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1.1   Background to the Study

Effectiveness of financial reporting is one area in accounting that is recognized as the power house of financial dealings and management (Howard, 2012). Financial report constitutes the climax of all the planning and operation in the corporate governance. The audit reputation may then depend upon the contents of its report. In essence this implies that effectiveness of financial report is justified only if it is able to repose confidence in the curiosity of its teeming shareholders.

According to section 259 of company and Allied matters Act (CAMA) 2004, the financial report prepared by an auditor may include “A report to it’s members the accounts examined by them and in every become sheet and profit and loss account, and on all group financial statements, copies of which are to laid before the company in a general meeting during the auditors tenure of office”. Recognizing the importance attached to the final report, the auditing practice committee sponsored by the six major accounting standards and guidelines have made suggestions and provided a member of example of audit report to apply in various circumstances (Alvin, 2017).

The importance of a corporate financial report cannot be overemphasized as the auditor may be held responsible to a great extent of what he states or does not state as his opinion to the trueness and fairness of company’s financial statement. And his responsibility may extend not only to his immediate client (Milky, 2014). This study seeks to ascertain how public confidence in financial reporting can be enhanced and the implications it has on corporate governance. It also aimed at ascertaining how it influences the decision of external users of company’s financial statement. The external users include shareholder’s government and potential investors.

1.2    Statement of Research Problem

Financial reporting cannot be considered effective unless the report is timely provided. This may form the culmination of a great deal of deterred work and effort over a long period and yet may be summarized in a few lines. This study seeks to find answers to the following research questions:

i.   Is financial reporting relevant in corporate governance?

ii. Do financial reporting help organizations in achieving their corporate objective?

iii. Does the incorporation of corporate governance help in building public’s confidence in financial report?

1.3    Objective of the Study

The objective of this study is to evaluate the role of corporate governance in enhancing public confidence in financial report. The research study also has the following interrelated objectives:

i.   To ascertain the relevance of financial reporting in corporate governance

ii.  To determine the extent which financial reporting helps organizations in achieving their corporate objective.

iii. To find out whether the corporate governance help in building public’s confidence in financial report For reports to have an impact in any organization, it requires the truth of these assumptions. The impact of this report would be examined for the purpose of conveying information, reporting, finding, putting forward ideas and making recommendations.

1.4   Scope of the Study

This study is restricted to financial reporting in corporate governance with particular reference to Consolidated Breweries Nigeria Plc. The research work is designed to look into audit report in corporate governance to have an accurate investigation of information in different categories of workers in various department of Consolidated Breweries Plc. The period of coverage is between (2006- 2011) five years.

1.5   Statement of Hypotheses

Hypothesis is a tentative statement about relationship that exists between two or among many variable to prove their validity. Therefore, the hypotheses formulated for consideration are as follows:

1. Ho:  financial reports have not significantly improved the process of corporate governance in Nigeria. 
   Hi: financial reports have significantly improved the process of corporate governance in Nigeria.

2. Ho: effectiveness of financial reporting does not significantly improve corporate objectives 
   Hi: effectiveness of financial reporting significantly improves corporate objectives

3. H0: Corporate governance does not enhance public confidence of financial reports. 
  H1: Corporate governance help enhance public confidence of financial reports.

1.6   Significance of the Study

It is expected that the findings of the, research study in conjunction with findings of similar research studies on the subject enhancing public confidence in financial reporting and  the implications for corporate governance  would be useful to the public and private sector. A significance result of this study would be to find out of the objectives of the financial reporting one being achieved and if these objectives have furthered the growth of the corporate governance in Nigeria.

1.7   Limitation of the Study

In carrying out this study, the researcher strictly limit himself with the case study. This is because of time constraint in conducting the research work.

Lack of adequate finances of transportation of fathering data collection and they expanded in the case of the research work.

The computation of information used for the preparation of their research work has not been easy. Another noticing problem is the unwillingness of some executive officers to give information and have a direct interview with them. Finally, the researcher also limits himself on the role of financial reporting and corporate governance in Nigeria as it affects public confidence of corporate reporting.

1.8   Definition of Terms

In carrying this research the following important terms were used and their definitions are seen below:

1. Financial report: These consist of the balance sheet, profit and loss account, sources and application of fund, value added statement five years financial summary etc. it is the statement which communicates information about the company to those who have a right to receive it, e.g. the shareholders, loan creditors etc. It provides an indication of the company’s trading or operational performance and give a fixed point, snap-short of its financial position at a particular date (section 331 CAMA).

2.  Audit: audit is a Latin word meaning to “hear” it is a process carried out by qualified parsons called auditor on the account prepared by management of organizations, parastatals and establishment to ensure adherence to laid down rules or policy. The auditing standard Board defined audit as “the independent examination of opinion on the financial statement of an enterprise by an appointed auditor in accordance to the term of his engagement and compliance with any relevant statutory obligation and professional requirements.

3. Audit report: this is a statement made by an independent auditor expressing his opinion as to the true and fairness of the financial statement examined by him and whether or not it is in compliance with the relevant act.

4.  Internal control: this is defined by the Auditing Standard Board as the system of control,  financial or otherwise established by management in order to carry on the business of the enterprise or company in an orderly and efficient manner and ensuring adherence to management policies, safeguard the asset and secure as far as possible the completeness and accuracy of records.

5.  Financial institutions: in this study shall be taken for the banks that are into commercial activities, that is commercial banks, having branches across the federation.

6.  Auditing guideline: Auditing guidelines are intended to give guideline on: 

(a) Procedure by which the auditing standards may be applied.

(b) The application of auditing standard to specified items appearing in the financial statement of enterprises.

(c) The application of auditing standards to particular sector, industries or service organization.

(d) Other matters relating to the proper performance of audit work.

7.  Corporate Governance: is an all- encompassing concept that seeks to guarantee and institute credible bedrock governance standards, in the creation of wealth, in the light of the primacy that corporations have come to assume in privately- led economies.


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