Board Characteristics and Muslim Ownership Structure on Value Relevance of Accounting Information: Evidence from Malaysian Shariah Compliant Companies

2018 ◽  
Vol 15 (2) ◽  
pp. 39-53
Author(s):  
Abdelhakhem Hamed Mohamed Ali Adaa ◽  
Mustafa Mohd Hanefah
Keyword(s):  
Financial Reporting ◽  
Ownership Structure ◽  
Value Relevance ◽  
Accounting Information ◽  
Positive Association ◽  
Investment Efficiency ◽  
Corporate Reporting ◽  
The Board Of Directors ◽  
The Relationship

Corporate reporting is considered important because it provides information to assist internal and external corporate annual report users in making informed decisions. The high quality of financial reporting information is really significant, since employing this information can also lead to an increase in investment efficiency. Owners or shareholders need all necessary financial information for decision making. Nevertheless, even though they own the companies but the management is carried out by a pool of professionals – managers and directors. Thus, the directors set the directions and policies for the management team to run the company’s daily affairs. The separation between ownership and managers in firms leads to the agency problem between them. This study looks into the relationship between corporate governance characteristics (the size of the board of directors, the number of Shariah background directors, number of Muslim female in board, Muslim ownership structure) and value relevance of accounting information. Findings show a positive association between board size and value relevance of accounting information in Malaysian Shariah-compliant firms. However, there is not enough evidence to prove Shariah background members on board can enhance the value relevance of accounting information. Regarding the relationship between the presence of Muslim female directors in the board and the value relevance of accounting information, the results reveal insignificant relationship. The findings also indicate that companies with large Muslim ownership are negatively significant for value relevance of accounting information.

scholarly journals The ownership structure, the board of directors and the quality of accounting information

2013 ◽  
Vol 10 (4) ◽  
pp. 420-433 ◽  
Author(s):  
Nejla Ould Daoud Ellili
Keyword(s):  
Board Of Directors ◽  
Financial Reporting ◽  
Ownership Structure ◽  
Accounting Information ◽  
Poor Quality ◽  
Annual Data ◽  
Quality Of Accounting Information ◽  
The Board Of Directors ◽  
Recent Financial Crisis

High quality accounting information is vital for the accuracy of the financial statements, whereas poor quality information may lead to serious economic problems. The recent financial crisis has attracted the interest of many researchers in determining the factors that may affect the quality of accounting information. In this field, our research investigates the possible impact of the ownership structure and of the make-up of the board of directors on the quality of accounting information, using annual data from 29 companies listed on the Abu Dhabi Securities Exchange in 2008 and 2009. The actual research starts by presenting an appropriate measure of the quality of the accounting information, then developing a model explaining the relationship between the ownership structure, the board of directors and the quality of the accounting information. In the light of our results, we will be able to provide recommendations for helping the companies improve the quality of their financial reporting.

scholarly journals The Influence of the Quality of an Audit to Relationship Other Comprehensive Income (OCI) And Relevance of Value Accounting Information, And Asymmetry of Information (Study on Companies in Indonesia)

2017 ◽  
Vol 5 (1) ◽  
pp. 46-52
Author(s):  
Yurniwati Yurniwati ◽  
Amsal Djunid ◽  
Nini Sumarni ◽  
Ike Pranita
Keyword(s):  
Information Asymmetry ◽  
Value Relevance ◽  
Linear Regression Analysis ◽  
Accounting Information ◽  
Asymmetry Of Information ◽  
Comprehensive Income ◽  
Other Comprehensive Income ◽  
Relationship Of ◽  
The Relationship

Objective - This study examines the influence of the quality of an audit to the relationship of Other Comprehensive Income (OCI) and Relevanceof Value Accounting Information, and Asymmetry of Information in Indonesia's companies. Methodology/Technique - This research uses secondary data obtained from the company's annual report in 2012 - 2014. A purposive sampling method is used to collect data and the analysis of the hypothesis was conducted usingmultiple linear regression analysis. Findings - The research has shown that Quality of Audit has a significant influence to the relationship of the OCI disclosure and Relevance of Value Accounting Information has a value of sig. 0.000, F calculate is 26.816 larger than F table 2.396 and adjusted R square 0.241. Novelty - The study looks at the disclosures of OCI component's role in the investors decision making and it increases value relevance of accounting information and reducing information asymmetry. Type of Paper - Empirical Keywords: Other Comprehensive Income (OCI); Relevance of Value Accounting Information; Information Asymmetry; Quality of Audit. JEL Classification: D82, M41, M42.

