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CHAPTER ONE

INTRODUCTION

1.1       Background of the Study

The International financial reporting standards (IFRS) also postulated the information to be disclosed in financial reports. The aim of publication of financial report by management is to provide information to stakeholders for decision making. This may take the form of management information needed to enhance performance or to re-strategize. The report will enable investors to know the state of the organization or company; whether to invest or not or how well the company has performed during that particular Accounting period. Other parties that may desire the information are the creditors; to know the position of their investment, Government for the purpose of fiscal and monetary policies, Employee for salaries and wages negotiation and the shareholders to ascertain the performances of the management. Corporate organization or company makes internal use of the financial reports or statements to access performance either within the country of domiciliation or across the boarder of the country.

The information so provided must be valuable in both cases. Corporate financial manager required quality information for their day to day decision as well as long term strategic decision. Providing financial information to users in a country is a challenge, there is even a greater challenge when the information is to go across the borders of a country. However there is a corporate report standard which has gained general acceptance worldwide. Since International Financial Reporting Standards (IFRS) became operational more light has been thrown on financial reports. Most nations have embraced this set standard of financial reporting. This system of financial reporting was adopted in Nigeria and with effect from January 2012. The Federal Executive Council (FEC) approved January 2012 as the effective date for the convergence of accounting standards in Nigeria (SAS)

By its adoption of IFRS, Nigeria joined over 100 countries who either use or have adopted t he accounting guidelines as stipulated by the International Accounting Standard Board (IASB). This will ensure harmony and easy comparison of financial statements. This is particularly useful in the oil and gas industry considering that it is one of the most global industries. The adoption of a common accounting framework also widens access to investment opportunities.

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