ADVERTISEMENT
Thursday, February 9, 2023
Getview Updates
  • Scholarships
  • Education
  • Tech
    LAPTOP SYSTEM

    How to maintain your laptop system

    Checkout Top 9 New Technology Trends for 2022

    Checkout Top 9 New Technology Trends for 2022

    Technical: Six ways to achieve financial freedom

    Technical: Six ways to achieve financial freedom

    Trending Tags

  • Lifestyle
    • All
    • Food
    Stay healthy with these daily fitness tips 2022

    Stay healthy with these daily fitness tips 2022

    Easy method  on how to make FIESTA

    Easy method on how to make FIESTA

    Recipe on how to prepare ofe Nsala (white soup)

    Recipe on how to prepare ofe Nsala (white soup)

    Crime Updates: A Woman Who Allegedly Cooks With Mortuary Water was denied by Akwa Ibom Police

    Crime Updates: A Woman Who Allegedly Cooks With Mortuary Water was denied by Akwa Ibom Police

    How to make delicious ciabatta bread with pepper and chorizo sausage for lunchtimes – Recipes

    How to make delicious ciabatta bread with pepper and chorizo sausage for lunchtimes – Recipes

    How to prepare Fried rice salad recipes

    How to prepare Fried rice salad recipes

    Easy vegan burgers recipes

    Easy vegan burgers recipes

    Cooking: How to cook delicious yam porridge/yam pottage with fresh vegetables – Recipes

    Cooking: How to cook delicious yam porridge/yam pottage with fresh vegetables – Recipes

    Catering: How to make simple Nigerian nutritional salad recipe

    Catering: How to make simple Nigerian nutritional salad recipe

    Cooking: How to cook delicious ukwa (African breadfruit) – Recipe

    Cooking: How to cook delicious ukwa (African breadfruit) – Recipe

    Trending Tags

    • Health
    • Food
No Result
View All Result
Getview Updates
  • Scholarships
  • Education
  • Tech
    LAPTOP SYSTEM

    How to maintain your laptop system

    Checkout Top 9 New Technology Trends for 2022

    Checkout Top 9 New Technology Trends for 2022

    Technical: Six ways to achieve financial freedom

    Technical: Six ways to achieve financial freedom

    Trending Tags

  • Lifestyle
    • All
    • Food
    Stay healthy with these daily fitness tips 2022

    Stay healthy with these daily fitness tips 2022

    Easy method  on how to make FIESTA

    Easy method on how to make FIESTA

    Recipe on how to prepare ofe Nsala (white soup)

    Recipe on how to prepare ofe Nsala (white soup)

    Crime Updates: A Woman Who Allegedly Cooks With Mortuary Water was denied by Akwa Ibom Police

    Crime Updates: A Woman Who Allegedly Cooks With Mortuary Water was denied by Akwa Ibom Police

    How to make delicious ciabatta bread with pepper and chorizo sausage for lunchtimes – Recipes

    How to make delicious ciabatta bread with pepper and chorizo sausage for lunchtimes – Recipes

    How to prepare Fried rice salad recipes

    How to prepare Fried rice salad recipes

    Easy vegan burgers recipes

    Easy vegan burgers recipes

    Cooking: How to cook delicious yam porridge/yam pottage with fresh vegetables – Recipes

    Cooking: How to cook delicious yam porridge/yam pottage with fresh vegetables – Recipes

    Catering: How to make simple Nigerian nutritional salad recipe

    Catering: How to make simple Nigerian nutritional salad recipe

    Cooking: How to cook delicious ukwa (African breadfruit) – Recipe

    Cooking: How to cook delicious ukwa (African breadfruit) – Recipe

    Trending Tags

    • Health
    • Food
Thursday, February 9, 2023
No Result
View All Result
Getview Updates
No Result
View All Result
Home Updates

Financial Statements vs Investment Decision Making: The role of Financial Statements on Investment Decision Making – getviewupdates

in Updates
Financial Statements vs Investment Decision Making: The role of Financial Statements on Investment Decision Making – getviewupdates
491
SHARES
1.4k
VIEWS
Share on FacebookShare on Twitter

RelatedPosts

Asup strike update

Important healthy benefit of Onions

As London Ambulance Service reports ‘one of busiest days ever – COVID hospital admissions near first wave peak

COVID-19:The new strain of coronavirus circulating in Senegal is more virulent – Diouf Sarr

POLITICS: Ethiopian parliamentary election to go amid political, ethnic violence

Christmas Day blast: Intentional massive explosion hits the heart of America’s country music capital, Nashville

Financial statement is a formal
and comprehensive statement describing financial activities of a business
organization such as the financial institutions.

Financial Reporting Standards and
Practices have in  the recent past come
under great criticisms, demanding that accountants take further steps in  ensuring that the true and fair view of the
actual worth of business are also incorporated in  the financial statements published by them.
Corporate organizations owe a
duty to fully disclose matters concerning their operations so as to aid
investors in making investment decisions.
Both large and small
organizations in addition to satisfying the legislating requirement tend to
retain existing investors and to attract potential ones through the publication
of their financial statements where the capital stock of a corporation is
widely held and its affairs are of interest to general public relations.
Financial statement provides
important information for a wide variety of decision, investors draw information
from the statement of the firm in whose security they contemplate investing.
Decision makers who contemplate
acquiring total or partial ownership of an enterprise expect to secure returns
on their investment such as dividends and increase in the value of their
investment [capital gain].

