Project Abstract

The purpose of this study was to examine banks, on investments and performance appraisal. It was also to ascertain the problems of using financial reports to access performance of banks and finally to determine 17 there’s a relationship between financial reporting and performance evaluation of a bank.

The inductive research method was adopted and the statistical analysts, particularly the chi-square and t-distribution test were used in the analysis of the data collected from the bank.

The findings of the study were that

1.                 Source financial statement contained in the financial reports influence investment remarkably in banks.

2.                 The annual reports do not reflect inflationary effects in the country today.

3.                 The financial reports were prepared adapting a general purpose nature with the assumption that different user as of the report have different information needs.

The following conclusions ere made

Although investors and performance evaluation analyst relied on financial statement in their decisions and appraisal, the reliability of financial report especially during inflation cannot be assured owing to the historical cost convention used as a basis for asset valuation by banks. This is because; the profits of an accounting year would not usually show a true figure owing to the courage effect of inflation. Therefore, managerial decision of banks based entirely on financial reports will lend to poor and inadequate decisions.

The recommendations and suggesting made were base wholly on the out come of the study, for example, on the problem inflation, it was recommended that the bank should adopt the current cost accounting basis for its financial reporting ensure credibility and reliability of information, by the various users, given the inflationary relatives.

Project Overview

INTRUDUCTION

1.1            BACKGROUND OF STUDY

A farmer, who plants corps, expects result, similarly to student who sits for examination expects results. The same 5 also true of an investor.

For the farmer, the result might be communicated to him in the form of a bumper harvest. It result sheet or a report card would usually sufficed for a student. However, in the of an investor, the result is communicated through the financial reports.

Financial reports are law to be prepared by every limited liability company; these limited liability companies abound in virtually all sector of the economy.

Every company shall cause accounting records to be kept. The accounting records shall be sufficient to show and explain the transactions of the company and shall be such as to disclose with reasonable accuracy, at anytime the financial position of the company.

In the banking industry, financial reports are of great interest to the general public because the banks directly or indirectly interact with people.