1. Introduction

Corporate Governance in today’s business is increasingly receiving highest attention from chief executives, academics and other corporate stakeholders. One of the best ways of filling these felt attentions is via corporate reports. It is a general knowledge that corporate annual reports represent one of the most important publications of a company. In the words of[1] corporate reporting refers to the process used to communicate with stakeholders, regardless of the vehicle used for such communications. It reflects the messages that management needs to convey to investors and other stakeholders, taking into consideration generally accepted accounting principles. Corporate Governance is tied to good and accurate corporate reports, corporate social responsibility erroneously, accurately or felt need of a company. A very good aspect of corporate governance and corporate social responsibility is dependable corporate reporting, captured mainly by annual reports and financial statements. In the time past – 1960s to 1990s, there were great surges of interest in the financial statements of companies in Nigeria and other emerging economics. It was advocated by[2] that the surge of interest in dependable or reliable reporting (Corporate social responsibility and good corporate governance) is its impact on the financial performance of a company. They asserted that a firm by keeping to good corporate governance/social responsibility has high propensity to improve

mitted workers, increase its sales and decrease cost through higher corporate reputation and finally obtain better performance during economic downturns or negative events because the firm’s stakeholders have established faith with her activities. Stakeholders and Firms’ bond also affect firm’s stock prices. These bonds are not permanent but may increase or decrease over time based on perceived accuracy of financial reports and reporting policy inferred to have been adopted by any firm. This flexible bond explains the aftermath high profile scandals resulting from misleading financial reporting of Companies such as Enron, Tyco, Xerox and Cadbury. These have led to increasing wave of diminishing reliance on corporate reports mainly from emerging economics with semi or weak form of market efficiency. The primary purpose of this paper is to carry out comparative analyses of reliance on Quoted and Non-quoted annual reports by Corporate stakeholders in emerging economics. The secondary objectives are to investigate the causes of diminishing reliance on corporate reports in emerging economics and its effects on corporate governance.

2. Theoretical Framework

According to the author in[3], Nigeria is classified as a mixed economy emerging market with abundant supply of natural recourses, well developed financial, legal, communications, transport sectors and has the second largest stock market in Africa. These features have placed additional responsibilities on corporate governance of her non-human legal persons. An authority[4], citing Shleifer and Vishny(1997) opined that corporate governance is about ensuring that a mechanism is in place to guarantee that goals pursued by managers do not diverge from those of the owners. According to[4] there is no single model of good corporate governance but there are principles stipulated by Organization for Economic Cooperation and Development(OECD)which are internationally acknowledged as capable of promoting sound corporate governance, one of which is ‘Disclosure and Transparency’. This principle stipulates that there should be timely and accurate disclosure of information on all material matters relating to the Company. Information of a company is completely and concisely disclosed by way of annual reports. Annual report or Corporate annual report is one of the most important publication of a Company. In the view of[5] the importance of business reports is that it is an epilogue which can be explored at ease. It may be more important to financier and other corporate stakeholders because it has detailed information about ups and downs of the business. It is also useful for providing information about previous years’ performances. The major lines of the business are always disclosed in a corporate report, apart from having details of financial records of the business. An Investor uses corporate reports to analyse how much has been put into the business and how much more he needs to plug into the business. Corporate reports facilitates future decision making process and help management to make decisions and be able to evaluate the impact of their decisions on the corporate good of the organization. A corporate report though summarizes events of a business; it helps in systematic presentation of a business pictures both past and future irrespective of whether quoted or non quoted companies.

A corporate body is said to be ‘quoted’ if her shares and stocks are publicly traded in the stock exchange market. However[6] defined quoted company as a company whose shares have been accepted for trading on a stock exchange. This makes it easier to raise capital, as shares once issued are made more marketable by being quoted on an organized exchange. A non-quoted company in the other hand is a company whose shares are not traded in the stock exchange. Corporate reporting plays an essential role in the effective functioning of the market economy. It provides the building blocks of information necessary for effective decision-making by investors[7]. Other advantages of quoted companies over non-quoted ones as listed by[8] are:

Liquidity and increased share price: Shareholders can sell or transfer their shares freely at the best market price have been quoted usually adds to the valuation of company’s share prices.

Management and employee motivation: The shares do serve as collaterals for further capital acquisitions.

Enhanced image/prestige: The credibility for being quoted creates greater awareness about the company and her products.

Access to alternative sources of capital: Quotation gives management, choice of alternative means of raising further capital.

Other ancillary benefits such as making the company to formulate and document a clear business strategy for the first time.

It is a common knowledge that the disadvantages of quoted company include;

Her activities are subject of public disclosures,

Loss of control of a business and ownership by the Shareholders,

Corporate reports are usually regulated as to time and formats,

The cost of initial quotation is huge and expensive to maintain annual returns to stock exchange.

The paper work involved in obtaining quotation into the Stock Exchange is huge.

2.1. Limitations of corporate reports

In the opinion of[9] financial reporting is not the end in itself but it is intended to provide information that is useful in making business and economic decisions. Other limitations of corporate reports are;

Corporate reports many a time excludes events that occurred after the cut-off date and many material events that are non-financial in nature.

Business reports concentrate more on financial yardsticks and less on human capital of the organization. This view had been expanded by[10] that nearly 80 percent of corporate business assets are made of intellectual capital, and where financial reports represents only on the 20 percent tangible assets, it is startling if one does not wonder about the accuracy and efficacy of these reports in reflecting the value of the enterprise and its future performance potential.

Many a time the regulatory prescriptions for good corporate reporting are circumvented in order to reflect only the messages managers need to convey to corporate stakeholders.

Contributing[11] asserted that a corporation's financial statements also may differ based on country rules, timing and corporate reorganization initiatives such as mergers and acquisitions, thus limiting comparisons.

According to[12] Corporate reporting must provide the right information to the right people at the right time. It also must enable the end user to fully understand the data presented as well as giving them the tools to analyse the data on their own but many a time, corporate reports do not meet with these requirements.

In the words of[13] Financial reports are especially made to the company's shareholders, however, in reality a variety of potential users are interested in seeing financial and other information relating to the company. Indeed, the number of possible users with different interests presents a significant challenge, a particular difficulty is how best to balance the different and competing needs of the various user groups and how to prioritize them, if necessary, for the purpose of presenting and delivering corporate reports.

In the opinion of[14], a corporate report summarizes the corporation’s operating activities for the past and plans for the future. This means that in a bid to summarize, many important events are subject to be excluded.

2.2. Users of corporate reports and area of interests

The listed users of financial statements have the blessings of[15,16]. In their views, users of corporate reports include;

(i)The management: Management would want to know how well they have preformed. Have they been able to do better than they achieved in the previous years? How has their performance compared with budget and forecast? How well have they managed the company’s resources?

(ii) Owners or shareholders: The owners of the business would like to know if the return they get from the business by way of profit is adequate, having regard to the risk involved in the business. They are also interested in the prospects of growth and value of the firm.

(iii) Banker and creditors: These groups are interested in the solvency and liquidity of the business; the ability of the business to generate enough funds pays its debts in all circumstances.

(iv). Prospective investor: This group will be interested in finding out how stable the business is and what likely return on investment in the business.

(v) Other outsiders: These include financial journalists and commentators, potential take-over bidders, employees, etc; who may use a comparison to draw conclusions about that particular industry.

(vi) Government:

(a) As a provider of finance or guarantees in various forms for industrial development, the government requires information on a company similar in kind to the requirement of an investor or a lender, which has been discussed above.

(b) The government carries out a number of regulatory functions, which are based on the published accounts of companies, in some cases with adjustments made for particular purpose. These functions comprise; price controls, controls over monopolies and restrictive practices, operation of fair trading regulations etc.

©The other main requirement of government is for information on which to base taxation.

3. Research Methods

The scope of this research is limited to Nigeria. The period studied is a ten year period, spanning from year 2000 to 2010. One thousand, six hundred questionnaires were administered. The distribution and spread were limited to Research Assistants’ (20 Students Volunteers) States’ of vacation in Nigeria for 2011 Spring break. Fourteen out of the thirty-six states of the federation were covered. In order to effectively address the objectives of this research, four research questions were raised;

What are the major causes of falling reliance on company annual reports from 2000 to 2010 (name at least ten), indicating whether is applies more to Quoted or to Non-quoted?

