Appraisal Of Financial Reporting As A Tool For Evaluating Management Performance

ABSTRACT

This study was necessitated by Effective Financial Reporting Vaccum existing among reporting firms as well as high level influence exerted by the management of organization in the preparation of financial statements. Also, the need for study become inherent, given the fact owners of Companies are not involved in the day to day running of the business, and to the need to explore an effective tool to apprise the management of business firms on their care became more pronounced. Problems encountered include, inadequate information in financial reporting, reporting vanations due to non —compliance to reporting standards window — dressing of financial statements, inability to satisfy information needs of user, and inconsistence among others. In an attempt to focus this study, three hypothesis were formulated and Questionnaire was utilized for purpose of procuring relevant data to test the hypothesis formulated. There was an extensive review of expert's opinion and contribution to compare and contrast the research findings. Methodologically, the study covered 100 employees of PZ Industries Aba. On the basis of judgmental sampling technique, 70% of the population which is 70 people formed the sample. The data obtained were statistically analyzed using the simple percentage method, and the hypothesis were tested using correlation model. The following findings were made. i) Financial reporting serves as an effective tool for evaluating management's performance. ii) Financial reporting does not satisfy all the information needs of the users. The above findings have implication for users and prepares of financial statement and upon which recommendations have been made on how to improve financial reporting effectiveness. In additions, some suggestions for further research have been incorporated in the study.