IFRS Adoption and the Value Relevance of Accounting Information in Nigeria： An Empirical Study

The objective of this article is to determine the effect of International Financial Reporting Standards （IFRS） adoption on value relevance of accounting information in Nigeria. The study therefore empirically analyzed the effect of IFRS adoption on value relevance of book value, earnings per share, and cash flow from operations in Nigerian firms - evidence from consumer fLrms sector. Three hypotheses guided the study. The ex-post facto research design was used. The population is made up of 25 consumer firms listed in Nigerian Stock Exchange. A sample size of 12 firms selected on the basis of availability of data among other considerations was used. The study covers a period of eight years （2008-2015）. Secondary data collected from annual reports of finns and database of Capital Assets （http：//www.capitalassets.com.ng/） were used. Multiple regression analysis was used in analyzing the data with the aid of Statistical Package for Social Sciences （SPSS） Version 22. The findings revealed that IFRS adoption has an incremental effect on the value relevance of book value, earnings per share, and cash flow from operations, with earnings per share showing the highest increment. Based on the findings, the researchers recommended that investors should consider the values of earnings, book values of equity, and cash flow from operations in the annual reports of firms prepared in accordance with IFRS before making any investment decision. However, more emphasis should be laid on earnings.

The Value Relevance of Foreign Currency Translation Adjustments （FCTAs） in the Italian Stock Exchange

The main aim of this paper is to test whether the foreign currency translation adjustments （FCTAs）, the largest components of other comprehensive income （OCI） for most firms, are incrementally value-relevant for investors with respect to the net income （NI）. Previous archival research on the value relevance of FCTAs has documented a weak or non-existent link between FCTAs and firm valuation （Pinto, 2005）. The hypothesized reasons could reside in the econometric method employed, in the use of as-if numbers, and in the missing consideration of the differential effect that exchange rate changes have on firms of varying levels of capital intensiveness. This study adds to the existing literature by empirically testing the value relevance of as-reported FCTAs numbers in the earnings and book value model the Ohlson-like interacted model through panel data techniques. The main finding of this study is that as-reported FCTAs are significantly and incrementally value-relevant, when their parameter estimates are allowed to vary in the cross-section.

Analysis of Hidden Value and Value Relevance of Financial Statements Pre- and Post-IFRS Adoption

This study analyses the hidden value and value relevance of financial statements pre- and post-IFRS （International Financial Reporting Standards） adoption. Prior studies on IFRS adoption provide conflicting evidence on value relevance. Market-to-book ratio and IFRS adoption value relevance using price is examined for Australian listed firms. Results show that IFRS adoption is value relevant over a longer period of time. Results are opposite for profit-making firms compared to loss-making fu＇ms which may explain the conflicting results. In the presence of goodwill, IFRS is not value relevant when post-global financial crisis （GFC） period is included. Market-to-book ratio has increased in the post-IFRS period lowering the usefulness of financial statements. Moreover, results show mic changes affecting valuation of firms may explain for differences in the results for market-to-book ratio and value relevance in different jurisdictions and time periods

Impact of Information Technology Adoption on Value Relevance of Accounting Information： Evidence From the Colombo Stock Exchange

The purpose of this paper is to investigate the value relevance of earning based accounting information and to see how value relevance has changed with the introduction of new information technology at Colombo Stock Exchange （CSE） in Sri Lanka. Sample of the study includes 129 companies selected from 6 major sectors at CSE. Cross sectional and time series cross-sectional regressions are used for the data analysis. Study finds that earnings per share （EPS） and returns on equity （ROE） have a significant impact on market price. However, the explanatory power of combined variables is below average. Further, value explanatory power of earnings has considerably improved after the new information technology adoption at CSE. This study is unique because it examines the impact of technological advancements on value relevance of accounting information probably as the first paper to be applied on Sri Lanka.

An Exploratory Study on Value Relevance of Sustainable Growth Rate—— Evidences from Chinese and American Listed Companies

Based on relevant researches, it can be said that it is a development of valuation perspective to determine sustainable growth rate （SGR） as an accounting variable for study on value relevance. The author selects samples from Chinese and American listed companies. The finding includes： the SGR of Chinese listed companies has value relevance and SGR is more significant than EPS, BV and EVA; the SGR of American listed companies does not have value relevance, with possible reason of timeliness of data that are selected after 2001, and the most significance of EVA.

Value-relevance of accounting numbers for valuation

Recent empirical work suggested that the ability of accounting numbers to explain the relationship between accounting numbers and stock prices has deteriorated over the past four decades. The findings of this study suggest that the accounting earnings and book value are capturing most of the information that is relevant to assess the values of firms. At the same time, it also suggests that earnings and book value as well as non-accounting beta are more valued during the financial crisis as compared to after the financial crisis. Overall, the accounting estimate of the value of the firm is not deviating from the markets＇ estimate, which suggests that accounting numbers play an important role in the valuation of firms in Malaysia.

