The Value Relevance of Financial Accounting Information in a Transitional Economy: The Case of the Czech Republic
AbstractThe paper investigates the value relevance of accounting information in the Czech Republic in 1994-2001. Value relevance is understood as the ability of financial statement information to capture or summarise information that affects share values and empirically tested as a statistical association between market values and accounting values. The first objective is to evaluate the value relevance of accounting information in the Czech Republic in comparison to accounting information in a well-developed market economy. The second objective is to investigate whether the value relevance of accounting information has increased over time in the Czech Republic, as an indictor of improvements in the accounting regulation and practice. Sweden is chosen as a benchmark country for the comparison. The results show that the value relevance of accounting information indeed is lower in the Czech Republic than in Sweden. The results, however, indicate an improvement in the quality of the Czech financial accounting information during the research period
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Bibliographic InfoPaper provided by Stockholm School of Economics in its series Working Paper Series in Business Administration with number 2005:10.
Length: 44 pages
Date of creation: 11 Oct 2005
Date of revision:
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Postal: The Economic Research Institute, Stockholm School of Economics, P.O. Box 6501, SE 113 83 Stockholm, Sweden
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value relevance; financial accounting information; transitional economy; international accounting;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-11-05 (All new papers)
- NEP-FMK-2005-11-05 (Financial Markets)
- NEP-TRA-2005-11-05 (Transition Economics)
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