Financial Reporting Skill Needs of Small Scale Business Operators in Onitsha, Anambra State

Abstract

Financial Reporting Council of Nigeria (FRCN) in collaboration with International Accounting Standard Board (IASB, 2012) introduced International Financial Reporting Standard in Nigeria as to harmonize countries reporting format. FRCN went further to state that PLCs were to comply to IFRS in 2012, SMEs were to comply in 2014using IFRS for SMEs while other small scale businesses that do not meet the criteria for that of SMEs should continue with their local GAAP. In line with the above directive, a preliminary visit was conducted by the researcher and her group among small scale business operators in Onitsha considering the fact that Onitsha is known to have many small scale businesses and there were cases of winding up of these businesses from literatures. Therefore this study was borne out of an identified problem among small scale business operators in Onitsha. The study was designed to find out financial reporting skill needs of small scale business Operators in Onitsha, Anambra state. Four research questions and five hypotheses guided the study. The population comprised 243 operators of small scale businesses registered with Anambra State Ministry of Commerce and Industry (Onitsha, unit).The population was manageable so there was no sampling. Data was collected from the respondents using a structured questionnaire titled Financial Reporting Skills Need of Small Scale Business Operator’s Questionnaire (FARSNSSBOQ).The structured questionnaire was validated by three experts, a professional accountant from Yinus Shokoya & Co Chartered Accountants Lagos and two lecturers from Business Education Department, University Of Nigeria Nsukka. The internal consistency of the questionnaire items was ascertained was through Cronbach Alpha technique which yielded a reliability coefficient of0.82 for balance sheet statement reporting skills need, 0.76 for profit and loss account reporting skill needs, 0.91 for value added statement reporting skills need and 0.86 for cash flow statement reporting skills need. The overall clusters yielded 0.86. Research question were analyzed using mean and standard deviation while the formulated hypotheses of no significant difference @ 0.05 were analyzed using independent t-test and one way analysis of variance. (ANOVA) The result of the analysis revealed that the identified skills above were considered important and highly needed by small scale business operators in Onitsha for effective operation of their businesses. The result also revealed that the five null hypotheses of no significant difference tested, were all upheld. Based on the above findings, it was recommended that operators of small scale business must subject themselves to training on financial reporting skill needs. Federal and State government must organize periodic seminars and workshop for small scale business operators on financial reporting practices, having in mind the importance of small scale businesses to our economic development.