Between quoted and non-quoted annual reports, which one do you rely more on?

What were possible ten effects of falling reliance on company annual reports?

None reliance on Corporate Reports have negatively affected Corporate well-being from 2000 to 2010. (Tick: ‘Yes’ or ‘No’)

The sampling technique used was based on availability and willingness to participate until the allotted numbers were filled. The sampling design also fixed the maximum administration of questionnaires in one company to ten in order to make for unbiased capture of respondents’ view and to ensure wide spread of samples within the Nigerian population. Completed and returned questionnaires from the allotted samples were;

Two hundred shareholders/owners each from quoted and non-quoted companies in Nigeria (Actual received from quoted companies amounted to 220 but the last 20 received respondents were rejected as the allotted number had been filled.)

Two hundred and twenty correctly filled questionnaires from academics and knowledgeable reading publics. The first two hundred received were selected as allotted.

Two hundred from Fixed Interest Lenders, Debenture-holders, Creditors and Potential Investors

One hundred each from Corporate managers and senior staff of quoted and non-quoted companies. The first hundred received from each population were deemed valid for this research.

In summary, a total of one thousand completed questionnaires were validated as returned for the purpose of this research analyses. The stated research questions stimulated the following null research hypotheses:

H0₁There is no significant cause of falling reliance from 2000 to 2010 on Corporate Reports.

H0₂There are no significant differences in causes of falling reliance between quoted and non-quoted corporate reports among the major corporate stakeholders from 2000 to 2010 in Nigeria.

H0₃There are no significant differences in reliance between quoted and non-quoted corporate reports among the major corporate stakeholders from 2000 to 2010 in Nigeria.

H0₄The effects of falling reliance on corporate reports from 2000 to 2010 have not significantly affected corporate well-being in Nigeria.

The obtained data were first shown in frequencies tables and further analysed using the Statistical Package for Social Sciences (SPSS) version 16.0. Univariate tool, MANOVA and ANOVA were employed to test and analyse the stated hypotheses, at 5% level of significance.

4. Results and Discussions

Major felt causes of falling reliance on Company annual reports from 2000 to 2010 were asked to be listed by question 1. The result is as shown in tables 1:

Table 1. Ten major causes of falling reliance on company annual reports from 2000 – 2010 Causes Frequency Quoted Non-quoted There is no full disclosure of many material events & Lack of justifications of some information contained in the corporate reports 148 50 98 Auditors reports’ do not address felt needs of stakeholders 115 91 24 Non-listing on the Nigerian Stock Exchange 35 1 34 Frequent change of Managements, Policies and Poor quality of personnel employed by many companies 127 100 27 Lack of quality presentations, Delay in preparation and release of Corporate Reports 80 50 30 Lack of effective Standards and regulatory frameworks to enforce reliable reporting 100 60 40 Corporate Reports many a time only highlights positive reports of the company and those things management want to disclose. 66 27 39 Fraudulent accounting, Fraudulent reports, Fraudulent waves across the Country and decay in Societal morality 137 58 79 Weak form of market efficiency, Scandals from previous Corporate Reports such Enron, Cadbury etc, and impart of rumors 76 70 6 Nigerian Economic problems, Increasing inflationary rates and Lack of facilities to access such reports and verify the correctness of variables contained there-in. 99 39 60 Other sundry reasons 17 7 10 Total 1,000 543 457

Testing of hypothesis 1

Ho₁ which states that there is no significant cause of falling reliance on corporate reports from 2000 to 2010, using the data from table 1, and employing Univariate Analysis, the results appeared as seen in tables 2:

Table 2. Assertions of the causes of falling reliance on corporate reports Source Type III Sum of Squares df Mean Square F Sig. Intercept Hypothesis 45454.545 1 45454.545 89. .067 Error 510.727 1 510.727a Causes Hypothesis 8482.455 10 848.245 .936 .540 Error 9060.273 10 906.027b Status Hypothesis 510.727 1 510.727 .564 .470 Error 9060.273 10 906.027b Causes * Status Hypothesis 9060.273 10 906.027 . . Error .000 0 .c

Discussions of Results and decision on Hypothesis one test: Table 2 results show the significance level of the test. The result showed that none of the felt causes of falling reliance on corporate reports is insignificant (p>0.05), thus we accept the null hypothesis which states that there is no significant cause of falling reliance on corporate reports from 2000 to 2010 in Nigeria.

