The Impact of the New Accounting Reporting Among Listed Firms in Nigerian Stock Market (original) (raw)
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The value relevance of accounting disclosures among listed Nigerian firms: IFRS adoption
Iranian Journal of Management Studies, 2016
This study determined the value relevance of assets and liabilities after the adoption of IFRS among listed Nigerian firms. Ohlson Model (1995) model of stock price regressions tested the relationship between assets and liabilities with the stock price, which has been widely adopted by accounting researchers. A sample of 126 firms listed in Nigeria stock market is used for the study. Data is collected from Thomson Reuters and Bank Scope Data Streams for non-financial and financial firms, respectively. The findings provide empirical evidence, established on unique Nigerian environment, statistical significance difference on the value relevance of assets, and liabilities prepared and disclosed under IFRS. Robustness test, as well as yearly trend analysis, produce collaborating evidence. The significance of the study's findings presents statistical significance value relevance increase based on the unique Nigerian adoption of IFRS as an emerging market.
2017
This paper examined the impact of International Financial Reporting Standard (IFRS) adoption on the value relevance of accounting information in Nigeria. In achieving the objectives of this research, the fact book and the annual reports for the period 2010-2013 were used. Also, using the judgmental sampling technic a total of 10 companies were selected from a population of 26 listed companies in the consumer goods industry listed on the floor of the Nigerian Stock Exchange (NSE), The Ohlson model was adopted to develop six models for the course of the paper. Using ordinary least square regression, the study found out that; earnings per share (EPS) and book value of equity per share are accounting variables that jointly explains share price. The study observed that with the introduction and adoption of IFRS, there has been is an improvement in the value relevance of accounting information. The study also observed that EPS exhibits a stronger explanatory power both in pre and post IFR...
گۆڤارا زانستێن مرۆڤایەتی یا زانكۆیا زاخۆ, 2022
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 analyze the sample data. Data were collected from the published financial statement of the sample firms. 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 R 2 of post-IFRS (51%) which is higher than the R 2 of pre-IFRS (30%).
IFRS adoption and the value-relevance of financial statements figures in Nigeria
Journal of Accounting and Management Information Systems, 2024
Research Question: Has IFRS adoption improved the value-relevance of financial statement figures in Nigeria? Motivation: The informativeness of the reported earnings, book values, and cash flows depends on the accounting standards used in preparing the financial statements. IFRS is a global set of accounting standards that tries to improve the relevance of accounting figures by recommending more realistic measurement and recognition criteria and increasing the level of disclosure of relevant information. Idea: The value relevance of accounting figures in predicting stock prices is widely acknowledged. However, this study tests whether IFRS adoption significantly improves this value-relevance by increasing the degree of correlation between accounting figures and stock prices in Nigeria. Data: The data were collected from the Bloomberg market data terminal and Datastream financial database. A sample of 85 listed companies was selected. The sample period was from 2007 to 2016. Tools: The study applied the Ohlson model (using fixed and random-effect models) along with the Driscoll-Kraay standard errors (DKSE) and Panel-corrected standard errors (PCSE) to anticipate autocorrelation, heteroscedasticity, and cross-sectional dependence biases. The Ohlson model was estimated separately for the pre- and post-IFRS adoption periods to detect changes in value relevance. The interactions of the IFRS dummy with earnings, book values, and cash flows were also estimated separately to detect the significance of IFRS interaction with the accounting figures. Findings: The results showed an overall increase in value-relevance by comparing adjusted R2s across the pre-and post-IFRS adoption period. Also, the interactions of IFRS with earnings, book value, and cash flows were all significant. Contribution: The study contributes to the existing literature by including cash flow in the value-relevance test in Nigeria and by applying estimation techniques that control for possible estimation biases. The authors recommend that investors pay more attention to these accounting figures under the IFRS regime when making investment decisions.
IFRS Adoption and Value Relevance of Financial Statements of Nigerian Listed Banks
International Journal of Finance and Accounting, 2015
Adopting the International Financial Reporting Standard (IFRS) have been empirically found to improve the quality of accounting in some countries, thereby increasing its usefulness to stakeholders. This study empirically examines whether the mandatory adoption of IFRS has improved the value relevance of financial information in the financial statements of commercial banks in Nigeria. The sample comprises of twelve listed banks in Nigeria. Specifically, financial statement figures of 2010 and 2011 (pre-adoption period) and 2012 and 2013 (post-adoption) were utilized. Descriptive statistics and least square regression were conducted to analyse the effect of IFRS adoption on the accounting quality. The result indicates that the equity value and earnings of banks are relatively value relevant to share prices under IFRS than under the previous Nigerian SAS. Results also indicate that earnings per share is incrementally value relevant during post-IFRS period while book value of equity per share is incrementally less value relevant during the post-IFRS period. This may imply that earnings reported by Nigerian Commercial banks have become more informative to equity investors in determining the value of banks following IFRS adoption. We therefore recommend that Financial Reporting Council of Nigeria and other accounting standards setters should incorporate more measures to enhance the quality of the financial reporting in order to increase the value relevance of financial statements.
