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The Use of Accounting Information by Financial Analysts in Emergent Markets: The Case of Romania

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  • Mihaela IONASCU
  • Ion IONASCU

    (The Bucharest University of Economic Studies, Romania)

Abstract

The purpose of this paper is to investigate the use of accounting information by Romanian financial analysts with a focus on the models used and the factors affecting their forecasts accuracy. We hypothesize that on the emergent market of Romania, analysts rely more on simple valuation models (such as price multiples) and that accounting variables are perceived as less important compared to macroeconomic factors when it comes to forecast accuracy. To collect data we sent out questionnaires to the Research Departments of the brokerage companies authorized to operate on the Bucharest Stock Exchange (BSE) (investment firms, financial investments banks, credit institutions). As IFRSs became mandatory for consolidated accounts of listed companies and as the National Securities and Exchange Committee (CNVM) envisions the application of IFRS in the individual accounts of these companies, the paper also tries to capture the perception of Romanian financial analysts on the role plaid by IFRS adoption in reducing forecasts errors.

Suggested Citation

  • Mihaela IONASCU & Ion IONASCU, 2012. "The Use of Accounting Information by Financial Analysts in Emergent Markets: The Case of Romania," Journal of Accounting and Management Information Systems, Faculty of Accounting and Management Information Systems, The Bucharest University of Economic Studies, vol. 11(2), pages 174-186, June.
    • Handle: RePEc:ami:journl:v:11:y:2012:i:2:p:174-186
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    Citations

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    Cited by:

    1. Victoria Bogdan & Olimpia Iuliana Ban & Dorina Nicoleta Popa, 2017. "Applying Mpca Analysis To Evaluate Financial Performance Of Romanian Listed Companies," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 235-246, July.
    2. Houqe, Muhammad Nurul & Easton, Samuel & van Zijl, Tony, 2014. "Does mandatory IFRS adoption improve information quality in low investor protection countries?," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 23(2), pages 87-97.
    3. Khaled Aljifri & Hafiz Imtiaz Ahmad, 2019. "Preferred Valuation Techniques in the UAE: A Comparative Study of Financial and Nonfinancial Sectors," International Journal of Economics and Financial Issues, Econjournals, vol. 9(1), pages 51-59.

    More about this item

    Keywords

    valuation models; accounting information; financial analysts; forecast accuracy; IFRS adoption in Romania;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • G29 - Financial Economics - - Financial Institutions and Services - - - Other

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