scholarly journals The impact of the Law on Strengthening the Security of Financial Relations on the value relevance of accounting information in Tunisian Stock Exchange

2013 ◽  
Vol 3 (1) ◽  
pp. 42
Author(s):  
Mohamed Rafik Ben Ayed ◽  
Ezzeddine Abaoub
Keyword(s):  
Stock Returns ◽  
Value Relevance ◽  
Stock Exchange ◽  
Explanatory Power ◽  
Accounting Information ◽  
Financial Statements ◽  
Accounting Earnings ◽  
The Law ◽  
Security Returns ◽  
The Impact

This paper empirically investigates the value relevance of accounting earnings measures in the emerging capital market of Tunisia. The issue is tested by estimating the regression of annual security returns on different earnings measures extracted from income statements. In Tunisia, firms prepare their financial statements in accordance with Tunisian Accounting Standards (TAS) which are inspired from International Financial Reporting Standards (IFRS). Based on a sample of 389 firm years for firms listed on the Tunis Stock Exchange (TSE) during the period 1997-2008 and using pooled regressions, we find that accounting earnings measures are weakly related to security returns. However, we find that earnings before taxes has the higher explanatory power for stock returns. This is perhaps due to the fact that financial statements are often influenced by taxation rules (ROSC, 2006; section 42). Further, we find that cash flow from operations and Total accruals are not value relevant for valuation. We tested whether the value relevance of each measure of performance improved after the adoption in October 2005 of the Law on Strengthening the Security of Financial Relations (LSSFR). Consistent with prior US and other international findings, results show that the explanatory power and the magnitude of the slope coefficient of each measure increased when we take into account for the impact of this enactment. However, the increase is not statistically significant. This is perhaps due to the employed specification of the relation between security returns and accounting information.

scholarly journals i, The Impact of Adoption of IFRS 9 on the Value Relevance Accounting Information for the Companies Listed in ISX

2021 ◽  
Vol 11 (3) ◽  
Author(s):  
Prof Dr Bushra Najem Aubdullah Al- Mashhadan ◽  
Prof Dr Bushra Najem Aubdullah Al- Mashhadan
Keyword(s):  
Value Relevance ◽  
Stock Exchange ◽  
Accounting Information ◽  
Financial Statements ◽  
Book Value ◽  
Earnings Information ◽  
Income Statement ◽  
Ifrs 9 ◽  
The Impact ◽  
The Relationship

This research aims to know the effect of adopting IFRS 9 on the relevance of the value of the accounting information of the companies in the Iraqi Stock Exchange. Researchers relied on analyzing the financial statements of 10 listed companies for years 2016 – 2019. Researchers used the Ohlson price model to test the relationship between accounting information and value relevance. The research indicated that there is a significant relationship between the adoption of IFRS 9 and the relevance of the value of the earnings and the book value, but the earnings information is more relevance than the book value information, it is due to the interest of investors in the income statement in making investment decisions.

scholarly journals RELEVANSI NILAI INFORMASI AKUNTANSI TERHADAP HARGA SAHAM YANG DIMODERASI KONSERVATISME AKUNTANSI

2019 ◽  
Vol 7 (2) ◽  
Author(s):  
Margareta Chaslim, Carmel Meiden
Keyword(s):  
Stock Price ◽  
Value Relevance ◽  
Stock Exchange ◽  
Linear Regression Analysis ◽  
Accounting Information ◽  
Financial Statements ◽  
Multiple Linear Regression Analysis ◽  
Accounting Conservatism ◽  
Analysis Techniques ◽  
The Impact

An information content of the published financial statements is said to have value relevance if it is able to revise investor beliefs as reflected in market reaction through stock price changes. Nevertheless, many issues suggest that the value relevance of accounting information has declined, mainly due to the increasing practices of conservatism. This research purpose is to know and  prove the value relevance of accounting information and the impact of conservatism on the value relevance of the manufacturing firms listing in the Indonesian Stock Exchange in the period of 2013-2016. The sample used amounted to 320 observations consisting of 80 companies each year. Based on data analysis techniques with multiple linear regression analysis, it was found that accounting information proved to have value relevance to the stock price, as well as accounting conservatism have a different effect on each accounting information.Keywords: Value relevance, accounting information, stock price, conservatism

