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Effect of IFRS on Value Relevance of Accounting Information: Evidence from Quoted Manufacturing Firms in Nigeria

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Effect of IFRS on Value Relevance of Accounting Information: Evidence from Quoted Manufacturing Firms in Nigeria


Ezejiofor | Raymond Asika (PhD)

https://doi.org/10.31142/ijtsrd18346



Ezejiofor | Raymond Asika (PhD) "Effect of IFRS on Value Relevance of Accounting Information: Evidence from Quoted Manufacturing Firms in Nigeria" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-2 | Issue-5, August 2018, pp.2255-2291, URL: https://www.ijtsrd.com/papers/ijtsrd18346.pdf

This study evaluated the extent to which value relevance of financial information in Nigerian manufacturing firms has improved after the implementation of International Financial Reporting Standards (IFRS). Specifically, the study intended to: Ascertain the extent the adoption of IFRS has significantly improved the book value per share of manufacturing companies in Nigeria; Determine the extent the adoption of IFRS has significantly improved the Earnings Per Share of manufacturing companies in Nigeria and Examine the extent the adoption of IFRS has significantly improved the cash flow of manufacturing companies in Nigeria. Ex-post facto research design was adopted for the study. A sample of 54 manufacturing companies was randomly selected from manufacturing companies quoted on the Nigerian Stock Exchange for the periods of 2008-2015. Data for the study were obtained from the annual reports and accounts of the sampled companies. Specifically, a modified price model for detecting value relevance of accounting data for two different periods was employed. Regression Analysis and Chow test statistical tools were used to analyze and validate the data with aid of SPSS version 20.0. The study found that the adoption of IFRS has improved the book value per share, market share price, Earnings Per Share and cash flow of manufacturing companies in Nigeria. The implication of findings is that the value relevance of accounting information of manufacturing companies is more sensitive during Post-IFRS era than the Pre-IFRS era. The findings also imply that the book value per share, market price, earnings and cash flow have become informative to equity investors in determining the value of firms following IFRS adoption. The study recommends among other things that the accounting information for book value per share should be communicated to the investing public; and such information should be of high quality to avoid negative consequences on the part of investors.

Value relevance, accounting information, manufacturing companies


IJTSRD18346
Volume-2 | Issue-5, August 2018
2255-2291
IJTSRD | www.ijtsrd.com | E-ISSN 2456-6470
Copyright © 2019 by author(s) and International Journal of Trend in Scientific Research and Development Journal. This is an Open Access article distributed under the terms of the Creative Commons Attribution License (CC BY 4.0) (http://creativecommons.org/licenses/by/4.0)

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