ABSTRACT
The creditability of corporate financial reporting and audit challenges in the economy is relevant if there is no bias in the preparation to favour a segment in the public. This study looks into issues affecting corporate financial reporting in Nigeria economy. Using the questionnaires I administered questions like relationship among internal control system, board size, audit committee, auditor’s independence and corporate financial reporting were asked.
Empirical and theoretical review were re-viewed. In analyzing the hypothesis, z-test method was employed in testing the hypotheses which shows that board size and internal control system have a positive and significant relationship with corporate financial reporting. It was thus concluded that for corporate financial reporting should be more relevant, reliable and auditors should be granted more independent along with the audit committee in order to be more effective and efficient.
CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
In any business entity, whether profit or non-profit, it has set of objective. It mobilizes resources from various sources to achieve set goal at the end of the period. This is necessary to determine how well these resources have been utilized.Where there is separation of ownership from management, the owners will want to know how judiciously these resources have been used. This is the stewardship function of accounting.The function is discharged by the presentation of a report of the activities to owners by management; such report are usually conveyed by means of financial statement (Schipper and Vincent, 2003).
The following objective of financial reporting information concerning economic entities, primary financial report is useful for economic decision making (FACB, 1999, IAEE, 2008).Providing high financial reporting information is important because it will positively influence capital provider and other stakeholders in making investment credit and similar resources. Allocation decision enhancing overall market efficiency (IASB, 2006; IASB, 2008).Although both FASB and IASB stress the importance of corporate financial reporting, it is how over affected by the quality of auditing. This is due to its context specifically, empirical assessment of financial reporting inevitably including preference among myriad of constituent (Dechow and Dishes, 2002).Statement of accounting Standard (information to be disclosed in financial statement) and section 334(2) of Companies and Allied Matters Act (CAMA), provides that financial obstacle shall include; the mission of statement comprehensive income policies, statement of financial income, note to the account, auditor’s report, directors report, value added statement of five years financial summary.