Digital corporate reporting and value relevance: evidence from the US and Japan

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Yuan George Shan ◽  
Indrit Troshani
Keyword(s):  
Financial Reporting ◽  
Stock Price ◽  
Value Relevance ◽  
Accounting Information ◽  
Financial Information ◽  
Content Type ◽  
Corporate Reporting ◽  
The Us ◽  
The Impact ◽  
Corporate Financial Reporting

PurposeThe study improves current understanding concerning the implications of digital corporate reporting technology on the informativeness of accounting information.Design/methodology/approachIt looks at how XBRL, an exemplar digital corporate financial reporting technology, affects value relevance of accounting information in the US and Japan, two key jurisdictions where XBRL has been mandated. We operationalise stock price and return value relevance models to assess and compare predicted associations between selected accounting measures and market value of equity in these countries.FindingsWe predict that the selected accounting measures are more value relevant after XBRL was mandated than before. We find evidence to support our prediction for the US sample. We also predict and find that the contribution of XBRL to the value relevance of the selected accounting measures is greater in the US than in Japan. Overall, our evidence provides support that digital corporate reporting technology enhances relevance and reliability of accounting measures.Originality/valueThe study appears to be the first to have examined the impact of XBRL on value relevance whilst comparing between two major jurisdictions. The study extends emerging but limited literature concerning the benefits of digital corporate financial reporting for enhancing the communication between firms and users of financial information. The findings are useful to both users of financial information and standard setters.

Auditor's report, auditor's size and value relevance of accounting information

2020 ◽  
Vol 21 (4) ◽  
pp. 721-739
Author(s):  
Ahmad Abdollahi ◽  
Yasser Rezaei Pitenoei ◽  
Mehdi Safari Gerayli
Keyword(s):  
Financial Reporting ◽  
Firm Size ◽  
Value Relevance ◽  
Accounting Information ◽  
Positive Association ◽  
Alternative Measure ◽  
Policy Makers ◽  
Content Type ◽  
Audit Firm ◽  
Audit Firms

PurposeThe present study sets out to examine the effect of auditor's report and audit firm size on the value relevance of accounting information of the companies listed on the Tehran Stock Exchange during the years 2008–2017.Design/methodology/approachThe study includes a sample of 1,530 firm-year observations drawn from the listed companies, and the research hypotheses were analyzed using multivariate regression model based on panel data.FindingsThe findings reveal that auditor's report and audit firm size are positively and significantly correlated with two indicators of the value relevance of accounting information including value relevance of earnings and book value per share. Also our results exhibit robustness to the alternative measure of auditor's attributes.Research limitations/implicationsAs far as we know, this is the first study to analyze the association between auditor's attributes and value relevance of accounting information in emerging capital markets, thereby generating certain implications for investors, managers, capital market policy makers and audit profession regulators in general and those in emerging markets in particular.Practical implicationsOur findings have implications for policy makers, regulators, managers and investors. Our evidence on the positive association between auditor's size and value relevance of accounting information should help policy makers and regulators which they improve value relevance of accounting information and financial reporting by integrating small audit firms and setting up larger audit firms.Originality/valueA rise in the value relevance of accounting information deserves further attention while drawing investment, selling the stocks of existing firms and increasing investor's decision-making ability. The way how auditor's attributes can promote the value relevance of accounting information is still open to new research.

scholarly journals Η χρησιμότητα των χρηματοοικονομικών πληροφοριών και η επίδρασή τους στις αποδόσεις των μετοχών

2012 ◽  
Author(s):  
Παναγιώτης Δημητρόπουλος
Keyword(s):  
Financial Reporting ◽  
Value Relevance ◽  
Accounting Information ◽  
Cash Flows ◽  
Listed Firms ◽  
Financial Reporting Standards ◽  
Quality Of Accounting Information ◽  
Valuation Process ◽  
Banking Institutions

The present doctoral thesis aims to study the issues of value relevance and quality of accounting information within the context of the Greek capital market. Using a sample of Greek listed firms from all business sectors (including banking institutions) and applying alternative methodologies, we examined the main factors (internal and exrternal) which shape and determine the value relevance of accounting information. Our empirical evidence indicate that earnings (more than any other accounting figure) cash flows, common equity and accruals seem to have significant impact on investor‟s desicions and contribute to the valuation process of the Greek listed firms. Also the quality of accounting information seems to be positively affected from the efficiency of corporate governance, the adoption of International Financial Reporting Standards (IFRS) and the quality of statutory audits. On the contrary, speculation and the adoption of the euro currency by the Greek government in 2001 have impacted negatively in the quality of accounting information.

scholarly journals Compliance With International Financial Reporting Standards and Value Relevance of Accounting Information in South Africa

2021 ◽  
Vol 12 (4) ◽  
pp. 277
Author(s):  
Unity Maqeda Putsai ◽  
Msizi Mkhize
Keyword(s):  
South Africa ◽  
Financial Reporting ◽  
Value Relevance ◽  
Stock Exchange ◽  
Accounting Information ◽  
Positive Association ◽  
Reporting Standard ◽  
International Financial Reporting Standard ◽  
Significant Positive Association ◽  
Compliance Level

