According to Okoye( 1997 03) “ fiscal account is guided by generally accepted account principles or rules similar as matching conception, thickness neutrality conception etc.

These rules are necessary to cover the interest of shareholder, creditors ’ governors. Though some account scholars argue that fiscal account alone can no longer be accepted as giving an acceptable picture of cooperation performance.

still, assessment of company performance still rest solely on its fiscal position. This is the main reason that lead to growing acceptance that commercial fiscal statement to a significant and consummate to the number of group both inside and outside the association. When an association issues a set of fiscal statement, its complication and propagation are anticipated to meet the demand of the account standard of body of “ rule ” deduced from the experience of account habits and practice. These rules may be set up in counting literature especially pronouncement by counting bodies.

The medication of these statements implies the harmonious on the operation of principle and styles from one period to another, the numbers and probative analysis must represent “ a true and fair view ” values grounded on objects on measurable criteria of the means and arrears as well as the deals of an reality over a particular period.

realities liabilities of meeting “ Accounting Standard ” criteria in preparing their reportspre-supposes that fiscal statement service several purposes and class of people.

The statements may give information which will enable druggies to arrive at prudent opinions. It may also be used by operation possessors. Implicit benefactors and workers as a result of serving different interest thickness in system and principles not only assures community of reports of one period with another but also by use of account standard it may be possible they compare to conditioning( both once and implicit) of one reality with another. The Nigerian Account Standard Board Act 2003, enhances the validity of the statements of account standard by correcting the failings linked by major failures similar as Enron and Parma lot. The Board is charged under the Nigerian Account Standard Board Act 2003 to promote and apply compliance with account norms developed by the Board from the perspective of the medication of fiscal statement.

The board has issued about 21 Statements of Accounting Standard. This work intends to dissect and examine the medication of fiscal statement and the Nigerian Account norms with particular emphasis on Ocean Bank.

Statement Of The Problem

After a careful observation of the conditioning of Ocean Bank, the experimenter observed thenon-full obediences of internal section with the account standard established by Nigerian Account Standard Board. As a problem of Oceanic Bank which should be remedied meetly and augustly for the purpose of growth and success of the association.

The experimenter observed this problem before the experimenter decided to bed on this exploration work.

This problem observed by the experimenter leads the experimenter to probe the effect ofnon-full compliance of Oceanic Bank with Nigerian Account Standard on growth and success of Oceanic bank.

Exploration Questions

1. What are the benefits of published fiscal statements?

2. What goods do the full compliance to Accounting standard have on the growth and success of any business.

3. Does the Nigerian Account Standard Board complies with other account bodies in the world similar as International Accounting Standard( IAS)?

4. What are the contents of financials?

Exploration Ideal

1. To review the benefits of published fiscal statements

2. To estimate the effect of Nigerian Account Standard Board on the growth and success of Oceanic Bank.

3. To ascertain the extent of compliance in the medication and donation of fiscal statement by Ocean bank with Nigerian Account Standard Board.

4. To identify Nigerian Account Standard Board compliance with other Account bodies for illustration statement of Accounting Standard and International Accounting Standard.

5. To know further about the content of fiscal statement.

Compass Of The Study

The study is limited to the Nigeria Accounting Standard. The analysis when made would involve a review of the living standard. Identification of critical analysis of the standard, revision of being standard through recommendation and commentary.

The study covers a six months period from October 2004 to March 2005. Data collected will be limited to periodic report and accounts 2001 of Oceanic bank.

Significance Of The Study

It provides that necessary information about how accounting information should be prepared and presented in order to enhance the value of its contents and facilitates through understanding.

This study is intended to be of benefit to all the druggies of counting information, who needs to interpret and get proper understanding of fiscal statements and use the information deduced in making directorial opinions for the interest of the association.

This study is also intended to high light significance of account standard on growth and success of Oceanic bank.

Eventually, this study will also serve as reference literature to unborn exploration on the medication of fiscal statement and the Nigerian Account Standard.

Limitation Of The Study

The exploration works though being, there were problems encountered. Due to constraint factors the experimenters couldn’t collect enough data, as the experimenter wanted to, though the data collected by the experimenter was enough to draw up a conclusion on the experimenter findings and recommendations from the study. The following factors were limitations of the study.

visit to repliers were in utmost cases either cancelled or tallied.

Confidentiality of information This is because the exploration is considered a foreigner. Accordingly, vital information in certain areas relating to the design content are handed therefore reducing the proposed quality of the design.

In gathering the data demanded for this design, the compass of the study might be limited by the knowledge of the repliers, their reluctance to give out data and also the validity of the data deduced.

The staff of the association was made to give the experimenter enough attention since they’ve to carry out their primary duties in their colorful services.

Exploration Suppositions

The following suppositions are formulated and will be tested in the process.

H0 Shall be used for null thesis

H1 Shall be used for alternate

1. H0 Accounting standard doesn’t serve as base of counting uniformity among

associations within the same position of operation.

H1 Account standard serves as base of counting uniformity among associations within the same position of operation.

2. H0 For the general acceptance of fiscal statement, the association doesn’t need to

expose all sale relating to transfer, periodic reserves and previous time adaptation.

H1 For the general acceptance of fiscal statement, the association needs to expose all sale relating to transfer, periodic reserve and previous time adaptation.

3. H0 Organizations shouldn’t apply account standard demand in medication of fiscal statement.

H1 Organizations should apply account standard demand in medication of fiscal statement.

Operation Description Of Terms

In view of the fact that a conception may mean different effects, some terms have been defined as used in the study.

1. Decision- Making A decision is the selection volition courses of action from available choices in order to achieve a given ideal. The decision process is told by the decision maker, the organizational position, knowledge and experience in decision timber.

2. NASB Nigeria Accounting Standard Board, a body which establishes the Accounting Standard being use in Nigeria.

3. Account The process of collecting records, presenting and assaying interpreting fiscal information for the druggies of fiscal statement.