The Extent to Which Financial Reports Can Be Relied Upon by Users in Decision making at Border Timbers Limited Mutare, Zimbabwe

Abstract

The main objective of the study was to present an assessment of the extent financial reports can be relied upon by various users in decision making at Border Timbers Limited. The study was carried out to ascertain whether the financial reports at Border Timbers presented a true and fair view and thus fulfils the reliability concept of financial reports. The study adopted a descriptive research design, which used both primary and secondary data as well as both qualitative and quantitative methods. Primary data was collected using questionnaires and interviews while the secondary data was obtained from the annual reports of Border Timbers Pvt Ltd. The study was based on a population of 100 people in the form of employees, creditors and shareholders and the sample size was 80 respondents drawn from the total population through stratified sampling. The data was analysed through descriptive statistics which utilised frequency tables and summary measures, such as the average or mean and standard deviation. Data analysis was also done through SPSS Version 25 and a correlation and regression analysis was performed on the study’s variables. The study found out that integrated reporting has not been adopted to a large extent at Border Timbers Pvt Ltd with the financial reports containing predominantly financial information and minimum non-financial information. The study also found out that information contained in the financial reports of Border Timbers Pvt Ltd was presented clearly with all revenue, expenses, profit and all obligations were clearly presented and thus the annual reports of Border Timbers were found to be readable and easily understandable. The study also found out that Border Timbers Pvt Ltd was adequately equipped to provide useful information required by users as it has qualified Finance and Accounting Staff, qualified auditors and that Staff at Border Timbers fully understands the IASs, IFRSs and the global regulatory framework. The study also found out that a positive correlation existed between the qualitative factors of understandability, relevance, comparability, faithful representation and timeliness of information contained in the financial reports of Border Timbers and decision making. The study recommended that management at Border Timbers should commit to Integrated Reporting and disclose a large proportion of both financial and non financial information as in the modern society users prefer to understand the business philosophy by analysing the commitment of the organization to both financial and non-financial activities. The study also recommended that management at Border Timbers must ensure that all Finance and Accounting staff well trained on the adoption of the Integrated Reporting Framework.