Effect Of Published Financial Statement On Shareholders' Investment Decision: (A Study Of Selected Banks)

ABSTRACT

This work empirically investigates the impact of published financial statements on shareholders' investment decisions: The study is vital as it portrays the extent to which shareholders of banks listed on the Nigerian Stock Exchanged (NSE) are influenced by the contents of published accounts in their investment decisions. In order to determine the relationship between information contents offinancial statements and shareholders' investment decisions, some of the key contents offinancial statement were used to derive the proxy variables used in the study, namely earnings per share, dividend per share and return on equity; while shareholders' investment decisions is represented by change in number of shareholders. Data for the study were obtained from the published annual financial report of the selected banks. Regression model was employed to establish the relationship between the variables. The findings generally indicate that shareholders of the selected bank rely much on financial statements as a major determining factor for their investment decisions investment decisions. The study recommends proper awareness creation by the appropriate agencies to enhance shareholders' understanding of the relevance of published accounts to enable them to know the financial states of the companies of their interest before making investment decisions. Besides, shareholders should seek the advice of financial analysts so as to be properly guided in their investment decision.