Effort is made to access the effect of formal accounting reporting on the effective management of a business, financial accounting covers activities related to the preparation of reports which are known as financial statement. These statements show the status of the business enterprise at a particular time. The enterprise activities show the result of profit/loss during the most recent period and the flow of resources occurring within the enterprise during the same period. The objective of this research is to find out what relevance is financial reporting to business enterprise. While chapter two centers on the literature review, the data was analyzed using simple percentage. It is recommended among others that management should aim at profit optimization in other to keep the business going and also to have a reasonable return investment of stock holders.     


Title Page                                                                               





Table of Contents                                                                   

          Chapter One: Introduction

1.1            Background to the Study                                                                 

1.2            Statement of the Problem                                                       

1.3            Research Questions                                                                

1.4            Objectives of the Study                                                          

1.5            Statement of Hypothesis                                                                  

1.6            Significance of the Study                                                                 

1.7            Scope of the Study                                                                           

1.8            Limitations of the Study                                                                  

1.9            Definition of Terms                                                                

Chapter Two: Review of Related Literature

2.1            Introduction                                                                                     

2.2            Users of Financial Reporting                                                  

2.3            Characteristics of good Accounting Information                    

2.4            Management of Information                                                   

2.5            Basic Accounting Concepts                                                    

2.6            The Financial Accounting Branch                                          

2.7            Other Accounting Branches                                                   

Chapter Three: Research Method and Design

3.1            Introduction                                                                                     

3.2            Research Design                                                                     

3.3            Description of Population of the Study

3.4            Sample Size

3.5            Sampling Techniques

3.6            Sources of Data Collection                                                     

3.7            Method of Data Presentation

3.8            Method of Data Analysis

Chapter Four: Data Presentation, Analysis and Hypothesis Testing

4.1            Introduction                                                                                     

4.2            Presentation and Analysis of Data                                         

4.3            Hypothesis Testing                                                                

Chapter Five: Summary of Findings, Conclusion and Recommendations

5.1            Introduction                                                                                     

5.2            Summary of Findings                                                             

5.3            Conclusion                                                                             

5.4            Recommendations                                                                            






1.1            Background to the Study

Financial reporting covers those activities related to the preparation of certain reports which hark own as financial statement. These statement reports the financial status of a firm at a particular time, the firms activities and resulting profit or losses or during the most recent period and the flow of resources occurring within the firm during the same period.

The statement made by Montgomery (1998) gives us an idea on the meaning of financial accounting. However this question arises, what are the effects of these financial accounting reports in the management of business enterprise? The answer poses a problem which the paper will seek to solve because not all business person understand the impact of financial reporting information on the management of their business, some manages business intuitively, others like defaulters who disobey road traffic, disobey the warning communicated by financial reporting information and end up in a ‘business accident’.

There are other sources of information which have impact on the management of business and the combination of those sources gives an information system in a complex nature “it must not be thought that accounting of any firm is the management control system, instead it is part of it! But accounting information is the only system through which both managers and external users get a picture of the organization as a total entity.

1.2            Statement of the Problem

Finance is of fundamental importance to the business organization. The financial reporting system in most business enterprise does not portray fully the principle of accounting systems. The flows of information, the cost of collecting any information and the internal control procedures have some loop holes.

In reality, it would be impossible for the researcher to study all the organization. This study involves some typical financial reporting. It’s effect on the effective management of business enterprise. The researcher will carryout an empirical study and appraisal of a business financial reporting and see whether there is room for improvement to be made. It will therefore involves a review of the financial reporting and its related procedure.

1.3            Research Questions

Research question of the study have been formulated so that when answered the purpose of this research work is meant to achieve will be farfetched.

a.                 Does the neglect of financial reporting information has a positive effect on the effective management of a business enterprise?

b.                 Does the neglect of financial reporting information have a negative effect on the effective management of a business enterprise?

c.                  What relevant is financial reporting to the business enterprise?

d.                 Does financial reporting has effect on the effective management of business enterprise?

1.4            Objectives of the Study

The objective of this research is to find out; what relevance is the financial reporting to business enterprise, what source of finance are available to the business enterprise, if financial reporting in an organization adequately has an impact on the profit earning of that enterprise knowing fully well the goal of every business is profit optimization.

1.5            Statement of Hypothesis

Hypothesis One

Ho:   Financial reporting information has a negative impact on the effective management of a business enterprise.

Hi:    Financial reporting information has a positive impact on the effective management of a business enterprise.



Hypothesis Two

Ho:   Neglect of financial reporting information will not have any effect on the business.

Hi:    Neglect of financial reporting information will have effect on the business.

1.6            Significance of the Study

The significance of the study are:

a.                 Examining the effect of financial reporting as information system.

b.                 Directing the business persons to such effect.

c.                  Catering not only business persons but all persons from neglect of financial reporting.

d.                 Encouraging all to obey the head warning of financial reporting information.

The following classes of people will find the work as a useful references.

a.                 Managers of companies and any other firm enterprise whether such enterprises are owned by management or not.

b.                 Actual and potential lenders of money to business enterprise.

c.                  Customers

d.                 Owners and shareholders

e.                  Government

f.                   Other Researchers

1.7            Scope of the Study

A look into the document of the business and drawings heavily from such record is intended. Financial reporting is often regarded as “figure”. Such figures will be useful to both those who have knowledge of accounting and those who do not.

1.8            Limitation of Study

One of our main constraints in the course of this project work has actually been in the area of data collection and the authority to give out information.

The library and textbook could not provide sufficient information. I then had to check other libraries and information centers for data required.

Furthermore, this was not easy to coordinate due to large amount of work involved in combining class work with research.

1.9            Definition of Terms

The following are defined in this section.

a.                 Effect

b.                 Financial reporting

c.                  Management

d.                 Business

e.                  Sole proprietorship

a.                 Effect is defined as “to cause something to come into use”, it can therefore be good or bad.

b.                 Financial reporting is concerned with the recoding and interpreting of transaction for a business enterprise or other economic unit and the periodic preparation of various report from such records is also a systematic gathering, summarizing and interpreting of business transaction in monetary terms such that it provides information which permits informed judgement by the users of the information.

c.                  Management: This can be defined as the rational selection of causes of action to optimize the interrelationship of man, material and money for the survival and growth of the organization. It can be regarded as the process of getting things done through other people. A person who manages is called a manager.

d.                 Business: This is a process whereby human, material and capital resources are combined to earn/satisfy human needs and wants. An entity which carries on such organized efforts is known as a business entity.

e.                  Sole proprietorship: This is a business owned and operated by one person.

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