Corporate organization such as limited companies distribute financial information to stakeholders both to shareholders and other financial parties having financial interest in business, by way of annual reports and accounts. This action in turn tends to produce pertinent information package with beneficial content to management, government and the general public.

Recipients of these annual reports and accounts are expected to assess the overall performance of the organization as well as gaining an insight in the health of the business after closely studying the information items contained in the corporate report; for ensuring reasonable information disclosure, statuary provision are contained in schedule of Companies Act 1968, prescribing the minimum disclosure requirement which every limited liability companies must comply with. This is aimed at making more information available to users, to enable them make better investment decisions.

However, what is the great concern is the failure of different steps aimed information disclosure. Therefore, in view of reaction on information disclosure shortcomings under the Companies Act of 1968, the companies and Allied matter Decree 1990, Section 334(2) enumerates various financial statement to publish by every company for all stakeholders, the extent to which stakeholders rely on them to make investment decisions and assess the company’s corporate performance.


Section 211(2) Companies and Allied Matters Decree 1990 states that, directors shall, at least 21 days before the day on which the statutory meeting is held, forward to every members of the company the statutory report.

In the same vein, Section 15(1) of the Companies Act 1968 amongst other things, provides a company of every balance sheet of the company, with a copy of auditors report shall not be less than 21 days before the date of the company’s next meetings be forwarded to all persons, other than members or holders of debentures of the company, being persons on entitled.

However, in spite of compliance with this statutory requirements and provisions by companies, shareholders seem not to place much premiums on this provisions they tend to be mainly interested in the dividend declared, thereby loosing sight of other critical spheres, the earning capacity of the business in the same industry which will invariably spin management into better performance. This attitude of stakeholders suggest problems existence.

Therefore, the state question below has become relevant in defining the following problems:

  1. Is it the financial information so disclosed not relevance to their needs?
  2. Are the reports and accounts too concentrated in content and form to be comprehended by them?
  3. Are there other potential external variables that dominate their investment decision?


The major objectives of this study amongst other things is to make investigations into the usefulness to published annual report and accounts to stakeholders of companies by finding out the following:

  1. The type of study stakeholders make out of poor annual report and accounts before making initial investigation decision.
  2. After investigation, the use to which they put the annual report received in appraising the overall performance of the company.
  3. Shareholders’ perceptions of the adequacies of the annual report as a tool in their buy hold and sell of share decisions.
  4. Inadequacies of any, with current disclosure practices of corporate reporting in Nigeria.
  5. If there exist other determining variables different from information provided in the annual report which influence investment decisions.


For the purpose of this research, the following null-hypotheses (H0) which shall be tested against their respective alternative hypothesis (H1) are formulated.

  1. The initial investment decisions of stakeholders do not depend on the information contained in annual report and accounts.
  2. The information contained in annual reports and accounts are not useful and will not aid a prudent investor in making judicious investment decisions.
  3. Other determining variables do not influence investment decisions of stakeholders.
  4. Publish Annual Report and Account of Companies will not reveal their financial strength and weaknesses.
  5. The motives for investing in shares of corporate organization are not only for dividend reasons.

1.5          METHODOLOGY

The research study shall employ the survey method of analysis. This shall involve the administration of questionnaire, and the interpretation and analysis of same to elicit the relationship between the information needs of users (stakeholders) and annual financial reports and accounts.


The work is interest to ascertain the benefits of corporate reports and account to stakeholders in Nigeria but concentrating in stakeholders in Benin-City, holding diverse investment in various limited liability companies in Nigeria.

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