The Value Relevance of International Financial Reporting Standards: Empirical Evidence in an Emerging Market

Fatima A. Alali and Paul Sheldon Foote

The International Journal of Accounting, 2012, vol. 47, issue 1, 85-108

Abstract: This study examines the value relevance of accounting information under International Financial Reporting Standards (IFRS) in the Abu Dhabi Stock Exchange (ADX, henceforth). Based on models developed by Easton and Harris (1991), and Ohlson (1995) and using monthly market data from 2000 to 2006, this paper investigates the value relevance of accounting information of firms traded on the ADX. Our overall results show that earnings scaled by beginning of period price are positively and significantly related to cumulative returns and that earnings per share and book value per share are positively and significantly related to price per share. We also find that value relevance of accounting information has changed since the market inception in 2000. The results documented herein extend the literature on value relevance accounting information in an emerging market that requires the use of IFRS. The study therefore contributes to the debate over the mandatory adoption of IFRS and the value relevance of accounting information reported under IFRS.

Keywords: IFRS; Value relevance of accounting information; Emerging market; Empirical research (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (27)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:accoun:v:47:y:2012:i:1:p:85-108

DOI: 10.1016/j.intacc.2011.12.005

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