Organizational complexity and value relevance under the regulatory and financial standards of Brazilian electric power companies

The organizational complexity in the electric power industry can influence the quality of information reported to their users differently, given the context of double disclosure under different standards. This article analyzed the influence of organizational complexity on value relevance under regulatory and financial accounting standards in the Brazilian electric power industry. The sample included 13 companies on the Brazilian stock exchange that published regulatory and financial reports between 2010 and 2021. An adapted Ohlson model measured value relevance. The Hirfindahl-Hirschman Index measured the firms' complexity. The results demonstrate that: regulatory are less complex than financial revenues; the financial standard has greater value relevance; in both accounting standards, greater complexity influenced a reduction in stock prices; the complexity affected more the relevance of the financial standard than in the regulatory one; there is greater relevance of the earnings in the distributors and the equity in the transmission companies; and revenue complexity reduces the relevance of both segments. Understanding how accounting standards impact information quality in Brazil's energy industry is globally significant. Increased foreign investment boosts investor confidence, which is crucial for resource management worldwide, and gives insights into the difference in complexity and earnings quality in contexts of double disclosure.