Also Read: Improve your listening skill – one of the ability to encode information understandably
Both dividends and increase in
the value of shares of company depends on the future profitability of the
enterprise. So investors are interested in future profitability. Past income
dividend data are used to forecast returns from dividend and increase in share
prices.
The financial statement comprises
of balance  sheet (for determining
financial position), profit and  loss
statement (describes statement of 
comprehensive income), statement of equity  changes (explain the changes of the company’s  equity), and cash flow statements (reports on
a  company’s cash flow activities,
particularly its  operating, investing and
financing activities).
The perceived relevance of the
financial statement are, to provide information about the financial position,
performance and changes in financial position of a firm that is useful to a wide
range of users in making management and investment decisions.
These users include managers,
directors, employees, prospective investors, financial institutions, government
regulatory agencies, media, vendors and general public.
Though, these financial statement
are often prepared according to national standards, corporate governance,
professional ethics, and code of ethics. This to avoid financial reporting
fraud and scandals that might hinders effective decision making process by
management and other users of reports.
The purpose of ethics in
financial accounting reporting with expected standards is to re-orientate
corporate organization on the need to abide by a code of conduct that facilitates
public confidence in their services. 
In Nigeria, it has become common
practice by financial institutions to adopt creative accounting in anticipation
of sourcing for equity capital from the capital firms.
A perceived problem of financial
statement disclosure is the non-compliance to industry corporate governance,
ethics, and regulatory standards which is prevalent in the financial institutions
of Nigeria.
In 2009, during CBN commercial
banks test, huge financial fraud and scandal occurred in commercial banks and
other financial institutions in Nigeria that led to service disengagement of
its Managing Director and Executive Director.
This was on the account  of 
manipulating  the  company’s 
financial  records,  book 
padding  scandal  and corruption. This warranted CBN to review
and investigate all the financial institutions accounting records.
The investigation confirmed a
deliberate overstatement of the company’s financial position over a number of
years to the tune of billions of naira. The over-statements are directly
traceable to those systems abuses, violation of regulatory standards, in
particular, deliberate breaches of our accounting systems and controls.
It was observed that the roles of
financial statement on investment decision making of financial institutions in
Nigeria has some problems to both investors and managers of business
organizations who are either not aware of the importance of interdependence
relationship that exist between investors and financial organizations.
Publication of financial
statement provides a way for a firm to present its financial health or
otherwise to shareholders, creditors and the general public and to potential
investors, to enable them make rational investment decision.

Also Read: Basic facts you need to know about job interview – Take good advantage of every opportunity you have with your interviewer (Technical Skills)
The role of financial statement
analysis in making investment decisions should not be overlooked as it helps
investors to establish the fiscal strength and weakness of a firm. Financial
statement analysis can reveal the red flags of an investment opportunity.
On the other hand, they can also
reveal the strength of a company as well as the potential profit of investing
with a particular company. By their nature, financial statements are
retrospective, which means an investor should never look at a single statistic
or metric in making investment decisions.
Every financial institution
should ensure that all material facts as regard the assets and equity of the
organization should be reflected in their yearly financial statement. As such,
the financial institutions should adhere to the demand of subjecting their
financial statement to statutory audit as a way of authenticating their
contents.
The financial statement should be
prepared using such a language and terms a layman can understand because the
technical terms do not mean much to the investors. These should be prompt
provision of the financial statement at the end of each financial year and the
profit after tax should be reported precisely and correctly with actual figures
and avoid use of percentage to enable any layman make good investment decision.
Adequate care and due diligence
should be maintained in preparation of financial statements to avoid faulty
investment decisions which could lead to loss of funds and possible
litigations.

Related

Tags: technicalUpdates
Share196Tweet123Share49

Related Posts

Asup strike update

by Getview Updates
May 10, 2022
0

The Academic staff union of polytechnic has said that they are fully poised to embark on an indefinite strike. According...

health-benefits-of-onion for skin

Important healthy benefit of Onions

by Scholar
March 7, 2022
0

healthy benefit of Onions Few Important Healthy Benefits of Onions Important healthy benefit of Onions: Garlic, shallots, leeks, and chives...

As London Ambulance Service reports ‘one of busiest days ever –  COVID hospital admissions near first wave peak

As London Ambulance Service reports ‘one of busiest days ever – COVID hospital admissions near first wave peak

by Getview Updates
March 6, 2022
0

As London Ambulance Service reports 'one of busiest days ever -  COVID hospital admissions near first wave peak   More than...

COVID-19:The new strain of coronavirus circulating in Senegal is more virulent – Diouf Sarr

COVID-19:The new strain of coronavirus circulating in Senegal is more virulent – Diouf Sarr

by Getview Updates
March 6, 2022
0

New strain of coronavirus circulating in Senegal is more virulent Senegal has been experiencing an upsurge in new COVID-19 infections over...

POLITICS: Ethiopian parliamentary election to go amid political, ethnic violence

POLITICS: Ethiopian parliamentary election to go amid political, ethnic violence

by Getview Updates
March 6, 2022
0

According to the Electoral Board on Friday, Ethiopia will hold a parliamentary election on June 5, as Prime Minister Abiy...

Which symptoms is a short term effect of tobacco use

Which symptoms is a short term effect of tobacco use

January 18, 2023
LAPTOP SYSTEM

How to maintain your laptop system

December 12, 2022
Financial Plan

How to make financial plan for college

July 2, 2022
Getview Updates

Copyright © 2022 Getview Updates.

Main Link

  • About
  • Advertise
  • Contact
  • Privacy
  • Terms and condition

Follow Us

No Result
View All Result
  • Scholarships
  • Tech
  • Education
  • Lifestyle
    • Health
    • Food

Copyright © 2022 Getview Updates.

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.
x Logo: Shield Security
This Site Is Protected By
Shield Security →