THE IMPACT OF ACCOUNTING ON BANK LENDING DECISION

CHAPTER ONE

INTRODUCTION

In any business outfit, be it government or privately moment of decision making present challenges to the executive.  Decision taking is the life wire of any organization as the future growth or retardation of the enterprise depends on the soundness of such decision.  The decision making process is confronted by a lot of problems.

The dangerous trend in the banking industry has sent a disturbing wave to the national economy.  In a rapid reaction to salvage the banking industry and save the economy from collapse; the government enacted the failed degree and established a tribunal to try the formal decision makers n the banks who have contributed to the bank’s failure.

The utilization of accounting knowledge in bank lending decision will make a lot of impact in enhancing bank growth and productivity, the usefulness to the lending decision as it is very useful in all operations in the banks.

Osisima (1990) classified accounting knowledge into three integrated parts, which includes store-keeping knowledge attention directing information and problem.

Also Nwobodo Okafor (1995) classified accounting knowledge into financial accounting system and management accounting system which includes records of profit and loss of the enterprises business activities and financial decision taken by management.

One of the ways bank lend money I through loan and this can be group into short term  and long term loan, they advance money to their customers in various categories.  Before bank lends money, they will make sure the borrowed money is going to be paid back at the appropriate time.  They will also know the purpose in which that money is borrowed before affording it to the customer.  Accounting knowledge represents the real life situation of the banks which cannot be ignored in lending.

Because of the importance of accounting knowledge in enhancing bank growth and development, we have decided especially in the era when so many banks are distressed and liquidated.  As students of accountancy,