ABSTRACT
This research was conducted after a thorough consideration of the role of accounting information in investment decision making. There is growing pressure around the world to promote greater transparency and disclosure, consistent with the importance of the growth of world trade and investment. Disclosure regulation varies internationally and there is often a lack of transparency especially in the emerging economies. From the study, we discovered that the quality of accounting information in terms of its accuracy, adequacy, reliability and mode of disclosure is a major determinant of the level of efficiency of the capital market and other decision tasks.
This study considered a total of 20 companies quoted on the Nigerian Stock Exchange (NSE). The use of questionnaire was introduced in order to receive direct (primary) information from the companies. The findings in this study suggested among other things, that the current level of accounting information made available to potential and existing investors requires significant improvement. The researcher therefore recommends strict compliance with prescribed accounting information disclosure requirements. This could be achieved if the relevant regulatory agencies effectively pursue the disclosure requirements recognized by laws, while making sure that corporate entities who default are made to face due penalties, thus protecting innocent investors from undue heartaches.
Further suggestion for the study; hereby introduce transparency in accounting related forecast. Since most financial report forecasts have been discovered to suffer actual realization, suggestion is made that relevant regulatory agencies should hold managers of corporate bodies responsible for any significant variance between projected and realised performance.
Conclusively, there’s need for relevant regulatory agencies to alert investors on the extent to which they can rely on the accounting information provided in financial or corporate reports, as a basis for making their investment decisions, while specifically disclosing the limitation of such accounting information being provided.
TABLE OF CONTENTS
TITLE PAGEi
CERTIFICATIONii
DEDICATIONiii
ACKNOWLEDGMENT iv
ABSTRACT v
TABLE OF CONTENTS vi
CHAPTER ONE: INTRODUCTION
1.0 BACKGROUND TO THE STUDY1
1.1 STATEMENT OF THE PROBLEM 3
1.2 THE OBJECTIVES OF THE STUDY 5
1.3 RESEARCH QUESTIONS 6
1.4 RESEARCH HYPOTHESIS 6
1.5 SIGNIFICANCE OF THIS STUDY 7
1.6 SCOPE AND LIMITATIONS OF THE STUDY 7
1.7 DEFINITION OF TERMS 8
REFERENCES9
CHAPTER TWO: LITERATURE REVIEW
2.0 INTORDUCTION 10
2.1 EARLY HISTORY OF ACCOUNTING 10
2.2 LUCA PACIOLI’S CONTRIBUTION 12
2.3 DEVELOPMENT OF DOUBLE-ENTRY BOOKKEEPING 13
2.4 RELEVANCE OF ACCOUNTING HISTORY 16
2.5 BACKGROUND ON STOCKHOLDERS EQUITY 17
2.6 EVOLUTION OF VALUE-BASED METHODOLOGIES 19
2.7 INFORMATION AND ACCOUNTING INFORMATION 20
2.8THE ACCOUNTING INFORMATION SYSTEMS 22
2.9 USERS OF ACCOUNTING INFORMATION 24
2.10THE PURPOSE OF ACCOUNTING INFORMATION 24
2.11 NATURE OF FINANCIAL STATEMENTS 25
2.12 ACCOUNTING INFORMATIO4 TOOLS 30
2.13 INVESTMENTS CHARACTERISTICS THEORY 31
2.14 TEST OF RELIABILITY OF ACCOUNTING INFORMATION 34
2.15QUALITATIVE CHARACTERISTICS OF FINANCIAL INFORMATION35
2.16COMPONENTS OF ANALYSIS37
2.17INVESTMENT AND INVESTMENT DECISIONS39
2.18IN VESTMENT ASSETS41
2.19RELEVANCE OF ACCOUNTING INFORMATION45
2.20ACCOUNTING RATIOS FOR INVESTMENT DECISIONS46
2.21BENEFITS OF ACCOUNTING INFORMATION TO INVESTMENT
DECISION MAKERS48
REFERENCES49
CHAPTER THREE: RESEARCH METHODOLOGY
3.0 INTRODUCTION51
3.1 POPULATION AND SAMPLING51
3.2 METHOD OF SURVEY RESEARCH52
3.3 ADMINISTRATION OF QUESTIONNAIRES52
3.4 PROCEDURE FOR DATA PROCESSING AND ANALYSING52
CHAPTER FOUR: PRESENTATION AND ANALYSIS OF DATA
4.0 INTRODUCTION 53
4.1 RESPONDENTS’ CHARACTERISTICS AND CLASSIFICATIONS53
4.2 PRESENTATION AND ANALYSIS OF DATA ACCORDING TO
RESEARCH QUESTIONS55
4.3 TEST OF HYPOTHESIS61
CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.0 SUMMARY65
5.1 CONCLUSION65
5.2 RECOMMENDATIONS66
5.3 SUGGESTIONS FOR FURTHER STUDY67
BIBLIOGRAPHY 68
QUESTIONNAIRE70