The objective of the study is to investigate the relationship between the International Financial Reporting Standard (IFRS 1) and the value relevance (VR) of accounting information. In this study forty-six companies listed on the Johannesburg Stock Exchange during the period 1993 to 2017. Panel data is used to compare the period before and after IFRS. The companies in the sample are composed of the following sectors; mining, manufacturing, banks and investment companies, real estate, general industry, retailers, construction and material, chemical and software, and computers. Based on the yearly financial reports published by public companies in South Africa, the study employed the Cookes (1992) Unweighted Disclosure Index to measure the level of compliance in South Africa. Fifty-six disclosure elements from IFRS 1 were utilized to measure the compliance level. Thereafter Ohlson (1995) Model is used with dummy variables to compare the pre-and post-IFRS period. First, the study reflected that most of the South African companies exhibit higher compliance rates ranging from 87 to 93.417 which is impressive. On the other hand, 4 companies recorded Medium level compliance that is between 60% to 79% compliance level. The findings further revealed that there is a significant positive association between compliance with IFRS 1 and the value relevance of accounting information.

scholarly journals Integrated Reporting Practices in Europe and Value Relevance of Accounting Information under the Framework of IIRC

2018 ◽  
Vol 13 (5) ◽  
pp. 1 ◽  
Author(s):  
Salvatore Loprevite ◽  
Daniela Rupo ◽  
Bruno Ricca
Keyword(s):  
Financial Reporting ◽  
Price Level ◽  
Value Relevance ◽  
Accounting Information ◽  
Financial Capital ◽  
Integrated Reporting ◽  
Book Value ◽  
Reporting Practices ◽  
Level Model

The research has been conducted on a sample of European companies with the aim to investigate whether the adoption of the Integrated Reporting (IR) affects the value relevance of summary accounting information. The relations between Market Value (MV) and traditional accounting information (Book Value and Earnings) are studied by a linear price-level model, typical of the studies on the value relevance of accounting information. The results of analysis show that the degree of value relevance of Earnings is significantly different for companies that publish an Integrated Report compared to companies adopting traditional financial reporting. The study confirms the assessment made by IIRC and the other advocates: Integrated Reporting is expected to improve the quality of traditional accounting information for providers of financial capital.

The Impact of IFRS Adoption on Earnings Management Activities and Value Relevance of Accounting Information: Applied Study

2018 ◽  
Vol 1 (3) ◽  
pp. 11-42
Author(s):  
Mohamed Ibrahim Mohamed Hessian
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Value Relevance ◽  
Accounting Information ◽  
Discretionary Accruals ◽  
Economic Benefits ◽  
Financial Reporting Standards ◽  
Study Results ◽  
The Impact

This study focused on the economic benefits of adoption of IFRS. More specifically, this study emphasis on whether the quality of the accounting information has been improved after the adoption of IFRS. The study investigated quality of accounting information through two main variables: earnings management and the value relevance of accounting information. The study was applied on 56 Egyptian listed companies during the period from 1997 to 2011, which divided into two periods: the period after the adoption of the standards from 2007 to 2011, and before the adoption of the International Financial Reporting Standards from 1997 to 2006. The research concluded that there is a significant impact of the adoption of IFRS on managerial opportunities to manage earnings using discretionary accruals, which is reflected in the lower value relevance of accounting information. Study results also indicate that companies with high leverage are the lowest companies in the value relevance of accounting information, and that companies that are subject to private sector law No. 159 of 1981 are the most companies engaged in earnings management activities through discretionary accruals, large size companies, without any significant impact on future growth opportunities and listing on global exchanges.

scholarly journals Research on the Relationship between the Female Directors' Personal Characteristics and the Quality of Accounting Information

2021 ◽  
Vol 96 ◽  
pp. 02008
Author(s):  
Lu Yin
Keyword(s):  
Board Of Directors ◽  
Accounting Information ◽  
Personal Characteristics ◽  
Quality Of Information ◽  
Female Directors ◽  
Quality Of Accounting Information ◽  
The Board Of Directors ◽  
The Relationship ◽  
Positive Effect

This paper explores the relationship between female directors and the quality of accounting information. it takes 51 enterprises from 2008 to 2018 as samples, selects the proportion of female directors, age, education background and financial background to study the personal characteristics. The results show that: the percentage of female directors is directly proportional to the accounting information; the higher the female director's education, the higher the quality of information; the female directors with financial background have a specific positive effect on the improvement of accounting information. Based on this, this paper proposes some suggestions on how to strengthen the construction of the board of directors and improve the quality of information about listed companies.

Sign in / Sign up

Export Citation Format

Share Document