This study is on impact of financial statement on the performance of food and beverages ( a case study of Nigeria breweries Plc). The total population for the study is 200 staff of Nigeria breweries Plc, Lagos state. The researcher used questionnaires as the instrument for the data collection. Descriptive Survey research design was adopted for this study. A total of 133 respondents made up production managers, brewers, HRMs and junior staff were used for the study. The data collected were presented in tables and analyzed using simple percentages and frequencies
Background of the study
The initial goal of financial accounting is to provide useful information for investors to anticipate the performance of the economic unit. The financial reporting statement is made up of statement of financial position and statement of comprehensive income, statement of changes in equity (records of how revenue is generated and records of variations in capital structure, information on how revenue is earned especially as pertaining how monies used for business are realized). (Companies and Allied Matters Act 1990). However, such financial information is difficult to understand as it is usually followed by attached explanations about how decisions are made in the enterprise. (IASB, 2007b). The understanding of the importance of financial statements is anchored on its ability to give true financial status of the enterprise and how such information can be applied to the day to day running of the establishment by different users of accounting information (Rezaee, 2005). Those who make use of financial statement are, managers of the firm, owners of the enterprise, people working for the enterprise, people who are likely to do business with the enterprise, people in government, journalists and everybody who have something to do with the company. Khanh (2010), Rezaee (2005) defined financial statement fraud as “the deliberate misrepresentation of the financial condition of an enterprise accomplished through the intentional misstatement or omission of amounts or disclosures in the financial statements in order to deceive financial statement users.” Management fraud is usually seen as the same as the financial statement fraud due to the fact that the preparation and presentation of financial reporting information is the sole task of the management. Each time that there exit a financial statement fraud, the management is always aware of it, (Everette, 1998). Bringing to the knowledge of the people about financial statement fraud and diversion of resources of enterprise has taken a centre stage by many researchers in the recent past (Aburime, 2012). Previously, incidence of financial statement frauds have risen greatly, (Rezaee, 2005). In the years past, fraud has gone up systematically both on frequency of occurrence and magnitude of losses. Frauds in financial dealings affect those that own the business, lenders and people that the business owes including the workers of the firm. As a result, those who do business with those enterprises expresses loss of confidence in financial information (Khanh, 2010). Under reporting income, over reporting expenditure is done by firms that try to evade tax. It is clear from available evidence that accounting for (fictitious revenue) income not earned, that is, non-existing income and bringing revenue from a different period to another are common in most financial statement, (Odunayo 2014). As much as financial statement fraud takes place, it becomes difficult to stop it along the line. If revenue is deliberately raised in a particular year, it would make the next year income to be smaller. Chief executives mostly continue this practice year after year, (Everette 2012). Other scholars and writers like Everette (2012), Kanu and Okorafor (2013), Odunayo (2014) all concurred that the purpose of financial statement fraud more often than not speak about earning supervision, cash flow adjustment and sudden significant sales which stem on fictitious revenue, concealed expenses, third party related transactions and improper valuation of assets. Arakumar (2015) observe that financial reporting fraud appears in various ways, he further maintain that regular attempt in advancing financial statement involves: over reporting income, understanding expenses and liabilities, timing differences, incorrect valuation of assets and third party related transactions Everette (2012), Odunayo (2014) gave analytical review of tracing the ‘red flag’ as the most powerful techniques of tracing any anomalies in the financial statement. Athur (2014) and Arunkumar (2015) explained analytical review method as comparing the current period with the prior period, compare income statement and cash flow. The role of financial statement fraud on the output and growth of manufacturing industry in Nigeria has raised a lot of concerns, despite the fact that most of all these financial statements are audited by registered accountants in Nigeria; managements have always find loopholes in perpetrating financial statement fraud. Eze and Ogiji cited (Libiano 2006) defined manufacturing industry as the bedrock of increases in productive sector of an economy. Deception in financial reporting is a major challenge on entire manufacturing industry (Olorunsegun 2010). The shareholders of manufacturing companies and the public expect accountability, fairness, transparency in their day to day operations for effective intermediation. Okoye and Alao (2008) observe that recent widespread financial statement fraud and resultant failures were primarily due to dishonest management decisions and outright cover up by notable accounting firms. Though there were known cases of fraud in the manufacturing industry, one major question still remain unanswered which is the nature and various methods through which financial reporting fraud can be perpetuated in manufacturing industry (Adeyemo, 2012). On this background the researcher wants to investigate the impact of financial statement on the performance of food and beverages. A case study of Nigeria breweries plc
1.2 STATEMENT OF THE PROBLEM
Those who make use of financial statement are, managers of the firm, owners of the enterprise, people working for the enterprise, people who are likely to do business with the enterprise, people in government, journalists and everybody who have something to do with the company. Management fraud is usually seen as the same as the financial statement fraud due to the fact that the preparation and presentation of financial reporting information is the sole task of the management. Each time that there exit a financial statement fraud, the management is always aware of it. On this the researcher wants to investigate the impact of financial statement on the performance of food and beverages
1.3 OBJECTIVE OF THE STUDY
The objectives of the study are;
- To ascertain the impact of financial statement on Nigeria breweries plc
- To ascertain the relationship between financial statement and organizational performance
- To ascertain the impact of financial statement on fraudulent act of the company
1.4 RESEARCH HYPPOTHESES
The hypotheses stated below are raised in order to actualize the objectives of this study.
HO: there is no impact of financial statement on Nigeria breweries plc
HI: there is impact of financial statement on Nigeria breweries plc
HO: there is no relationship between financial statement and organizational performance
HI: there is relationship between financial statement and organizational performance
1.5 SIGNIFICANCE OF THE STUDY
This study will be significant to students, Nigeria breweries Plc and others companies. This study will give a clear insight on impact of financial statement on the performance of food and beverages. It will also serve as reference to other researchers that will embark on this topic.
1.6 SCOPE AND LIMITATION OF THE STUDY
The scope of the study covers impact of financial statement on the performance of food and beverages a case study of Nigeria breweries Plc.
LIMITATION OF STUDY
Financial constraint– Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).
Time constraint– The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.
1.7 DEFINITION OF TERMS
FINANCIAL STATEMENT: Financial statements are formal records of the financial activities and position of a business, person, or other entity. Relevant financial information is presented in a structured manner and in a form which is easy to understand.
COMPANY PERFORMANCE: Liquidity and solvency ratios evaluate your company’s performance with regard to ensuring that it can continue its operations. Liquidity is the ratio of current assets minus current liabilities divided by total assets and measures how quickly a company can raise cash.