EARLY RELEASES AND VALUE RELEVANCE OF ACCOUNTING INFORMATION: EMPIRICAL EVIDENCE FROM NIGERIA
 /  EARLY RELEASES AND VALUE RELEVANCE OF ACCOUNTING INFORMATION: EMPIRICAL EVIDENCE FROM NIGERIA

EARLY RELEASES AND VALUE RELEVANCE OF ACCOUNTING INFORMATION: EMPIRICAL EVIDENCE FROM NIGERIA


Josiah Mary (Ph.D), Adetula Samuel Lanrewaju, Bosun-fakunle Yemisi Funmilayo

ABSTRACT
The focus of this study is to examine the value relevance of accounting information in Nigeria. The
survey research design is adopted for this study. The simple random sampling technique is used to
select a sample of sixty companies covering the period 2006-2012. Secondary data, sourced from
annual reports of the selected companies, was employed in the study. For the purpose of this study,
we winsorize the data to help screen the population and ensure only timely financial statements are
considered. The Ordinary Least Squares Regression was utilized for the analysis. The analysis is
conducted on a year-to-year basis. As a general rule, the practice in extant literature in evaluating
the value relevance of accounting information is to examine the coefficient (R2) of determination
of the model. Thus, the higher the R2, the better the set of accounting numbers incorporated in the
model is able to explain market value and thus the more relevant the accounting information. The
result shows that accounting information released earlier has a high and strong explanatory ability
for systematic variations in market value with R2 values of 99.8% for 2006, 98.1% for 2007, 99.6%
for 2008, 99.5% for 2009 and 98.6% in 2010. But in 2011, value relevance declined to some average
values of 43.5% and 53.6% in 2012. Nevertheless, the results suggest that investors usually tend to
react strongly to early announcement whether good or bad and hence accounting information is
value-relevant in Nigeria.

Journal Article
PDF, 137.2 KB
Creative Commons LicenseCreative Commons license
Accounting, Banking and Finance
N/A
Value relevance, earnings, dividends, cash flow, Book value, Regression
Christian Bassey
17th April, 2018
17th April, 2018
http://oer.mciu.edu.ng/wp-content/uploads/2015/04/Article-Early-Releases-and-value-relevance.pdf


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