International Financial Reporting Standards and Value Relevance of Accounting Information: A Mult-Institutional Perspectives from Nigeria Quoted Firms
Keywords:
International Financial Reporting Standards, Value Relevance of Accounting Information, Quoted Firms.
Abstract
This study examined the effect of International Financial Reporting Standards on value relevance of accounting information of quoted firms in Nigeria. The objective is to examine if International Financial Reporting Standards affect value relevance of accounting information. The study focus on the commercial banks, manufacturing firms, insurance, government agencies and the oil and gas firms, questionnaires were structured and administered to accountants and finance managers. The data analyses adopted was the simple percentages and correlation coefficient. The results found a coefficient of 85.1 %, R2 and adjusted R2 of 60.3% and 51.4 %. We conclude that there is significant relationship between International Financial Reporting Standard and value relevance of accounting information of quoted firms in Nigeria. We therefore recommend full compliance to the International Financial Reporting Standard, audit firms should adopt fully the International Financial Reporting Standard and Nigerian accounting bodies such as Institute of Chartered Accountants of Nigeria and Association of National Accountants of Nigeria should endeavor to encourage the auditing firms on the relevance of adopting International Financial Reporting Standard.
References
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Adaramola, A.O., & Oyerinde, A. A., (2014). Value relevance of financial accounting information of quoted companies in Nigeria: a trend analysis.” Research Journal of Finance and Accounting. 5(8).86-93.
Adebimpe, O. U. , & Ekwere, R. E., (2015). IFRS adoption and value relevance of financial statement of Nigeria listed banks. International journal of finance and accounting. 4(1), 1-7.
Aljifri, K., & Khasharmeh, H., (2014). An investigation into the suitability of the international accounting standards to the United Arab Emirates environment. International Business Review, 1(5), 505–526.
Bahloul, J. & Ben Arab, M., (2014). The effect of mandatory IAS/IFRS regulation on the properties of earning quality in Australia and Europe. European Journal of Business and Management. 6(3),92-111.
Beaver, W. H. (1968). The information content of eamings. Journal of Accounting Research (6 (Supplement)). 4(3), 56-70.
Chan, K. C., & Seow, G. S., (2011). The association between stock returns and foreign GAAP earnings versus earnings adjusted to U.S. GAAP. Journal of Accounting and Economics, 21(139–158).
Chen.C. J., Chen. S, & Su. X. (2011). Is Accounting Information Value-Relevant in the Emerging Chinese Stock Market. Journal of International Accounting Auditing and Taxation, 10(3), 1-22.
Dung, N. V., (2013). Value-Relevance of Financial Statement Information: A Flexible Application of Modern Theories to the Vietnamese Stock Market. Paper presented at the Development and Policies Research Center, Vietnam. 7(4), 23-46.
Iyoha, F., (2013). Nigeria and the Adoption of International Financial Reporting Standards. University of Benin, Nigeria 6(4), 45-68.
Joshi, K. &Al-Basteki, H. (2013). Development of Accounting Standards and Adoption of IASs: Perceptions of Accountants from a Developing Country. Asian Review of Accounting. 7(2), 56-70.
Joshi, P. L. and Ramadhan, S. (2012). The adoption of international accounting standards by small and closely held companies: evidence from Bahrain. The International Journal of Accounting. 3(7), 429–440.
Kipchoge, K. A., (2015). Effect of corporate attributes on international financial reporting standard disclosure level: evidence from Kenya listed firms. Research Journal of Finance and Accounting. 6(1),97-107.
Landsman, W. (2011). An empirical investigation of pension fund property rights. The Accounting Review, October, 662–691. African Journal of Social Sciences 1(1), 101-114
Lev, B. and Zarowin, P. (2013). The Boundaries of Financial Reporting and How to Extend Them. Journal of Accounting Research Supplement. 3(7), 353-385.
Markus, K., Timm, H., & Stefan, M., (2014). Information quality under IFRS, IFRS for SME and German-GAAP-survey on preferences of non-publicly traded mid-sized corporations Open Journal of Business and Management. 7(4), 57-80.
Miller, M. H., & Modigliani, E., (1966). Some estimates of the cost of capital to the electric utility industry, 1954-57. The American Economic Review. 5(6), 333-391.
Muhammad, N. H., Tony, V.Z., Keitha, D., & A. K. M. W. K. (2010). The effect of IFRS adoption and investor protection on earning quality around the world. The International Journal of Accounting. 4(7),333-355.
Musa, A. F . & Shehu, U. H., (2014). Impact of audit quality and financial performance of quoted cements firms in Nigeria. International Journal of Accounting and Taxation. 2(2).
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Muhibudeen L (2015). International financial reporting standard and value relevance of accounting information in quoted cement firms in Nigeria. International journal of science Basic and applied research, 22(1), 81-95
Ohlson, J. A., (2012). Earnings, book values, and dividends in equity valuation. Contemporary Accounting Research. 11(2), 661-711.