Investor Protection, Deviation of Local Accounting Standards From IFRS, and the Effectiveness of the IFRS Adoption

The objective of this study is to examine the effect of accounting standards and investor protection on value relevance of earnings and book value of equity among European Union countries during the years 1999-2007. The results indicate that the adoption of International Financial Reporting Standards [IFRS] leads to improvement in value relevance, particularly on earnings. We also examine the impact of investor protection and the deviation of local accounting standards from IFRS on the effectiveness of the IFRS adoption. The results show supporting evidence for investor protection but inconclusive evidence for accounting standard deviation. However, additional analysis indicates that the countries which apparently benefit from adopting IFRS are those with high deviation of local accounting standards from IFRS and high investor protection. The findings imply that adopting IFRS alone cannot improve value relevance of accounting information, but standard setters and regulators need to strengthen their investor protection mechanisms in order to improve the quality of accounting information.

An empirical study on information content of accounting earnings and cash flow

Based on deep analyzing the colluding and checking relation of income statement and cash flow statement, this paper chooses and designs the corresponding profit index, carries on the comparative study of information content between accounting earnings and cash flows. The paper utilizes the financial data of Chinese listed company in manufacturing industry from 2003 to 2005, adopts the price model and analyzes empirical study about two kinds of profit indexes and value relevance. Studies have suggested： accounting earnings and cash flows all have relevant relations to stock prices; however, the relevance between cash flow and stock price is stronger, and cash flows have higher information quality.

The Impact of Switching Standard on Accounting Quality

In a developing country, modernization and change of the accounting regime are possible if the standards are in compliance with global ones. The change of accounting standards adopted by Turkey started to be implemented, and this created a number of qualitative and quantitative results. This study examines the impact of change of accounting standards on accounting quality. In order to determine how switching standard reflects accounting quality, first of all, the earnings management, timely loss recognition, and value relevance variables pertaining to accounting quality were listed and the findings were stated after subjecting the obtained data to statistical analyses. Accordingly, by the transition to International Financial Reporting Standards （IFRS）, the earnings management practices were observed to decrease as compared with the pre-IFRS period and the timely loss recognition and value-relevance values were observed to increase, which constitute the dimensions of accounting quality. It was also concluded that by the switch from domestic accounting standards to International Accounting Standards （IAS）, the quality of accounting in the country was improved and the market became more active than it was before.

The accounting valuation of bank stocks in Europe

In this study we examine the validity of the earnings-book value capitalization model in the pricing of bank stocks in Europe. We perform cross-sectional tests using a sample of banks operating in 21 European Union countries. We split our sample into code and common law countries to control for the influence of the financial reporting system upon the pricing of earnings and book value. Our empirical findings suggest that disaggregating total reported clean surplus income into reported gains and losses from securities and other income increases the explanatory power of the accounting valuation model. Indeed, reported gains and losses from securities are priced lower than other income, irrespective of whether the financial reporting system is classified as a code or a common law system, probably because the market considers the former as a less stable source of income. Additionally, we observe that the pricing of both earnings and book value is influenced by the financial reporting system. We conclude that earnings announced under a common law financial reporting system are priced differently from those reported under the respective code law system. Finally, we provide evidence that comprehensive and dirty surplus income are two value relevant variables for banks reporting earnings under the code law system, although dirty surplus income is priced lower than clean surplus income.

How Do Investors Evaluate Business Continuity Management （BCM） Disclosures in Emergency Situations？ Evidence From the Great East Japan Earthquake

This study examines economic effects of business continuity management （BCM） disclosures through analyzing changes in shareholder returns in the wake of the Great East Japan Earthquake. The author examined differences in the recovery of share price between disclosing and non-disclosing corporations. The results show that the cumulative average abnormal returns （CAARs） of disclosing corporations recovered faster than non-disclosing corporations. Then, the author examined differences in the recovery of share price between developing and non-developing corporations. The results show that there is no statistically significant difference in the recovery of share price between developing and non-developing corporations. Finally, the author examined the differences of BCM between disclosing and non-disclosing corporations. The results suggest that BCM or business continuity plan （BCP） disclosing corporations have a broader coverage of the BCP, more appropriate procedures for responding to emergency situations, more effective training of the BCM, and more mature BCM systems than non-disclosing ones.

The Accounting and Economic Effects of Currency Translation Standards： AASB 1012 vs. AASB 121

This paper1 empirically examines the accounting and the economic effects of foreign exchange rate fluctuations on the oil and gas industry under the former and the current translation accounting standards in Australia. Due to the unique features of the oil and gas industry and based on an analysis of the former standard-Australian Accounting Standards Board （AASB） 1012, the authors predict that a positive translation adjustment （the accounting effect） is associated with a loss, instead of a creation of the firm value （the economic effect） under AASB 1012. The authors also predict that the new standard AASB 121, adapted from the International Accounting Standard （IAS） 21 with modifications, will report translation adjustments that are consistent with the economic effects. By using Australia-based multinational oil and gas firms, the authors find that translation adjustments under AASB 1012 are inversely associated with firm value and that the relationship changes to a positive one under AASB 121. This study concludes that the new standard has the potential to improve the quality of the translation accounting information.