The Influence Of Accounting Standard On Financial Reporting In The Nigerian Banking Sector

The Influence Of Accounting Standard On Financial Reporting In The Nigerian Banking Sector

Abstract

The study examines the influence of account standard on fiscal reporting in the Nigeria banking sector, using a slice size of 14 banks out of all banks quoted in the Nigerian stock exchange as at third quarter of 2012. The check design was espoused in this study and a total number of 50 questionnaires were administered but 47 clones were returned fully. The t- statistics was espoused in carrying out the analysis of data. From the analysis of data collected, the result reveals that there’s a positive relationship between account norms, its contents and donation of fiscal statement in the banking sector. Grounded on these findings, some recommendations among others were made that proper account norms be put in place by the applicable account standard setting bodies so as to insure the medication of high quality fiscal report or statement in the Nigerian banking sector.

Chapter One

Preface

Background to the Study

Section 33 5( 1) of the companies and confederated matters act CAMA 1990 as amended stipulates that the medication of fiscal statement, shall misbehave with the account norms ’ issued from time to time by the Nigeria Accounting Standard Board.

fiscal statements are described as the end product of account deals or profitable events aimed at furnishing qualitative and quantitative fiscal information to estimate and prognosticate the performance of an association to permit informed judgment and decision timber,( Illaboya, 2005,p. 167).

In Nigeria, the; standard setting body was the Nigeria Accounting Standard Board( NASB) which is presently appertained to as the Financial Reporting Council of Nigeria( FRCN) which was passed into law On 18 May 2011 and was inked into law on 20 July 2011. The fiscal reporting council of Nigeria like all standard setting bodies in the world is independent of the profession of account. The council identifies areas where a measure of uniformity is needed so as to ground the variation in reporting practices and insure a high position of uniformity which is nostrum to commercial comity,( Illaboya, 2005,p. 169).

The need for an account standard setting body in Nigeria came critical when the Nigeria enterprise creation decree was announced to transfer power of companies to Nigerians. Nonnatives exploited the lack of invariant account procedures in valuing their equities in companies affected by the decree. Those companies, whose parents were resident outside Nigeria, followed the mandate of their parents. At the end of it all, there were as numerous account practices reflected in the account as there were companies in Nigeria,( Nnadi, 2007,p. 32).

Whenever an adjudicator challenged a company on the felicitousness of its account practices, operation was generally quick to as the adjudicator to produce the law proscribing similar practice. The Nigeria account standard board presently known as the fiscal reporting council of Nigeria was thus ‘ established in order to insure that these conditions didn’t persist,( Nnadi, 2007,p. 38).

The Nigeria Accounting Standard Board( NASB) presently appertained to as Financial Reporting Council of Nigeria( FRCN) has been the body responsible for establishing norms of account and reporting in the Nigeria business enterprises. The board help to insure that the published fiscal statements are invariant in content and format and communicate precisely what they purport to convey. These norms are in effect rules governing the medication of fiscal statements. Account norms issued by the board are essential because they lead to effective allocation of coffers in the frugality similar that further successful companies are more suitable to raise capital to finance their operations than the less successful one,( Nnadi, 2007,p. 45).

The development of new account norms involves a long process generally appertained to as “ due process ”. The due process ensures that all interested parties get the chance to make some benefactions towards the proposed norms. The process begins with the selection of an area of account to be formalized. An account problem must be sufficiently significant in terms of its effect on the fiscalstatements.However, the cost of the due process may be maintainable, If problems don’t produce significant difficulties. Any individual or association can write to the fiscal reporting council( F1C) to suggest an issue for standardization,( Nnadi, 2007,p. 45).

Account standard is a statement issued by the applicable standard setting body locally or internationally on a specific area or content in fiscal account, the acceptance and operation of which is obligatory for prepares and druggies of fiscal statement,( lgben, 2004,p. 41).

Account norms are issued at the transnational position by the International Accounting Standard Committee( IASC) while they’re issued in Nigeria by the fiscal reporting council of Nigeria. The norms issued by the( IASB) are known as transnational account standard( IAS) while those issued by the( FRCN) are known as statement of account standard presently know as International Financial Reporting Standard( IFRS). Both IAS/ IFRS are applicable except that if an IAS is inconsistent with an SAS, the IAS/ IFRS would be irrelevant to the extent of the inconsistency. This implies that on any matter on which an IAS and an SAS make disagreeing pronouncements, the SAS shall, relieve the IAS in Nigeria,( Igben, 2004,p. 4l).

Statement of Problem

Our public account standard( SAS) are incompletely grounded old IAS, some of which have ago been amended or withdrawn by IASB. likewise, the original norms don’t cover all the aspects of fiscal reporting encountered by prepare of fiscal statements. We suppose it’s fair to admit that our norms are incompletely out of date and aren’t sufficiently comprehensive to form a base for the medication of high quality fiscal statements.

Exploration Question

Is there a positive relationship between account norms, its contents and the donation of fiscal statement?

Ideal Of The Study

To find out if there’s a positive relationship between account standard and the content in the donation of fiscal statements.

Statement of Hypothesis

Ho There’s no positive relationship between account standard andthe content and donation of fiscal statements.

HI There’s a positive relationship between account standard and the content and donation of fiscal statements.

Significance Of The Study

This study will be applicable tousers of fiscal statement. exemplifications are investors, shareholders, workers, government etc. Every business association uses fiscal statement to communicate information about its performance, coffers and obligation and interested parties. The report, are prepared in similar down to meet different requirements of the parties. It’s anticipated that at the end of the exploration work results would be handed to the problems and recommendations on the content and donation of fiscal statement and the influence of norms on fiscal statement in the Nigeria banking sector.

Compass Of The Study

The fact is that this study attempts to pierce and eva1uate the influence of account norms on fiscal statements in the Nigeria banking sector. The study covers the statement of account standard( SAS), the Nigeria account standard board( NASB) now appertained to as Financial reporting council of Nigeria( FRCN), the applicable transnational account standard board( IASB) and the transnational fiscal reporting standard( IFRS).

The study shall be concentrated on 14 banks in Nigeria and shall be concentrated in Benin City, Edo State.

Limitations of the Study

The compass of the study would have been more enlarged in terms of looking at further banks but the incapability to go round the banks in Nigeria has limited the experimenter to just 14 banks all in Benin City, Edo State. Data were uprooted from published information attained from books, fiscal statements, forum papers and the internet.