Are abnormal accruals values relevant? Evidence from Sub-Saharan Africa

Godfrey Akileng, Diana L.K. Ssekiboobo and Eric Nzibonera

International Journal of Economics and Business Research, 2025, vol. 29, issue 8, 1-23

Abstract: This study examines whether the market values abnormal accruals differently in Sub-Saharan Africa. Abnormal accruals signal managers' valuations of a firm. Alternatively, abnormal accruals are opportunistic and, therefore, misrepresent the value of the firm. We use panel data from listed firms in securities markets in South Africa, Nigeria, and East Africa for the period 2006-2020 collected from annual reports and financial market databases. Ohlson's (1995) price model is used as the basis for regression analysis to measure value relevance. We find that abnormal accruals are value-irrelevant and thus discounted by the market. Rational investors perceive abnormal accruals to represent managers' opportunistic actions. This study contributes to the literature on the value relevance of accounting information and market-based accounting research on African markets.

Keywords: value relevance; abnormal accruals; financial markets; Africa. (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.inderscience.com/link.php?id=144285 (text/html)
Open Access

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ids:ijecbr:v:29:y:2025:i:8:p:1-23

Access Statistics for this article

More articles in International Journal of Economics and Business Research from Inderscience Enterprises Ltd
Bibliographic data for series maintained by Sarah Parker ().