The Value Relevance of Financial Accounting Information in a Transition Economy: The Case of the Czech Republic

Katerina Hellstrom

European Accounting Review, 2006, vol. 15, issue 3, 325-349

Abstract: The paper investigates the value relevance of accounting information in the Czech Republic in 1994-2001. Value relevance is understood as the ability of financial statement information to capture or summarise information that affects share values and empirically tested as a statistical association between market values and accounting values. The objective of the study is to investigate the validity of the value relevance methodology by finding an accounting setting where the results of value relevance tests might be predicted unambiguously. If the results of these tests confirm the predicted results, the validity of the value relevance methodology might be assumed. A transition economy represented by the Czech Republic provides such an institutional and accounting setting. It might be assumed that value relevance of accounting information is lower in a transitional economy than in a well-developed market economy. It can also be assumed that the value relevance increases over time as a result of the progress in transition. The results of the study confirm these predicted results and give thus supportive evidence of the validity of the value relevance methodology.

Date: 2006
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://www.tandfonline.com/doi/abs/10.1080/09638180600916242 (text/html)
Access to full text is restricted to subscribers.

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:taf:euract:v:15:y:2006:i:3:p:325-349

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/REAR20

DOI: 10.1080/09638180600916242

Access Statistics for this article

European Accounting Review is currently edited by Laurence van Lent

More articles in European Accounting Review from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().