ACCOUNTING INFORMATION AND PERFORMANCE OF DEPOSIT MONEY BANKS

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

In mobilizing savings and allocating scarce resources between   competing   ends,   commercial   banks   and   other financial institutions occupy a very important position in the Nigerian economy: In contemporary Nigeria, banking is one industry  which  has  witnessed  unprecedented  upsurge  in activities as a result of reforms in the economy by the federal government. In the past years, there were about 89 banks with 3,389 branches located in both rural and urban centres nationwide.  These banks were characterized by structural and operational weaknesses such as:

-           Low capital base; Dominance of a few banks

-           Insolvency and illiquidity

-           Over  dependency  on  public  sector  deposits  and foreign exchange trading.

-           Weak   corporate   governance;   A   system   with   low depositor confidence

-           Banks  that  could  not  effectively  support  the  real sector of the company at 24% of GDP, compared to Africa   average   of 78%   and 272%  for  developed countries,     Morgan (2010; 10).  

The recapitalization and consolidation exercise in the banking industries by the former Central Bank of Nigeria Governor Professor Charles Soludo has necessitated the need for different organization to engage in corporate consolidation (Mergers and acquisition).  The concept of recapitalization refers  to  the  current  trend  of  compelling  all  commercial banks to raise their capital base from 2billion to 25 billion naira  by  the  Central  Bank  of  Nigeria  on  or  before 31st December, 2005.

The effect of the recapitalization exercises are to

•           Facilitate evolution of a strong and safe banking system;

•           Improve  transparency  and  accountability in  the sector;

•           Drive down the cost structure of banks and make them more competitive and development oriented;

• A new banking system that depositors can trust and  investors  can  rely  upon  usher  in  a  new

economy.

The ability of the commercial banking system to perform its tasks efficiently and in harmony with our needs and economic   goals   depends   in   large   measure   an   efficient management. There is too much at stake to do otherwise. However, the efficiency of a commercial bank as well as its overall success depends to a great extent on the quality of information  available  to  its  management  in  its  decision making   process.   Effective   planning   and   control   of   an organization   requires   good   information   system.   Logical decision making  requires an  understanding    of    the circumstances surrounding on issue and knowledge of the alternatives  available.  The  more  pertinent and  timely  the information the better the resulting decision. The accounting function helps in the accumulation of accounting data, which help management in the planning process. Benjamin C. [199: 6] define “accounting as process of  measurement and communication  in  which  the  major responsibilities are recording,   analyzing,   reporting and interpreting  financial  information  of  an  economic  entity” Accounting is more than this; however, it permits informed judgements and decisions to be made by the users of the information.  Perry,  F.E      (1973:  2)  describe  the  users  of accounting information as “Owners and prospective owners of a business enterprise, bankers and supplies of credit and government agencies”.  Other users are employees who requires information about  the financial results of the enterprise activities on which their remuneration will be based and the management which has responsibility for the survival of the enterprise on behalf of the owners.

TOPIC: ACCOUNTING INFORMATION AND PERFORMANCE OF DEPOSIT MONEY BANKS
Format: MS Word

Chapters: 1 - 5, Abstract, References, Questionnaire.
Delivery: Email

Number of Pages: 90

Price: 3000 NGN

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