CHAPTER ONE

• INTRODUCTION

1.1 BACKGROUND OF THE STUDY

The corporate objective of an enterprise can be said to be bord or slome hold by a group of company dealing with out ward things, which are influenced by personal feeling or opinion. Also published accountings report are a means which an undertaken communicate information about its familial affair to interest individual or group of individuals. The report normally comprises the historical or baleeesheet and profit and boss account but may include other statement such as found statement and for cast or profit or dividend.

The proprietors of a company are recognized in law being that person owning its capital.

The capital devided into slare and stock and by arguing slonc, investor became shareholder as evidence of their legal tiitle share hare transferable right and may be negotiated ether individual wishing to incorporate themselves for the purpose of caring and trade which are called promoter and to24 their responsibility to arrange for the process of incorpotation this involve lodging a number of document with the register of companies and paying the require fees.

The twoo most important document are the memorandum of association which defines the power and objective of the comparison, and article of association which contain the rules for its internal regulation. The names, objective and capital clauses are found in memorandum of association

        Once share have been issues, they become the property of individual investor who have accursed them and these investor are free to sell their share to anyone. The sale price to negotiate between the buyer and the seller and the dead may be affected through a stock if the shame are quoted share.

The seller transfers his share formally to the buyer by noties to the company and the buyer is registered in the registered share holder as the new share holder. Share transfer in this way one known as registered share. An alternative type of share holding, which is resisters by law in same countries is know as a bearer share which does not need to be registered in the registered of shareholder consequently bearer. Shares are transfer rabble by hand

        A company receives only the issue of a share and the legal effort of share holding is to grant ownership rights in respect of the farction of capital represented by the share and right to receve the appropriate perform of corporate net profit districution in the form of dividend. Companies usually retain a pertion of net profit for investment and distribute the balance as dividends.

        The distinction between ownership and management is one of the most distention featime of corporate activity. As owner share holder may be considered and having ultimate control over the activities of the company through their right to appoint directors

                Once appointed director exercise day to day control of the company affairs and although they are accountable to share holders, the diffusion of share among many shareholders, usually place direct in a very strong position. Although they are treated as statement of corporate asset on behalf of shareholders, the affective power to make decision of major importance in respect of those assets lays almost anlirely in their hands.

        Social changes is attacking the traditional method of regulating corporate objective of an enterprises in a number of ways

        First the reorganization of the right of employee to share managerial responsibility is an important feature of the democratization of corporate control. Employee participation in the management of companies in an explicit admission that the interests of employee are as important as those of shareholder.

        Secondly, the concept of social responsibility which broaden the classical nation sterorship as definition of function of director to include a responsibility to all section of society having an interest in the activities of corporaty enterprises.

        This consumers as well as the local community are including in the group of those having a rested in the nation of corporate activities.

• STATEMENT OF THE PROBLEM

        The decision to undertaken an impact of corporate objective and the disclosure of accounting dta as a problem to study could be made under the imperfect knowledge of this following factors: given the increasing complecity and detail of report imformation with more emphasis on greater dislosure of accounting data lilke to know to whon a corporate financial report shold be directed to the information and adoption of incorect criteria for measuring the efficient of an enterprises the management ofm exsting shareholders waelth the content of financial statement.

• OBJECTIVE OF THE STUDY

The study seek to elicit readers about the shareholders understanding of the corporate objectives and the disclosure of accounting data and as such the following are the and of this study.

First, I attempted to find out the classic objectives of bosuness enterprises which are assumed to be the maximization of existing shareholder waelth.

Secondly, I enderoved to find out and study the welfare of the economy’s, shareholder, have been pursued and their information needs to describe in volalation from their holder of the financial abst.

Thirdly the formulation and adoption of incorrect criteria for measuring the efficient of the management of the form and the rationality of their decision, and finally I try to find out to kow whon corporate financial report are directed to

1.4           SIGNIFICANCE OF THE STUDY

The study is relevant because it will expose the general data requirement of an ordinary commercial company. A corporate report is a package of information which diotribe the economic activities of an organization such as a limited company, it include the financial statement (Balance sheet and profit and loss account e.t.c)

The following characteristic of useful information identified for corporate report to contain

1. Comprehensibility
2. Reliability
3. Relevance
4. Objectivity

More also, the following provision must be complied with as regards disclosure in the balance sheet

1. Loan advance
2. Deposit
3. Other investment

• SCOPE AND LIMITED OF THE STUDY