Have accounting numbers lost their value relevance during the recent financial credit crisis?

Tahat, Yasean; Alhadab, Mohammad

doi:10.1016/j.qref.2017.02.007

Cited by 21 publications

(38 citation statements)

References 53 publications

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“…Studies in this research have operationalised correlation models to test for associations between market value of equity and accounting measures (e.g., Aharony et al, 2010;Barth et al, 2018;Ciftci et al, 2014;Francis and Schipper, 1999;Holthausen and Watts, 2001;Kothari, 2001;Shan, 2015;Tahat and Alhadab, 2017). We note that the focus is on testing associations, not causality, since these variables are linked to each other by common underlying factors that are related to firm economics (Hail, 2013).…”

Section: Value Relevance and Xbrlmentioning

confidence: 99%

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

Shan

Troshani

2020

IJMF

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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.

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Section: Value Relevance and Xbrlmentioning

confidence: 99%

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

Shan

Troshani

2020

IJMF

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“…We consider several control variables in our models. We add a bank specific variable such as the bank size (SIZEit), the firms' risk profile measured by the leverage (LEVit) and the firm's operational performance (measured by the return on assets ROAit) (Tahat and Alhadab, 2017). We also consider the following macro-economic variables: the stock market capitalization to GDP ratio (SMCt), the supervisory Pillar 3 disclosure requirements for banks (PIL3t), the GDP growth rate The Two-sample t-test (Two-tailed) highlights a mean difference for the majority of variables used, in particular for the stock price between CBs and banks offering Islamic financial services (IBs and HBs).…”

Section: 2econometric Modelingmentioning

confidence: 99%

Accounting standards and value relevance of accounting information: a comparative analysis between Islamic, conventional and hybrid banks

Agbodjo

Toumi

Hussainey

2020

JAAR

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PurposeThe purpose of this study is to investigate the value relevance of accounting information for Islamic, conventional and hybrid banks. It also investigates the moderation impact of IFRS adoption and AAOIFI mandatory adoption on value relevance of accounting information.Design/methodology/approachUsing value relevance models, The authors run panel data regressions on 47 Islamic banks, 112 conventional banks and 42 hybrid banks (conventional banks with Islamic windows). The study covers listed banks from 14 countries over the period 2010–2018.Findingspaper offers three empirical evidences. First, the authors find that value relevance of accounting information is higher for Islamic banks, compared to conventional banks. Second, the authors find that IFRS framework strengthens the relevance of accounting information in Islamic banks, but the authors did not find the same for hybrid banks. Third, the authors find that the mandatory adoption of AAOIFI accounting standards has a moderation effect on value relevance of accounting information for both Islamic banks and hybrid banks. The robustness analysis shows that there is a significant contribution of compliance with Islamic Finance rules in IBs and HBs, which substantially reduces managers' opportunistic behavior to manage accounting information.Research limitations/implicationsOne limit of this research is the reduced number of sampled listed IBs since the authors deleted countries that do not have both listed Islamic and conventional banks.Practical implicationsThe study is useful for investors that consider the Islamic ethical practices to make their investment decisions as well as for the standards-setting bodies that focus on establishing accounting standards for the Islamic banking industry.Originality/valueThe authors contribute to the value relevance literature by providing novel evidence on the value relevance in fully-fledged Islamic, fully-fledged conventional and hybrid Banks. The authors also provide new evidence on the moderating role of International Financial Reporting Standards (IFRS) and Auditing Organization for Islamic Financial Institutions standard (AAOIFI) for the value relevance of accounting information.

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“…Sebenarnya, masalah praktik manajemen laba menjadi tindakan yang mengganggu (Feltham & Pae, 2000;Bartov et al, 2001). Penelitian-penelitian empiris dalam literatur terbaru telah menemukan nilai buku dan arus kas operasi menjadi variabel yang lebih signifikan dibandingkan dengan laba (Kown, 2018;Tahat & Alhadab, 2017 Literatur terdahulu juga menunjukkan bahwa arus kas operasi juga mengandung nilai informasi yang relevan (Bepari et al, 2013;Tahat & Alhadab, 2017). Selain itu, regulator di AS, Inggris, Australia, Kanada, dan International Accounting Standard Board (IASB) juga mendukung gagasan bahwa arus kas operasi berisi informasi yang relevan dengan nilai (Bartov et al, 2001).…”

Section: Tinjauan Literaturunclassified

Relevansi Nilai Informasi Akuntansi Pada Laba, Nilai Buku, dan Arus Kas Operasi: Kasus di Perbankan Indonesia

Hadinata

2020

AKTSAR

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<p class="bdabstract">This study aims to examine the relationship between capital markets and accounting information in Indonesian banking. Specifically, this study examines the value relevance of earnings, book values, and operating cash flows. Using a sample of banks listed on the Indonesia Stock Exchange from 2014 to 2018, this study accommodates the documented accounting information in the context of developing markets using stock prices of four months after year-end as a dependent variable. Sampling using a purposive sampling method. This research obtained 35 companies used in this study sample. This study uses panel data regression techniques with the Generalized Least Square (GLS) analysis approach. This study indicates that earnings and book value statistically have a positive effect on stock prices. Meanwhile, operating cash flow has no statistical effect on stock prices. This study also shows that earnings more value-relevant than other variables.</p>

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Have accounting numbers lost their value relevance during the recent financial credit crisis?

Cited by 21 publications

References 53 publications

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

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

Accounting standards and value relevance of accounting information: a comparative analysis between Islamic, conventional and hybrid banks

Relevansi Nilai Informasi Akuntansi Pada Laba, Nilai Buku, dan Arus Kas Operasi: Kasus di Perbankan Indonesia

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