Testing of hypothesis 2

which that are no significant differences in causes of falling reliance between quoted and non-quoted corporate reports among the major corporate stakeholders from 2000 to 2010 in Nigeria. To carry out this test, we had to reproduce the results of table 1 by coding asserted causes from 1-10, Status are coded from 0 to 1 while frequencies are entered into the Data view and running it in SPSS with Multivariate statistical tool, the results are as shown in table 3.

Table 3. Tests of Between-Subjects Effects causes of Falling reliance between quoted and non-quoted reports Source Dependent Variable Type III Sum of Squares df Mean Square F Sig. Corrected Model No of Respondents asserting to the cause 8482.455a 10 848.245 .975 .512 Status of Company 8.882E-16b 10 8.882E-17 .000 1.000 Intercept No of Respondents asserting to the cause 45454.545 1 45454.545 52.241 .000 Status of Company 5.500 1 5.500 11.000 .007 Causes No of Respondents asserting to the cause 8482.455 10 848.245 .975 .512 Status of Company .000 10 .000 .000 1.000 Error No of Respondents asserting to the cause 9571.000 11 870.091 Status of Company 5.500 11 .500 Total No of Respondents asserting to the cause 63508.000 22 Status of Company 11.000 22 Corrected Total No of Respondents asserting to the cause 18053.455 21 Status of Company 5.500 21

Discussions of Results shown in table 4 and decision of Hypothesis two test

The statistics as seen from table 3 showed that the significance level is outside our stipulated limited and very insignificant, thus we accept our null hypothesis that there are no significant differences in causes of falling reliance between quoted and non-quoted corporate reports among the major corporate stakeholders from 2000 to 2010 in Nigeria.

Testing of Hypothesis 3

Data collected from question 2 which asked respondents to state the one, they rely more on between quoted and non-quoted corporate reports and testing of Hypothesis 3 that states, there are no significant differences in reliance between quoted and non-quoted corporate reports among the major corporate stakeholders from 2000 to 2011 in Nigeria.

The result from respondents from question 2 is as seen in table 4

Table 4. Rate of Reliance between Quoted and Non-quoted Corporate Reports Major Stakeholders Quoted Corporate Reports Non-quoted Corporate Reports Total Shareholders/Owners 240 160 400 Academics and Reading Publics 180 20 200 Creditors and Potential Investors 160 40 200 Corporate Managers and Employees 165 35 200 Total 745 255 1,000

Using the data from table 4, to test the hypothesis which states that there are no significant differences in reliance on quoted and non-quoted companies among the major corporate stakeholders, we employed ANOVA statistical tool. The results are as seen in tables 5 and 6.

Table 5. Descriptives Outcome of rate of reliance between Quoted & Non-quoted Corporate Reports N Mean Std. Dev. Std. Error 95% Confidence Interval for Mean Min Max Lower Bound Upper Bound Quoted Corporate Reports 4 186.25 36.82 1.841 127.64 244.85 160.00 240.00 Non-quoted Corporate Reports 4 63.75 64.72 3.236 -39.24 166.74 20.00 160.00 Total 8 125.00 81.63 2.886 56.75 193.24 20.00 240.00

Table 6. ANOVA Outcome of rate of reliance between Quoted & Non-quoted Corporate Reports Sum of Squares df Mean Square F Sig. (Combined) 30012.500 1 30012.500 10.823 .017 Between Groups Linear TermContrast 30012.500 1 30012.500 10.823 .017 Within Groups 16637.500 6 2772.917 Total 46650.000

Discussions of Results of Test of Hypothesis 3

Table 5 above, showed the descriptive statistics of each group of Corporate reports rate of felt reliance, while table 6 is the result of the ANOVA analysis. The result of the hypothesis test as seen from table 6 showed that there are significant differences of failing reliance between quoted and non-quoted corporate reports as p is less than 0.05 chosen criterion of statistical significance. The outcome of the analysis thus led us to reject the null hypothesis which suggests that there are no significant differences in reliance between quoted and non-quoted corporate reports among the major corporate stakeholders from 2000 to 2010 in Nigeria.