Omaima, A. G. H. Peter, R., Gianluigi G., & David P. (2008). The value relevance of disclosure:evidence from emerging capital market of Egypt. The International Journal of Accounting. 4(4),79-102.
Oshodin, E. & Mgbame, C. O. (2014). The comparative study of value relevance of financial information in the Nigeria banking and petroleum sectors. Journal of Business Studies Quarterly. 6(1), 42-54.
Perara, R. A. A. S., & Thrikawala, S. S., (2010). An empirical study of the relevance of accounting information on investors decision. Online paper (ICBI 2010) University of Kelaniya, Sri lanka. 4(2), 45-78.
Pius, V. C. O., Jane, F. N. O. & Raymond A. E., (2014). Impact of the IFRS adoption on stock market movement in Nigeria corporate organization. International Journal of Academic research in Business and Social Sciences. 4(9). 202-218.
Qystein, G., Kjell, K., & Frode S., (2012). The Value-Relevance of Financial Reporting in Norway 1965-2004. Norwegian School of Economics and Business Administration, Norway. 3(2), 76-90.
Robert M. B., & Abbie,k J. S., (2001). Financial accounting information and corporate governance. Journal of Accounting and Economics. 3(2), 237-333.
Tanko, M., (2012). The Effect of International Financial Reporting Standards Adoption on the Performance of Firms in Nigeria. A paper presented at IFRS Conference - Challenges & Opportunities International Refereed Conference 1st – 2nd May Organized by College of Business & Economics, Qassim University - Saudi Arabia. 5(3), 46-79.
Thinggaarda, F., & Damkierb, J., (2014). Has financial statement information become less relevant? Longitudinal evidence from Denmark. Scandinavian Journal of Management, in press. 5(3), 46-79.
Urouigbe, U., Urouigbe, O.R., Duroelola, M. E., Jafaru J., & Jimoh R (2017). International financial reporting standard adoption and value relevance of accounting information in Nigeria. International Journal of Economics and Financial issues (3), 1-8.
Verriest, A., (2007). The Evolution of Accounting Quality: An International Comparison (Electronic Version). 4(5), 24-57.
Yusuf., A. M., & Nor Asma, L. (2015). The value relevance of accounting disclosure among Nigeria financial institutions after IFRS adoption. Mediterranean Journal of Social Sciences. 6(1), 344-56.
Zayyad, A., Ahmad, B. U., & Mubaraq, S., (2014). Financial ratios as performance measure: a comparison of IFRS and Nigerian GAAP. Accounting and management information system. 13(1). 82-97.
Yahaya O.A, Onyabe J M & Usman S. O (2015). International financial reporting standards adoption and value relevance of accounting information of listed deposit money banks in Nigeria. Journal of economics and sustainable development 6(12), 109-127.
Adaramola, A.O., & Oyerinde, A. A., (2014). Value relevance of financial accounting information of quoted companies in Nigeria: a trend analysis.” Research Journal of Finance and Accounting. 5(8).86-93.
Adebimpe, O. U. , & Ekwere, R. E., (2015). IFRS adoption and value relevance of financial statement of Nigeria listed banks. International journal of finance and accounting. 4(1), 1-7.
Aljifri, K., & Khasharmeh, H., (2014). An investigation into the suitability of the international accounting standards to the United Arab Emirates environment. International Business Review, 1(5), 505–526.
Bahloul, J. & Ben Arab, M., (2014). The effect of mandatory IAS/IFRS regulation on the properties of earning quality in Australia and Europe. European Journal of Business and Management. 6(3),92-111.
Beaver, W. H. (1968). The information content of eamings. Journal of Accounting Research (6 (Supplement)). 4(3), 56-70.
Chan, K. C., & Seow, G. S., (2011). The association between stock returns and foreign GAAP earnings versus earnings adjusted to U.S. GAAP. Journal of Accounting and Economics, 21(139–158).
Chen.C. J., Chen. S, & Su. X. (2011). Is Accounting Information Value-Relevant in the Emerging Chinese Stock Market. Journal of International Accounting Auditing and Taxation, 10(3), 1-22.
Dung, N. V., (2013). Value-Relevance of Financial Statement Information: A Flexible Application of Modern Theories to the Vietnamese Stock Market. Paper presented at the Development and Policies Research Center, Vietnam. 7(4), 23-46.
Iyoha, F., (2013). Nigeria and the Adoption of International Financial Reporting Standards. University of Benin, Nigeria 6(4), 45-68.
Joshi, K. &Al-Basteki, H. (2013). Development of Accounting Standards and Adoption of IASs: Perceptions of Accountants from a Developing Country. Asian Review of Accounting. 7(2), 56-70.
Joshi, P. L. and Ramadhan, S. (2012). The adoption of international accounting standards by small and closely held companies: evidence from Bahrain. The International Journal of Accounting. 3(7), 429–440.
Kipchoge, K. A., (2015). Effect of corporate attributes on international financial reporting standard disclosure level: evidence from Kenya listed firms. Research Journal of Finance and Accounting. 6(1),97-107.
Landsman, W. (2011). An empirical investigation of pension fund property rights. The Accounting Review, October, 662–691. African Journal of Social Sciences 1(1), 101-114
Lev, B. and Zarowin, P. (2013). The Boundaries of Financial Reporting and How to Extend Them. Journal of Accounting Research Supplement. 3(7), 353-385.
Markus, K., Timm, H., & Stefan, M., (2014). Information quality under IFRS, IFRS for SME and German-GAAP-survey on preferences of non-publicly traded mid-sized corporations Open Journal of Business and Management. 7(4), 57-80.
Miller, M. H., & Modigliani, E., (1966). Some estimates of the cost of capital to the electric utility industry, 1954-57. The American Economic Review. 5(6), 333-391.
Muhammad, N. H., Tony, V.Z., Keitha, D., & A. K. M. W. K. (2010). The effect of IFRS adoption and investor protection on earning quality around the world. The International Journal of Accounting. 4(7),333-355.
Musa, A. F . & Shehu, U. H., (2014). Impact of audit quality and financial performance of quoted cements firms in Nigeria. International Journal of Accounting and Taxation. 2(2).
1- 22.
Muhibudeen L (2015). International financial reporting standard and value relevance of accounting information in quoted cement firms in Nigeria. International journal of science Basic and applied research, 22(1), 81-95
Ohlson, J. A., (2012). Earnings, book values, and dividends in equity valuation. Contemporary Accounting Research. 11(2), 661-711.
Omaima, A. G. H. Peter, R., Gianluigi G., & David P. (2008). The value relevance of disclosure:evidence from emerging capital market of Egypt. The International Journal of Accounting. 4(4),79-102.
Oshodin, E. & Mgbame, C. O. (2014). The comparative study of value relevance of financial information in the Nigeria banking and petroleum sectors. Journal of Business Studies Quarterly. 6(1), 42-54.
Perara, R. A. A. S., & Thrikawala, S. S., (2010). An empirical study of the relevance of accounting information on investors decision. Online paper (ICBI 2010) University of Kelaniya, Sri lanka. 4(2), 45-78.
Pius, V. C. O., Jane, F. N. O. & Raymond A. E., (2014). Impact of the IFRS adoption on stock market movement in Nigeria corporate organization. International Journal of Academic research in Business and Social Sciences. 4(9). 202-218.
Qystein, G., Kjell, K., & Frode S., (2012). The Value-Relevance of Financial Reporting in Norway 1965-2004. Norwegian School of Economics and Business Administration, Norway. 3(2), 76-90.
Robert M. B., & Abbie,k J. S., (2001). Financial accounting information and corporate governance. Journal of Accounting and Economics. 3(2), 237-333.
Tanko, M., (2012). The Effect of International Financial Reporting Standards Adoption on the Performance of Firms in Nigeria. A paper presented at IFRS Conference - Challenges & Opportunities International Refereed Conference 1st – 2nd May Organized by College of Business & Economics, Qassim University - Saudi Arabia. 5(3), 46-79.
Thinggaarda, F., & Damkierb, J., (2014). Has financial statement information become less relevant? Longitudinal evidence from Denmark. Scandinavian Journal of Management, in press. 5(3), 46-79.
Urouigbe, U., Urouigbe, O.R., Duroelola, M. E., Jafaru J., & Jimoh R (2017). International financial reporting standard adoption and value relevance of accounting information in Nigeria. International Journal of Economics and Financial issues (3), 1-8.
Verriest, A., (2007). The Evolution of Accounting Quality: An International Comparison (Electronic Version). 4(5), 24-57.
Yusuf., A. M., & Nor Asma, L. (2015). The value relevance of accounting disclosure among Nigeria financial institutions after IFRS adoption. Mediterranean Journal of Social Sciences. 6(1), 344-56.
Zayyad, A., Ahmad, B. U., & Mubaraq, S., (2014). Financial ratios as performance measure: a comparison of IFRS and Nigerian GAAP. Accounting and management information system. 13(1). 82-97.
Yahaya O.A, Onyabe J M & Usman S. O (2015). International financial reporting standards adoption and value relevance of accounting information of listed deposit money banks in Nigeria. Journal of economics and sustainable development 6(12), 109-127.
Published
2018-06-08
How to Cite
Diepiriye, D. (2018). International Financial Reporting Standards and Value Relevance of Accounting Information: A Mult-Institutional Perspectives from Nigeria Quoted Firms. International Journal of Accounting & Finance Review, 2(2), 1-14. https://doi.org/10.46281/ijafr.v2i2.25
Section
Regular Research Article/ Short Communication Article
Copyright (c) 2018 Davies Stanley Diepiriye
This work is licensed under a Creative Commons Attribution 4.0 International License.
