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The Influence of Financial Statement Disclosures on Investor Decision-Making: A Case Study of GTBank

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Background of the Study

Financial statement disclosures are a cornerstone of corporate transparency, enabling investors to make informed decisions. These disclosures provide insights into a firm's financial health, operational performance, and compliance with regulatory standards (Adesina & Bello, 2023). In Nigeria, where capital markets are gradually evolving, the quality and reliability of financial disclosures are critical to fostering investor confidence and enhancing market efficiency (Central Bank of Nigeria [CBN], 2024).

Guaranty Trust Bank (GTBank), a leading financial institution in Nigeria, is renowned for its robust financial reporting practices. However, recent financial scandals and inconsistencies in disclosure practices across the banking sector have raised concerns about the reliability of information presented to investors (Obi et al., 2023). Effective disclosure practices can mitigate these concerns by enhancing transparency and reducing information asymmetry between management and stakeholders.

This study examines how financial statement disclosures influence investor decision-making, using GTBank as a case study. By focusing on key disclosure elements such as financial performance, risk management, and corporate governance, the study aims to provide empirical evidence on the role of transparency in shaping investment behavior.

Statement of the Problem

Investor confidence in Nigeria's financial markets has been undermined by inconsistencies in financial reporting and inadequate disclosure practices. While regulatory frameworks such as the International Financial Reporting Standards (IFRS) have been adopted, compliance levels vary significantly among firms, leading to information asymmetry and suboptimal investment decisions (Ajibade et al., 2024).

Although GTBank has been commended for its disclosure practices, questions remain regarding the extent to which these disclosures influence investor behavior. The lack of empirical studies focusing on Nigerian banks limits understanding of how disclosure practices impact investment decisions. Addressing this gap is essential for strengthening investor trust and promoting financial market stability.

Objectives of the Study

  1. To analyze the relationship between financial performance disclosures and investor decision-making.

  2. To evaluate the influence of risk management disclosures on investor confidence.

  3. To assess the impact of corporate governance disclosures on investment decisions.

Research Questions

  1. How do financial performance disclosures affect investor decision-making?

  2. What is the influence of risk management disclosures on investor confidence?

  3. How do corporate governance disclosures impact investment decisions?

Research Hypotheses

  1. H₀₁: Financial performance disclosures do not significantly influence investor decision-making.

  2. H₀₂: Risk management disclosures have no significant impact on investor confidence.

  3. H₀₃: Corporate governance disclosures do not significantly affect investment decisions.

Scope and Limitations of the Study

The study focuses on GTBank as a representative case of disclosure practices in the Nigerian banking sector. It examines financial performance, risk management, and corporate governance disclosures. The study's findings may not be generalizable to other banks or sectors. Additionally, reliance on secondary data from financial statements may pose limitations due to potential reporting biases.

Definitions of Terms

  • Financial Statement Disclosures: Information provided in a firm's financial reports to enhance transparency and compliance.

  • Investor Decision-Making: The process by which investors analyze financial information to make investment choices.

  • Risk Management Disclosures: Information regarding a firm's strategies for identifying and mitigating risks.

  • Corporate Governance Disclosures: Information related to the structure, policies, and practices guiding a firm's management and operations.





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