Quality of Accounting Reporting After the IFRS Adoption in Nigeria
International Journal of Business, Economics and Management, 2016
This study determined the effect of IFRS on the quality of financial reporting among Nigerian financial firms. The study adopted stock price (Ohlson, 1995) and return (Easton and Harris, 1991) models, that have been commonly used in accounting research. Data were collected from Thompson Reuters (stock price) and Bank Scope Data Streams (net income and total expenses) to determine the relationships. The study found that there is a greater relationship between net income and total expenses with the stock price and return. Furthermore, the relationships have been statistically significant using Cramer Zstatistic for both stock price and return model. The overal result have shown value relevance of net income, operating expenses, and change in net income and operating expenses has improved as a result of IFRS adoption among Nigerian listed financial institutions. The study implication for the policy makers, standard setters and investors are to give more emphasis on the use of IFRS for all firms even if they are not listed in the stock market as IFRS adoption provided a better quality accounting information than domestic reporting. Besides the relevance of these study findings to security market, the literature has provided greater contributions to fewer market research in African capital market particularly, Nigeria after the IFRS adoption being the first study to carry such study in Nigeria.
International Journal of Accounting & Finance Review, 2017
This study investigates the International Financial Reporting Standards (IFRS) and value relevance of financial information among Nigerian listed companies after the adoption of IFRS. 77 sample companies were randomly selected from the population. Data were collected from UUM-Data stream through the annual reports and accounts of companies, which consist of Stock price (dependent variable), Book value of equity and net income as (independent variables) for the year 2016. Ordinary Least Square Regression was the method used in analyzing the variables. The regression result revealed that there is a positive and significant relationship between book value of equity and net income on stock price. These reveal that the financial information of listed companies in Nigeria is more value relevant after the adoption of IFRS. In view of the findings, the study recommends that, Nigerian Stock Exchange should ensure that all listed companies are comply with the accounting framework issued by IF...
IFRS Adoption and the Value Relevance of Accounting Information in Nigeria: An Empirical Study
Journal of Modern Accounting and Auditing, 2017
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 firms 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 firms 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.
Accounting Numbers and Stock Prices in the Nigerian Stock Market
Journal of Accounting and Auditing: Research & Practice, 2016
This research is motivated to study the extent to which accounting information summarizes stock prices in Nigerian stock market as an indicator of value relevance. Piece of accounting data is termed value relevant if it is significantly related to the dependent variable, which may be expressed by the stock price. The methods used for gauging information contents of various accounting numbers were Ordinary Least Squared (OLS), Random Effects Model (REM), and Fixed Effects Model (FEM). The findings show that there is a significant relationship between accounting information and share prices of companies listed on the Nigerian Stock Exchange. Dividends are the most widely used accounting information for investment decisions in Nigeria, followed by earnings and net book value. The study therefore recommends that the firms should improve the quality of earnings as manipulated earnings (of which dividends are subsets) have large effects on share prices. The paper also recommends that all companies listed on the Nigerian Stock Exchange should prepare Simplified Investor's Summary Accounts (SISA) with emphasis on the most widely used accounting information along the required mandatory detailed financial statements to suit Nigerian peculiarities. The study's findings and recommendations may be of use to National Standard Setters, preparers of accounting information, Nigerian Stock Exchange Regulators, investors and other emerging stock market.
Impact of Accounting Information on Market Value of Equity in Nigeria
Ambrose Alli University (AAU) Journal of Management Sciences, 2016
This paper examines the impacts of accounting information on the market value of shares in Nigeria. The study relied on pooled panel data extracted from Nigeria Stock Exchange and annual report and account of 59 listed companies in the Nigeria Stock Exchange over the period 2008-2014. The study found that; fixed-effect model is more appropriate over random-effect model in Hausman's test for appropriate model, Pesaran test of cross sectional dependence show no serial correlation in the residual across entities. Assets' tangibility, EPS, P/E ratio and firm size were positive and statistically significant to explain market value of equity. The study recommends large tangible assets for attracting investors while management should maintain activities that will lead to higher earnings and at the same time result to growth of the firm.