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Effect of IFRS on the value relevance of accounting information in the Nigerian stock market

Author

Listed:
  • Amaka Elizabeth Agbata

    (Department of Accountancy, Nnamdi Azikiwe University, Awka)

  • Callista Ukamaka Uchegbu

    (Department of Accountancy, Nnamdi Azikiwe University, Awka)

  • Maria Nwankwoeke Eze

    (Department of Accountancy, Nnamdi Azikiwe University, Awka)

Abstract

The study examined the effect of International Financial Reporting Standards (IFRS) on the value relevance of accounting information in the Nigerian Stock Market (NSE). The purpose was to determine the effect of Earnings per Share (EPS), Book Value of Equity (BVE), and Dividend per Share (DPS) on stock prices in the pre and post-periods of IFRS. Ex post facto research design was used. The population consisted of 180 firms quoted on the NSE. Purposive sampling was used in selecting 48 companies as the sample size. The study covered a period of 10 years from 2007 to 2016. The period was divided equally into 5 years (2007-2011) pre-IFRS and 5 years (2012-2016) post-IFRS periods. Secondary data were used which were obtained from the annual audited reports and accounts of the sampled firms. Multiple Regression Analysis was used in testing the formulated hypotheses with the aid of E-View 9.0. Findings revealed that the effect of EPS, BVE, and DPS on stock price in the pre and post-periods of IFRS is not statistically significant. Based on the findings, the researchers recommended that the Financial Reporting Council (FRC) of Nigeria should strictly monitor the level of IFRS compliance by Nigerian Companies and ensure full compliance by these companies as well as sanction defaulting companies as this will help to fully achieve the benefits of full IFRS implementation which will result in more relevant accounting information. Nigerian companies should comply with the standards to produce high-quality financial statements which are value relevant.

Suggested Citation

  • Amaka Elizabeth Agbata & Callista Ukamaka Uchegbu & Maria Nwankwoeke Eze, 2022. "Effect of IFRS on the value relevance of accounting information in the Nigerian stock market," Social Sciences and Education Research Review, Department of Communication, Journalism and Education Sciences, University of Craiova, vol. 9(1), pages 73-83, July.
    • Handle: RePEc:edt:jsserr:v:9:y:2022:i:1:p:73-83
    DOI: 10.5281/zenodo.6794604
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    References listed on IDEAS

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    1. Ahmad Bukola UTHMAN & Zayyad Abdul-BAKI, 2014. "The value-relevance of accounting information in Nigeria: analysts’ perception in the IFRS regime," The Journal of Accounting and Management, Danubius University of Galati, issue 1, pages 43-60, April.
    2. Holthausen, Robert W. & Watts, Ross L., 2001. "The relevance of the value-relevance literature for financial accounting standard setting," Journal of Accounting and Economics, Elsevier, vol. 31(1-3), pages 3-75, September.
    3. Okuns Omokhoje Omokhudu & Peter Okoeguale Ibadin, 2015. "The Value Relevance of Accounting Information: Evidence from Nigeria," Accounting and Finance Research, Sciedu Press, vol. 4(3), pages 1-20, August.
    4. Francis, J & Schipper, K, 1999. "Have financial statements lost their relevance?," Journal of Accounting Research, Wiley Blackwell, vol. 37(2), pages 319-352.
    5. Jamal Barzegari Khanagha, 2011. "Value Relevance of Accounting Information in the United Arab Emirates," International Journal of Economics and Financial Issues, Econjournals, vol. 1(2), pages 33-45, June.
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    More about this item

    Keywords

    IFRS; Value Relevance; Accounting Information; Stock Price; Financial Reporting Council of Nigeria;
    All these keywords.

    JEL classification:

    • Z0 - Other Special Topics - - General

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