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

Amaka Elizabeth Agbata, Callista Ukamaka Uchegbu and Maria Nwankwoeke Eze
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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

Social Sciences and Education Research Review, 2022, vol. 9, issue 1, 73-83

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.

Keywords: IFRS; Value Relevance; Accounting Information; Stock Price; Financial Reporting Council of Nigeria (search for similar items in EconPapers)
JEL-codes: Z0 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:edt:jsserr:v:9:y:2022:i:1:p:73-83

DOI: 10.5281/zenodo.6794604

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