CHAPTER ONE
1.0 INTRODUCTION 1.1 Background of the Study Financial report provides an overview of a business profitability and financial condition in both short and long term. They are necessary sources of accounting information about companies for wide variety of users. In every business, there are needs for information. This information needs ranges from financial, production, marketing etc. Generally, the larger the organization the greater the management need information. Financial report plays a vital role in decision making process of business organizations. The main purpose of financial reports is the provision of financial information as a record making. It has been said that accounting is the language of business. It might also be said that the ability to apply accounting knowledge is vital to the success of a business: A business prepares various report at the end of each fiscal period. This report summarizes the changes that have taken place during the period. For this financial report to be useful, the data have to be presented in such a way that the user will recognize, Similarities, differences and trends form one period to another to enable them make decisions. The accounting information contained in the financial reports enables management to make more useful decisions. Financial reportshould provide adequate information in all areas of an organization and economic activities; it should be able to disclose clearly the nature and accurate accounts of the transactions fund shows a true and
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fair view of the financial position of the organization to be ascertained. Financial reports serve a lot of useful purpose to different users namely, shareholders, Creditors, Banks, government agents, employees, potential investors and the management of the entity. The above identified groups of persons rely on the information supplied by the given firm through financial reporting in which they have interest to ascertain thestateorganization‟soaffairswhichservesasimportant guide in deciding the extent to which they commit their fund. It is the“communication of financial information useful for decision making suchas investment, credit and other business decisions” suchinclude, general. Purpose financial statement, balance sheet, equityreport, cash flow reports and notes to these statements.
1.2 Statement of the Problem The problem of this research is that, the management does not know the various ways of presenting financial accounting reporting, which often affects managerial decision making. There are no proper allocation of resources of the organization which leads to non-achievement of theprofit maximization objective. Also the inability of the management to recruit trained and professional personnel, as a result, the quality of the decision made by this organization are very poor. 1.3 Significance of the Study The significance of this study is that, it shows the effect of financial reports in the operation of the organization. This research is beneficial to internal and external users of financial report. The financial of this research will help managers determine the method of financial needs that will help in realization of their corporate objectives. The study will help the management to know the experts (accountants) that will be able to prepare an annual report that will enable the management to make well-informed decision that will enhance profit maximization. It will enable the external users to know whether the organization is
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making profit in coder to invest more. Thi0s study will also serve us resource material for other researchers for further research in related areas. 1.4 Objective of the Study The main purpose of this study is to provide empirical evidence on the effect of financial accounting reporting on the management of a business in trade fair complex, Lagos. Therefore, the following are the objectives of this study. To obtain the significant effect of financial accounting reporting on the management of a business at trade fair complex, Lagos. To ascertain the significant effect of income and asset value measurement system on the strategic insight of business at trade fair complex. To access the significant impact of consolidation accounting on the strategic insight of business at trade fair complex, Lagos.
1.5 Scope of the Study The research work covered the whole of Enugu State manufacturing companies, but due to certain constraints the research is restricted to Trade Fair complex, Lagos. Thus, the research investigate the effect of using financial reports in making management decisions.
1.6 Research Questions Based on the objectives, the following research questions were developed: 1. Is there any significant effect of financial accounting reporting on the management of a business at Trade fair complex, Lagos? 2. To what extent does the significant effect of income and asset value measurement system on the strategies insight of business at trade fair complex, Lagos? 3. Is there any significant impact of consolidation accounting on the strategic insight of business at trade fair complex, Lagos?
1.7 Research Hypothesis
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Because of the above research questions, the following hypotheses were formulated. Ho: There is no significant effect of financial reporting on the management of a business at trade fair complex, Lagos Ha: There is significant effect of financial reporting on the management of a business at trade fair complex, Lagos Ho: There is no significant effect of income and assets value measurement system on the strategic insight of business at trade fair complex Ha: There is significant effect of income and assets value measurement system on the strategic insight of business at trade fair complex Ho: There is no significant impact of consolidation accounting on the strategic insight of business at trade fair complex, Lagos Ha: There is significant impact of consolidation accounting on the strategic insight of business at trade fair complex, Lagos
1.8 Limitation of the Study The limitation of this study is the time factor. Since the researcher carried out the research of the same time with her studies, there was limited time for to cover all the necessary areas of the research study. And also lack of audience from the despondence.
1.9 Definition of Terms Annual Report: this is a comprehensive report on a company’s activities throughout the preceding year. Annual reports are intended togive shareholders and interested people information about the company’sactivities and financial performance. Managerial Decision: This is the decision concerning the operating of the firm, such as the choice of the firm size, firm growth rate, and employment.
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Information: This can be seen as data which have been processed into a form meaningful to the recipient (receiver) Organization: Is an organized body of people working together forthe pursuit of a particular purpose (s) called organization goals.
