Appraisal of Financial Reporting Practices of Pension Fund Administrators in Nigeria. A Case Study IBTC
CHAPTER ONE
Objectives Of The Study
The aim of this study is to appraise financial reporting practices of pension fund administrators in Nigeria with IBTC Plc as case study
Among other Specific objectives of the study are:
- Evaluate the relationship between financial reporting and the effectiveness of Pension Fund Administrators in enhancing the welfare of the pensioners
- Examine the extent to which the contributory pension scheme is beneficial to the public sector
- Examine if the financial reporting of the PFA fully take into cognizance the principles of accounting systems
- Ascertain the extent to which the financial information reporting by IBTC Plc. has affected organization
CHAPTER TWO
LITERATURE REVIEW
This Chapter contains the work of other researchers relating to financial reporting. It comprises of the conceptual Review, Theoretical Review and Empirical Review.
Conceptual Review
Concept of Financial Reporting
Financial reporting involves recording financial information according to relevant accounting standards. According to (Vargiya, 2015), Financial Reporting includes the exposure of related financial information to the different Stakeholders about an organisation over a predefined timeframe. These Stakeholders include – investors, lenders, suppliers, and government organisations. Financial Reporting is considered as the final result of Accounting. It comprises of various important statement which include – financial related explanations from Statement of financial position, Statement of comprehensive income, Statement of cash flow, Statement of changes in equity, notes to financial related explanations, Quarterly and Annual reports (if there should be an occurrence of quoted organizations),Prospectus (if there should be an occurrence of
organizations going for Initial Public Offers) and Management Discussion and Analysis (if there should be an occurrence of open organizations).
Concept of Reliability of Financial Reporting.
The expression “reliable quality” in connection to financial communication is a vital subjective property of accounting information. This term is imperative and may impact whether the information is helpful to the individuals who read financial related explanation or something else. The reliable quality of inspected corporate yearly financial report is thought to be vital and a fundamental element influencing the convenience of information made accessible to different users. The accounting researches have perceived that the dependability of reports is a critical normal for financial accounting information and for administrative and expert offices. Reliable quality idea is a nature of information that guarantees the management that the information contained in the financial related records catches the genuine conditions and occasions of the communication substance. The FASB was the main standard setter to characterize the term dependability. As far as the FASB Concepts Statement No. 2 (FASB, 1980) the dependability of a measure lays on the loyalty with which it speaks to what it implies to present (portrayal dedication), combined with an affirmation for the client, which comes through confirmation, that it has that representational quality (undeniable nature). In Contrast, the IASB Framework expresses that information has the nature of dependability when it is free from material blunder and inclination and can be relied on by customers to speak to reliably which it either indicates to speak to or could sensibly be required to speak to.
CHAPTER THREE
RESEARCH METHODOLOGY
INTRODUCTION
In this chapter, we described the research procedure for this study. A research methodology is a research process adopted or employed to systematically and scientifically present the results of a study to the research audience viz. a vis, the study beneficiaries.
RESEARCH DESIGN
Research designs are perceived to be an overall strategy adopted by the researcher whereby different components of the study are integrated in a logical manner to effectively address a research problem. In this study, the researcher employed the survey research design. This is due to the nature of the study whereby the opinion and views of people are sampled. According to Singleton & Straits, (2009), Survey research can use quantitative research strategies (e.g., using questionnaires with numerically rated items), qualitative research strategies (e.g., using open-ended questions), or both strategies (i.e., mixed methods). As it is often used to describe and explore human behaviour, surveys are therefore frequently used in social and psychological research.
POPULATION OF THE STUDY
According to Udoyen (2019), a study population is a group of elements or individuals as the case may be, who share similar characteristics. These similar features can include location, gender, age, sex or specific interest. The emphasis on study population is that it constitute of individuals or elements that are homogeneous in description.
This study was carried out to appraise the financial reporting practices of pension fund administrators in Nigeria a case study of IBTC. IBTC pension form the population of the study.
CHAPTER FOUR
ANALYSIS AND PRESENTATION OF RESULTS
This chapter presents the analysis of data derived through the questionnaire and key informant interview administered on the respondents in the study area. The analysis and interpretation were derived from the findings of the study. The data analysis depicts the simple frequency and percentage of the respondents as well as interpretation of the information gathered. A total of hundred and twenty (120) questionnaires were administered to respondents of which 100 were returned. The analysis of this study is based on the number returned.
The table above shows the gender distribution of respondents. 48% of the respondents were male and the remaining 52% were female. Thus, female respondents were slightly higher than their male counterparts.
CHAPTER FIVE
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS:
Introduction
This chapter summarizes the findings on the appraisal of financial reporting practices of pension fund administrators in Nigeria, a case study of IBTC. The chapter consists of summary of the study, conclusions, and recommendations.
Summary of the Study
In this study, our focus was on the appraisal of financial reporting practices of pension fund administrators in Nigeria, a case study of IBTC. The study is was specifically focused on examining tthe relationship between financial reporting and the effectiveness of Pension Fund Administrators in enhancing the welfare of the pensioners, the extent to which the contributory pension scheme is beneficial to the public sector, Examining if the financial reporting of the PFA fully take into cognizance the principles of accounting systems and investigating the extent to which the financial information reporting by IBTC Plc. has affected organization.
The study adopted the survey research design and randomly enrolled participants in the study. A total of 100 responses were validated from the enrolled participants where all respondent are staff of IBTC Pensions.
Conclusions
With respect to the analysis and the findings of this study, the following conclusions emerged;
Disclosure of financial information to contributors of defined contributory pension scheme in line with PENCOM financial disclosure guidelines should be enforced by PENCOM and Financial Reporting Council of Nigeria (FRCN) also PENCOM should mandate the PFA to include the annual rate of returns, 3-years rolling average rate of return, monthly Net Asset price per unit of RSA Fund, administration charges and investment management fees on RSA Fund, in the monthly statement of account to be dispatched to members on monthly, quarterly and annually basis as publication of annual reports in newspapers and on websites is not serving the purpose intended for contributors as a formidable group of users of pension fund financial information. Besides, last ten (10) years’ annual reports of the PFAs including RSA and Retiree Fund annual reports to the most current financial year should be hosted on PFAs and PENCOM websites. This becomes necessary because some of the PFAs host their latest annual reports of one year only which does not allow comparative analysis of the financial performance of the operators in the industry.
Recommendation
Based on the findings the researcher recommends that;
Members’ education on contributory pension schemes and investment management activities should be the prerogative of the PFAs. The PFAs should provide financial education to both old and newly acquired members for a period of two (2) years after acquisition of the members through monthly bulletin publications, seminars and workshops by the PFAs. The study further recommends that, the education authorities in Nigeria should ensure that pensions and investment courses are emphasise in the curriculum of undergraduate in all the Nigeria Universities and Polytechnics. This will prepare them to make future investment decisions about their post-employment benefits.
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