Table 7. Ten major effects of falling reliance on Corporate Reports Major Effects of falling reliance on Corporate Reports Frequencies Quoted Reports Non-Quoted Reports It prejudices data collection and inter-company policy formulations 86 30 56 Creates rumors and leads to unreliable opinions about corporate entities and Corporate performances 66 50 16 Divestment policies and decisions from Investors resulting from loss of confidence from investors and investing public 162 120 42 Fleeces or discourages potential investors and leads to poor investment decisions by the investing public 76 70 6 It reduces level of business dealings with Firms & reduces company performances 71 21 50 Contributes to many Corporate wind-ups 116 36 80 Affects negatively the Country’s economy and GDP 96 53 43 Creates funding problems and limits inflow of Credit facilities 111 32 79 Hinders policy formulations of regulatory bodies and leads to pursuance of wrong priorities 91 71 20 Leads to general failure to corporate decisions and failure of stock exchange operations 106 100 6 Other sundry effects 19 10 9 Total 1,000

Table 8. Major effects of falling reliance Tests of Between-Subjects Effects Source Dependent Variable Type III Sum of Squares df Mean Square F Sig. Corrected Model Frequency 12774.9 10 1277.491 . . Quoted Companies 11442.9 10 1144.291 . . Non-Quoted Companies 7640.0 10 764.000 . . Intercept Frequency 90909.09 1 90909.091 . . Quoted Companies 31968.09 1 31968.091 . . Non-Quoted Companies 15059.00 1 15059.000 . . Effects Frequency 12774.90 10 1277.491 . . Quoted Companies 11442.90 10 1144.291 . . Non-Quoted Companies 7640.00 10 764.000 . . Error Frequency .000 0 . Quoted Companies .000 0 . Non-Quoted Companies .000 0 . Total Frequency 103684.00 11 Quoted Companies 43411.00 11 Non-Quoted Companies 22699.00 11 Corrected Total Frequency 12774.90 10 Quoted Companies 11442.90 10 Non-Quoted Companies 7640.00 10

Testing of Hypothesis 4

To test hypothesis 4, this states that the effects of falling reliance on corporate reports from 2000 to 2010 have not significantly affected corporate well-being in Nigeria. We evoke the results of respondents’ answers to question no 3. The question asked respondents to list ten possible effects of falling reliance on corporate reports and indicate whether this effect is for either quoted or non quoted company. The outcome is as seen in table 7. Hypothesis 4 states that the effects of falling reliance on corporate reports from 2000 to 2010 have not significantly affected corporate well-being in Nigeria. To test this hypothesis, we employed the Multivariate analysis statistic ANOVA. Using Multivariate analysis test statistics, the result appeared as shown in table 8 showing the effects of falling reliance on corporate well-being Discussions of Results of test of hypothesis 3:

The result from Table 8, showed that the outcome is very significant (p<0.05), thus we reject the null hypothesis which states that the effects of falling reliance on corporate reports from 2000 to 2010 have not significantly affected corporate well-being in Nigeria. To analyse further these negative effects on corporate well-being between quoted and non-quoted companies, the use of ANOVA was employed on the data from table7 and the result is as seen in table 9. This showed that the effects of falling reliance on both quoted and non-quoted companies from 2000 to 2010 were very significant.

5. Conclusions and Recommendations

The research outcomes showed that there were many causes of falling reliance on corporate reports from 2000 to 2010 but none of them is significant enough to induce such abrasive reliance on corporate reports. It showed further that many corporate stakeholders rely more on quoted annual reports than on non-quoted ones. This perceived falling reliance on corporate reports has significant negative effects on Corporate well-being both on quoted and non-quoted companies. We hereby recommend that penalties be sent against falsification of financial statements and appropriate legislation be set in motion, making a punishable offence for a Director to sign a falsified financial statement. Also further research to be carried out on ways of increasing reliance on corporate reports by Company major stakeholders for the good of the nation and her investment opportunities.