Thesis Abstract

Abstract
Banks play a crucial role in the economy by providing financial services and acting as intermediaries between savers and borrowers. The accounting policies adopted by banks have a significant impact on their financial reporting and overall performance. This research project aims to investigate the accounting policies of banks and their implications. The study will explore the various accounting policies commonly used by banks, such as the treatment of non-performing loans, fair value accounting, and the classification of financial instruments. By examining these policies, the research seeks to understand how they affect the financial position and performance of banks. Additionally, the project will analyze the regulatory framework governing accounting practices in the banking industry. Regulatory requirements may influence the accounting policies chosen by banks and impact the comparability of financial statements across institutions. Understanding these regulations is crucial for assessing the quality and transparency of financial reporting in the banking sector. Furthermore, the research will investigate the impact of accounting policies on key financial metrics, such as capital adequacy, profitability, and risk management. By analyzing the relationship between accounting policies and financial performance, the study aims to provide insights into the factors driving bank profitability and stability. The methodology for this research project will involve a comprehensive review of existing literature on banking accounting policies and regulations. Empirical analysis will be conducted using financial data from a sample of banks to examine the relationship between accounting policies and performance metrics. The findings of this research have implications for various stakeholders, including regulators, investors, and bank management. Regulators can use the insights to evaluate the effectiveness of current accounting regulations and identify areas for improvement. Investors can make more informed decisions by understanding how accounting policies impact the financial statements of banks. Bank management can use the findings to optimize their accounting policies and enhance financial performance. In conclusion, this research project will contribute to the existing body of knowledge on banking accounting policies and their implications. By examining the various accounting policies used by banks and their impact on financial performance, the study aims to provide valuable insights for stakeholders in the banking industry.

Thesis Overview

1.0 INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Since the beginning of corporate form of business entity in Nigeria, the banking sector has been playing important role in promoting economic growth and development by way of providing liquidity and capital in form of loans to firms and private individuals, Izedonmi (2001) noted that banks help to allocate available resources by mobilizing funds from productive channels to finance investment activities in productive sectors and increase capital formation, they also promote financial investment activities by selling their financial securities to the public who in return will require mere performance to be reflected in their financial yearly report.
The activity of monitoring banks in Nigeria to ensure that there financial statement are released when due are the Central Bank of Nigeria (CBN) and the Nigerian Accounting standard board (NASB) through the statement of Accounting standard (SAS) and the code of corporate governance which have set pressing issue on standard of financial reporting by banks. Although the formation, development, application and disclosure of these accounting policies and principles has not been fully upheld to as it could be that the policies adopted are not favorable.
Accounting policies are specific accounting bases used by corporate firms which are appropriate to the circumstances of the business and suitable for presentation of its results and financial position through the use of fundamental accounting concept, conventions and principles to achieve its objective of a true and fair view of the financial statement since they are to be relied upon by stakeholders. The major accounting policies are in the area of consolidation, segment reporting, foreign currency conversion and translation, investment in subsidiary, depreciation, goodwill, sales of loan and security etc. Different techniques are used by different firm under the implementation of accounting policies. The policy making process involves a network of relationship among policies makers in different firms.
The complexity of accounting policies can takes its on financial report, some times financial report can be based on conflicting policies resulting to criticism of such reports; there may be conflict in the implementation of the policies and disclosure discrepancies between policies and report. The quality of financial information is a function of both the quality of accounting standard and the regulatory enforcement or corporate application of the standards (Kothori and Hope 2003). So these policies should be formulated using the standard.
It is on this note that the Nigeria Accounting Standard Board (NASB) develop the statements of accounting standards SAS that will guide banks and other corporate entity in the formation of sound and safety accounting policies for the efficiency of reporting in the financial statement. Despite the importance of financial performance of banks to investors and stakeholders there have been few study on the area so this study is attempt to fill the gap, that is to focus on the banking sector and study “the impact of their accounting policies on their financial performance.

1.2 STATEMENT OF PROBLEM
Previous studies have been carried out concerning the accounting policies of the banks and the problem associated with this research are:

1.3 OBJECTIVE OF THE STUDY
The objective of this research is to find out the impact of some selected areas of accounting policies on the financial performance of banks. Areas of study are: