Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/310888 
Year of Publication: 
2024
Citation: 
[Journal:] Journal of Accounting and Management Information Systems (JAMIS) [ISSN:] 2559-6004 [Volume:] 23 [Issue:] 1 [Year:] 2024 [Pages:] 189-214
Publisher: 
Bucharest University of Economic Studies, Bucharest
Abstract: 
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.
Subjects: 
IFRS adoption
value-relevance
signaling theory
Ohlson price model
Driscoll-Kraay standard errors
panel-corrected standard errors
JEL: 
M41
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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