TITLE:
Accounting Information and Value Relevance: A Quinquennial Comparison of Pre- and Post-IFRS Adoption of Listed Firms in Nigeria and South Africa
AUTHORS:
Enaibre Felix Ighosewe
KEYWORDS:
Accounting Information, Value Relevance, Quinquennial Comparison, Pre- Post-IFRS Adoption, Listed Firms
JOURNAL NAME:
Modern Economy,
Vol.13 No.7,
July
28,
2022
ABSTRACT: This study examined
accounting information and value relevance: A quinquennial comparison of pre-
and post-IFRS adoption of listed firms in Nigeria and South Africa. Panel data
were collected from listed Non-financial firms in Nigeria (from 2007-2016) and
South Africa (2000-2009). The Ex-Post facto research design was adopted for the
study. In line with the objectives set for the study, 6 research questions and
hypotheses were formulated and tested using pooled OLS methodology. The
independent variable is accounting information proxied by Book value per share
(BVPS), Earning per share (EPS), Firm size (FS), Leverage (LEV), Cash flow (CF)
and Current ratio (CURR), while the dependent
variable is value relevance proxied by the share price. Findings for Nigeria
firms suggest that Book value per share, earnings per share, Firm size,
leverage and cash flow are positively significant to share price and has higher
value relevance in the post-IFRS periods than the pre-IFRS periods whereas the
current ratio has an negative insignificant effect on share price and has no
value relevance in both pre and post-IFRS periods. The findings for South
African firms suggest that Book value per share, earnings per share and Firm
size have a significant positive effect on share price and have higher value
relevance in post-IFRS periods than in pre-IFRS periods, but leverage and cash
flow have an insignificant positive effect on share price while current ratio
has an insignificant negative effect on share price and do not have value
relevance in pre and post-IFRS periods. The study concludes that there is a
higher value relevance of accounting information in post-IFRS periods than in the
pre-IFRS periods in Nigeria and South African firms. Overall, by comparison,
accounting information was more value
relevance amongst Nigerian firms than South African firms. Consequently, the
study recommends that for Nigerian firms, investors and the financial
analyst should consider Book value, Earnings per share, Firm size, Leverage and
Cash flow as the relevant variables that determine share price, whereas for
South African firms, Book value per share, Earnings per share and Firm size are
the main variables that determine share price.