Corporate Financial Reporting of Marketable Securities in Nigeria

Abstract

This study was conducted to investigate Corporate Financial Reporting of Marketable Securities (MS) in Nigeria with a view to determine the impact of the reporting system on the financial performance of banks. To achieve the above objective research questions were raised, hypotheses were formulated, and a review of related literature was made. In order to generate the necessary data for this study, a survey method of research design were employed and the 25 recapitalized banks in Nigeria formed the population of the study. The data for this study were sourced from the financial statements of banks and the Central Bank of Nigeria (CBN) statistical bulletin for a period of 15 years, i.e. 1995 – 2009. The data generated for this study were analyzed using frequencies, percentages and bar chats while the stated hypotheses were tested with multiple regression analysis. Our findings indicated that the reporting system of MS influences the financial performance of banks. This will help them make a rational choice of reporting and accounting system that will enhance the market value of the bank. Based on the above findings, it was recommended that Marketable Securities should be reported at market value by Nigerian banks; marketable debt securities should be classified as temporary investments while marketable equity securities should be classified as long-term investment and emphasis on the reliability of accounting information should be shifted to the relevance and timely of accounting information to enable market value have prominence over the cost rule in reporting marketable securities.

Key words: Corporate financial reporting, marketable securities, market value, GAAP, IFRS