FINANCIAL REPORTING IN NIGERIA: PROBLEMS AND SOLUTION
FINANCIAL REPORTING IN NIGERIA: PROBLEMS AND SOLUTIONS
The unprecedented master influx of financial reporting in the country party as a result of deregulation measures produced by occasionally government action has piqued the interest of writers to do research of this sort.
This information appears to serve as a sham for management decisions. The issue is not so much with management decisions as it is with the financial market and public users in general.
Thus, the purpose of this research is to identify, among other things, the need for financial reporting, the likelihood of problems and their core causes,
the eventual findings and analyses of research work, recommendations, and potential solutions for appropriate financial reporting in Nigeria.
The study proceeds in chronological sequence, beginning with an introduction to the study, followed by its evolution, objective, relevance, and anticipated problems to be resolved, before expanding on the scope of study and definitions of some teams utilised in the investigation.
The researchers attempt to derive the study's salient quality from the study's literature review.
The researcher obtained information for the study through personal interviews, observation, and the collecting of related literature.
Furthermore, they assess their findings, highlighting difficulties, their main cause, and the regulatory bodies' users of financial reporting.
Finally, in recognition of the obvious, recommendations for the analysed work were made, and various remedies were given.
INTRODUCTION TO CHAPTER ONE
Financial reporting is primarily concerned with the communication of financial information relating to an enterprise's resources, obligations, earnings, and so on.
Financial statements are an important measure of communication for meaningful purposes and are typically the primary reporting medium. An enterprise's use of scarce economic resources. As such, they must contain all important information in order to be realised and understood by the well-informed reader.
When various accounting treatments and disclosures are used for essentially the same transaction, or information is missing, the likelihood of the information supplied in the financial statements being misleading or misleading is increased.
Although there may be valid reasons for differences in accounting standards, principles, applications, or disclosures that evolved at the national level or otherwise,
the introduction of MIDF and the growing public interest in financial reporting may be a good time to examine our local reporting from a broader perspective.
These validity and credibility difficulties stem from my topic “financial reporting in Nigeria: problems and solutions.” My speech's objectives are to identify and define the current challenges in financial reporting in Nigeria, and then to propose or suggest answers or recommendations. Thereon.
A brief overview of the evolution of financial reporting in this regard. Its goals and the overall challenges it will face will be carried out.
PURPOSE OF THE STUDY
The goal of financial reporting is to provide information on which to base investment credit and other comparable decisions. If the information provided is not valuable for decision making, there are no advantages to offset the associated expenses.
The following are the financial reporting objectives provided by the United States Financial Accounting Standards Board (FASB):
1. Financial reporting shall offer information that can be used by current and potential investors, creditors, and other users to make national investment, credit, and other comparable choices.
2. The material should be comprehensive enough for anyone with a reasonable comprehension of business and economic events to use.
3. Financial reporting should provide information to assist current and prospective investors, creditors, and other users in assessing the account, firming,
and ascertaining of prospective cash receipts from cash out flows of a business's ability to generate sufficient cash to meet existing obligations as and when they become due, reinvest in the business for further growth, and pay dividends to shareholders.
4. To assist existing and prospective investors in evaluating.
5. To offer information on an enterprise's economic resources, claims to those resources, and the impact of transactions or economic events.
6. To offer information on how businesses receive and use monetary resources, including borrowing and repayment of debt.
7. Financial reporting should provide information about how management must use the company resources entrusted to it by the business's owners.
Finally, financial reporting should provide information that assists management in making business-related decisions.
This appears to be a reasonably thorough definition of the goal of financial reporting. Of course, this raises the question of whether Nigeria's financial reporting follows such standards.
SIGNIFICANCE OF THE STUDY IS ONE OF THE FIRST THINGS TO BE MENTIONED.
As previously said, the entire purpose of a financial report is to serve as a tool in decision making, partially causing a transfer in resources to better alternatives. The three primary users of financial reporting are the shareholder,
the sender (often the bank), and the potential investor. There is no doubt that the level of financial literacy of these individuals/parties influences the quality of financial reporting.
1.4 STATEMENT OF THE PROBLEM
The extent to which the purpose of financial reporting is satisfied can be used to characterise the problem of financial reporting in Nigeria.
1. Mixed timeless and value: Our local performance on timeliness is mixed. Most businesses issue their accounts within six months of the fiscal year's conclusion, whereas most banks write four months.
In terms of value, most businesses find and disclose what is required by law and accounting standards. For from ideal, while a bit out of data in other sections rather extensive.
2. Reliability in terms of the objective the measure is based on the quality of verification and neutrality. How would financial reporting in Nigeria for on the reliability score-eard/
a development of current trends in financial reporting system present some incomparability views on this subject, where we regretfully believe we score quite high?
3. Comparability and consistency: We discovered that perks are firm company information that varies between firms and years.
In other words, financial analysis benefits businesses.
However, those of us who do (or attempt to conduct) financial analysis are well aware that fundamental limitations exist in such exercises.
1.6 DEFINITIONS OF TERMS:
THE BALANCE SHEET:
This is a statement that summarises a company's assets and liabilities.
KEEPING DOUBLE ENTRY BOOKS
This is a widely established accounting approach that requires every transaction to be recorded device in the book of account in order to go entire information about the supplied and received values in that single transaction.
STARNDARE IN ACCOUNTING:
The codification of accounting application is intended to eliminate subjectivity from accounting practises.
FASB (FINANCIAL ACCOUNTING STANDARD BOARD)
Issue financial accounting standard statements that are considered official expressions of generally accepted accounting principles.