This research project was designed to look into the problems and prospect associated with choice implementation and disclosure of accounting policies in public liability companies in Nigeria and its relationship with shareholder investment and the returns on such investments. This study was prompted by the fact that corporate disclosure is an inevitable activity such that the need to render a true and fair view of financial statements by management of resources owners (shareholders) who have entrusted them with limited resources. The literature review analyzed the stages of department though corporate disclosure has undergone and the need to identify most reliable accounting decision policies adopted by the firm. The possible disclosure techniques and what influences such disclosure techniques. The economic and political implication of accounting policy disclosures was also put into consideration. The research design used in the study involves the use of questionnaire and the policy statement of one sample limited liability companies. A total of 20 questionnaires items was developed and 50 questionnaires were distributed to members of management and staff of the company. The responses were tabulated and data were analyzed using the simple percentage method and the chi-square statistical analysis for accuracy. The result of the analysis showed that there are problem existing in the disclosure of accounting policies as well as defined prospects. The analysis also showed that there is a direct relationship between the accounting policies developed and adopted by a firm and the return on investment of shareholder.
TABLE OF CONTENTS
Table of contents vii
Chapter One – Introduction
1.1 Background of the study 1
1.2 Statement of problem 3
1.3 Objective of the study 4
1.4 Research Question 5
1.5 Research Hypothesis 6
1.6 Significance of the study 6
1.7 Scope of the Study 8
1.8 Limitation of the Study 8
1.9 Definition of Terms 8
1.10 History of Beta Glass Plc 10
Chapter Two – Literature review
2.1 Introduction 12
2.2 Accounting Policy Formulation 13
2.3 Conceptual Basic of Accounting and Policy Disclosure 15
2.4 Accounting Policies and Disclosure Techniques 21
2.5 Disclosure of Accounting Policies and its Economic/
Political Implication 25
2.6 Major Accounting Policies 27
2.7 Application of Accounting Policies in Beta Glass Plc 29
Chapter Three – Research methodology
3.1 Introduction 34
3.2 Research Design 34
3.3 Population and Sample Size 35
3.4 Instrument of Data Collection 35
3.5 Reliability of the instrument 36
3.6 Validation of the Instrument 36
3.7 Method of data collection 36
3.7 Data analysis 33
3.8 Statistical Data Analysis 37
Chapter Four – Data Analysis and Interpretation
4.1 Data presentation 38
4.2 Data Analysis and Discussion 38
4.3 Hypothesis Testing 38
Chapter Five – Summary conclusion and recommendation
5.1 Summary 47
5.2 Conclusion 48
5.3 Recommendation 49
Background of the Study
The disclosure of accounting policies in the statement of accounting standards’ (NASB) is contained in the current accounting standards as at 2001. This policy formulation application development and disclosure has been posing serious problem to many public enterprise over the years. Account ting policies are specific accounting based are the method that have been developed for applying the fundamental accounting concepts and convention to specific financial transaction and item. The fundamental accounting there are often more than one recognized accounting basis for dealing with the particular items for example department straight line method reducing balance and sum of the year digit method, inventory valuation includes FIFO, LIFO or weight average method other area of major accounting principles are on consolidation depreciation, tax and inventories.
There is variation in the implementation of these policies, however any methods or basis adopted and the activity of the policy maker. That is the procedure of policy formulation and attachment and the technical of implementation is a relative to individuals company, but the extend of such disparity is not much for instance, the difference in depreciation against assets.
The policy making process involves a network of relationship among policy makers decision makers individuals firm, and auditor etc.
The network process of accounting policy formulation makes financial reports to become more and more complex that there has been more criticism of the users of the information.
Information supplied should be that which would satisfy the need of this user and such information should also be subjected to an independent chew by an auditor and this will enhance reliance in financial information is prepared as objectively as possible ability to understand information is also very essential financial information should therefore show a true and fair view.
Consequently is one of the basic concept but it is not to be follow slavishly if new and improved technicians indicate a change in methods timelines to update information of more use to recipient than outdate news economy of presentation too many details can obscure.
The importance factors in accounts and comes difficulties in understanding them. Completeness a rounded picture of the company activities is needed.
The inconsistency in policy decision, the conflicts in the implementation of the policies and the disclosure discrepancies between policies and reports have caused to inferior in the formulation of this project topic ‘application of accounting policies in public liability companies and its effect on shareholders find with reference of Beta glass plc.
The research is necessary to finds out the courses of such inconstancies and disparity in accounting policy decision, its practicability.
The efforts on financial statement and reports that distorts the full and fair disclosure of accounting policies and its effects on shareholders’ investment. Therefore any concept that has to do with resources management be it cash or money worth, must be taken into consideration especially, now that fraudulent practices and embezzlement of firms resources in the public, municipal and private sectors are increasingly invading the moral of the accounting profession. Hence any research like this one designed to develop the process of accounting policy formulation, its implementation and disclosure base and concepts can never be detrimental in any sphere of the accounting profession for originating and reliability, this research will provide adequate information as a tool for generation inspite of the fact that the samples of the research are limited to one public limited company.
The Beta glass plc, the problem and prospects associated with the disclosure techniques of the company holds for the other public company or corporation.