The Impact Of Financial Accounting Report On The Corporate Performance (A Case Study Of Nigeria Breweries Plc)

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The Impact Of Financial Accounting Report On The Corporate Performance (A Case Study Of Nigeria Breweries Plc)


The research work “The Impact of Financial Accounting Report on the Corporate Performance”, basically aims at how financial accounting reports has helped in advancing the objectives of corporate organizations. In the process, it investigated the effect financial accounting bears on the performance of a business. Furthermore, it sought to ascertain the compliance of relevant statue by corporate organizations and the overall satisfaction on stakeholders in a corporate organizations. The study obtained its data basically from primary and secondary sources. The primary source of data collection employed were questionnaire, oral interview and observations, while the secondary source of data included textbooks, journals in the analysis of the data collected, the simple percentage was used to analyze the responses gathered. The study revealed that a lot of problem were inherent in financial reports ranging from non-disclosure of vital information, subjective judgments of prepares of the relevant statues. There were recommendations given such as sticks compliance to the relevant statue were made to the companies, the government needs to strengthen its regulatory agencies in order to ensure that the financial statement show a “true and fair view and comply with the relevant statue at all times”.

Chapter One


1.1 Background of the Study

The impact of financial accounting reports on the corporate performance is becoming more apparent to users groups of financial statements.

Accounting is not an exact science neither is business operations without some subjective and judgmental errors when it comes to reporting them. A financial report therefore is a document statement which informs the various interest groups to a business on the operations and performance of their business in a period under review its present state of affairs as well as its anticipated future, in accordance with the statues. If a financial report is to service its purpose it ought to be characterized by the following:

  1. Relevance
  2. Understand ability
  3. Reliability
  4. Completeness
  5. Objectivity
  6. Timeliness

In the accounting process of an organization is to provide the information required to prepare a financial report which shall have the above characteristics than the transaction during the period must be recorded promptly and accurately and interpreted in conformity with the Generally Accepted Accounting principles (GAAP), statements of Accounting Standard Board (NASB), international accounting standard committee and the companies and Allied matters Acts cops LFN (CAMA). Financial accounting reports become necessary with the obvious need for accountability of stewardship from the manage to whom investors entrusted their financial resources. The railway age in the UK. Occurred between 1830 to 1870 and the first time the world saw the emergencies of multimillion corporation with large number of share holder. It was a period of disorder but it brought the basis for the present day system of corporate financial report. Financial reporting is a duty of stewardship assigned to the director of a company by section 334 of the company and Allied matters Act cap L20 LFN, equally the mandatory responsibility of companies to keep accounting records derives its strength from section 331 and 382 of the same act. These sections explicitly defined the necessary content and manner in which financial records should be kept.

1.2 Statement of the Problem

The study “The impact of financial accounting reports on the corporate performance aims at investigating the financial report of selected companies in Enugu state with a view to determine the following.

  1. The extent to which a standard financial report contributes to or detracts from the growth of a business organization.
  2. The extent to which the financial reports of corporate business organization comply with statutory provision.
  3. The uniformity and conflict which exist in the financial accounting reports regulations given the multiplicity of regulators.

Therefore, based on the above statements, the researcher shall investigate the financial accounting reports standards and every regulation their bear on the financial statement and to the extent the selected company(s) has either complied with or disobeyed the relevant statues.

1.3 Objective of the Study

The objectives of this study are to critically examine the financial reports of the selected company and to probe into the fundamental for their preparation as well as its presentation with a view to determining:

  1. The adequacy of the basis and the fundamental that guides us preparation.
  2. The degree to which the financial report meet the need of its various users.
  3. The extent to which the financial report conforms to the established standards.
  4. The influence that financial report has on business performance.
  5. Finally, to present suggestion and recommendations based on my findings.

1.4 Research Questions

In order to determine the impact of financial accounting reports on the corporate performance, it is pertinent to test the following questions;

  1. Does the information disclosed in the financial statements adequate to support good decision making?
  2. Does the disclosure requirement of the status affect corporate performance positively or negatively?
  3. Does companies comply strictly with the regulations?
  4. Does the financial report meet the needs of the various users?

