Effects of New Financial Reporting Standards on Value Relevance–A Study about Turkish Stock Markets

Abstract

Financial statement information that make the users to evaluate their decisions is value relevant. This paper aims to determine the value relevance of financial statement information in Turkish stock markets during the period

Value Relevance of Accounting Information: A Review of Empirical Evidence Across Continents

“…On the positive side, Jermakowicz et al (2007), Bartov et al (2005), Hung and Subramanyam (2007) in Germany and (Pascan, 2014) in Romania found that accounting information is relevant after switching to IFRS, which is consistent with the findings of other researchers from Asia (Benyasrisawat, 2011; Bingbin et al, 2015; Kadri et al, 2011; Kristanto, 2015; Kwon, 2010; Liu & Liu, 2007); from Australia (Chua et al, 2012); from Africa (Adebimpe & Ekwere, 2015; Muhibudeen, 2015; Olugbenga, 2016). On the negative side, Paananen and Lin (2009), Karampinis and Hevas (2011), Kousenidis et al (2010), Bilgic and Ibis (2013), Karğın (2013) in Greece reported the decrease in the quality of accounting information after IFRS adoption, which is consistent with the findings of other researchers from Asia continent (Eccher & Healy, 2000; Haw et al, 1999; Lin & Chen, 2005) who found that Chinese GAAP is more relevant. In Australia, Ahmed and Goodwin (2006) concluded that local AGAAP improved value relevance of accounting information than AIFRS.…”

“…Similarly, Hellström (2006) in Czech and Bartov, Goldberg, and Kim (2005) in German reported the increase in the value relevance of earnings per share after IFRS regime. Contrary to the findings of Paananen and Lin (2009), Karampinis and Hevas (2011), Kousenidis, Ladas, and Negakis (2010) during post-IFRS implementation in Greece, value relevance of earnings per share and book value per share decrease, which is consistent with the findings of Bilgic and Ibis (2013) and Karğin (2013) in Greece. Another study by Tsalavoutas, Andr´e, and Evans (2012) in Greece and Callao et al (2007) in Spain concluded that after IFRS adoption, no improvement is seen in the quality of accounting information.…”

“…While in returns model, the value relevance of earnings is studied by regressing the market stock returns on earnings (Easton & Harris, 1991). Both valuation models made a hit in the market-based research and have been successfully tested in various studies (Bae & Jeong, 2007; Bhatia, 2018; Bilgic & Ibis, 2013; Dahmash & Qabajeh, 2012; Francis & Schipper, 1999; Khanna, 2014; Mishary & Alanezi, 2011).…”

Effect of information quality due accounting regulatory changes: Applied case to Mexican real sector

“…The importance of determining the effects of the incorporation of the IFRS complies with the fact that the fundamental information of the company is of quality for the users of financial information. There have been a great number of investigations on the effect that the accounting quality has on the variables of prices and profitability, which have not produced a consensus production, since certain studies (Barth, Landsman, & Lang, 2008;Bartov, Goldberg, & Kim, 2005;Bilgic &İbis, 2013;Dorantes, 2013;Kargın, 2013;Mohan & John, 2011;Standifird & Weinstein, 2002) found quality in the financial information, while in other studies there are mixed results. This means that they find quality in utilities but not in capital like in Agostino, Drago, and Silipo (2011) and Jarva and Lantto (2012).…”

Effects of IFRS on Accounting Information Quality: Evidence for Brazil

“…Other country-level studies indicate some significant impacts on accounting quality due to the adoption of IFRS such as Karampinis and Hevas (2009) for Greece, Kargin (2013) and Bilgic and Ibis (2013) for Turkey and Apergis (2015) for countries in the Middle East and North Africa. For France, Garrouch (2016) finds an increase in investments due to the adoption of the standards.…”