The Association between Accounting Earnings, Dividends, Stock Prices and Stock Returns: Value Relevance of Accounting Standards in the Tunisian Stock Market

2017 ◽  
Vol 7 (1) ◽  
Author(s):  
Ahmed Bouteska ◽  
Boutheina Regaieg
Keyword(s):  
Stock Market ◽  
Interest Rates ◽  
Stock Returns ◽  
Stock Prices ◽  
Value Relevance ◽  
Explanatory Power ◽  
Investment Decisions ◽  
Accounting Earnings ◽  
Stock Market Returns ◽  
The Impact

This present study aims to examine the relationship between accounting earnings, dividends, stock prices and stock returns for companies listed at the Tunisian stock exchange. Using panel data obtained from the annual reports and financial statements of 57 Tunisian companies over the period 2005-2015, we show the existence of an earning-dividend-return significant positive relation by applying four models developed from Easton and Harris (1991), Frino and Tibbits (1992) and Kothari and Zimmerman (1995).. The empirical results indicate a significant value relevance of accounting earnings and dividends reported by Tunisian companies under the standards generally accepted in Tunisia. Particularly, it appears from our main findings in regressions the relative explanatory power of above variables on stock market returns which clarifies the important proportions of variations of stock returns in Tunisia. The findings from the study also reveal that shareholders pay a special attention to the impact of dividend and dividend yield on stock returns. Moreover, investors should consider informative earnings numbers as investment criteria as well as many other factors for example interest rates and industry performance affecting stock returns when it comes to make investment decisions. Based on these results and due to the importance of accounting earnings in investment decisions we recommend that there is need for investors to carefully use financial advisory information that financial analysts provide to them in order to determine what the correct and comparable earnings per share (EPS) or dividend per share (DPS) of each company.

scholarly journals Association between Accounting Numbers and Value of Food and Beverages Firms in Nigeria

2015 ◽  
Vol 7 (12) ◽  
pp. 245
Author(s):  
Nyor Terzungwe ◽  
Nasiru Rabiu
Keyword(s):  
Value Relevance ◽  
Stock Exchange ◽  
Investment Decision ◽  
Market Price ◽  
Accounting Information ◽  
Financial Statements ◽  
Annual Reports ◽  
Market Values ◽  
Food And Beverages ◽  
Accounting Numbers

<p>The degree of statistical relationship between the contents of financial statements and market price of equity is what is termed Value relevance of accounting information. It explains stock market measures using financial information variables and it is a very useful guide to investors in pricing of shares. This study examines the extent of association between accounting information variables of earnings, dividend and book value of equity and market value of listed Food and Beverages firms in Nigeria. Data were collected from the published annual reports of the sampled firms and their market values obtained from the official daily list of the Nigerian Stock Exchange (NSE) over a period of 10 years (2001-2010). Using multivariate regression as technique for data analysis, the study established that accounting information of Food &amp; Beverages companies in Nigeria is value relevant. Accordingly, the study recommends the use of financial statements figures of Food and Beverages firms for investment decision.</p>

Value Relevance of DuPont Identity

2017 ◽  
Vol 7 (2) ◽  
pp. 48
Author(s):  
Pradeep Kumar Gupta
Keyword(s):  
Stock Returns ◽  
Value Relevance ◽  
Stock Exchange ◽  
Accounting Information ◽  
Empirical Support ◽  
Operating Efficiency ◽  
Valuation Theory ◽  
Financial Leverage ◽  
Return On Equity ◽  
Use Efficiency

This study provides an empirical support to the relevance of very prevalent and well-established almost a century ago the DuPont Identity in the context of India, one of big 10 emerging markets (Garten, 1997). The DuPont Identity, a familiar form of financial statement analysis (Soliman, 2008) for use in equity valuation (Nissim and Penman, 2001), decomposes the return on equity (ROE) into three multiplicative components: net profit margin (operating efficiency), assets turnover ratio (asset use efficiency) and equity multiplier (financial leverage). The present study is based on the valuation theory which considers the viewpoint of equity investors to empirical investigate the value relevance of accounting information (Beisland, 2009). In this study, value relevance of three measures of accounting information used in the DuPont Identity is investigated for 228 manufacturing firms listed in National Stock Exchange (NSE) of India over a period of ten years from 2006-07 to 2015-2016. The findings indicate that the firms should focus on asset use efficiency and financial leverage components of DuPont Identity since a statistically significant impact of these two components on the stock returns is found. The strategic use of asset efficiency and financial leverage inevitably ensures the operating efficiency of the firms. This empirical investigation is an addition to the value relevance literature with an important insight to the firms and the participants of stock market about the usefulness of DuPont Identity in the context of India.

