Financial Reporting and Bank Performance: An assessment of Union Bank of Nigeria PLC.
ABSTRACT
The purpose of this was to examine banks, on and performance . It was also to ascertain the problems of using financial reports to access performance of banks and finally to determine if there’s a relationship between financial reporting and performance evaluation of a bank.
The inductive method was adopted and the statistical , particularly the chi-square and t-distribution test were used in the analysis of the data collected from the bank.
Although investors and performance evaluation analyst relied on financial statement in their decisions and appraisal, the reliability of financial report especially during inflation cannot be assured owing to the historical cost convention used as a basis for asset valuation by banks.
This is because; the profits of an accounting year would not usually show a true figure owing to the courage effect of inflation. Therefore, managerial decision of banks based entirely on financial reports will lend to poor and inadequate decisions.
The recommendations and suggestion made were based wholly on the outcome of the study, for example, on the problem of inflation, it was recommended that the bank should adopt the current cost accounting basis for its financial reporting ensure credibility and reliability of information, by the various users, given the inflationary relatives.
TABLE OF CONTENTS
PAGES
TITLE PAGE 1
APPROVAL PAGE 2
DEDICATION 3
ACKNOWLEDGEMENT 4
ABSTRACT 5
TABLE OF CONTENTS 6-9
CHAPTER ONE: INTRODUCTION
1.1 BACKGROUND OF THE STUDY 10-12
1.2 STATEMENT OF THE PROBLEM 12-13
1.3 OBJECTIVE OF THE STUDY 13-14
1.4 RESEARCH QUESTIONS 14
1.5 RESEARCH HYPOTHESIS 14-15
1.6 SIGNIFICANCE OF THE STUDY 15-16
1.7 SCOPE AND LIMITATION OF THE STUDY 17-18
1.8 DEFINITION OF TERMS 18-19
CHAPTER TWO: REVIEW OF RELATED LITERATURE
2.1 HISTORICAL BACKGROUND OF UNION BANK OF NIGERIA PLC 20-21
2.2 THE NEED FOR FINANCIAL REPORTS 22
2.3 THE COMPOSITION OF THE FINANCIAL REPORTS 22-23
2.3.1 THE CHIAIRMAN’S REPORTS 23-24
2.3.2 THE DIRECTOR’S REPORT 24-25
2.3.3 THE AUDITOR’S REPORT 25-27
2.3.4 THE FINANCIAL STATEMENT 27-31
2.4 VARIOUS USERS OF FINANCIAL REPORTS AND THEIR INFORMATION NEEDS
2.4.1 SHAREHOLDERS 32-33
2.4.2 LONG-TERM CREDITORS 33-34
2.4.3 SHORT-TERM CREDITORS 34
2.4.4 TAX AUTHORITIES AND GOVERNMENT 35
2.4.5 EMPLOYEES AND TRADE UNIONS 35-36
2.4.6 MANAGEMENT 36
2.4.7 ANANLYSITADVISERS 37
2.5 FINANCIAL REPORTING BY BANKS
2.5.1 INTRODUCTION 37-38
2.5.2 THE PRUDENTIAL GUIDELINES 38
2.6 PERFORMANCE EVALUATION IN THE BANKING INDUSTRY 39
2.6.1 EFFICIENCY AND PROFITABLITY 39-40
2.6.2 POTENTIAL AND ACTUAL GROWTH 40
2.6.3 LOANS AND ADVANCES 41
CHAPTER THREE
3.0 RESEARCH METHODOLOGY 42
3.1 RESEARCH DESIGN 42
3.2 SOURCES OF DATA 43
3.2.1 PRIMARY SOURCES 43-44
3.2.2 SECONDARY SOURCES 45
3.3 POPULATION OF THE STUDY 46-47
3.4 METHOD OF DATA PRESENTATION 47
3.5 METHODS OF DATA ANALYSIS 48-49
CHAPTER FOUR
4.1 DATA PRESENTATION AND ANALYSIS 50
4.2 DATA ANALYSIS TECHNIQUES 50-55
4.3 TEST OF HYPOTHESIS 55-63
CHAPTER FIVE FINDINGS, CONCLUSIONS AND RECOMMENDATIONS
5.1 FINDINGS 64-65
5.2 CONCLUSION 66
5.3 RECOMMENDATIONS 66-67
5.4 BIBLIOGRAPHY 68-69
APPENDIX
INTRODUCTION
A farmer, who plants crops, expects result, similarly to student who sits for an examination expects results. The same is also true of an investor.
For the farmer, the result might be communicated to him in the form of a bumper harvest. The result sheet or a report card would usually suffice for a student. However, in the case of an investor, the result is communicated through the financial reports.
Financial reports are law to be prepared by every limited liability company; these limited liability companies abound in virtually all sector of the economy.
Every company shall cause accounting records to be kept. The accounting records shall be sufficient to show and explain the transactions of the company and shall be such as to disclose with reasonable accuracy, at anytime the financial position of the company.
In the banking industry, financial reports are of great interest to the general public because the banks directly or indirectly interact with people.
BIBLIOGRAPHY
Anthony M.G. (1990) Financial Accounting Teach Yourself Book Britain: Hoddex and Stoughton.
Barton A.D. (1999)The Anthony of Accounting, St Lucial Queen land: university of Queen land press.
Lee T.A. (1989) Company Financial Reporting: issues and Analysis, (ist Ed). Great Britain.
Nwabueze C.C (1997) Guide to audit, Enugu: Immaculate Publications.
Ndaji J. O (1998) Essentials of Research Methodology for Nigeria Educators; Ibadan: University press.
Orji .J. (1996) Business Research methodology, Enugu: Matson Publicity.