The Empirical Study of Investment Opportunities in the Value-Relevance of Accounting Earnings

2012 ◽  
pp. 235-241
Author(s):  
Yuanyang Fu ◽  
He Guo ◽  
Danping Wang ◽  
Wanlin Zhang
Keyword(s):  
Empirical Study ◽  
Value Relevance ◽  
Accounting Earnings ◽  
Investment Opportunities

scholarly journals Heterogeneity in earnings quality between different classes of companies after IFRS adoption: evidence from Brazil

2017 ◽  
Vol 28 (73) ◽  
pp. 113-131
Author(s):  
Roberto Black ◽  
Sílvio Hiroshi Nakao
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Value Relevance ◽  
Earnings Quality ◽  
Economic Incentives ◽  
Net Income ◽  
Accounting Earnings ◽  
Ifrs Adoption ◽  
Before And After

ABSTRACT This paper aims to investigate the existence of heterogeneity in earnings quality between different classes of companies after the adoption of the International Financial Reporting Standards (IFRS). IFRS adoption is generally associated with an increase in the quality of financial statements. However, companies within the same country are likely to have different economic incentives regarding the disclosure of information. Thus, treating companies equally, without considering the related economic incentives, could contaminate earnings quality investigations. The case of Brazil is analyzed, which is a country classified as code-law, in which tax laws determined accounting practice and in which IFRS adoption is mandatory. First, Brazilian companies listed on the São Paulo Stock, Commodities, and Futures Exchange (BM&FBOVESPA) were separated into two classes: companies issuing American Depositary Receipts (ADRs) before IFRS adoption and companies that did not issue ADRs until the adoption of IFRS. Then, this second class of companies was grouped, using cluster analysis, into two different subclasses according to economic incentives. Based on the groups identified, the quality of accounting earnings is tested for each class of the companies before and after IFRS adoption. This paper uses timely recognition of economic events, value relevance of net income, and earnings management as proxies for the quality of accounting earnings. The results indicate that a particular class of companies began showing conditional conservatism, value relevance of net income, and lower earnings management after IFRS adoption. On the other hand, these results were not found for the two other classes of companies.

scholarly journals The Different Changes Of Value Relevance Of Earnings Between SOEs And NSOEs After Adoption Of IFRS: Evidence From China

2016 ◽  
Vol 32 (3) ◽  
pp. 765-776
Author(s):  
Wanli Li ◽  
Hong Guo
Keyword(s):  
Empirical Evidence ◽  
Value Relevance ◽  
Accounting Standards ◽  
The State ◽  
Accounting Standard ◽  
Accounting Earnings ◽  
Financial Report ◽  
Empirical Results ◽  
Mandatory Adoption

This article studies changes of value relevance of earnings after mandatory adoption of new CAS (the Chinese Accounting Standards) which is substantially convergent with IFRS (the International Financial Report Standards) in China’s listed enterprises. We extend the previous research by examining the different impact on value relevance of earnings between SOEs (the State-Owned Enterprises) and NSOEs (the Non-State-Owned Enterprises) after adoption of new CAS, which is based on the samples consisting of 836 companies listed on A-shares market of China. The empirical results show that the value-relevance of accounting earnings significantly increased after 2007, and represent that value relevance of earnings increased significantly in SOEs while there are no significant changes in NSOEs after adoption of the new CAS. Our research has implications for China’s Accounting Standard setters who desire to reach expected consequences of convergence with IFRS, and provide empirical evidence for adoption of IFRS in different countries which have both SOEs and NSOEs.

scholarly journals THE MEDIATION INFLUENCE OF VALUE RELEVANCE OF ACCOUNTING INFORMATION, INVESTMENT DECISION AND DIVIDEND POLICY ON THE RELATIONSHIP BETWEEN PROFITABILITY AND THE COMPANY’S VALUE

2017 ◽  
Vol 21 (2) ◽  
pp. 170 ◽  
Author(s):  
Harnovinsah Harnovinsah ◽  
Sustari Alamsyah
Keyword(s):  
Dividend Policy ◽  
Value Relevance ◽  
Investment Decision ◽  
Accounting Information ◽  
Sampling Technique ◽  
Negative Influence ◽  
Positive Influence ◽  
Analysis Technique ◽  
Investment Opportunities ◽  
The Relationship

This study aimed to analyze the influence of profitability on the company's value, and determine whether this influence intervenes the value relevance of accounting information, investment opportunities and dividend policy, assuming that investors act rationally so that the fundamental aspects of the financial statements become major factor in the shares investment decision. The contribution of this research is to provide input to the management about the importance of maintaining and improving performance in order to give satisfaction to investors and provide expectations for the return on investment which can ultimately increase the company’s value. This study design is causality with the unit of analysis is the samples taken by purposive sampling technique on a population of listed companies on the IDX Kompas 100 index from 2011 - 2014. The analysis technique used is Path Analysis. The results from this study are: 1. Profitability has significant and positive influence on the company’s value; 2. Profitability has no significant and positive influence on the value relevance of accounting information; 3. Profitability has negative and significant influence on investment opportunities; 4. Profitability has significant and positive influence on the dividend policy; 5. The value relevance of accounting information has significant and negative influence on the company’s value; 6. The investment opportunities have no significant and positive influence on company’s value; 7. Dividend policy has no significant and positive influence on company’s value; 8. The value relevance of accounting information, investment opportunities and dividend policy have not been able to mediate the influence of profitability on company’s value.

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