scholarly journals RELEVANSI NILAI INFORMASI AKUNTANSI ALTERNATIF SERTA IMPLIKASINYA TERHADAP PROSES PENGAMBILAN KEPUTUSAN INVESTASI DENGAN MENGGUNAKAN SEQUENTIAL EXPLANATORY MIXED METHOD

2020 ◽  
Vol 3 (1) ◽  
pp. 87
Author(s):  
Mada Purwanto Wahyu Nugroho ◽  
Ahmad Syifaudin
Keyword(s):  
Mixed Method ◽  
Stock Prices ◽  
Stock Price ◽  
Value Relevance ◽  
Stock Exchange ◽  
Accounting Information ◽  
Financial Statements ◽  
Sources Of Information ◽  
Sequential Explanatory Mixed Method ◽  
Sequential Explanatory

Distortion of information is one of the inherent accounting risks in financial statements. Financial statements are one of the fundamental sources of information that can be used in investment decision making in the Indonesia stock exchange. If investors use this information, then investors also have the same risk that is the distortion of information contained in financial statements. This research tries to test whether stock prices can be more explained through alternative accounting information or information contained in financial statements. This research was conducted using a sequential explanatory mixed method. Using data on companies listed in the Business 27 index, tested using path analysis through multiple regression models, the results of this research indicate that alternative accounting information has not been able to explain variations in stock price changes compared to accounting information contained in financial statements. Meanwhile, the results of the analysis using qualitative data indicate there is a match between the results of quantitative analysis and qualitative analysis. Keywords: Value Relevance; Alternative Accounting Information; Investment Decisions

scholarly journals Relevance of earnings and book value: Evidence from listed pharmaceutical companies

2020 ◽  
Vol 18 (1) ◽  
pp. 196-206
Author(s):  
Mwila Mulenga ◽  
Meena Bhatia
Keyword(s):  
Decision Making ◽  
Stock Returns ◽  
Stock Prices ◽  
Value Relevance ◽  
Accounting Information ◽  
Least Square ◽  
Sufficient Evidence ◽  
Pharmaceutical Companies ◽  
Book Value ◽  
The Impact

For accounting information to be useful for decision making it is essential that it is relevant for decision-making and should have a significant relation with stock prices or stock returns. Value relevance research aims to explain the impact of accounting information on stock prices or stock returns. This study examines the value relevance of earnings and book values on listed Indian pharmaceutical companies’ stock prices by using the Ohlson price model. The study gathered a series of panel data from 2006 to 2015 from the Nifty Pharma index. Ordinary least square and panel regression estimation were done using EViews. The findings provide sufficient evidence of those earnings per share (EPS) and book value per share (BVPS) jointly and individually for the Nifty Pharma index sample played an essential role in influencing stock prices. However, there is an insignificant decline in the combined value relevance of EPS and BVPS. The findings reveal that the EPS and BVPS played an important role in influencing stock prices. However, explanatory powers of EPS and BVPS in all years are significantly lower than that of developed countries. Overall findings show mixed results on the considerable influence of firm size on the value relevance of accounting information. This study’s findings have implications for analysts, investors, and other market participants; they should use EPS and BVPS in the equity valuation of pharmaceutical companies for better allocation of resources in capital markets.

scholarly journals ANALISIS RELEVANSI INFORMASI, RELIABILITAS, DAN ASIMETRI INFORMASI SETELAH PENGADOPSIAN IFRS (STUDI PADA PERUSAHAAN MANUFAKTUR YANG TERDAFTAR DI BEI TAHUN 2009-2014)

