THE RELATIONSHIP BETWEEN ACCOUNTING INFORMATION DISCLOSURES AND INVESTMENT DECISIONS OF LISTED FIRMS IN NIGERIA

Trimisiu Tunji Siyanbola and Peter Ifeanyi Ogbebor
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Trimisiu Tunji Siyanbola: Babcock University, Postal: Department of Accounting,, School of Management Sciences, lisan Remo, Ogun State, Nigeria
Peter Ifeanyi Ogbebor: Babcock University, Postal: Department of Banking & Finance, School of Management Sciences, Ilisan Remo, Ogun State, Nigeria

International Journal of Contemporary Accounting Issues-IJCAI (formerly International Journal of Accounting & Finance IJAF), 2019, vol. 08, issue 1, 59-77

Abstract: Financial scandals and world-wide corporate failures have been attributed to persistent information asymmetry to discerning investors. The study focuses on the relationship between accounting information disclosure and investment decisions in Nigerian listed companies. To achieve this, three variants of accounting information disclosures (IFRS disclosures, Regulatory-induced-disclosures and Voluntary disclosures) and two variants of investment decisions (volume of shares traded and market value ofshares) were considered through descriptive, content and regression analysis. Data were collectedfrom auditedfinancialreports of52 selectedfirms (outof174 firms listedon the Nigerian Stock Exchange as at December 2016) for 10 years period from 2006 to 2015, using purposive judgment sampling technique. Pre-estimation and post estimation tests were conducted on the series and the final regression estimate reveals accounting information disclosure indicators jointly having significant effects on both the market value ofshares and volumes ofshares traded on Nigerian stock exchange. After a thorough review of relevant literatures on accounting information disclosures and investment decisions, formulating hypothesis, collecting and analysing the data, it can be stated that IFRS disclosures, Regulatory- induced-disclosures and Voluntary disclosures are negligible factors in influencing investment decisions which subsequently determine the volume and market value of shares traded by Nigerian listed entities. Also, IFRS disclosures, Regulatory-induced-disclosures and Voluntary disclosures are jointly significant factors in determining the volume and market value of shares in Nigerian corporate entities. The study therefore favours the full disclosure ofall accounting information to assist the investors in making wise decision on their investments in Nigerian listed companies, as this is the onlywaybywhich corporate failures could be reduced to the barest minimum if not totally eliminated. It was therefore recommended that financial statement preparers should ensure full disclosure practices to support meaningful investment decisions in order to improve the marketvalue ofthe company.

Keywords: Accounting disclosure; IFRS disclosures; Mandatory disclosures; Regulatory induced disclosure; Voluntary disclosure; Market Share values (search for similar items in EconPapers)
Date: 2019
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