Abstract
The study examined the influence of credit risk disclosure compliance on bank performance in Nigeria. IFRS 7 state that entity should disclose credit risk in their financial report. Credit risk may affect going concern concept and audit report is silent about it. The specific objective of the study is to ascertain the influence of credit risk disclosure on bank profitability. Linear regression analysis was used to analyse the data collected from financial reports, with the help of SPSS 20.0 version. The study discovered that there is positive relationship between credit risk disclosure and bank profitability. The study therefore recommends that the financial institutions regulators should enforce credit risk disclosure in their financial reports as this will help the stakeholders to make informed investment decision.
Highlights
According to Olweny and Shipho (2011) opines that banks are exposed to risks because of their roles of receiving deposit and advance loans to her customers
International Financial Reporting Standards (IFRS) 7 states that “An entity shall disclose information that enables users of its financial statements to evaluate the nature and extent of risks arising from financial instruments to which the entity is exposed at the reporting date.”
Credit risk disclosure was measured with seven IFRS 7 disclosure items on credit risk in balance sheet
Summary
According to Olweny and Shipho (2011) opines that banks are exposed to risks because of their roles of receiving deposit and advance loans to her customers. Many scholars agreed that bank intermediation roles induce their credit creation ability. Credit risk is one of the important hurdles that bedevil bank performance. Boahene et al (2012) notes that credit quality is a vital indicator of sound and healthy banks. Bank stakeholders are exposed to various types of risk and those risks are either fully disclosed or reported on by the auditors. International Financial Reporting Standards (IFRS) 7 (paragraph 33 - 42) states that “An entity shall disclose information that enables users of its financial statements to evaluate the nature and extent of risks arising from financial instruments to which the entity is exposed at the reporting date.”. Some of risks to be disclosed are: liquidity risk, market risk and credit risk International Financial Reporting Standards (IFRS) 7 (paragraph 33 - 42) states that “An entity shall disclose information that enables users of its financial statements to evaluate the nature and extent of risks arising from financial instruments to which the entity is exposed at the reporting date.” Some of risks to be disclosed are: liquidity risk, market risk and credit risk
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