2020 ◽  
Vol 5 (4) ◽  
pp. 526-539
Author(s):  
Shella Yolan Anggraini ◽  
Nadirsyah Nadirsyah
Keyword(s):  
Value Relevance ◽  
Stock Exchange ◽  
Financial Statements ◽  
Financial Statement ◽  
Test Model ◽  
Net Income ◽  
Discretionary Accrual ◽  
Bid Ask Spread ◽  
The Impact

The objectives of the research are to examine the impact of adoption of IFRS in Indonesia on quality of financial statement information in terms of relevance and reliability and to examines information asymetry. The Relevance is measured by combined value relevance of book value of equity and net income, reliability is measured by absolute discretionary accrual as an inverse measure, and information asymetry is measured by bid ask spread. Data were collected from the financial statements of the manufacture companies that listed at Indonesia Stock Exchange. Research conduct in 6 years (2009-2014). By using purposive sampling and balanced panel data, there are 31 companies fulfilling the sample criteria. Multiple linier regression and paired sample t-test model is used to test the hypothesis. The results showed that there is an increasing quality of financial statement information after the adoption of IFRS but no difference in information asymmetry after the adoption of IFRS

scholarly journals Value Relevance of Accounting Information in Explaining Stock Returns in Sri Lanka

2017 ◽  
Vol 12 (10) ◽  
pp. 223
Author(s):  
Yathra Mullage Chithrasheeli Gunaratne ◽  
P. A. Niluka Surangi Anuradha
Keyword(s):  
Sri Lanka ◽  
Stock Returns ◽  
Performance Measures ◽  
Value Relevance ◽  
Stock Exchange ◽  
Accounting Information ◽  
Performance Measure ◽  
Investment Strategies ◽  
Return On Equity ◽  
Accounting Performance

The value relevance of accounting information is an important area in accounting researches. However the literature provides contradictory conclusions on the value relevance of accounting information in different stock exchanges and there is a very limited knowledge in this regard in Sri Lankan context. Hence this study endeavored to investigate the value relevance of accounting information in explain stock returns considering three traditional accounting performance measures: Earnings Per Share (EPS), Return on Equity (ROE) and Return on Investment (ROI) as the proxy for accounting information. The study was conducted with the hypothesis that the traditional accounting performance measures are significant in explaining stock returns in Sri Lanka. A sample of 1695 firm year observations were used for the study covering 113 companies in Colombo Stock Exchange for fifteen years period from 1999 to 2013. This study used Easton and Harris (1991) formal valuation model. Panel data regression analysis technique was applied to test the relative information content of each performance measure to identify the best performance measure which could explain the stock returns in Sri Lanka. The study revealed that the EPS and ROI are significant performance measures and the EPS is the best performance measure which could explain the significant variations of stock returns in Sri Lanka. The results suggest that the market participants in the Colombo Stock Exchange should pay more attention on EPS and ROI. Meantime they must consider other determinants to develop their investment strategies.

Effect of Employee Expenses on Usefulness of Accounting Information

2015 ◽  
Vol 1 (1) ◽  
pp. 161
Author(s):  
Horiye Yaghoobi ◽  
Mohsen Moradi ◽  
Mehdi Jabbari Nooghabi
Keyword(s):  
Stock Returns ◽  
Value Relevance ◽  
Stock Exchange ◽  
Accounting Information ◽  
Target Population ◽  
Stock Value ◽  
Income Statement ◽  
Earnings Predictability ◽  
Administrative Expenses ◽  
The Cost

In this study, the employee expenses model and earnings model are compared in order to determine whether or not putting the employee expenses in the earning predictability models and high relevance of accounting information to stock value, increases usefulness of accounting information. We use the term ‘earnings model’ to refer to the consideration of earnings alone, for determining earnings predictability as well as value relevance. The term ‘employee model’ refers to the consideration of earnings and employee expenses in determining earnings predictability as well as value relevance. In this study, the cost of employees’ salary, which is shown under the heading of General and administrative expenses in the income statement, is the only monetary information that is available for us and relevance value is determined through the effectiveness of the models in determining stock returns. After applying these limitation, companies which were active in Tehran Stock Exchange from2003 to 2012 were chosen as the target population. The results showed that compared to earnings model, the employee expenses model provides a better prediction of the earnings but it isn’t a better model for predicting the stock relevance (related to the return of the stock).

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