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PROJECT TOPIC:THE IMPACT OF FINANCIAL ACCOUNTING QUALITY ON THE CORPORATE PERFORMANCE OF BUSINESS ORGANIZATION

 IMPACT OF FINANCIAL ACCOUNTING QUALITY ON THE CORPORATE PERFORMANCE OF BUSINESS ORGANIZATION

 

Abstract

 

This study examines the impact of financial accounting quality on the corporate performance of business organization. Providing high quality financial reporting information is important because it will positively influence capital providers and other stakeholders in making investment, credit, and similar resource allocation decisions enhancing overall market efficiency. The broad objective of the study is to ascertain if the adoption of IFRS by the organization moderates the effect of financial reporting quality.

The primary source of data collection was used and the simple random sampling was used to select 23 personnel as the sample size. The chi-square statistical tool was used to test the stated hypotheses and the findings revealed that the level of corruption perception in the organization moderate the effect of financial reporting quality on corporate performance. It was concluded that the financing reporting quality issued by the financial reporting standard of Nigeria encourages uniformity as well as provides a common ground for evaluation of business performance. It was recommended among others that users of financial statement should be efficiently knowledgeable on statement of financial reporting standard paying attention to the disclosure requirement so as to enable them to defect non-compliance with such financial reporting standard.

 

CHAPTER ONE

INTRODUCTION

1.1   Background to the Study

The quality of financial statements is not an indicator that can be easily quantified, as it cannot be observed directly, being based on the perception of the users of financial information. Each category of users has its own expectations and perceptions regarding what information is useful and of good quality.

Recent studies in the field of economics and accounting are analyzing more and more the term of financial accounting quality. One of the main objectives of the large number of papers upon this subject consists of finding an appropriate measure for it. That is why, it is important to understand what financial accounting quality represents and how it can be explained and quantified.

Due to the markets and business globalization, geographical expansion and the greater demand for information and transparency among investors, stakeholders and society in general, market agents find their toehold in the quality of their financial reporting and their main source of knowledge on company strategy.

IMPACT OF FINANCIAL ACCOUNTING QUALITY ON THE CORPORATE PERFORMANCE OF BUSINESS ORGANIZATION

According to Jonas and Blanchet (2010), financial reporting is not only a final output; the quality of this process depends on the influence and category of the report, including disclosure of the company’s transactions, information about the selection and application of accounting policies and knowledge of the judgments made. Financial information issued by a company has become an essential resource for any market participant, since it provides a reduced amount of information asymmetries between managers, investors, regulatory agencies, society and other stakeholders. Therefore, one of the main questions that arises about the quality of financial reporting is its effect on subsequent performance of a company, i.e. how the market values this higher perceived quality.

According to previous evidence, those companies with better quality of financial information are associated with subsequent higher performance, due to the fact that the market positively assesses those companies which are more committed to the issuance of good information for shareholders and other stakeholders, aiming to reduce or avoid information asymmetries between market participants (Ahmed & Duellmand, 2011). Furthermore, the manager’s decision and his discretional behaviour have an influence on corporate performance through the strategic management process. Thus, it is necessary to know the manager’s actions, decisions and behaviour, corporate strategy and accounting policies among others, to highlight and determine the causes of firm’s company performance.

 

1.2   Statement of Problem

The study analyzes the impact of financial accounting quality on the corporate performance of business organization using Nigerian Brewery Industry as the case study. Financial reporting quality has been on a decline place in corporate management of business organizations in Nigeria. Another problem is the level of corruption perception in the country of origin moderates and the effect of financial reporting quality on corporate performance.

THE IMPACT OF FINANCIAL ACCOUNTING QUALITY ON THE CORPORATE PERFORMANCE OF BUSINESS ORGANIZATION

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BANKACCOUNT NAME
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DIAMOND BANK
FREEMANBIZ COMMUNICATION
007 031 2905
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FREEMANBIZ COMMUNICATION
560 028 4107
GTBFREEMANBIZ COMMUNICATION013 772 5121
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FREEMANBIZ COMMUNICATION
101 326 3297
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