A CRITICAL ANALYSIS OF THE USE OF FINANCIAL STATEMENTS IN ASSESSING THE PERFORMANCE OF AN ORGANIZATION (A CASE STUDY OF UNION BANK NIGERIA)

CHAPTER ONE

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.

      “The fundamental objectives of corporate report are to communicate economic measurement of the reporting entity useful to those having reasonable right to such information”

     It is not an over statement when one says that the banking industry is the flume on which the national   economy rotates. This mammoth, impact upon a country economy therefore makes it a public affair is everybody in the country has a right to know what such organizations are doing, more so all information, necessary to explain the organization’s activities fully should be provided in the annual reports.

          One of the most significant aspects of the information system of business enterprises in an economy is that which deals with the communicate of financial data, especially in describing business profitability and financial position. This information is important because it attempts to partial the economic resources of the enterprises and the financial results, which have been achieved by its management when those resources have been put to use. It attempts to reveal how effective management has been in resources utilization as well as the financial reward available to compensate for risk taken by various suppliers of capital.