The Use of Financial Report in Assessing Bank Performance

 The Use of Financial Report in Assessing Bank Performance

The need to render financial report is to acquaint the shareholders with which to assess sufficient financial information with which to asses and decide upon the companies’ courses of action. Such information will enable the risk takers become much better informed to make decision and take actions concerning their interests in the enterprises. The need for financial report to shareholders and other interested parties is also to provide them with regular information intended to increase their knowledge companies business and financial affairs.

There is obvious need for reliable information, which shareholders and other users of financial reports can acquire an essential knowledge of the way in which business enterprises are behaving in relation to public interest. By perceiving enterprise behavior through communication information, interested parties, can use this knowledge to amend or adapt their behavior vis-à-vis the enterprise concerned.


ACCORDING TO LEE (1989) In company financial reporting, financial report are essentially historical documents describing the financial results of past company’s activities owing to inevitable delays in gathering the necessary accounting data, the information contained in a financial report are often much out of data when compared with the present situation of the company concerned.

Various reports, statement and notes constitute the totality of companys financial reports, and each must be clearly understood in order that acquaintance of their impacts on performance can be ensured. Such statements and reports are:


The chairman’s report is usually included in the financial report of most companies. This is rather as convention not as a rule, as it is not legally required to be presents. Its contents are mainly non-quantitative and formally included a review of the year’s operation and financial results, comments on important projects, information about new development, and the progress of the company within the economic, social and political environments that prevailed during the financial year.

According to  Slater (1994), he said the following on the importance of the chairman’s report: “We always read the chairman’s report over several years in Considerable dept. it is often a good way on fudging the caliber of management as the hopes expressed in earlier years guide often do not come to fractions and can get a good idea from the chairman’s statement as to how the individual sectors of the business are performing of have performed over a period. The chairman’s remarks on the company’s future profit and prospects are studied very closely as these are sometimes the only guide to the accent and future.

The contents of the chairman’s report are not subject to verification or attestation by the company’s independent auditors.  The quantity and quantity of the information contained in the report therefore depends on the chairman’s expertise and acumens.


Unlike the chairman’s report, the director is a regally required statement that gives information to their information users on such matters as principle activities of the company.

(a)      Principle activities of the company and any significant charge.

(b)     A fair review of the financial year and its position at the end of Year.

(c)       Names of person who where director at any time during the year.

(d)     Significant charges in the fixed assets of the company during the  year.

(e)      The difference, as principally as practicable between the market value and the book value of land and building, where such difference is substantial.

(f)      Directives interest in shares and or debentures of the company or any other company within the group, both at the beginning of the financial (or) data of appointment as director, if later and at the end of he financial year.

(g)     Particular of likely future development in the business of the company.

(h)     An indication of the activities (if any0 of the company in the field of research and development.

(i)      Amount recommended to be paid by way of dividend.

(j)      Amount to be carried to reserve.

(k)     Charitable and political donations


All companies are required to have their account audited by independence persons holding accountancy qualifications acceptable to the federal ministry of trade and industries. The auditors are appointed by the company in a general meeting and may be reappointed at each annual general meeting as long as both they and the company agree and as long as they (auditors) remain qualified.

The auditors duty in relation to an audit report was clearly aspect out in an English case Re-London and General Bank (1895) According to the ruling in that case, the auditor is expected to refer expressly in his report to the following:

  •  Whether the accounts (financial statements) have been audited in accordance with the approved auditing standards.
  • Whether in the auditor’s opinion the financial statements give a true and fair view of the state of affairs, profit and loss account and statement of source and application of funds (where applicable).
  • Any other matter prescribed by relevant legal and other requirements.

Similary, the companies and Allied matters decree       1990 states in sections 359 (1) that the auditors of the company shall make a report to its member on the accounts examined by them, and on every balance sheet and profit and loss account and on all group financial statements, copies of which  are to be laid before the company in a general meeting during the auditors tenure if office. The auditors report shall state other matters set out in the sixth schedule to CAND 1990 which are summarized below:

  • Whether they have obtained all the best of their knowledge and belief where necessary for the purpose of the audit:
  • Whether in the opinion, proper books of account have been kept by the company, and proper returns adequate for the purpose of their audit have been received from branched not visited by them:
  • Whether the company’s balance sheet and profit and loss account dealt with by the report are in agreement will the books and returns:
  • Whether is their opinion and to the best of their information and according to the explanations gives them, the said statements give a true and fair view:
  • In the case of a holding company submitting group financial statements, whether, in their opinion, the group financial statements have been properly prepared in accordance with the provision of theirs decree so to give a true and fair view of the state of affairs and profit or loss of the company and its subsidiaries and associate dealt with.

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