VALUE RELEVANCE OF ACCOUNTING INFORMATION IN THE NIGERIAN LISTED CONGLOMERATE FIRMS (original) (raw)
Related papers
2016
The main objective of the study is to examine whether accounting information is value relevant in both the food and beverage, and the conglomerate subseEtors of the Nigerian Stock Exchange (NSE). The study also compared the value relevance of accounting information for both sectors. A random sample of seven companies was selected from a total population of thirteen companies listed in the Food and Beverage subsector of the NSE. The study also took a random sample of another seven companies in the conglomerate subsector. Data were gathered from these companies for the period 2005 to 2014. Using the Ohlson (1995) model and the multiple regression method, we found that market price per share (MPS) is positively, but insignificantly related to book value per share (BVPS) and earnings per share (EPS) in the conglomerate sub sector. On the other hand, for food and beverage sub sector, MPS is positively and significantly related to BVPS and EPS. Accounting information is more value relevan...
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.
Afro-Asian J. of Finance and Accounting, 2018
We investigate the value relevance of book value, earnings and dividends among financial and non-financial companies listed on the Ghana Stock Exchange from 2005 to 2014. For the sample of non-financial companies, book value and earnings are found to be value relevant. Dividends are only value relevant when earnings are split into dividends and retained earnings. For the sample of financial companies, only dividends and earnings are found to be value relevant. Book value is not value relevant. Largely, accounting information has greater value relevance for the sample of non-financial companies than the sample of financial companies. There is no difference in the explanatory power of the Ohlson (1995) model as compared to the two alternative models under investigation. Largely, IFRS adoptions have a significant effect on the value relevance of accounting information. The results have implications for both policy makers and investors.
SIGNIFICANCE OF ACCOUNTING INFORMATION ON CORPORATE VALUES OF FIRMS IN NIGERIA
This study primary investigates the value relevance of accounting information in corporate Nigeria and employs simple descriptive statistics coupled with the logarithmic regression models to examine this interaction between the period 1999 and 2009, and taking 40 companies from various sectors of the Nigerian economy as samples, the logarithmic regression models is more appropriate in investigating this relationship than any other model because it has some unique statistical properties over and above other models and tends to provides better results for analyses and evaluation. Our findings shows that earnings is more value relevant than book values by extension that, the information contained in the income statements, as ably proxied by the earnings, dictates more the corporate values of firms in Nigeria than the information contained in the balance sheet, as ably proxied by the book values. Relevant information is such that it influences the economic decisions of users by helping them evaluate past, present and future events.
Accounting, 2018
The objective of this paper is to determine the effect of International Financial Reporting Standards (IFRS) as a new accounting reporting among Nigerian listed firms. This study uses book value, earnings and dividends to fill in the gap using a sample of 126 Nigerian listed firms in the stock market from 2009 to 2013 (pre and Post-IFRS adoption). Data was collected from Thompson Reuters, Bank scope DataStreams and annual reports. The study adopted Ohlson (1995) [Ohlson, J. (1995). Earnings, book-value, and dividends in equity valuation. Contemporary Accounting Research, 11(2), 661-687.] price model that has been frequently used in determining the quality of accounting information studies. The study finds that combined book value, earnings and dividends do not provide statistical significance effects on IFRS after adoption on the quality of accounting information. This could be possible, as dividends do not provide a significant effect in the presence of earnings. Furthermore, the audit big 4 quality provided an effect on the quality of accounting information because of IFRS adoption. Therefore, findings of this study provide additional literature on the decreasing quality of accounting information in an emerging market setting like Nigeria. The study implication is to the policy makers, regulators, and government that accounting information do not provide value relevance among Nigerian listed firms after IFRS adoption.
Value relevance of financial statements and share price: a study of listed banks in Nigeria
Banks and Bank Systems, 2016
This paper examined the effects of value relevance of financial statements on firms share price in Nigeria. In achieving the objectives of this research, the fact book from the Nigerian Stock Exchange Market and the audited financial statement of listed banks spanning the period 2010-2014 were used. Also, a total of 15 listed banks in the Nigerian stock exchange market were selected and analyzed for the study using the purposive sampling method. However, in analyzing the research hypotheses, the study adopted the use of both descriptive statistics and the use of Fixed Effects Panel data method of data analysis technique. Findings from the study showed that a significant positive relationship existed between earnings per share (EPS) and Last day share price (LDSP). The study recommends the need for banks in the country to improve on the quality of earnings reported, since it has a stronger ability to explaining share prices of firm. Keywords: value relevance, financial statements, Ni...
