Effect of Published Financial Statements on Shareholders Investment Decision

Each person like every business requires some measures of both financial position and financial performance in assessing his financial conditions. The financial position depicts one’s wealth at ascertain point in time while one’s financial performance describes once.

Financial  statements  according  to  Illoumezie  (2006:33)  are  like compasses “which navigators use to locate their bearing and find direction”.  People use them to gauge their financial positions at various points in their lives in order to judge their progress towards their financial goals. 
Financial statements according to meigs and meigs (1981:28) refers to reports  which  summarize  the  financial  position  and  operating  results  of  a business (balance sheet and income statements).

It referred to as genera purpose that satisfy the need of many groups generally called stakeholders. These groups are particularly concerned with the risk inherent in and returns provided by their investments, and who require accounting information to enable their assess the ability whether they should buy, hold and sell their investments.