1.5 Scope of the Study

This study could have covered the impact of financial accounting report on corporate performance of all the sectors of the Nigerian economy but due to the challenges of such a task especially the financial resource with which to execute it, it is limited to braving industry. The study used in Nigerian breweries Plc Enugu.

1.6 Limitation of the Study

The limitations of the study encountered by the researcher of this work are given as follows:

  1. The confidential nature of financial accounting information in the business organization posed as a problem to this study.
  2. The researcher was unable to reach all the members of the sample as a result of their frequent travels and busy schedule.
  3. The sample used in the research through representative but it relatively small compared to the population, as a result of lack of financial with which to carry out the research on a greater sample.

1.7 Significant of the Study

This study is very important one and most significant at this period of economic situation which has witnessed the collapse of giant corporate with impressive profit and loss accounts and balance sheet statement, because the financial report serves is a “Prima facial” evidence on the state of affairs at such companies as well as it’s performance and could be relied upon as a certificate because it had the audition certification, financial reporting could be done with every business, utmost good faith and diligence.

1.8 Brief History of this Company

The Nigerian Breweries Plc is a subsidiary of Heineken N.V. which has a 54.10% interest in the equity of company i.e. Nigerian Breweries Plc. The company, which is a publicity quoted, was incorporated on 16th November 1940 under the name of Nigerian Brewery limited. It was later named Nigerian Breweries Plc in 1990 when the companies and Allied matters Act of that year come into effect. The principle activities of the company remained brewing marketing and selling lager, stout, non-alcoholic malt drinks and soft drinks.

1.9 Definition of Terms


A person who is qualified to examine the accounts of an organization to see that they are in order.

Balance Sheet:

A business as at a specified date


A financial institution whose responsibility among others is to keep deposit for their client and customers.


An institution of the state whose responsibility is to maintain law and order in the society.

Prima Facie:

Sufficient to establish something legally until disprove later.


An enquiring basically concerned with search knowledge.

Chapter Five

Summary of Findings, Conclusion and Recommendation

5.1 Summary of Findings

This research is aimed at providing an insight into the impact of financial accounting reporting on the corporate performance. On the course of the research work, data were gathered, collected and analyzed, also various hypothesis were tested with a view to finding the extent to which financial accounting reporting bear on corporate performance it was discovered that not much significance difference existed between the respondent who were not the opinion that the information contents of the financial report was not enough to inform a good investment decision and the respondent who thought otherwise.

The hypothesis number two of the research work was tested and it was discovered that the disclosure requirements of the statues affects corporate performance of business organizations positively. This is because of the desire in every stakeholder to know about their business organizations. The extent to which this need is satisfied is the gravity of the weight it will bear on the positive or negative performance of the business organization. The hypothesis numbers four that was tested yielded quite and interesting result. If the operation does not satisfy the needs of the people whose stake in the business is enormous, then there is need for proper check.

5.2 Conclusion

In the light of the observation and discussion carried out on the impact of financial accounting reporting on the corporate performance, the following conclusion were drawn

  1. That the financial accounting report is a veritable document through which the status and performance of a business organization could be evaluated.
  2. Their given the weight of the financial accounting report, a lack of adequate information exists.
  3. The stakeholders place heavy reliance on the financial accounting report or desist from venturing into the business organization whose financial information rail to meet their taste.
  4. That there is no water-tight check which ensures that there is no compromise to an objective and fair reporting.
  5. That the information content in the financial report does not meet the needs of the various users of financial accounting information.

5.3 Recommendation

For the purpose of drawing a well balance in sight into the impact of financial accounting report on the corporate performance.

The researcher recommend as follows.

  1. If confidence is to be restored and sustained for the growth of the business organization, care must be exercised to ensure that the financial accounting report furnishes them with the required information they need.
  2. Reports on the organization operations should be made available to its users timely so that it can be put to adequate use.
  3. The regulators of the financial accounting report should that business organization adhere strictly to the reporting rules.

The directors who have the traditional role of preparing this financial report should ensure that it is prepared in accordance to the best international practices.

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