Ifrs Adoption and Value Relevance of Accounting Information of Listed Industrial Goods Firms in Nigeria

Abstract

The study examines the effect of IFRS adoption on the value relevance of accounting information of six (6) out of thirteen (13) listed industrial goods firms in Nigeria for the period of fourteen years (2007-2020); seven (7) years before IFRS adoption and seven (7) years after IFRS adoption. Earnings per share (EPS), Book value per share (BVPS) and Dividend per share (DPS) constitute the independent variables and share price as the dependent variable. Ex-post facto research design was employed and multiple regression models as well as Ohlson (1995) price model were used to analysis the audited financial statement of the sample size. The result reveal that EPS is negatively and DPS is positively associated with share price and both are significant, while BVPS is insignificantly associated with share price in the pre-IFRS era. On the other hand, EPS has negative significant association with share price, while BVPS and DPS is having a positive and significant association with share price in the post-IFRS era. Therefore, it is concluded that the value relevance of accounting information has increase after the adoption of IFRS; this is supported by the R2of post-IFRS (51%) which is higher than the R2of pre-IFRS (30%)

Moderating Effect of Leverage on the Value Relevance of Accounting Information in the Nigerian Listed Oil and Gas Firms

“…We therefore reject the null hypothesis. This is in line with the findings of Mamuda (2015), Omokhudu and Ibadin (2015) and Ernest and Oscar (2014). This reveals that a one-naira increase in earnings will result to 0.22-naira increase in the prices.…”

“…Additionally, Mamuda (2015) studied value relevance in the listed industrial good firms in Nigeria, between the year 2007 and 2013, with a sample size of sixteen firms out of the twenty five listed firms, using OLS technique of data analysis, the study found earnings per share, dividend per share, book value per share to be statistically and significantly correlated with market value. Despite the study reported mix findings by previous studies reviewed, however it made no effort to tackle the problem.…”

“…Value relevance is understood to be the ability of financial statement information (quantitative and qualitative) to capture and summarise information that affects share values and empirically tested as a statistical association between market values and accounting values (Hellstrom, 2005), financial information is only termed value relevant if there is an established association between accounting numbers and company share prices. Moreover, accounting information can only assist investors in coming up with the right investment decision that will give them higher returns on investment and minimize risks only if it gives the true and fair view of financial operations (Mamuda, 2015). financial statements achieve that role if they possess certain characteristics which are: reliability, relevance, comparability, timeliness and understandability (IASB, 2014).…”

“…However, one cannot find a commonly agreed conclusion. This is because different countries are at different level of development and have different institutional arrangements therefore the following mixed findings, for instance: (Bello, 2009); (Mamuda, 2015); (Alslehat, 2014) and ( Publisher, R. I., Shehzad, K., & Ismail, A. 2014) reported that accounting information positively and significantly affect market value while; (Abubakar, 2011) reported that accounting information is not value relevant.…”

An investigation into the impact of total revenue and internal public debt on Iraqi economic growth from 2004 to 2021

“…Meanwhile, internal public debt and total revenue were taken as two independent variables (Abdullah H & Tursoy T, 2023;Ibrahim P et al, 2022;Mohammed et al, 2019).…”