Decision Usefulness and Financial Reporting: The General Public Perspective

The study examines how the quality of financial reports aid accounting information users (the general public) to make informed decisions. To achieve this objective, the current Staff and Higher National Diploma Students of Accountancy Department, Rufus Giwa Polytechnic Owo, Ondo State, Nigeria was used as our respondents. Data were gathered using the questionnaire. A total of 75 sets of a questionnaire were administered to the respondents with 57 of them retrieved, thus, representing a 76% response rate. The Ordinary Least Square (OLS) regression technique was employed to analyze the data gathered. From the empirical results, reliability, understandability, comparability, timeliness and verifiability of financial reports with t-statistic values of (1.309), (-0.792), (-0.357) and (-0.681) respectively were found to be insignificant for decision making by the general public. While relevance and faithful representation with t-statistic values of (2.398) and (2.004) respectively were found to be positive and statically significant for decision making by the general public. The paper therefore concludes that most of the respondents do not rely on the financial reports provided by companies as a result of not providing their information needs as stakeholders. Therefore, it was recommended that for financial reports to be more meaningful and of immense benefit to the general public there is need to make information in financial reports more reliable, understandable, comparable, timely and verifiable.