Published Financial Statements Information Contents and Investment Decision Making in Nigeria Deposit Money Banks

Abstract

This paper examined published financial statements information contents as tools for investment decision making in Nigeria Deposit Money Banks (NDMBs).  Ten NDMBs quoted on the Nigeria Stock Exchange, ten stockbrokers in Oyo state that are registered with the Security and Exchange Commission in Nigeria and three audit firms were selected. Primary data was collected through the questionnaire administered on the stockbrokers and audit firms. And secondary data was sourced from the annual reports of the selected banks from 2011-2016. Multiple regression and Analysis of Variance (ANOVA) were employed to analyze relationship between the information contents of published financial statements and investment decision making at 0.05 level of significance. Descriptive statistics was used to show the extent to which the published financial statements are reliable for investment decision making. The result showed that there was a significant relationship between the information contents of the published financial statements and investment decision making. It also revealed that published financial statements information contents are only moderately reliable for investment decision making in NDMBs. The study concluded that contents of the published financial statements are vital information any investor would need or require of a bank before investing in that bank. Therefore, this study recommended that regulatory bodies like the Central Bank of Nigeria (CBN) should continuously ensure that banks' published financial statements are reflections of their financial status and performance.