Auditor's report, auditor's size and value relevance of accounting information

Abdollahi, Ahmad; Pitenoei, Yasser Rezaei; Gerayli, Mehdi Safari

doi:10.1108/jaar-11-2019-0153

Cited by 24 publications

(32 citation statements)

References 59 publications

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“…Lee and Lee, 2013; Uthman and Abdul-Baki, 2014; Qu and Zang, 2015; Manganaris et al. , 2016; Kouki, 2018; Abdollahi et al. , 2020; Benkraiem et al.…”

Section: Resultsmentioning

confidence: 99%

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Unraveling the existence of the necessity and sufficiency of accounting information

Agbodjo

Kan

Zori

et al. 2022

JAAR

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PurposeThe authors illustrate accounting information's effects in terms of necessity and sufficiency, using a set-theoretic approach, and highlight how the approach complements conventional correlational analyses.Design/methodology/approachThe authors examine the relationship between accounting numbers (accounting information) and stock prices (effect) under both correlational and set-theoretic perspectives using a value relevance methodology.FindingsThe claim that accounting information is significantly correlated to an outcome does not inform the accounting information's necessity or sufficiency. In addition, findings suggest that not all control variables that are significantly correlated to a supposed accounting effect are necessary to explain that effect. Moreover, variables reflecting accounting information are not individually sufficient to explain the effect under investigation.Research limitations/implicationsThe study contributes to set-theoretic approach to accounting research and echoes the call for a diversity of research approaches in accounting.Practical implicationsThe study may have practical implications for various accounting information users, including investors, financial analysts and financial market and accounting disclosure regulators as well. Indeed, accounting information users should consider the importance of the combined effect of multiple pieces of accounting information in the users' positions on firms' stocks. Understanding what might be the relevant combinations of accounting information associated with a given organizational context is a key in making compelling accounting-informed decisions. Such knowledge can inform reflections of accounting disclosures and regulations on the combined effects of several accounting information.Originality/valueFirst, the study adds to the newly introduced set-theoretic approach to empirical accounting. The study also resonates with the call for a diversity of research approaches in accounting. The authors empirically demonstrate that significant correlation between accounting information and its effects does not connote “necessity” or “sufficiency,” which is rather revealed by qualitative comparative analysis (QCA). Such complementarity can help accounting researchers to carry out (1) new investigations of accounting's earlier hypotheses or propositions and (2) investigations of new accounting hypotheses/propositions deriving from existing accounting theories and (3) to explore new relationships between accounting phenomena. Second, the study incidentally contributes to value relevance literature in terms of contextualization of the relevance of accounting information. Specific to the African capital markets, the study complements the few recent studies on the Bourse Régionale des Valeurs Mobilières d’Abidjan (BRVM).

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“…Lee and Lee, 2013; Uthman and Abdul-Baki, 2014; Qu and Zang, 2015; Manganaris et al. , 2016; Kouki, 2018; Abdollahi et al. , 2020; Benkraiem et al.…”

Section: Resultsmentioning

confidence: 99%

“…Second, this study incidentally contributes to value relevance literature in terms of contextualization of the relevance of accounting information (Abdollahi et al. , 2020; Benkraiem et al.…”

Section: Discussionmentioning

confidence: 95%

Unraveling the existence of the necessity and sufficiency of accounting information

Agbodjo

Kan

Zori

et al. 2022

JAAR

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“…Under this construct, value relevance can be defined as the ability of information disclosed by financial statements to capture and summarize firm value (Karğın, 2013). To highlight this notion, Abdollahi et al (2020) indicate that the most crucial trait of accounting information is its relevance, which plays a significant role in decision-making processes. It is greatly important to increase the accounting information’s value relevance, including earnings per share and book value per share, to draw investment and sell the stocks of existing firms (internal users) as well as boost investors’ decision-making capabilities (external users).…”

Section: Value Relevance Of Accounting Informationmentioning

confidence: 99%

The value relevance of accounting information: empirical evidence from Jordan

Shanak

2023

IJLMA

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Purpose This empirical study’s primary goal is to examine the connection between accounting information and share price for financial companies listed on Jordan’s expanding Amman Stock Exchange (ASE) between 2014 and 2018. Design/methodology/approach The correlation between accounting data and share price was investigated using multiple regression analysis. In this vein, “pooled ordinary least squares (OLS), fixed effect and random effect” static panel data estimators were used. The OLS model was chosen as the best model after a series of diagnostic tests. Findings The multiple proxies of accounting information value relevance have a positive and considerable impact on the market value per share, according to panel data research. Comparatively, the authors find proof that among the other accounting data – earnings, dividends and cash flow from operations – book value is statistically the most value-relevant. Research limitations/implications This empirical investigation was only conducted in Jordan. Because it is very likely to obtain different results in other nations, the findings cannot be applied to other business environments. Practical implications The findings of this paper may highlight the amazing relationship between accounting information and share price for policymakers, regulators and other stakeholders in developing nations, notably in Jordan. This could pave the way for effective accounting disclosures. Originality/value Seldom does empirical research on the relationship between accounting data and share prices from publicly traded companies on ASE exist. So, by demonstrating empirical findings from Jordanian companies, this study fills the gap in the existing literature and knowledge.

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“…Financial performance is an essential instrument in making decisions [1], [2], [3], [4]. According to research conducted by [5] and [6], market reactions have a significant relationship with financial statement information.…”

Section: Introductionmentioning

confidence: 99%