International Journal of Innovative Finance and Economics Research, 2025
This study investigated the relationship between the value relevance of accounting information and investment decisions in the context of the Nigeria Capital Market. The value relevance of accounting information is crucial for investors as it provides vital data about a company’s financial status, aiding in strategic decision-making. However, the quality and relevance of this information can significantly impact its usefulness. This research aimed to assess the value relevance of accounting information and its influence on investment decisions, providing evidence from the Nigerian Capital Market. The study adopted a cross-sectional survey design. The population for this study consisted of all quoted commercial banks in Nigeria. Available data from the Port Harcourt branch of the Nigerian Stock Exchange (NSE) revealed that there are 15 listed commercial banks in Nigeria. This study utilized primary and secondary sources of data. The findings of this study could offer valuable insights for investors, financial analysts, and other users of financial statements. It was concluded that there is no significant relationship between the reliability of accounting information and dividend per share. Comparability of accounting information does not significantly affect earnings per share while timeliness of accounting information does not significantly affect net assets value per share. The study recommended amongst others that all quoted companies on the Nigerian Stock Exchange must as a matter of urgency comply with the preparation of Simplified Investor’s Summary Accounts (SISA) with emphasis on accounting information on earnings, book value, dividends and cash flows aside from the mandatory detailed financial statements. This will remove information overload, particularly for nonaccountants and non-financial analysts.
The information content of accounting numbers in ascertaining security prices/ returns has gained considerable attention in the finance and accounting literature recently. Consequently, value relevance (VR) research evolved to generate empirical evidence of statistical relationship between accounting numbers and corporate value. This study investigates the VR of accounting information of listed Deposit Money Banks (DMBs) in Nigeria. Accounting information data were collected from the published financial statements of the sampled DMBs and the market value data were gathered through official daily list of the Nigerian Stock Exchange (NSE) over a period of nine years (2004 – 2012). The study used descriptive statistics to bring out the salient features of both the dependent and the independent variables of the study. Multivariate regression was used as the technique for data analysis. The study established that accounting information of DMBs in Nigeria is value relevant with adjusted R...
The objective of the study is to examine the nexus between accounting information and stock price of quoted consumer goods manufacturing firms in Nigeria. The study adopts an ex post facto research design; and, the sample drawn from quoted consumer goods manufacturing firms on the Nigerian Stock Exchange (NSE). The study employs a combination of descriptive and inferential statistical technique to analyse the data. The panel data from 2011 to 2019 was retrieved from annual financial reports and empirically analysed using the pooled OLS procedure. The results showed a non-significant negative effect of earnings per share and sales growth ratio on the stock price indicator; while, the operating cashflow ratio had a significant positive effect. The profitability ratio, i.e., return on assets had a non-significant positive effect on stock price indicator. Based on this, the study recommended that investors pay closer attention to information from the statement of cashflows as they tend to portray the true state of affairs in most companies. The futility of using only the profitability indicators as a yardstick for stock purchase decision. In addition, the use of supporting documents such as the corporate governance report to reveal otherwise information not obtained from the quantitative counterpart and vital for investment decisions.
The Impact of the New Accounting Reporting Among Listed Firms in Nigerian Stock Market
The study discusses the relationship between accounting disclosures and market value under new accounting reporting. The study addresses whether accounting information has improved after the IFRS adoption among Nigerian listed firms. The study adopted Ohlson (1995) stock price model that has commonly been used in the capital market for a 5-year data of 129 companies listed in the Nigerian stock market. The Findings of the study have shown disaggregated assets and liabilities have a strong relationship with stock price. However, there is higher association after the adoption of IFRS from the adjusted R 2. Furthermore, current assets presented more explanatory power than all other variables in the model, signifying that investors rely on current assets for decision making. However, Cramer (1987) Z statistics provided no significance difference in value relevance between the two periods. A possible explanation of the changes could be that investors do not view accounting information to be different in the two periods. Therefore, policy makers, standard setters, and regulators need to come together to address the issue of IFRS adoption by firms in Nigeria.